With Nelson Mandela’s recent passing, it is only right to appreciate all that he accomplished for not only South Africa, but for the oppressed around the world. He inspired within even the most marginalized members of society the hope that their battle for freedom and equality was not a losing one. He showed the world that change, even within the most unyielding of institutions, requires only the moral pressure to bend society’s rigid values to their breaking point.
Mandela’s vision and leadership radically transformed South Africa from a country of apartheid racism and suppression to one that values liberty and democracy. In doing so, he provided millions of Africans with the opportunity to contribute to and enjoy the benefits of South African society. His accomplishments are certainly numerous and laudable, yet South Africa still has a long ways to go in achieving the true bounds of his vision.
In addition to his passionate campaign against slavery, Mandela was a renowned advocate of economic justice. He once declared, “massive poverty and obscene inequality are such terrible scourges of our times…that they have to rank alongside slavery and apartheid as social evils.” For Mandela, poverty and inequality were as constraining as institutionalized racism, drastically limiting the freedom of the world’s poor.
However, the rates of poverty and inequality in South Africa are among the worst in the world. The 2011 census indicated that 41.4% of South Africans fell below the national poverty line. This statistic becomes particularly shocking when considering that this line falls at around 370 US dollars per capita per year, meaning that four out of ten people in South Africa live on about a dollar a day. Further, the level of income inequality in South Africa is second highest in the world. Disturbingly, this inequality often manifests itself along racial lines, with black households only earning 16 percent of average white households.
This inequality is visually apparent in many of South Africa’s big cities. When I visited Johannesburg a few years ago, the stark contrast between wealth and abject poverty was startling. Our hotel was situated in a gated community, with high fences surrounding the walls, protected by guards at the entrances. These secluded communities provide the safety and luxury demanded by Johannesburg’s wealthier classes. However, upon leaving this guarded bubble, the scenery immediately starts to change. Run-down shops and stands dominate the scene as you approach Johannesburg’s city center, which itself is dominated by the washed-out grays and browns of depressed industry.
Yet the real shock comes upon leaving this industrialized sector for Soweto, the very place where Nelson Mandela himself lived. From the car window, you can only see the faded reds and greens of shack rooftops, piling endlessly on top of one another. The destitution is immediately perceptible, and as the driver tells you that hundreds of thousands live in these shanties, you begin to wonder if this is what Mandela truly meant by freedom.
Why in this land known for progress and equality does so much poverty and inequality persist? Certainly it is not for lack of governmental effort, as South Africa provides welfare benefits to more than 16 million of its nearly 53 million inhabitants.
The problem seems not to lie with a lack of government effort in reducing poverty, but with major inefficiencies within these efforts. This system attempts to help families cope with economic hardship, but does little to correct the root of their economic problems: unemployment. Estimates indicate that the level of unemployment in South Africa is near 40%, leaving millions of families unable to provide for themselves. Naturally, these families turn to state welfare programs, but then the system fails: since these programs often merely provide handouts rather than pathways to economic self-sufficiency, people on welfare tend to stay on welfare. In order to effectively combat poverty and inequality, South Africa needs to secure jobs for its people.
In order to ensure that more of its citizens gain employment, South Africa first and foremost needs to encourage the development of employment opportunities both in the public and private sector. One obvious way to do this would be to increase government investment in infrastructure and industries that employ domestically, potentially through grants and tax breaks. Further, in order to encourage private investment in industry, South Africa should continue its recent trend of lowered interest rates. Though the decrease from the astronomical interest rates of 24% in 1998 to a much more moderate 5% in 2013 will surely begin to attract greater investment, greater decreases may be necessary.
Further, to ensure that impoverished South African citizens pursue newly available employment opportunities, the government needs to reform its welfare system and better incentivize work. The American Temporary Assistance for Needy Families program, which limits the amount of time that citizens may remain on welfare and requires evidence that the benefactors are pursuing employment, provides a viable model. In addition to employing these conditions, South Africa should expand investment in education and job training programs, requiring that those on welfare take part in these opportunities. This will serve cross-purposes, both encouraging citizens on welfare to be active and increasing the human capital capabilities of South African workers. Such a strategy would increase the productivity of African workers, benefiting economic output and potentially ensuring reasonable wage rates. However, if low wage rates persist, the government may consider raising its minimum wage standards, but must be careful to balance wages with the threat of unemployment.
This broad economic expansion is not only favorable, but possible. Currently, South Africa’s debt represents 39.9% of its GDP, a low number compared to other developing countries, such as India at 50%, and especially compared to fully industrialized nations such as Japan at 230%. Granted, South Africa certainly does not have unlimited room to spend, but as it does expand, it will also significantly benefit its economy, increasing GDP. Further, by making its welfare system more efficient, the government will be able to use some funds previously devoted to supporting those unwilling to work to better uses. By allocating funds more efficiently, the South African government may not need to increase spending by preposterous levels.
The time for band-aid fixes in welfare reform is over. In order to truly mitigate poverty and inequality, South Africa needs to start putting its citizens to work. This task will certainly be difficult and will require short-term governmental sacrifices. Nevertheless, if we are in doubt, Nelson Mandela’s words provide an apt reminder to stay the course: “It always seems impossible until it is done.”
 “Rich Must Feed the Poor,” CNN, http://www.cnn.com/2005/WORLD/europe/02/03/mandela.london/.
 “Poverty and Inequality at a Glance,” Transformation Audit, http://transformationaudit.org/blog/wp-content/uploads/2013/02/Poverty%20and%20Inequality%20at%20a%20Glance.pdf.
 “Country Comparison- Distribution of Family Income- GINI Index,” CIA, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html.
 “Poverty and Inequality at a Glance.”
 “Welfare for Wealth,” NY Times, http://latitude.blogs.nytimes.com/2012/02/29/changing-south-africas-welfare-programs-can-help-economy/?_r=0.
 “Welfare for Wealth.”
 “Trading Economics,” South Africa Interest Rate, http://www.tradingeconomics.com/south-africa/interest-rate.