Unit 1 Portfolio Task

Part 1- South
Africa-Comparative Levels of Inequality

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South Africa is the largest and most efficient economy in
Africa, “with the government’s commitment to market economy making it a
business hub for foreign investment”. Large mineral reserves and incredibly
advanced manufacturing facilities have led to increased economic growth.
However, “history has shown that the economy was built on systematically
enforced racial division in every area of the country, leaving deep scars of inequality
and economic inefficiency”, as told by (Visagie, 1997).


While the core text points out that South Africa “is amongst
the wealthiest developing countries”, but like any developing country, poverty
is a problem seen far too often, proven by the Human Development Index falling
from 0.73 in 1995 to 0.67 in 2003 (UNDP,2004). There is an ever-increasing
number of people who do not have access to basic healthcare and education, as
can be seen with upwards of two million people dying from AIDS (PlusNews,
2006). The mortality rate of AIDS victims who cannot access medical attention
is 100%, leading to a crisis with regards to the number of orphans in the
country, approximately two million of them in 2010, (Department of Social
Development, 2005)


Since the end of apartheid, the government allocated increased
budget spending on education reform. It introduced education to black citizens
leading to a dramatic increase in the black population completing higher level
education. Investment in education is still necessary, as the core text
outlines, as people who come from underprivileged neighbourhoods are being held
back, with 27% of 6th grade students being illiterate, yet only 4%
of people from wealthier backgrounds are illiterate, according to (Spaull,
2013). He bases this research on the income inequality still faced by people and
the segregation implemented during apartheid, as an area that still needs to be

Income Inequality

There have been attempts in recent years to evenly distribute
public finances and allow for widespread income equality. Sadly, there is still
an unequal distribution of wealth, with the expanding informal sector allowing
the rich to stay rich and the poor to stay poor. As stated in the core text,
there is a parallel 1st and 3rd world economy within a
single nation, which, unless merges together, will allow for unemployment rates
and income inequality to rise. Black people are still largely discriminated
against, accounting for 90% of the country’s poor population (United Nations,
2004). (Barbarinde, 2009) goes on to state that the level of income equality is
“particularly acute and based mainly upon racial stratification”.


Nearly quarter of a century on from the abolition of
apartheid, in the third quarter of 2017, unemployment was reported to be at
27.7%. Black South Africans are still discriminated against, as they account
for 85% of the unskilled workforce and 40% of those unemployed in 2014,
(StasSA). While unemployment in low-skilled manufacturing may have increased
due to a number of manufacturing companies relocating to developing countries
that offer higher incentives for business, as found by (Seria and Cohen,2009),
increasing foreign investment and economic growth suggest that, unemployment
should not be this high.