Inequality still a challenge for SA - Motlanthe

Wednesday, January 29, 2014

Pretoria - While government has made considerable strides since the dawn of democracy, much more still remains to be done to reduce inequality in the country, says Deputy President Kgalema Motlanthe.

Speaking at the Mail & Guardian 20 Years of Economic Transformation Summit in Sandton, Motlanthe said while poverty had declined, inequality had not, as data shows that the richest 10% of households still get over half of the country’s national income.

“We should not underestimate the impact of inequality on our society. Social stratification, which cuts across the colour line today, sharpens the sense of economic injustice among some sections of the South African population.”

Motlanthe said this shortfall should be taken into account with the unique institutions, the pattern of investment and infrastructure, workplace relations, and the structures of education, skills and ownership set up through centuries of colonial and apartheid rule.

These, he said, restricted and impoverished certain groups, leaving them without assets or land, adequate qualifications or entrepreneurial experience.

In trying to address both challenges of poverty and equality, government had much success in overhauling apartheid-inherited labour laws and creating greater equality in the work place, while seeking to bring about economic transformation and increasing productivity.

These included redirecting government investment into social services and infrastructure towards historically disadvantaged communities, introduction of labour rights and a new skills system, programmes to broaden economic power by supporting emerging enterprise, industrial and trade policy measures to diversify the economy.

Among those policies, Motlanthe said, was the Broad-Based Black Economic Empowerment (B-BBEE), which he admitted had its own challenges, such as fronting, speculation and abuse of the tender system.

“BBBEE regulations also fail to adequately incentivise job creation and support for small enterprises and local procurement.”

He said the revision of the code and the passing of the B-BBEE Amendment Act were intended to deal with this.

With regards to the labour market, which the Deputy President said was characterised by deep segmentation and oppressive workplace relations, government had made notable strides since 1994.

“Labour laws were deracialised and extended equally to all workers. The Labour Relations Act of 1995 (LRA) introduced organisational rights for workers, set a framework for bargaining structures and provided for alternative dispute settlement mechanisms.”

To work its way out of the current challenges, the country would need to invest in innovation and people.

“Innovation is the impulse that propels modernisation and consistently empowers societies that are largely successful today. Therefore going forward, we need to invest in local capacity that enables us to research new ways of value addition to our mineral resources.”

Among areas that innovation can prove of great value to us are: agro processing; the maritime industry; green economy; and hydrogen fuel cells or clean energy, all of which he said  could create decent jobs, grow the economy and energise ongoing process of reconstruction and development of our country. – SAnews.gov.za 

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