S. Africa’s problem? A ‘cappuccino economy - white cream over a large black mass, with some chocolate sprinkled on top’

Inequality is worse today than in 1994 at apartheid’s end, and poverty rates remain stubbornly high.

TOO many South Africans can’t find work, which has long been the case. Lately, however, too many South Africans are blaming their plight on immigrants instead of on their own government.

If South African President Jacob Zuma wants to stop the anti-immigrant riots that have resulted in at least seven deaths in the last month, he must do more than send in the army and call for tolerance and calm.

He and the African National Congress (ANC), which has ruled South Africa since 1994, must convince ordinary South Africans that their long-deferred expectations for a better life will be met.

South Africa’s economic growth has sputtered since 2011, and its unemployment rate—which has not been below 22% since 2000—now stands at nearly 25%, with no improvement in sight.

Inequality higher than ever

Notwithstanding wide-reaching government assistance programmes, inequality is worse than in 1994 at apartheid’s end, and poverty rates remain stubbornly high.

Against that backdrop, tensions over the presence of an estimated 1.7 million foreigners in the country have long simmered. The current round of violence erupted after Goodwill Zwelithini, South Africa’s Zulu king, reportedly called on immigrants to “take their bags and go back to where they came from.” Even as Zuma, a Zulu, condemned the attacks, he did not take the king to task; Zuma’s son, meanwhile, agreed with the king.

South Africans should realise that these foreigners are there in part because of their own government’s policies. The ANC’s collusion in Robert Mugabe’s misrule and repression in Zimbabwe, for instance, has led to more Zimbabweans—who make up the overwhelming majority of foreigners in South Africa—applying for asylum.

Moreover, South Africa’s failure to prepare its citizens for the workplace has created an opening that foreigners have filled. For all Zimbabwe’s problems, its educational system has long outperformed that of its neighbour—one reason Zimbabweans have historically found economic opportunity next door.

Sweetheart deals for homeboys

The larger problem is that the ANC has pursued policies designed more to keep it in power than to empower ordinary South Africans. Sweetheart deals with the private sector to increase black representation have benefited a select few, creating what one recent study called a “cappuccino economy … white cream over a large black mass, with some chocolate sprinkled on top.” State-owned industries have been a nexus of mismanagement and conflicts of interest. Labour unions within the ANC coalition have secured expensive minimum-wage increases that have hurt employment, as well as the passage of laws and regulations that have made South Africa’s economy one of the hardest in which to hire and fire workers.

The way forward

The way forward is for Zuma to expand the privatisation plans in energy and elsewhere that fiscal circumstances have forced his administration to announce, to hold the line against government workers demanding wage increases of more than double the rate of inflation, and to pursue innovative policies that get more young South Africans working.

The biggest, most important challenge for Zuma is fixing South Africa’s educational system, which isn’t teaching the skills needed for the labor market and still suffers from the legacy of apartheid.

One recent survey ranked its primary education system 133rd among 144 nations.

Making such reforms will require South Africa’s leaders to put the interests of their country ahead of the interests of their party. If they fail to do so, South Africa’s citizens should focus their anger not on the immigrants in their midst, but at the politicians mismanaging their economy.

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