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FUZILE JWARA | GDP INDICATES THAT POVERTY, INEQUALITY HAVE REPRODUCED

Fuzile Jwara | 3 May 2023

Child support and old age grants account for 70% of government’s spending on social grants which is due to reach R284bn by 2026.


In SA, there has been a pervasive perspective that economic development can best be measured by Gross Domestic Product (GDP). However, this analysis is not only inaccurate, but is also misrepresentative of socioeconomic realities.


The point that is often overlooked is that GDP only measures production and consumption of goods in a particular country. As such, GDP alone cannot reflect the socioeconomic disparities in SA. Better analysis of welfare should be conscious of capital accumulation, e.g, as offered by German activist Rosa Luxemburg in 1913, and redefined by Marxist geographer David Harvey as “Accumulation by Dispossession”.


These theories explain how the SA economy can be considered an historically oppressive settler-colonial economy based on the exploitation of indigenous people and mineral resources for the benefit of colonial and neocolonial capital.


The SA economy historically relied on cheap black labour through the migrant labour system, whereby labourers travelled from various parts of Southern Africa to work in the mines.


The class dynamics were simple: indigenous people experienced economic exclusion from owning the means of production.


An historical class analysis of SA enables us to understand the very foundations of the economy as we know it today. There has been minimal transformation of the colonial economy and its labour processes.


SA’s economic arrangement illustrates the absolute peak of racial capitalism. Simply put, SA labour relations are comparable to a cargo ship crossing the Atlantic Ocean with a rusty, leaky engine and the captain of the ship blames the chef.


In post-apartheid SA, old colonial structures remain entrenched in economic activity, and in the disparities between those who control the means of productions and labourers.


One thing endures in contemporary SA – the exploitation of workers and extraction of mineral wealth. In this regard, how does one apply the GDP as a reliable measurement of SA when our labour force consistently ranks among the most militant in the world?


Better yet, how does a GDP per capita of $7,055 (about R129,691) in 2021 (37th highest in the world) reflect well in what is now deemed the most unequal country in the world, with my home city Johannesburg being the most unequal city in the world, according to Euromonitor.


The top 1% owns 50% of the country’s wealth. This elucidates racial overtones of capital accumulation in SA bears.


It is no surprise that SA ranks as only the 91st happiest country out of 149 countries, which indicates that the general population is gatvol with the state of the country.


I understand that there will be an argument of SA having too much red tape when it comes to labour relations. However, we rank 4th only behind Britain, US and Canada in “labour flexibility”, according to the OECD.


Importantly, this can be linked to the neoliberal policies adopted by the ANC government since 1994. Capital strike and much lower corporate taxes have decayed the state’s ability to provide the basic necessities for the people.


In a world where neoliberal policies reinforce the reproduction of inequality and poverty, how do we rationalise the historical disenfranchisement of indigenous people with the idea of capital-driven solutions, which are tokenistic at best as leading political philosopher Nancy Fraser theorises in her new book on “cannibal capitalism?"


Subsequently, neoliberal tools such as GDP also illustrate that the idea of capitalists acting in good faith is farcical, particularly in a country where the private sector consistently ranks among the three most corrupt in the world, according to biannual PwC “Economic Crime and Fraud” surveys.


Going forward, neoliberalism ought to follow the same fate as the National Party, a painful death reflective of the millions who died in the capital cannibalisation of social reproduction, the environment and the state. GDP cannot nourish people.


The state should be measured on its ability to care for its most vulnerable. A battle the government is currently not winning. A case of the blind leading the blind.


• Jwara is an MA in sociology candidate at the University of Johannesburg


‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.



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