How Nations Resurge: Overcoming Historical Inequality in South Africa

Abstract

South Africa is known for its light and shadow: Nelson Mandela’s moral leadership in constructing a “rainbow nation” on the one hand, and horrifying inequality as a legacy of apartheid on the other. South Africa’s post-apartheid economy is not only unequal but also stagnant. This chapter contends that, in order for South Africa to pull out of the “middle-income trap,” it is critical not only to make the workforce more productive and innovative but also to create decent jobs for the chronically unemployed in both cities and the countryside, thereby reinforcing national cohesion. After tracing the historical origin of inequality and describing the recent rise of the “black middle class” in South Africa, this chapter reviews a series of development policies of the post-apartheid government, indicating that the lack of resoluteness hinders implementation of policies that would make the South African economy more inclusive and dynamic. In conclusion, this chapter argues that short-term policies to upgrade technological capacity should be combined with long-term policy efforts that give voice to the poor and address the root causes of inequality.