Economic inequality has dominated international economic debate recently, and with good reason. Developmental charity
In America, the top 1 % of the population earns 95% of the total income. Even in the world's largest economy, this is a very topical issue, and could be the flashpoint of the next Presidential election. Sub-Saharan Africa sees nearly 50% of its population live on less than
Of course to be fair, this is a broad generalisation which may not hold true for all the continent`s rich. However evidence would seem to suggest that they have leveraged off their political connections to climb up the economic ladder. Nowhere else is this fact clearer than in
What is fundamentally wrong with an approach that allows a select few individuals to get rich first is that it breeds a sense of entitlement among wealthy elites that can be particularly hard to get rid of in the long run. Inevitably, corruption tends to become commonplace as the politically-connected elite seek to consolidate their hold on the economy.
Equitable growth, which sees a thriving middle class also enjoying a larger cut of the pie, is most desirable. This is the class that creates sustained demand for goods and services. Their financial well-being or lack thereof has a direct bearing on any economy. It would seem that this elementary fact is increasingly being overlooked today – with the scandalous revelations of CEOs of quasi government organisations like ZBC and PSMAS awarding themselves hefty salaries when workers have gone for months on end without pay,
As a result, economic activity at the lower end of the pyramid is stifled, as with no money, there is no spending power. Growth will never be sustainable as it is not at all inclusive. These "few big men" can never drive real economic growth.
A shift in the mind-set of policymakers and responsible authorities is critical to effect economic structural reforms that would ensure inclusive growth with less income inequalities. The current model of a few wealthy elites enriching themselves while the masses suffer under the vagaries of poverty will curtail growth in the long run.
Renowned political commentator Moeletsi Mbeki makes this point in his book Architects of Poverty, "If the African sub-continent is to develop, it needs a new type of democracy that will empower not only the political elites but also the region`s private sector producers - most of whom are peasants. The new democracy should be able to restore the growth of an independent and productive middle class too."
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