Gordhan: Globalisation widens income gap, policy must counter inequality
Former finance minister Pravin Gordhan said globalisation is one driver of higher inequality in countries such as South Africa.
He was speaking at the University of Johannesburg’s Convocation Leadership Seminar on Monday on Economy 4.0: The Global Revolution, Urbanisation and Digital Transformation and What it Means for the South African Economy.
Gordhan highlighted that, with an increase in the level of stratification, the issue of inequality must be at the forefront of policies. He added that new forms of social safety nets should be created to mitigate these social and economic divides.
It was through the effects of globalisation such as the divergence of incomes and the loss of jobs because of technological advances that contribute to greater inequality in South Africa and other similar countries.
“There’s a realisation that globalisation has actually resulted in winners and losers and that greater note needs to be taken of who are the winners and what percentage of the population do they constitute and who are the losers,” Gordhan said.
Gordhan also tackled issue of radical economic transformation, saying the term is often misrepresented, deceiving people into believing that its initiatives will help the majority whereas it will benefit a minority.
“Economic transformation must be for the benefit of all 55-million South Africans,” Gordhan said.
“The others would actually articulate it in a way in which it’s designed to mislead people that if we do these extremely so-called radical things they would benefit but ultimately the small elite would actually benefit.”
Gordhan said that, to address various inequalities in South Africa, the government must look at new ways of creating growth that not only favour certain individuals, but the entire population. And it must solve the problem of state capture by a minority of influencers.