{
  "title": "South Africa: Bridging the Income Divide",
  "publication": "IMF Blog, February 7, 2020",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2020/02/07/south-africa-bridging-the-income-divide",
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  "summary": "The top 20 percent of the population holds over 68 percent of income.",
  "sections": [
    {
      "heading": "Extent and nature of inequality",
      "content": "- The top 20 percent of the population holds over 68 percent of income.\n- The poorest 40 percent possess only 7 percent of income.\n- Inequality manifests in unequal access to opportunities—education, health, and jobs—and regional disparities.\n- South Africa’s Gini—an index that measures inequality—has increased further in the early 2000s and has remained high ever since.\n- Its peers have made inroads in reducing inequality."
    },
    {
      "heading": "Drivers of persistent inequality",
      "content": "- High unemployment has perpetuated inequality.\n- South Africa's unemployment rate is significantly higher than other emerging markets.\n- Nearly 60 percent of the country’s youth (aged 15-24) are unemployed.\n- The policy of apartheid left already elevated inequality at the start of the 1990s by excluding a large swath of the population from economic opportunities.\n- Low growth has contributed to the persistence of unequal outcomes."
    },
    {
      "heading": "Government responses to inequality",
      "content": "- Progressive fiscal redistribution has been used as a tool to tackle inequality.\n- Efforts have focused on:\n  - Higher social spending.\n  - Targeted government transfers.\n  - Affirmative action to diversify wealth ownership.\n  - Promoting entrepreneurship among the previously marginalized.\n- Rising debt is reducing the scope to further use fiscal policy for redistribution."
    },
    {
      "heading": "Policy recommendations and way forward",
      "content": "- Existing measures will need to be complemented by reforms that:\n  - Promote private investment.\n  - Create jobs.\n  - Foster inclusive growth.\n- These reforms are presented as necessary for South Africa to bridge its great income divide.\n\nThe Editors, February 7, 2020.\n\n---\n\n\n References\n\n- https://www.imf.org/wp-content/uploads/2020/02/South-Africa-Chart-of-the-Week-FINAL2.docx.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2020/02/07/south-africa-bridging-the-income-divide"
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    "Authors: The Editors",
    "Published: February 7, 2020",
    "The top 20 percent of the population holds over 68 percent of income.",
    "The poorest 40 percent possess only 7 percent of income.",
    "Inequality manifests in unequal access to opportunities—education, health, and jobs—and regional disparities.",
    "South Africa’s Gini—an index that measures inequality—has increased further in the early 2000s and has remained high ever since.",
    "Its peers have made inroads in reducing inequality.",
    "High unemployment has perpetuated inequality.",
    "South Africa's unemployment rate is significantly higher than other emerging markets.",
    "Nearly 60 percent of the country’s youth (aged 15-24) are unemployed.",
    "The policy of apartheid left already elevated inequality at the start of the 1990s by excluding a large swath of the population from economic opportunities.",
    "Low growth has contributed to the persistence of unequal outcomes.",
    "Progressive fiscal redistribution has been used as a tool to tackle inequality.",
    "Efforts have focused on:",
    "Rising debt is reducing the scope to further use fiscal policy for redistribution.",
    "Existing measures will need to be complemented by reforms that:",
    "These reforms are presented as necessary for South Africa to bridge its great income divide.",
    "[https://www.imf.org/wp-content/uploads/2020/02/South-Africa-Chart-of-the-Week-FINAL2.docx.jpg](https://www.imf.org/wp-content/uploads/2020/02/South-Africa-Chart-of-the-Week-FINAL2.docx.jpg)"
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