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South Africans often hear that the country’s most pressing issues are threefold: unemployment, poverty, and inequality.

However, these are different problems with different solutions.

Inequality is not actually a problem, the primary problem facing South Africa is that of low economic growth, which in turn leads to problems of poverty and unemployment.

India and China have both seen inequality rise significantly in the past four or so decades, but this has been against a significant drop in poverty.

The table below shows how poverty declined in India and China since the early 1980s while inequality has increased, fairly significantly, but also showing how South Africa stagnated.

Extreme poverty (defined as people who survive on $3 a day) now effectively no longer exist in China, while in India very few people live in extreme poverty. However, at the same time as this decline in poverty, the share of income held by the top 1% and top 10% has grown, while that held by the bottom 50% has declined.

By contrast, since the end of apartheid in South Africa, extreme poverty declined somewhat, but nowhere near the levels of India and China, falling from 45% in 1993 to 17% in 2022, while inequality remained flat. However, South Africa’s decline in poverty was not because of growth in incomes and employment, but primarily because of the increase in grants.

In addition, average incomes in China and India have both risen significantly while South Africa’s has remained stagnant.

China and India did not lift hundreds of millions of people out of poverty by first reducing inequality. They did so through decades of rapid growth, industrialisation, investment, and job creation. Inequality increased during this process, but ordinary citizens became substantially better off.

South Africa has experienced the opposite trend. Growth has slowed, investment has weakened, and unemployment has risen. The country has attempted to redistribute a limited pool of wealth while failing to sufficiently expand an economy that creates new opportunities.

A society without poverty is not built by limiting success. It is built by ensuring more people can participate in a growing economy. South Africa’s central challenge is therefore not that some people have become too wealthy, but that too few people have found employment.