Monday, 20 August 2012

From white only to rich only – results of high Gini coefficient

From White only to Rich only same old distribution problem

Is high Gini coefficient led to the unfortunate deaths of miners in South Africa? Is high Gini coefficient only happened in global cities? Think about the recent South Africa worst shooting and killing of miners, can we learn a lesson from the crash between police and striking miners?   

Gini coefficient in South Africa is one of the highest in the world. And SA is a country with plenty of natural resources; she is not a global city.   So, Gini is a concern to us and it not only happens to global cities like New York, London or Hong Kong as suggested by Singapore ministers.

Gini is an indicator of wealth distribution.  High Gini means unequal distribution of wealth towards a small group of people. Even rich in natural resources, SA has a very high Gini.

“The other social problem is inequality. South Africa has a very high Gini coefficient of 0.69, we seek to reduce that to 0.60 by 2030,” the minister said.“Our approach to tackling poverty and inequality is premised on faster and more inclusive economic growth,”

The above is stated in a report “National Development Plan 2030” by the South Africa’s National Planning Commission (NPC) last week, just few hours before the crash, to President Jacob Zuma for review.

Global city or not it is a distribution problem

High Gini coefficient is not only limited to global cities.  Our government wants to justify it as a concentration of people in a city rather than the fair distribution issue. Not to forget there are ‘occupy’ movements in major world cities that crying for fair distribution of wealth and high pay of executives.    

The explanations, by Singapore government, below is just an excuse to move the focus point to global city.  Even this is a global city problem; we still need to solve it.  Otherwise, the price of non-action is too high as happens in South Africa.    

Josephine Teo: Singapore's Gini coefficient is high because we are a global city

"We have a higher Gini coefficient in Singapore compared to most larger countries, because we are a global city. Hong Kong, London, the key American cities, and the leading Chinese and Indian cities in fact have somewhat higher inequality than Singapore. But we cannot resign ourselves to widening inequality. Unlike these other cities, we are a country. We have to try to contain inequality, and ameliorate its effects on our society."

Non-action of government and union

Blaming the high Gini coefficient due to global city in fact is a show of non-action of government and NTUC in Singapore. The low wage workers and families in Singapore have suffered from no increase in real income for more than 10 years. This directly affects and contributes to the high Gini in our little red dot.   

Similarly, the political development and the relationship between ruling party and union in South Africa, especially their non-action and protection of self-interest, have led to the high Gini and crashes between miners and police.   

This strike was sparked by a demand for better wages. And - armed with spears and machetes - strikers were in no mood for compromise.But it goes much deeper than that. The traditional union in the area, the NUM, is a key ally of the African National Congress. Their backing is critical for President Jacob Zuma in his fight to retain his position in the ANC's party elections this December.Miners accuse their leaders of abandoning their grassroots concerns, focussing instead on politics. So they turned to an alternative union to fight their corner. But - as so often happens in South Africa - this dispute turned violent. Two police had been killed earlier in the week.

End of Apartheid has not solved the distribution problem

From white only during the Apartheid time, the development in South Africa after Apartheid seems to suggest the country is going towards another ‘only’ – rich only due to the high Gini.    
From white only to rich only, it still goes back to the old question and problem – distribution of wealth in a country. In the past, the white took the major share of wealth and resources. Now, the rich replaces the white and commands and controls majority of wealth and resources.   

The Singapore government’s attitudes towards high Gini is an indication that they want to maintain the high Gini.  And due to our global city status as explained by ministers, we cannot do much just like many other leading world cities are not able to solve the Gini problem.

Is this a good excuse? Will the widening rich-poor gap in Singapore lead to more unhappy crashes (not necessary violent ones, can be a change of government) in Singapore?  Is there room for dialogue if the government is adopting this attitude and approach?

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