South Africa - Poverty and wealth

Due to South Africa's history of apartheid, a period when blacks were oppressed both politically and economically, the country's poverty and wealth profile is highly skewed to favor the white population. According to a study conducted in 1995, whites in South Africa, with per capita income of US$32,076, made 11.8 times more per capita than blacks (who had a per capita income of US$2,717), 5.1 times more than people of mixed-race (with an income of US$6,278), and 2.5 times more than Asians (with an income of US$12,963). In fact, South Africa has one of the most unequal distributions of wealth and income in the world. Recent research indicates that 40 percent of the households with the lowest income in South Africa earn less than 6 percent of total income, while the 10 percent with the highest income earn more

than half the total income. The average income of the top-earning 20 percent of the households is 45 times that of the bottom earning 20 percent.

The general population has high expectations of improvement in their quality of life, particularly concerning housing, education, healthcare, jobs and income. These expectations are the result of election promises by the ANC alliance, formalized in the so-called Reconstruction and Development Program (RDP). The RDP came into being as an ANC election document in the run-up to the 1994 election, and reflected the party's then dominant commitment to state intervention in the economy. According to the U.S. Department of State's Background Notes: South Africa, "The RDP was designed to create programs to improve the standard of living for the majority of the population by providing housing—a planned 1 million new homes in 5 years—basic services, education, and health care."

In 1996, as the government shifted to embrace free-market economic practices, it announced new plans to deal with poverty under a market-driven plan called Growth, Employment and Redistribution: A Macroeconomic Strategy. This plan took the a more market-based approach to economic improvement, using fiscal and trade policy to create jobs and lending less direct government aid to the impoverished.