“ the economic system has been changed over the past 30 years from one of colonial and racial capitalism to a neo-liberal , first world, capitalist enclave that is disengaging itself from a large part of the black labour force . Although the black elite – both the bourgeoisie and petit bourgeoisie – has been adopted as a junior partner, the new system has retained a racial character; it is still a white-controlled enclave in a sea of black poverty”. (Terreblanche 2003: 422)
This transition has, as Terreblanche observes, coincided with the introduction of a system of representative democracy but has not been fundamentally altered by it. In a similar vein, Seekings and Nattrass (2005: 1) use the concept of a ‘distributional regime’ to analyse economic policy both during and after apartheid.
Despite elements of redistribution and social protection since 1994, such as welfare grants and collective bargaining agreements, they argue that the economic system that was created under apartheid continues to redistribute wealth from poor to rich remains largely intact, thereby perpetuating extreme inequality and poverty. Under democratic government, these policies have largely continued, albeit accompanied by de-racialisation of the upper and middle strata and major increases in spending on social services and infrastructure.
Continuity is most evident in the persistently high level of unemployment (arguably more than one-third of the labour force) and extremely low wages at the bottom of the ladder. This combination of high unemployment – at rates higher than those experienced under apartheid – and low wages have served to increase economic inequality in the democratic era, particularly within the black population, as well as increasing the rate of absolute poverty (Seekings and Nattrass 2005: 340).
sources: 1.Terreblanche, S. 2003. A History of Inequality in South Africa 1652-2002. Scottsville: University of Natal Press.2.Seekings, J. and Nattrass, N. 2005. Class, Race, And Inequality In South Africa. Yale University Press.3.http://r4d.dfid.gov.uk/PDF/Outputs/ESRC_DFID/60332_Lahiff_Redistributive.pdf.