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Boosting South Africa’s Diversity Dividend

CAPE TOWN – After an insight-filled and enjoyable visit to South Africa – my first to this beautiful country in 15 years – I am leaving with mixed feelings. The country’s ongoing process of economic and political development has left those living here, as well as concerned observers like me, both hopeful and worried about the future.

A quarter-century ago, South Africa embarked on its extraordinary transition away from nearly 50 years of stifling apartheid, by following Nelson Mandela’s principled vision to “forgive but never forget.” When its black majority was finally given a say in governance, it elected an African National Congress (ANC) government that, by refraining from confiscating and nationalizing private property held by the privileged minority, distinguished the country from many others, in Africa and elsewhere, that have emerged from repressive colonial rule.

Instead, the Mandela-led government recognized the country’s diversity as a potential source of long-term unity and wellbeing, and decided to pursue a remarkably inclusive approach. This model has inspired many others outside of South Africa, not least in countries still ruled by authoritarian regimes that use fear tactics to maintain their grip on power. Mandela’s approach showed that orderly and inclusive transitions are possible, and that previously suppressed and imprisoned freedom advocates can transform themselves to form a legitimate and effective government.

But the outcomes of South Africa’s transition are far from perfect. Today, growth is insufficiently inclusive and far too slow, with the annual GDP growth barely positive last year. The country’s Gini coefficient is one of the worst in the world, reflecting stark levels of income inequality; its rate of unemployment, at 26.5%, is alarmingly high and hits young people the hardest; and too many people are stuck in disastrous poverty cycles.