Case Studies

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Mali Cotton/ USA Cotton Subsidies

Mali

Low price of cotton - would be 26% higher with no US subsidies

Loses $150 a year due to cost of fertilisers - potential to build school and health centre gone (cycle of poverty)

Before US subsidies, they were on a living wage, not anymore

30% of population work in cotton industry (first production)

3 million cotton growers struggling to survive

USA

25,000 farmers subsidised

$4 billion in subsidies - more than the crops they grow and therefore they can sell their cotton very cheaply

Over-production is encouraged

Getting higher profit and getting richer

Result = widened development gap - goes against MDGs/ SDGs

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Apartheid

Meaning: means 'segregation', a political and legal system used in South Africa to separate different ethnic groups there between 1948 and 1994.

Background: British and Dutch Afrikaners took over native lands in South Africa and created separate reserves for the indigenous peoples. The Afrikaners believed they were racially superior to the indigenous African's, and that racial purity was essential. A few British supported this view including the Cape Colony PM, Cecil Rhodes. British and Dutch worked together to extract South Africa's mineral wealth.

Key Dates:

1948 - Policy of Apartheid adopted

1950 - Population classified by race

1994 - Mandela becomes president, remaining sanctions lifted

Disparities

Before 1994, South Africa's white dominated economy was heavily state-run and subsidised. To attract overseas investment for the expansion of mining, the new African National Congress government cut government spending by privatising state assets and reducing the size of the civil service. Most economic growth has been in capital-intensive rather than labour-intensive sectors. This is a particular problem because a high proportion of the South African labour force is unskilled. Companies have also had to cut back on their labour costs in order to remain competitive in global markets.

Inequalities made worse

Privatising state assets and cuts in the civil service has given the wealthy white more opportunities to become richer.

The poor (majority black) are getting poorer because, during the economic transition, millions of jobs were lost and unemployment doubled to 30%, which has affected the black population far more than the white.

50% of South Africa's population is under 18, and the economy can't absorb hundreds of thousands of school leavers every year. Unemployment is especially high in young men.

Exposure to the global market has affected food prices, which were previously subsidised. Annual inflation has varied between 14 and 20% since 2000. This has shown its greatest effects on the poor.

There are widening differences within ethnic groups. A small black middle class has emerged, while poorer whites have lost state benefits.

Cuts in health spending have worsened the impacts of HIV/ AIDs, which affects 5.3 million South Africans (out of 43.8)

3 ways in which inequality is still seen in South Africa

Greater regional inequality between the richest and the poorest regions. Those areas benefitting from global growth - such as the gold fields around Johannesburg, or producers of wine and cash crops for export from the Western cape (poverty rates lower than 7%) - have done well. Other areas with a traditional subsistence economy remain poor with few/ no job opportunities - rely on wages sent in from family in cities.

Ethnic inequalities still arise because of skin colour. Black % with no schooling is 22.3% and whites is at 1.4%. 39.3% of black people use electricity for cooking, 96.6% of whites. 28.1% of blacks aged 15-65 are unemployed compared to 4.1% of whites. White incomes are still much higher than those of black incomes. Poverty has also increased for some whites. Data from 2001 census.

Crime and personal safety - number of murders