Botswana, which has been touted as an “economic miracle”, is, according to latest figures from the World Bank, the third most unequal country in the world with a Gini index of 60.5. “Almost one out of every two Africans survives on $1.25 a day or less, and the continent hosts six out of 10 of the world’s most unequal countries,” the Bank says. The Gini index, which measures income or wealth inequality, was developed byItalian statistician Corrado Gini in 1912. A Gini index of 0 represents perfect equality while an index of 100 implies perfect inequality.
The World Bank report shows that now, as in the recent past, Southern Africa remains the global epicentre of income inequality and Botswana is maintaining a solidly negative score. The 10 most unequal countries in the world are: South Africa (65), Namibia (61.3), Botswana (60.5), Zambia (57.5), Honduras (57.4), Central African Republic (56.3), Lesotho (54.2), Colombia (53.2), Brazil (52.7) and Guatemala (52.4). In Botswana’s case, the richest 20 percent of the population own a 65 percent share of national income while the poorest 20 percent own a 2.8 percent share of income. Having enjoyed Africa’s longest and one of the world’s longest booms in the 1980s, Botswana has been touted as an economic miracle. However, there is no miracle when one considers that the link between GDP growth and quality of life is at best, a tenuous one. Some leading economists contend that GDP is a poor indicator of socio-economic well-being because economic growth (which GDP measures) and prosperity are two very different things.
First used during the Second World War, the GDP matrix was used by countries that needed to know what their economies were capable of producing so they knew how much financial effort they could put into the war. Over decades, GDP came to be identified with economic progress which is something that its originators never intended. Botswana and Japan would be one the most suitable examples to illustrate the latter point. Botswana has experienced exponential economic growth in the last several years but has the third highest rate of income inequality in the world. In what has become known as the Lost Decade, Japan’s GDP stagnated in the 1990s and remained sluggish even after those 10 years, largely because of the global slowdown in 2000.
That notwithstanding, the country scores better thanindustrialised peers like the United States and Canada in health and education. The African Development Bank has pointed out that the laudable and impressive growth witnessed recently in Africa has not been matched with a significant reduction in unemployment and poverty. “In view of the high inequality, Africa’s impressive economic growth results in limited progress in poverty reduction. Thus, between 2000 and 2008, the proportion of people living on less than USD 1.25 a day declined slightly from 57 percent to 48 percent, in spite of the rapid economic growth in most African countries during the period. This slow pace of poverty reduction makes reduction of extreme poverty to meet the MDG target of 29 percent by 2015 doubtful,” the bank says in its “Inclusive Growth: An Imperative for Agriculture Report” report. Like the International Monetary Fund, AfDB has expressed grave concern that while Botswana has made remarkable progress in social and human development, the country’s level of poverty remains egregiously high for an upper-middle-income country.