Wealth Doesn't Trickle Down : The Case for a Developmental State in South Africa

No matter how strongly the IMF and World Bank advise that a country's salvation lies in economic growth, experience in developing countries is that wealth does not trickle down.

When growth comes from the developed sector of the economy, it benefits the rich and simply does not reach the poor majority.

Conditions in South Africa show the same outcome. Fourteen years after the ANC came to power; the South African unemployment rate of 24 percent is more than twice that of the next country on the list compiled by the Economist.

Poverty is so prevalent that welfare grants are a desperate remedy in this "budget surplus" economy.

No One denies that inequality is rising. All of this flies in the face of the Freedom Charter's declaration that sharing would be the guiding principle for a democratic South Africa.

This title is the result of a high level seminar convened to draw together the threads of a vigorous national debate on the role of the State in socio-economic development.

Hosted by the Minister of Provincial and Local Government, it was attended by top leaders and officials of the State, Parastatal Development Organizations and Academic Institutions. Although the prominence of the "developmental state" idea at the ANC policy and national conferences of 2007 has been met with concern in business circles as a "victory of the left", the papers here make a case that rests fat more.