Economic Inequality Is a Major Obstacle to Growth in South Africa- New York Times

http://www.nytimes.com/roomfordebate/2013/07/28/the-future-of-south-africa/economic-inequality-is-a-major-obstacle-to-growth-in-south-africa

It has been roughly 20 years since South Africa declared themselves a democratic nation. The process to becoming a self sustaining democracy and the all-around growing process of the country itself is posing to be a bigger task than South Africa predicted. With the Gini Coefficient measuring 0.69, the country's income inequality is actually one of the worst in the world.

South Africa's poverty line is currently at $43 per month. About 47% of South Africans are considered poor. That's an overwhelming percentage. Another shocking statistic hindering South Africa is that their unemployment rate is a whopping 25.4%. Because of these statistics, the country is forced to give out a colossal amount of welfare checks. The amount of welfare given out is so high, in fact, that it makes up for 3% of South Africa's Gross Domestic Product.

From an economic standpoint, it seems that South Africa has a bit to work on. The fact that 3% of their GDP is solely welfare checks is very concerning. When you look at the opportunity costs of these welfare checks, we see that the 3% of GDP taken up could be used for many other things. With the unemployment rate so high and the country battling mass poverty, we have a perfect example of how inequality is worse in other countries than it is here in the United States.