South Africa must not fall for Trump-style capitalism, Finance Minister Pravin Gordhan said on Wednesday.
Referring to leading Republican presidential candidate Donald Trump, Gordhan said business, labour and government must work together to create a growth economy that benefits all parts of society.
Trump is well-known for his controversial plans for the US. Last week President Obama hit out at Trump’s “crazy” economic policy proposals, lashing out at his promises to tear down financial regulations.
“How it is that somebody could propose that we weaken regulations on Wall Street. Have we really forgotten what just happened eight years ago? It hasn’t been that long ago,” CBS News quoted Obama as saying.
Citing conversations he had at the Organisation of the Petroleum Exporting Countries (Opec) meeting in Paris last week, Gordhan said “the rich club is talking about similar concerns” that South Africa talks about regarding inequality.
“One of the issues people have is that productivity gains are not being broadly shared,” he told the Gauteng Provincial Economic Indaba in Johannesburg.
“Enterprises need to be productive, but the cream – depending on whether you’re on a Banting diet or not – is whisked away by a few at the top,” he said.
Gordhan referred to a story in the UK-based Guardian newspaper this week, which said “rising numbers of millionaires in the fast-growing economies of China and India helped to push global private wealth to £115trn (R2 496trn) in 2015”.
“The 5.2% increase in wealth among the world’s richest individuals was driven largely by the Asia-Pacific area, which is expected to overtake western Europe as the second wealthiest region behind North America next year,” the report revealed.
However, Gordhan said: “Most of the millionaires and billionaires are coming from the East, my dear apologies to Gauteng.”
He said that at the Opec meeting, one of the issues was that productive growth has slowed and inequality has grown.
“It is not only the leftists who are commenting on these injustices, it is now becoming a wider concern,” he said, explaining that rich countries are concerned about populist politics and socialist disruptions, which are increasing.
It is therefore becoming a global issue to create growth initiatives that benefit all parts of society, Gordhan said.