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THE PROBLEM WITH INEQUALITY IN ANGOLA

The gap between the incomes of rich and poor Angolans is the second biggest in the world. That is, Angola is the second most unequal country in the world, surpassed in 2011 only by Haiti. This is a huge problem for Angola, and this article explains why. In 2009, the British epidemiologists Kate Pickett and Richard Wilkinson decided to study a range of social ills from a medical perspective.2 They looked at more than 20 countries, and discovered a striking set of correlations between inequality and a wide range of medical and social problems. Whenever income inequality became greater in a particular country, a whole range of problems worsened. These problems included social problems such as increased crime, violence and imprisonment, reduced environmental concern, lower educational achievement and reduced social trust. The medical problems included obesity and mental illness, more teenage pregnancies, drug and alcohol addiction and shorter lifespans. According to the UNICEF last report:

Equality)is)o,en)more)important)than)income)for) development
A very important point that Wilkinson and Pickett make is that its not the amount of wealth a country has that determines its overall development, but how that wealth is distributed. Countries with quite different levels of average income can have similar levels of overall development. If Wilkinson and Pickett are correct, Spain and Norway have similar levels of health and social problems, because they both have similar levels of inequality. But Norway has almost twice the average income of Spain. This suggests that high levels of development in a country are often determined by equality more than they are determined by wealth.

Malnutrition is an underlying cause in most child deaths, with 29.2 per cent of children stunted and 15.6 per cent underweight. Exclusive breastfeeding remains low at 31.1 per cent. Just 60 per cent of the population has access to sanitation, and only 42 per cent to safe water. The national HIV prevalence is 1.9 per cent low in comparison with neighbouring countries but uneven across provinces. In some southern provinces bordering with Namibia, prevalence is as high as 4.4 per cent.

Child and maternal mortality rates are among the highest in the world, with almost one child in five not surviving to age five, while maternal mortality is 610 per 100,000 live births. Malaria, diarrhoea, respiratory infections and neonatal problems compounded by low birth weight are major killers

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The)problem)of)inequality
Pickett and Wilkinson reported their work in a landmark book called The Spirit Level. The book has become quite controversial. Progressives like to quote its conclusions, while conservatives argue with those conclusions. Pickett and Wilkinson, as serious scientists, now refuse to respond to any criticisms that are not published in recognised academic journals. After four years of criticism and response, it appears that most of their conclusions withstand serious scrutiny

The graph strongly suggests that countries with higher inequality have higher levels of health and social problems.

What)is)the)best)measure)of)a)countrys)success:)growth)or) equality?
In our time, it has become customary to associate economic growth with a countrys success. If a country is growing strongly economically, it is assumed that it is a thriving country. If its growth is slow or non-existent, it is considered a failure. But there are many problems with exaggerating the importance of GDP. One of these problems is that GDP conceals inequality. On the other hand, closely studying inequality can give a clearer picture of how evenly the benets of economic growth are distributed, which appears to be more important for development. Where there is high inequality in a country, the wealth of the rich grows much faster than the wealth of the poor. When there is high equality, rich and poor benet equally from economic growth.
Acording to the UNICEF last report:

Child and maternal mortality rates are among the highest in the world, with almost one child in five not surviving to age five, while maternal mortality is 610 per 100,000 live births. Malaria, diarrhoea, respiratory infections and neonatal problems compounded by low birth weight are major killers of children; and haemorrhage, infections, obstructed labour and hypertension are responsible for 80 per cent of deaths of women who die during pregnancy and immediately after birth. 1 million children are still outside the primary school system, and repetition and drop-out rates are high. Early childhood education covers less than 10 per cent of children. The quality of education remains a problem, and securing universal access to education is a huge challenge. For secondary education, the situation is even bleaker, with just 20 per cent coverage for children aged 12-17.

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If the wealthy in a society is even distributed, then there should be a correlation between levels of development and GDP per capita. Broadly speaking, the most developed country should have the highest GDP per capita (per person), the most undeveloped country should have the lowest GDP per capita. But Angola is ranked 104th in the world in terms of GDP per capita,2 yet only148 in human development terms. Lets assess the extent of inequality-linked problems in Angola. Inequality)in)Angola According to the compilers of the UN Human Development Index for 2011, the GINI coefcient, a measure of income inequality, for Angola is 58.6. Thats slightly worse than South Africa, widely regarded as one of the most unequal countries in the world. In fact, in 2011, the only country in the world that had higher levels of income inequality was Haiti. In 2007/8, the UN ranked Angolas development at 162 out of 177 countries. In the decade up to 2013, Angola managed to achieve double-digit growth gures. But this didnt stop it remaining one of the worlds least developed countries. The Berne Declaration, a Swiss-based NGO, attributes this problem to the inequitable distribution of oil revenue in what is regarded as one of the most corrupt countries on the planet.iii In Angola, the revenues from oil wealth appear to go mostly to politicians. These arrangements have been politely described by the Berne Declaration as confusing the distinction between public and private interests.

Many Angolas are forced to live in squalor, increasing vulnerability to disease - Creative Commons pic Elisa Finocchiaro.

Pervasive)medical)problems)in)Angola
According to the World Bank, the country has one of the worlds highest levels of childhood mortality, with 160 out of 1,000 children born dying before the age of ve.iv Thirty percent of children under ve are stunted, more than 8% are wasted, and 15.6% are underweight. Micronutrient deciencies are also pervasive: 30% of preschool children and more than half of pregnant women are anemic.

The African Development Bank has notediii immense inequality in access to health services: Angola has a huge challenge in the provision of medical services to the general population although it Its worth comparing what happens to oil revenues iscurrently rebuilding its health infrastructure. At present, only from Angola with what happens in the far some 30 percent of the population has access to government health northern US state of Alaska. There, part of the revenues from exploitating natural resources go facilities. As a result of these and other problems, life expectancy into a state fund. Each year, every Alaskan in 2009 was a little over 50,ii almost half what it is in highly equal, receives a substantial payout from that fund their developed countries like Japan and Iceland.
individual share of benets from the resources of the state.

According to the World Bank Angola update, 2013

Angola remains dependent on oil exports. While oil-export revenues have recently rebounded, the economy remains highly vulnerable to both global price volatility and domestic supply shocks. Meanwhile, the low rate of investment presents a serious concern over the longer-term. In this context, enhancing economic management can help transform Angolas natural wealth into productive capital and lay the foundation for economic diversification and non-oil competitiveness, which will ultimately be as vital to employment, income and poverty reduction as robust GDP growth.

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Leveling)the)playing)eld)for)business
One aspect of inequality in Angola is that some businesses are in a much stronger position than others. Because there are few if any restrictions on politicians also running businesses, they can easily take advantage of their access to information and their control over government bureaucracy to advance their own interests. The same advantages apply when business people seek nance. Again, politicians often have an unfair advantage. This corporate inequality worsens individual inequality because of monopolies, unfair competition, high prices. The knock-on result is the existence of black markets that threaten government revenues and services.

Many Angolas are forced to live in squalor, increasing vulnerability to disease - Creative Commons pic Elisa Finocchiaro.

Pervasive)social)problems)in)Angola)

Some inequality-linked problems in Angola Crime, violence & imprisonment Environment Education In 2007/8, Angola was ranked 148 in the world for personal security. Detailed crime stats are difcult to nd, but the Australian governments advice to travellers describes high levels of civil unrest and criminal violence. In adherence to international environmental treaties, Angola was ranked 162/177 in the world, in 2007/8. Ranked 162 in the world by the UN in 2007/8.

Life expectancy at birth Ranked 162. Whereas neighbouring Namibia spends over 7% of GDP on health services, Angola spends just 2.5% on health services. Social trust Difcult to establish. Mental illness Teen pregnancy Alcohol abuse There are no specic stats available for Angola, but the countrys violent recent history strongly suggest that rates of mental illness must be high. No statistics available. No statistics available.
According to the World Economic Forum Angola is the least uncopetitive country in the SADC region and one of the lest competitive in the world only in front of Sierra Lione, Burundi, Guin and Chad.

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SoluEons
The problem of inequality begins with an excessive concentration of power in the hands of vested interests. Resolving issues of inequality is extremely simple in principle, but difcult in practice, because it requires extremely powerful vested interests to surrender wealth and power. The basic solutions are easy higher taxes on the wealthy and corporations, and much higher spending on health, h o u s i n g, e d u c a t i o n a n d p u b l i c infrastructure. But there are other ways. Companies can reduce internal wage differentials noone should earn more than 15 or 20 times what the lowest-paid worker earns. In some US companies, chief executives earn hundreds of times more than their lowest-paid workers which is part of the reason why the US is a highly unequal country by Western standards, with much higher levels of health and social problems than most of its Western peers. Wo r k e r - o w n e d a n d c o o p e r a t i v e companies create much more social value than companies owned by small elites or shareholders. The Alaskan solution of distributing resource wealth is another solution.
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To deal with the problem of climate change, some recommend a system called cap-and-share, where the amount of fossil fuels that can be burned annually by a country is capped to stop climate change, and all citizens are issued with permits to use or sell as they prefer. High fuel consumers would need to buy emissions permits from the poor, a self-equalising system. Hopefully, everyone would win. How should elites be persuaded to surrender power? The fact is that in the long run, greater equality is good for everyone. In unequal societies, even the rich are affected by the problems of drug and alcohol addiction, and poor mental health, and are vulnerable to crime, violence and disease, despite their privilege. Unequal societies are also much more likely to experience political and social upheaval.

Conclusion
For Angola to reduce the suffering of its people and secure its prospects for development, a focus on equality is likely to be far more effective than a focus solely on economic growth.

See the website of the Equality Trust, www.equalitytrust.org.uk, for detail on the work of Richard Wilkinson and Kate Pickett.

World Development Indicators database, World Bank. Database updated on 16 April 2013. The Berne Declaration, Traguras business in Angola, Lausanne, 2013. iv Christine McDonald, Ziauddin Hyder, Humberto Albino Cossa, Angola Nutrition Gap Analysis, December 2011. Washington: The World Bank. Paper presented for analysis of the Angola nutrition gap analysis at the World Bank, Washington, United States, March 2012. v African Development Fund2011-2015 Country Strategy Paper& 2010 Country Portfolio Performance Review. vi UNICEF information by country for Angola, available at www.webcitation.org/6I0OZlHXy, accessed 9 July 2013.
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Authors: Bruno Miguel and David Le Page AOPI & IEA Contact: contac@aopi.org www.aopi.org

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