Wpływ bezpośrednich inwestycji zagranicznych na nierówności w Republice Południowej Afryki z uwzględnieniem struktury rasowej

Abstract

THE IMPACT OF FOREIGN DIRECT INVESTMENT ON INEQUALITY IN SOUTH AFRICA WITH A FOCUS ON RACIAL STRUCTURE

South Africa remains one of the most stratified countries in the world according to almost all available measures of inequality. This is despite the fact that the system of racial segregation known as apartheid, which economically and politically discriminated against the non-white population, collapsed three decades ago. Moreover, inequality persists, reinforcing South Africa’s economic structure and economically marginalizing the Black population. At the same time, South Africa’s economy has many assets, such as raw material deposits, a large market, and a solid industrial base, and is generally seen as an investment gateway to the African continent. Despite its deteriorating economic outlook, it has been receiving the most foreign direct investment (FDI) of any African country for years. After the political transition, FDI was viewed as the engine of development and the key to solving South Africa’s problems, including extreme inequality and unemployment. It is therefore reasonable to reflect on the impact of FDI on inequality in South Africa. The FDI-inequality nexus has been addressed by relatively few studies, and to the best of the authors’ knowledge, no studies specifically dedicated to South Africa exist. Furthermore, the results of studies using widely varying methodologies are inconclusive, which is not surprising given the high complexity of the relationship between FDI inflows and inequality. This article examines the relationship between FDI inflows and inequality in South Africa. It reviews the relevant literature to conceptualize the research, identify the mechanisms of FDI’s impact on inequality, and map the key variables determining this causal relationship.