- Note - The original title of this article was "Two
economies persist in one country". The idea of "two nations"
in one, is a favourite theme of our beloved President who is never at a
loss for finding an excuse to foist more socialism upon us. When you read
the article below - just note the twisted thinking in it. For example,
you will see how the poor have become ever poorer AFTER 1994... but, in
the twisted logic so common in South Africa these days, they manage, through
an incredible leap of illogic to blame this on... wait for it... APARTHEID!!!
Apartheid died a long time ago, but they like blaming even the obvious
failures of their policies on Apartheid!! Take further note that their
"narrow" definition of unemployment is criticised by researchers
below. The reality is that true unemployment among the South African population
is 10-15% higher than the government's "narrow definition". The
Norwegians did a study of unemployment in SA a while back and concluded
real unemployment was at 45%. If you look carefully at the statistics presented
in the article below you will see that in the first 5 years of black rule,
about 2 million BLACK PEOPLE lost their jobs... I still say, as I have
long said, that in the future common black people (not the elite) will
look back on Apartheid as the time when MATERIALLY they were better off
- incredible as that may seem. -Jan
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- JOHANNESBURG -- South Africa
has made significant gains since the advent of democracy in April 1994.
However, the country still faces serious problems. The most significant
one -- apart from the impact of HIV/Aids -- is the lack of economic and
social rights for a large sector of the population.
-
- Research undertaken by a project team in the office of
President Thabo Mbeki, assisted by the Department of Social Development,
has attempted to capture the essence of the problem.
-
- Their report, titled Towards A Ten Year Review, seeks
to quantify the performance of the state in its constitutional obligations
to its citizens, and its progress in redressing apartheids injustices.
-
- While the government's performance in provision of health,
education and other basic services has been commendable, the report notes
that "two economies persist in one country".
-
- "The first is an advanced, sophisticated economy,
based on skilled labour, which is becoming more globally competitive. The
second is a mainly informal, marginalised, unskilled economy, populated
by the employed and those unemployable in the formal sector," the
report said.
-
- During a recent talk at the annual conference of the
Black Management Forum, Mbeki reportedly likened the "two economies"
in the country to a double-storey house "without a connecting staircase".
-
- "Despite the impressive gains made in the first
economy, the benefits of growth have yet to reach the second economy, and
with the enormity of the challenges arising from the social transition,
the second economy risks falling further behind if there is no decisive
government intervention," the report warns.
-
- The 10 year review argues that "the central economic
challenge for the next decade, to help address the negative impact of the
social transition -- with far-reaching social and political implications
-- is to ensure much higher rates of growth and employment creation".
-
- Between 1995 and 2002 the number of people classified
as unemployed, according to the narrow definition of those actively seeking
work, had risen from just over 1,9-million to over 4,2-million -- an increase
of over 2,3 million.
-
- The department of labour says the national official unemployment
average is 30,5% or 4,8-million people. However, the department uses a
strict defenition for unemployed, which independent researchers have disputed,
and some have pegged the general unemployment figure as high as 40%.
-
- Social grants
-
- The extension of social grants has been trumpeted by
the government as a major achievement, following the systematic scrapping
of apartheid era legislation aimed to place whites above other citizens
in terms of accessing state assistance.
-
- According to Statistics South Africa, in 1995 about 28%
of households and 48% of the population were living below the poverty line.
In 1999 just under 33% of households were living below the poverty line
-- most of them were defined as African (black indigenous South Africans).
-
- This is an indication of the impact that the exclusion
from the broader economy, through apartheid job reservation legislation,
and the prejudicial nature of state assistance, has had on black communities,
analysts say.
-
- Since 1994 the state's expenditure on social grants has
increased from R10-billion (about $1,4-billion) in 1994 to R34,8-billion
(about $5-billion) in 2003.
-
- Similarly, there has been a concurrent increase in beneficiaries
as the state attempts to address the legacy of apartheid. In 1994 some
2,6-million people benefited from direct social grants, while in 2003 that
figure had ballooned to 6,8-million.
-
- The 10 year review notes that "overall, social grants
have the potential of reducing the number of individuals in poverty from
42% to 24%. Although great progress has been made in registering recipients,
the full impact of these grants will only be realised when all eligibles
are registered".
-
- The government has admitted that many South Africans
eligible for social grants are unable to access them as they lack the necessary
identity documents, proving their citizenship, to do so.
-
- As with social grants, public works programmes are a
key intervention which allows the state to address, in part, the poverty
of individuals and asset poverty (houses, infrastructure) of communities.
-
- "Expenditure on public works programmes has increased
almost tenfold since 1998 ... employing a total of 124 808 people since
1998. However, most of these jobs were temporary," the review notes.
-
- Some 3 407 permanent jobs were created by public works
projects between 1999 and 2002 and a further 141 permanent jobs were created
by the first half of the 2002/03 financial year.
-
- "Research indicates that public works programmes
vary in their efficiency of transferring income to the poor with the average
expenditure per worker varying between R27,242 ($3 928) in Limpopo (province)
to R6 515 ($939) in the Eastern Cape (province)," the review said.
-
- It added, however, that "while increasing provision
of assets to the community, [public works programmes] are not as efficient
as income grants in alleviating income poverty".
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- Education, an escape from poverty?
-
- Literacy rates have increased from 83% in 1996 to 89%
in 2001 for the general population, while literacy rates for the 15 to
24-year-old age group have risen from 83% to 96% over the same period.
"Which is exceptionally high for any nation," the 10 year review
notes.
-
- The report added that "while significant progress
has been made, there is evidence that discrimination in employment still
exists. Unemployment and other social ills are still disproportionately
higher for blacks and women, and there is still a gender-based premium
in earnings".
-
- Many black South Africans are now better educated, but
this has not necessarily translated into better jobs. While studies have
shown that the better educated an individual, the better off they are,
in South Africa it is not only those without skills and education who struggle
to find employment.
-
- Research by the Centre for the Study of African Economies
(CSAE), based at the University of Oxford in the UK, notes that in South
Africa race and unemployment are linked.
-
- Evidence from Ghana, Uganda and South Africa was collected
for the report which questioned whether investing in education reduced
poverty.
-
- The report notes that in "Uganda and Ghana, education
plays an important role in access to certain types of employment, whereas
in South Africa, the issue is access to employment (overall)".
-
- "In South Africa, racial differences in unemployment
incidence cannot simply be dismissed as a problem of the poorer productive
characteristics of the African, coloured and Indian groups relative to
whites," the CSAE said.
-
- "While a substantial part of the race gap in the
incidence of unemployment in the mid-1990s was explained by inter-group
differences in observed characteristics, there remained a residual that
could not be explained in this way. The residual may be due to employer
discrimination or to racial differences in unmeasured determinants such
as the quality of education," it added.
-
- Another report from the CSAE, titled Race and the Incidence
of Unemployment in South Africa, takes the point further.
-
- It says "an empirical model fitted to predict individuals'
probability of unemployment shows an important role for race, education,
age, gender, home-ownership, location, and numerous other variables, all
of which have plausible explanations".
-
- But it is "the large race gap in unemployment"
which "might represent labour market discrimination against blacks".
-
- A recent survey by the Human Sciences Research Council
of South Africa (HSRC) found that while university graduates have a distinct
advantage in the country's competitive labour market, some historical hurdles
remain.
-
- "Africans, women and those who studied at historically
black universities still have the greatest difficulty finding employment,"
the HSRC found.
-
- It conducted a survey of 2 672 university graduates who
obtained their first degree between 1990 and 1998.
-
- The study revealed differences along racial lines. "About
70% of white graduates found employment immediately, compared with 43 percent
of Africans, 42,2% of coloureds and 47,6% of Asians. A higher proportion
of graduates from historically black universities (65,4%) experienced periods
of unemployment compared to graduates from historically white universities
(34,65%)," the report said.
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- Key challenges for the future
-
- A comparison of public opinion polls provides important
direction as to the concerns uppermost in the minds of South Africans,
of all race groups.
-
- In 1994, 67% of those polled believed job creation to
be the "most important problem" facing the country. While in
2002 the number of people who believed job creation was the "most
important problem" had risen to 84%.
-
- Likewise, in 1994 just 9% of respondents were concerned
about poverty, by 2002 that had increased to 28% of respondents.
-
- The government's performance in providing safety and
security, education and health care seems to have been given a nod of approval.
In 1994, 34% of respondents were concerned about education, but by 2002
that had dropped to 15%.
-
- South Africa will celebrate 10 years of democracy in
April 2004, during which time the electorate will go to the polls once
more for presidential and legislative elections.
-
- The lack of social and economic equality for a large
section of the population is set to be a key election issue.
-
- Institute for Democracy in South Africa (Idasa) executive
director Paul Graham said that "in general the figures are pointing
to a continued high level of inequality between the wealthy and the poor".
-
- "The data does suggest that there's de-racialisation
among the wealthy. But poverty levels certainly have not improved and when
we do our research, which asks people what they think the main public issues
are, jobs comes up as the key issue," he said.
-
- Idasa research indicated that "about 80% of people
in the country see (economic inequality) as the key issue that government
should be doing something about". With regard to peoples' perception
of government performance around key issues, "the general view is
that this is the area where government has done the worst, I think about
9 percent believe government has done a good job in terms of job creation,"
Graham noted.
-
- "People who were poor 10 years ago have not been
able to escape the poverty trap. Government's rejoinder is that the social
security net and availability of services to the poor has improved, and
there's some evidence in that regard, [the roll out of] houses, potable
water and so on. But the problem for people is that they don't feel they
are able to get themselves out of the poverty trap, they need work,"
Graham added.
-
- The debate in South Africa was moving away from the undisputed
facts around poverty and more toward finding solutions.
-
- "I think over the elections there's going to be
a substantial debate over macro solutions to these micro problems, how
one actually changes the structural problems of South Africa. I do get
the impression of increasing interest in Brazil and the policy formation
of the new president of Brazil in an attempt to see whether there are ways
in which the state can be more proactive. Instead of merely creating an
investment climate - which is largely policy at the moment, fiscal discipline,
liberalisation of the policy arena etc," Graham noted.
-
- Research has shown that with an average growth rate of
2,8%, net employment grows at a rate of 2,1%. South Africa's economy grew
by 3% in 2002 up from 2,5% the year before, said a UN Economic Report on
Africa 2003.
-
- But the issue remains how to raise growth to higher levels.
"And more specifically, the rate of investment from the current 16%
to 17% of GDP," the 10 year review noted.
-
- Graham said the "only way to change [unemployment
trends] is if the growth rate is running between 5 percent and 6 percent.
Which we have not had over the last few years. Also [while there has been
economic growth] we have had jobless growth, in fact there's been some
shedding of jobs".
-
- To address poverty it was necessary to "address
the asset base of the poor, political power of the poor and income security
of the poor".
-
- "The political power issues have been partially
addressed. The asset base areas such as land, education, tenure of housing,
are being addressed, but those are slow processes. [With regard to] income
security, government has been good about providing a social security net,
which is not yet being accessed by everybody, and the other area is jobs,
jobs, jobs - and that is not happening," he concluded. - I-Net Bridge
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- http://196.2.63.80/Content/l3.asp?ao=23056
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