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The Problem of Poverty in South Africa

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What is Poverty

The poverty line was defined in as an urban household (two adults and three children) with a monthly income of less than R.In , the poverty line for a rural household (two adults and three children) was defined as a monthly income of less than R. How many people are in poverty in South Africa

  • In , the Centre for Development and Enterprise estimated that over three million households (about per cent) were living in poverty
    Almost one in three people do not have enough to eat
  • In , about two-thirds of all black children were living in poverty.
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    Where is poverty most acuteAbout per cent of South Africa`s poor live in rural areas – especially in the former homelands and TBVC states

  • per cent of South Africa`s poor live in the Eastern Cape
  • per cent of South Africa`s poor live in KwaZulu/Natal
  • per cent of South Africa`s poor live in the Northern Province
  • In , about a third of all black people living in metropolitan areas were in poverty
  • In rural areas, per cent of women and per cent of men are living in poverty.

Who is living in poverty nearly per cent of South Africa`s poor are black five per cent are coloured  less than one per cent are Asian or white What is the main cause of poverty in South AfricaThe primary cause of poverty is lack of income, and the main cause of a lack of income is the lack of paid work. More than per cent of South Africa`s poor working-age adults are unemployed. Unemployment is therefore the core cause of poverty in South Africa, and it has a clear race dimension. Unemployment among black South Africans is per cent; among coloureds, it is per cent; among Indians, per cent; and among whites, four per cent.

  • black South Africans have nearly twice the unemployment rate of coloureds
  • black South Africans have more than three times the unemployment rate of Indians
  • black South Africans have almost ten times the unemployment rate of whites.

How is the Government fighting poverty? The Government is fighting poverty on many fronts, including employment creation, to take the poor out of unemployment; health, to improve the health of the poor; and education, to give the poor a better chance at improving their position. The Government is fighting poverty through job creation policies

The Government has already created, or helped create, more than a quarter of a million jobs since the elections
under the Macro-Economic Strategy, more than a million new jobs will be created by the year
after the year , the Government expects , new jobs a year to be created.The Government is fighting poverty through affirmative action policies As unemployment and poverty are both overwhelmingly problems for black South Africans, affirmative action policies are ensuring that black job applicants get a better chance of competing against white and coloured applicants for the work that is available.

Affirmative action creates more equal conditions in the job market, allowing all South Africans to compete on an equal basis. The Government is fighting poverty through health policies As well as attacking the root causes of poverty, the Government is also dealing with the damage that poverty causes to the health of the poor, particularly among children.

Since , the Government has:

  • guaranteed free health care for all children up to the age of six
  • introduced school feeding programmes to provide basic nutrition to millions of school children
  • guaranteed free health care to pregnant women undertaken immunisation programmes against polio and tuberculosis
  • restructured health services to enable universal and free access to primary care for the poor, especially in rural areas, which were previously
  • overlooked in the provision of health services. The Government is fighting poverty through education policies For South Africa to eliminate
  • poverty, it must ensure that the poor are given the opportunities to help themselves.

Education is a key plank of the strategy, to provide all South Africans with the skills and training they need to compete for work and enjoy a higher standard of living than was enjoyed by their parents and grandparents.

The Government is therefore:

  • renovating thousands of existing schools
  • building thousands of new classrooms
  • increasing attendance rates in secondary and tertiary institutions
  • increasing access to all universities for previously disadvantaged racial groups. The Government is fighting poverty through meeting basic needs
  • The most basic of all needs is clean water. The Government has launched a major programme to supply portable water to the million people who do not have adequate access.

Section : The causes of poverty and addressing the challenges The distribution, extent and characteristics of social exclusion in South Africa have a definite material and structural basis. In short, the economic aspects of social exclusion are linked to the inability to command a sufficient flow of resources to avoid growing inequalities and to prevent deprivation—be it nutritional, medical, in terms of shelter, or a lack of full participation in society.

. Inequalities in the distribution of wealth There are five broad categories of economic flows reflecting different economic positions in an economy. These include income derived from owning property, income received in terms of salaries and wages, economic resources mobilised through subsistence and household activities, transfer payments received from private or government sources and self-employment. Each of these categories is intimately connected to a set of economic relationships that define and structure a modern capitalist economy.

Exclusion from, or marginalisation within, these sources of economic resource flows greatly increases the risk of poverty. A key factor in South Africa is the skewed distribution of economic assets. Apartheid was central to this skewed distribution, driving the social exclusion of the majority and social inclusion of the minority. In particular, the apartheid regime constructed citizenship and subject rights to determine which groups would have access to what level of social protection depending on their functionality to the racially constructed economic and social system.

Apartheid gave black South Africans an inferior education, excluded them from ownership of most of the land and the prime residential property, and prevented them from entering many of the more lucrative occupations by prohibiting or severely restricting their access to many economic activities. The following are all examples of apartheid measures, which excluded the majority of people. The Land Act of , which confined the land area that Africans could legally own or rent to per cent of South Africa The Mines Act, which contained the first of many job reservations policies The Urban Areas Act of Coloured Preference Policy The Group Areas Act of , which restricted African access and African economic activity in the urban areas. White South Africans were from onwards given substantial protection against poverty and vulnerability, partly by measures to exclude black South Africans referred to above, and partly by the introduction of social and economic policies similar to those adopted in the social democratic countries of Europe.

Black South Africans were generally either excluded from these positive measures, or were protected to a much lesser extent than the white counterparts.For example, the Industrial Relations Act that gave employees rights similar to that they were gaining in the Scandinavian countries, but excluded Africans from the definition. In the mid-s the old age pension paid out to Africans was only per cent of that of white South Africans. Substantial maintenance grants were paid to single mothers with low income, but not if they were African.

i Over the last few decades of the twentieth century, blacks began to gain access to work related benefits and social insurance institutions primarily due to increasing unionisation and political ressure. This formed an important pressure that precipitated the breakdown of the citizenship/subject relationship underpinning the apartheid regime. As democracy approached, the expectations of the excluded majority increased in regard to the role of the post-apartheid State in ensuring redress, employment and development. However, as democracy approached, the apartheid regime, seeking to pre-empt effective post-apartheid intervention, sought to push through various pieces of legislation loosening the grip of government over social and economic policy.

In some instances they were successful (such as deregulating aspects of private healthcare and food production). In other areas, such as broader economic policy, social resistance manifested through mass mobilisation and the establishment of tripartite socioeconomic forums restrained them. .

Shortcomings in the South African social security system As mentioned above, the apartheid social security system was generally comprehensive and inclusive for whites at the expense of the black majority, who were entirely excluded.Though the distributional stance has shifted considerably since that period, many distortions remain. First, regarding non-contributory social assistance, there are large gaps resulting in a large proportion of the poor being excluded, and those who are uncovered are often not given appropriate support. The assumptions on which the Social Assistance Act, No.

There is a pre-existing social security infrastructure, both in urban and rural areas, that can be used as a platform from which to roll-out policy and legislative requirements. ??Social security development and planning is sequenced with national budgetary planning. The integrity of social security policies and legislation, once reached, need to be maintained by being provided with requisite fiscal support to, for example, ensure that benefits maintain their real values. Significant levels of public debt exist which act as additional limitations on the coverage, extent and characteristics of social security provision that is possible.

Significant economic growth with job creating outcomes, thus taking pressure off social security provision. ??Capacity of community sector to use new opportunities and to limit their expectations in relation to government programmes The Social Assistance Act covers the following categories of people: Aged Women over years of age, and men over years of age receive a State Old Age grant of R per month. This grant is the largest current social security transfer in the country, and, for those elderly persons who receive it, the grant plays a pivotal poverty alleviation role for the entire household. Disabled There is a disabled grant of R per month for medically-diagnosed disabled persons over years of age.

This grant is a de facto poverty grant, as per cent of recipients are also in poverty. ii Foster care There is a grant of R per month for caring for foster families caring for children under years of age. Care dependency grant There is a grant of R per month for parents of a disabled child (-) who requires care at home by another person. Thereafter application must be made for the adult disability grant.

Child support grant There is a child support grant of R per month, paid to the primary caregiver, for children under seven years of age.This grant has been afflicted by a slow take-up rate, with only per cent of the targeted group receiving the grant three years after implementation. iii The following categories remain uncovered by social assistance: Children per cent of poor children below seven years of age do not get the child support grant. All children over seven do not get any support.

Finally, all children without primary caregivers, and child-headed households (which are in the increase) do not get any grant. Disabled Those with a chronic illness but who do not meet the strict medically based criteria are excluded.Thus if the disability is not medically complete, but does prevent that person from carrying out their trade, they would not qualify for the grant. Unemployed The UIF covers only per cent of the unemployed.

Therefore excluding those unemployed getting disability and childcare related grants, about five million unemployed people are without any form of income support from the social security system. Poverty Those with incomes below the poverty line, including working poor, are without any social security transfers. Currently about per cent of the all the poor, or million people, are uncovered. v ??Non-citizens While the Constitution in S () (c) states that “everyone” has a right to social security, current social assistance mostly excludes non-citizens.

In this regard, there will probably be constitutional pressure to ensure all people (including illegal immigrants) have access to certain basic services (such as emergency healthcare), and full access to certain categories such as refugees. In short, there are large gaps and inadequacies in the social assistance system. Second, regarding contribution-funded social insurance and regulated private schemes, these, too, cover a relatively small number of the population.Moreover, the increasing numbers who fall outside of the formal sector undermine the scope of social insurance’s contribution base, further limiting the system.

In addition, there are internal distribution inadequacies within social insurance that provides the most vulnerable workers with a smaller share of benefits. The better paid generally seem to secure the largest share of benefits. Furthermore, some of the most vulnerable workers are often legally excluded from the system. The limited nature of the publicly provided benefits means that social ecurity costs are, de facto, passed onto employers.

This has increased non-wage costs in the economy. This acts as a disincentive for direct employment, that is, the employment of regular workers. The increase in indirect employment (including casualisation), and the stagnation of net permanent jobs, is partly the result of employers trying to avoid these non-wage costs. The growth of employer-linked benefits necessarily excludes a significant share of the population.

The unemployed, informally employed and many temporary workers have no access to these benefits.A current legal framework that cannot cope with the changing forms of employment aids this. In the South African situation this forces the non-wage costs to be higher still, since workers require more to support many unemployed persons (with no benefits) in their household. Consequently, this contributes to upward pressure on workers’ remuneration.

This extreme pressure on the breadwinner effectively undermines any worker support for labour flexibility—since loss of employment equals total loss of income. Private-provision schemes are contributing to escalating costs of services.Healthcare is a primary example of this. South Africa spends, including both public and private expenditure, about almost twice on health than considered necessary by the World Health Organisation—all this for relatively inadequate public and private service.

The national overspend derives primarily from the cost-intensive private medical scheme environment that has created perverse incentives for over-servicing by private providers (who are paid on a fee-for-service basis), massive administrator profit-taking and undermined consumer protection.The relatively high levels of expenditure is due to two-thirds of health spending going towards the well resourced, private health sector. vi Profit-driven provision of services has often been accompanied by a removal of crosssubsidies to those unable to afford services. There is a tendency to “cherry-pick” highincome, low-risk groups that accordingly increases the difficulty of funding publicly provided social services through contributions.

Third, it is important to consider the additional barriers faced by women. The UN Commission for Social Developmentvii stresses the following: many women are still barred from paid employment because of their homemaking and childcare duties. Inferior access to health, education and training places them in a disadvantageous position in the labour market where many women predominate in low-pay, low-status, part-time or contract-work, which offers limited opportunities for social security coverage. Additionally, unequal access to productive resources such as land, credit, … restricts women’s capacity for self-protection and increasing their dependence on their families.

These gender barriers are equally relevant for South Africa, too. . The growing challenges The inadequacy of current interventions, in a context of persistently high risk and deprivation, has contributed to several growing and, potentially, unsustainable challenges.

The most important of these are the following: The wage-income relationship is breaking down High unemployment, including the massive net loss of formal sector jobs, and growing shift towards so-called “atypical” work, has reduced the incomes of the poor.Historically, the working poor have supported the poor and unemployed via remittances and intra-household transfers. However, this relationship between formal sector wages and household incomes has declined due to the considerable loss of net formal jobs, and the downward qualitative shift in formal employment being created. In this period, there has been a decline in the incomes of the poorest per cent.

The state is increasingly vulnerable to Constitutional Court challenges The Constitutional Court, in its State v.Grootboom judgement, has increased pressure on the State to put in place a coherent and comprehensive programme for progressively realising the constitutional obligations. This requires devising, formulating, funding, implementing and constantly reviewing relevant measures. The Grootboom judgement opens the way for further constitutional challenges against the State on the basis of not complying with the Constitution’s Bill of Rights.

It should also be noted that theConstitutional Court has the power to enforce socio-economic rights, with direct implications for budgetary matters. The impact of AIDS will exacerbate poverty and inequality Research conducted for the Department of Health indicates that there will be , million people infected with HIV/AIDS by ,ix and the impact will be increasingly felt in society. The impact is apparently already evident on social service institutions (mainly public healthcare).This will increase downward pressure on households and household incomes, and could significantly undermine the country’s medium- to long-term economic growth and social development potential.

The racially differentiated composition of public service users reinforces apartheid-style prejudice The poor (mainly black) are dependent on strained public services, if at all available. The rich (mainly white) make use of private services. There is thus a continuation of the Two Nation divide.This also contributes to a lack of a lack of racial tolerance and understanding, and reduced support among whites and the rich for interventions to bolster the public services.

Delivery of key services is affected by inability of poor to pay for inclusion More people have access to important basic service such as telecommunications, water and sanitation, electricity, housing, and primary healthcare. While these have been hard fought gains, this extension of services has been undermined by an inability of the poor to afford payment. Importantly, this same lack of an ability to pay undermines the possibilities for social insurance to be the key route of including those who are currently excluded. Poverty-related increase in crime and social instability This is potentially undermining to legitimacy of new democracy, and investment strategies.

Levels of crime remain far too high, and include an increasing incidence of domestic violence. This reflects the underlying causality of poverty and the resulting depressed aspirations among the poorest in society. Social development/investment backlogs are now widely recognised as barriers to economic growth and development There is growing recognition among international financial and credit rating institutions, national government and domestic social formations, that insufficient social investment and social development backlogs are a primary barrier to the achievement of sustainable levels of economic growth and development.

Defining an appropriate social security conceptComprehensive social security … is necessary because traditional familial, communal, or private market welfare arrangements are wholly inadequate. It is also necessary because stable democracy demands a level of social integration that only genuine citizenship can inculcate. (Esping-Andersen, [], p.) … since the early twentieth century, welfare policies have reached across from public to private and helped uphold a patriarchal structure of familial life … (Cited in O’Connor et al, , p. )

Comprehensive social protectionThe objective of comprehensive social security is the “provision of a national social security system” with the ultimate goal of ensuring that all South Africans have a minimum income, sufficient to meet basic subsistence needs, and should not have to live below minimum acceptable standards”. (White Paper for Social Welfare, ) The term “social security” has, internationally, attracted a wide range of meanings, and needs to be clarified at this point. In developed countries, where the term first originated, social security refers mainly to the following: Social assistance This refers to State provided basic minimum protection to relieve poverty, essentially subject to qualifying criteria on a non-contributory basis. Social insurance This refers to a mandatory contributory system of one kind or another, or regulated private sector provision, concerned with the spreading of income over the life cycle or the pooling of risks.

Social security, as defined by its European origins, developed as a complement to the formal employment relationship. The extent to which one an adopt this traditional concept of social security for South Africa can be questioned. First, the contributory-social insurance bias inherent in unemployment benefit schemes will have limited effect in the context of high and persistent levels of unemployment and growing informal work. In such an environment, there would be little possibility of insuring oneself against the “contingency risk” of unemployment—rather the entire environment would be one of uncertainty, in which insurance would be impossible.

Further, attempts to get the all of the working poor and socially excluded to contribute to such systems are certain to fall short. Second, while the non-contributory social assistance aspect can extend to non-contributors, it does so in a residual “safety net” fashion, essentially seeking to ameliorate the difficulties of those that fall through the economic system. However, developing countries such as South Africa, require more active systems that can play a constructive role in promoting economic development and addressing the structural basis of poverty and social exclusion.As a result of these weaknesses in the traditional concept of social security, the concept of “social protection” has originated, largely to accommodate the realities of developing countries.

The United Nations (UN) Commission on Social Development describes social protection as: Social protection embodies society’s responses to levels of either risk or deprivation … These include secure access to income, livelihood, employment, health and education services, nutrition and shelter. Further, the UN Commission notes that:The ultimate purpose of social protection is to increase capabilities and opportunities and, thereby, human development. While by its very nature social protection aims at providing at least minimum standards of well-being to people in dire circumstances enabling them to live with dignity, one should not overlook that social protection should not simply be seen as a residual policy function of assuring the welfare of the poorest—but as a foundation at a societal level for promoting social justice and social cohesion, developing human capabilities and promoting economic dynamism and creativity. xiClearly a broad conceptualisation of social protection has many merits for South Africa.

First, it incorporates developmental strategies and programmes more appropriate to a developing country such as South Africa. For instance, it increases opportunities for people doing “informal” work to gain access to social protective coverage. Second, it provides a coherent framework for integrating existing and proposed social and economic policy interventions. These wider functions and objectives of social protection are better able to address socially and economically embedded problems, new risks and increased vulnerabilities.

Third, social protection could create added potential for integrated and linked private, public and community sector interventions and benefit systems. For these reasons, the Committee of Inquiry has taken on board the concept of social protection. However, such as system in South Africa, even more than suggested by the UN Commission, needs to be embedded in economic organisation and social relations enabling it to address the country’s underlying structural and material basis of social exclusion. For this reason, the Committee of Inquiry has settled on the term Comprehensive Social Protection (CSP).

The Committee defines comprehensive social protection thus: Comprehensive social protection for South Africa seeks to provide the basic means for all people living in the country to effectively participate and advance in social and economic life, and in turn to contribute to social and economic development. Comprehensive social protection is broader than the traditional concept of social security, and incorporates developmental strategies and programmes designed to ensure, collectively, at least a minimum acceptable living standard for all citizens.It embraces the traditional measures of social insurance, social assistance and social services, but goes beyond that to focus on causality through an integrated policy approach including many of the developmental initiatives undertaken by the State.

A comprehensive social protection “package” CSP will work through a variety of mechanisms, embracing a “package” of social protection interventions and measures. The need for a package derives from an understanding that there are certain basic requirements that should be available to all, and not subject to being traded off against each other.

For example, it is not acceptable to ask a poor parent to choose between attaining a certain level of household income or sending their children to school, though this is not an uncommon choice in reality. Further, a package approach enables one to achieve a degree of balance between measures focused on reducing income, services (capability) and asset poverty. In this way, a dependence on cash benefits, ignoring the potential for basic service cost inflation, is avoided, or vice versa.Rather a poor person is guaranteed some cash support and a basic level of service delivery.

This allows comprehensive social protection to better deliver on minimum acceptable living standard outcomes. The “capabilities” approach developed by Amartya Sen, the recent Nobel-prize-winner has been useful in developing the content of the CSP package. Basic incomes, services, and assets emerge as central components of the “capabilities” approach. This is set out in table .

Matrix of means and endsxii Means Ends to promote Creation of entitlements Improvements in terms of exchange Building capacities Healthy Access to healthcare, water, sanitation Grants and institutional reforms Productive Redistribution of assets Restructuring of markets and redistribution of opportunities Improving access to and affordability of education and economic services Secure lives Tenure rights Social welfare and safety nets Community and individual safety (Source: May, et al. )In identifying the practical aspects of such an approach, and taking into account necessary adaptations for South Africa, the Committee of Inquiry has arrived at the following package form: a) Measures to address “income poverty” This includes measures to ensure that people have adequate incomes throughout their life cycle, covering childhood, working age and old age.

Income poverty can be addressed through a range of measures. However, the CSP package should comprise at least one primarily income transfer which ensures that all South African have some income to mitigate or eradicate destitution and starvation.A basic level of income would also have other developmental spin-offs related to enabling that person to participate more effectively in the economy (for example, afford the bus fare to engage in job search). b) Measures to address “capability poverty” This can be achieved through the provision of certain basic services, deemed crucial to enable a person to live and function in society.

This includes the provision of basic (lifeline tariff) water and electricity, free and adequate healthcare, free education, food security, and affordable housing and transport. ) Measures to address “asset poverty” This includes income-generating assets, such as land, and social capital such as community infrastructure. This addresses the key underlying structural basis of poverty and inequality in South Africa. d) Measures to address “special needs” This includes mainly standard measures to address special needs such as disability or child support.

In the CSP package, (a) + (b) + (c) are core elements, the comprehensive social protection basic platform, that should be available to all South Africans (including certain categories of noncitizens).To this basic floor, (d), which addresses special needs, and largely as it currently applies, will be added. Crucially, what are the key components of such a CSP packageAfter detailed analysis of the social and economic cost-benefits of possible components,xiii the key income transfers, services, assets and special needs measures put forward by the Committee of Inquiry are set out in table .

Comprehensive social protection package and components Application Key components Income poverty Universal (a) Basic income grant Child support grant (- years) Maintained State Old Age grantCapability poverty Universal/ Eligibility criteria (b) Free and adequate publicly-provided healthcare Free primary and secondary education Free water and sanitation (lifeline) Free electricity (lifeline) Accessible and affordable public transport Access to affordable and adequate housing Asset poverty Universal/ Eligibility criteria (c) Access to productive and income-generating assets such as land and credit Access to social assets such as community infrastructure Special needs Eligibility (d) criteria Reformed disability grant COIDA (injuries) RAFThis package includes mainly publicly provided forms of social protection. On the whole this total package needs to be established as a universal-as-possible package of income transfers, services and access provided in a non work-related manner and whose availability is not primarily dependent on an ability to pay. In addition, the Committee of Inquiry has proposed important reforms to many other, privately provided but State regulated, aspects of social protection.

These forms are aimed at improving inclusively, equity, consumer protection and efficiency of the benefit types concerned.These include the private pension/provident funds and life assurance. .

Determining the “minimum” requirements for the CSP package The Constitution obliges the State to take positive action to meet the needs of those living in extreme conditions of poverty, basic services, and suffering from a lack of access to constitutionally stipulated socio-economic rights. The difficulty for the State, and anyone insisting on the State’s obligations, is that the “minimum essential level” must be described for each of the socio-economic rights (for example, the right to dequate housing). As the Constitutional Court, in The Republic of South Africa et al v.

Grootboom et al, has observed: It is not possible to determine the minimum threshold for progressive realisation of the right to access to adequate housing without first identifying the needs and opportunities for the enjoyment of such a right. This will vary according to factors such as income, unemployment, availability of land and poverty. The differences between city and rural communities will also determine the needs and opportunities for enjoyment of such a right.Variations ultimately depend on the economic and social history and circumstances of the country.

Essentially, determining the “minimum essential level” could be a complex and involved process, with the minimum level being determined on a case-by-case basis. In other words, determining or contesting a minimum essential level may require a Constitutional Court challenge each time, with uncertain outcomes for all concerned. While there is a clear logic to that approach, it does not appear to serve either the interests of the State, which may suffer costly judgements, or those in need of such minimum essential levels of support.This is all the more likely when one considers the State’s current lack of institutional ability to roll out these programmes fast enough.

This lack of clarity over “minimum” obligations will therefore not assist effective delivery. As a result, it may be advisable for the State to stipulate up front its considered minimum obligations for service delivery, such as it is doing with the free water programme, and its intended schedule for progressively realising this. Further, even while the State is rolling out these medium- to long-term programmes, it is has to ensure “temporary” relief for the poor who are “particularly vulnerable”.In all likelihood, the State will be unable to ensure that all of its capability and asset programmes adequately have built-in measures for temporary relief for those most vulnerable.

The result is that the State is again exposed to Constitutional Court challenges, and instances where the poor feel forced to take matters into their own hands (such as with land invasions). In this regard, the “income poverty” aspect of the CSP package is relevant, particularly for three reasons:First, income poverty measures are easier to rollout in the short-term than more infrastructural and institutional intensive “capabilities” and “asset” poverty programmes. Second, people who are in “capability” and “asset” poverty, or for that matter having “special needs”, are invariable also facing “income poverty”. Third, the Constitutional Court has recognised that if the State were providing better social assistance to the poor there would be less pressure on other socio-economic rights.

The poor are particularly vulnerable and their needs require special attention.It is in this context that the relationship between sections (housing) and section (social security) and other socio-economic rights is most apparent. If under section the state has in place programmes to provide adequate social assistance to those who are otherwise unable to support themselves and their dependants, that would be relevant to the State’s other obligations in respect of other socio-economic rights. In other words, the State could buy time for progressive realisation of its other socio-economic rights if it improved income transfers to the poor in the short term.

Social protection can promote sustainable growth The Poverty and Inequality Report concluded that the perpetuation of extreme poverty in South Africa would most likely act as a brake on the government’s economic growth strategy. And where higher growth was achieved, a noticeable reduction in poverty and inequality may not follow. As a result, it proposed that South Africa could pursue more redistributive policies without undermining current growth objectives—and rather that such policies would instead promote economic growth.

Indeed, the UN Commission for Social Development finds that: Experiences of countries successful in economic, political and social terms show that economic development and social protection are mutually reinforcing— essentially they are elements of the same paradigm. Any trade-off between public spending items, between various economic needs and the need for social protection must incorporate recognition of the long-term social pathologies … This approach (of objecting to social protection because it costs too much) has proved to be shortsighted and superficial. xivFurther, the UN Commission states, social protection facilitates the process of social and economic change by moderating the costs of economic transition and structural change. By providing a cushion, it can encourage the necessary economic restructuring.

“Affordability” is not a linear process Internationally, two factors have been important in terms of shaping the limits, or otherwise, of “affordability”.

These two factors are: A country’s level of economic development The level of economic development broadly determines the limits of the social security system.It is clear that, all other things being equal, a rich country can afford to provide a more comprehensive system than a poor one. South Africa, in this regard, is defined as an upper-middle income country. The relative strengths of social forces The relative strength of social forces and institutions determines the distribution of the country’s resources.

A rich country may be able to afford to provide for everyone, but may instead develop a system that caters for the wealthy. Therefore, conceptually, the “affordability” or otherwise of a social protection system is partially dependent on social contestation.However, political and institutional mechanisms can be used to avoid zero-sum trade-offs. For example, a productivity/investment accord could be agreed to in the context of a new comprehensive social protection system.

Fiscal space does exist A further factor is the extent to which “affordability” is determined by a policy decision to reduce public spending as a percentage of GDP from % in to % in .

In this regard the parameters of “affordability” may be artificially constrained. Further, research indicates considerable taxable capacity in the South African economy. South African revenue to-GDP is currently ,%, compared to ,% in Organisation for Economic Cooperation and Development (OECD) countries. xvi This indicates that higher taxes, if related to better outcomes, are unlikely to result in immigration from South Africa to OECD countries.

Further, the South African revenue to-GDP level is lower than the average for developing countries within per cent of South Africa’s per capita income level.However, before considering options for increasing tax revenue to-GDP ratios, there is a need to recognise that the current South African fiscal parameters can accommodate increased public spending, if appropriate and sufficient return initiatives can be developed and implemented. In this regard, there has been a reprioritisation away from social spending, without any prior explicit policy decision. The extent to which this has occurred (a shift of about R billion) represents some degree of fiscal space that can be reclaimed without a new policy decision being made.

There is potentially further fiscal space through the creation of a “contingency reserve” in the National Budget. Since /, the savings from the reduced debt servicing have been moved into an unallocated reserve. By /, it is estimated that this reserve would be , per cent of the total budget, or approximately R billion. xviii In addition, the State provides numerous tax breaks to regulated private sector providers.

Several of these tax arrangements—running into many billions of rands each — are inherited from the past, and do not appear based on any clear rational or equitable basis.Over time these could be reallocated on a clear, rational and equitable basis in line with the chosen social protection approach. .

Current system and social costs The current cost of social security transfers, based on actual take-up rates, is R billion. Calculations by the Committee of Inquiry show that should the take-up for these targeted schemes reach per cent, an additional R billion would be expended on grant payments. xix Further, in this event, there would be an approximate additional R billion required for the administrative costs based on current grant: administrative cost ratios.

In short, even in the current scenario, the total potential social spend could be increased by that additional R billion liability. Finally, there is a cost to not acting. It is not always economic to defer important interventions and preventative steps for primarily short-term cost reasons. In this regard, the social backlog and accumulating challenges present a barrier both to social and economic development, and intervention sooner rather than later may be economically and fiscally prudent.

Indeed it could be argued that via the negative social externalities generated by lack of State action, the society, or the affected communities bear the cost.

The need to resolve multi-institutional challenges in a short timeframe Given the legacy of apartheid and the relatively short space of time since democracy, much of the institutional framework necessary to address poverty, unemployment and inequality is weak or absent. Therefore the challenge is to rapidly resolve multi-institutional challenges.

These challenges include, for example, the design of new policy and legislation; new administrative structures at national, provincial and local level put into place to ensure the inclusion of the previously excluded; a change of mindsets; the establishment of mechanisms to deliver social goods efficiently and equitably; and the establishment of monitoring and evaluation. Since national government policy initiatives have attempted to finely-target poor and vulnerable groups within South Africa. However, the institutional mechanisms to implement such policies have been uneven, with crucial governance failures resulting.Public spending cutbacks have contributed to growing institutional crises.

The current economic strategy has introduced a tighter fiscal approach from government, with less fiscal support for social protection reforms. There is thus a resulting tension between increasing access to social protection (as required by the constitutional and democratic imperatives) and declining real per capita spending (driven by fiscal policies). Institutions have therefore struggled to both reduce costs and increase access.This declining public spending, concurrent with increasing commercialisation of key services, has pushed many people into the regulated private market.

In this regard, the problems related to the health sector (mentioned above) are relevant. To address this tension, institutional efficiencies clearly need to be improved substantially and/or fiscal support needs to be increased. Regarding institutional efficiencies, efforts to devolve functions and create new responsibilities for provincial and local government have run up against un-funded mandates and uneven institutional capacity. There is clearly more to be done in this area.

First, there is a need to explore ways of increasing autonomy, and hence accountability, in delivery institutions (such as public hospitals) as a strategy to increase operational efficiency. Second, the fiscal federal environment, introduced after the Constitution, needs to be re-examined. Provinces are responsible for implementation, but national government for developing planning and overall budgets. There is often a disjuncture between the two processes, with a tendency for the different roles and responsibilities to become confused and appropriately directed.

Further, the means test has negatively affected the bility of the poor to access benefits. Meanstested schemes invariably have low take-up rates, that is, only a small proportion of those entitled to assistance actually applies for or receives them. Some may argue that if people do not apply for a benefit then they must really not need the benefit very much or do not qualify for it. However, these are often not the reasons for non-application.

More likely fear, a lack of public awareness of the schemes, an inability to afford the transport to the welfare offices, stigma, or difficulty inherent to the administrative requirements are the key factors. xi In reality, it may be a combination of all of these. Means testing also intensifies the problem of the “welfare-trap”. At its simplest, this arises where you receive a benefit only if you are not earning anything else.

As soon as you start earning, you lose the benefit. While in practice some means tests allow for some income to be earned, the welfare-trap remains, if somewhat reduced. In the South African context, and the tendency for incomes to fluctuate, applying the means test correctly becomes a very complicated and generally impossible task within the available institutional capacity.Crucially, it promotes corruption, where government officials are in a position to waive or overlook certain requirements.

In short, it is advisable that, wherever possible, social protection systems avoid the use of means tests. Related to problems of means testing and screening of applicants is the unevenness and fragmented nature of adjudication measures. In many instances claimants are required to go to the High Court, face undue delays, and much of this without access to any legal aid. xii In this regard, consideration needs to be given to the creation of a social security tribunal able to process all social security claims (both social assistance and social insurance).

Incorporating social mobilisation into social protection Social mobilisation is important in embedding social protection in economic organisation and social relations.

It is also important in terms of increasing the level of participatory governance, institutional accountability and, hence, contributing towards institutional effectiveness and efficiency.In this regard, the Committee of Inquiry supports the notion of a Youth Corp engaged in comprehensive social protection activities. For instance, there is a need for approximately community-based caregivers to assist communities by dealing with the HIV/AIDS outcomes. xxiii Such a necessary scheme could be given to specially trained youth, potentially as part of a learnership programme, supported by existing social programme funds, with contributions from relevant job creation/skills development funds.

In this regard non-governmental organisations (NGOs) and community-based organisations (CBOs), with government support, have an important role to play in creating and supporting an environment of social mobilisation. Such a role seems preferable to NGOs/CBOs as partner delivery agents; these organisations are generally facing funding and capacity constraints, and the attempt to use them, as is the case with for-profit institutions, has exposed several weaknesses in government administrative and management systems.Those government departments using such organisations had the most prevalence of under spending (due to their inability to process the funding), and also limited delivery outcomes (due to their inability to ensure contract compliance). NGOs and CBOs are more likely better suited in social mobilisation roles, and related roles where they can keep a critical perspective and promote the interests of communities and potential beneficiaries.

The need for co-ordination of planning, implementation, monitoring and evaluationCurrent social security functions are, in practice, spread across many different line departments and tiers of government and the State.

To the extent that the State needs to deliver a comprehensive social protection system, as suggested by the Committee of Inquiry, or meet its obligation to progressive realisation of its existing constitutional socio-economic obligations, better co-ordination of planning and implementation is needed. Hand in hand with planning and implementation goes the need for effective monitoring and evaluation of programmes.Government has already recognised the need for this. One instance of improvement in this area has been the announcement of integrated urban and rural development strategies.

This reflects an important understanding of the need to integrate service delivery strategies for optimal impact, in this case around development nodes. These integrated strategies, while at an early stage, should result in more effect delivery at the nodal points. However, these strategies do not, and were not intended to, comprise a sufficiently coherent and co-ordinated response to the constitutional obligations.They are also unable to comprise a wider absence of a comprehensive social protection system.

The Committee of Inquiry has thus revisited the notion of a National Social Security Agency. It is suggested that such an agency be responsible for, in varying degrees, leading the planning and monitoring and evaluating of State programmes for comprehensive social security. While the various tiers of government currently required to implement programmes would largely continue to do so, a single national agency would promote effectiveness and overall State efficacy.The Committee recommends that social security (social assistance and social insurance payments) be a fully-funded mandate within a costed norms approach.

This would be administered at a national level while social welfare services remain a concurrent function of national and provincial government. It is further suggested that there could be provincial involvement in the national agency, representing a commitment to “co-operative governance”, through, for example, provincial secondments to the agency. The Committee envisages the establishment of a Social Protection Commission, that comprises relevant government departments, key stakeholders, and international experts. This Commission would play a policy advisory and evaluation role, and inform the activities of the agency.

The Committee has also recognised that the budget processes need to reflect these planning processes. In this regard, the current Medium-Term Expenditure Framework (MTEF) lacks a prior strategic framework that can shape the overall direction of government spending.The current MTEF process is largely effected on the basis of “competitive budgeting”, where departments compete against one another for resources. This encourages a less holistic and comprehensive approach, and has allowed, for instance, social spending as a whole to decline in relative terms rather than strengthen.

For this reason, the Committee of Inquiry suggests a Medium-Term Strategic Framework (recognising the importance of comprehensive social protection) creating an overall framework for the MTEF. Trends in poverty in Africa Decade after decade, politicians and international organizations have failed to reduce poverty. Nor have they been able to help Africa generate growth or build basic infrastructure. Worse, between and it was the only place on earth where poverty has intensified.

It’s only recently that the situation started to slowly improve. Excluding the African continent from the world In fact, there has been some growth since but it’s been mostly in the very new services sector so it created only a few jobs whereas manufacturing and agriculture could have done much better. As the British prime minister declared in African poverty is “a scar on the conscience of the world”.In recent years, globalization and technological inflation have made it only worse.

It only helped further excluding the continent and widening the gaps with the rest of the world. However development economists and experts from all boards are now approaching the problem from new angles to provide innovative ways to fight African poverty. Better yet, some African countries are now emerging as real economic powers thanks to better leadership and deals with foreign investors to build infrastructure. Let’s see how all that improves our understanding of poverty in Africa, the plague of a continent.

Answer:Proper management of resources,prioritizing of needs and the ending of corruption and theft by government officials. overty and inequality in South Africa Sep : – Sponsored Feature Today, almost half of South Africans are living below the poverty line, surviving on just over R a month — an improvement from . Special Focus Being Poor Matters Being Poor Matters Today, almost half of South Africans are living below the poverty line, surviving on just over R a month—an improvement from , where this was the case for the majority of the population. Yes, poverty has gone down over time—but clearly not enough.

And this is only part of the dilemma we face in South Africa, because while poverty levels decline, inequality has increased and the gap between the haves and have-nots continues to grow. A recent conference entitled Being Poor Matters was held by the Programme to Support Pro-poor Policy Development (PSPPD), a partnership between the Presidency of South Africa and the European Union (EU). The conference served as a platform for policy-makers, academics and development practitioners to interrogate the dynamics of poverty and inequality and explore why we are faced with such high levels of both—and what we can do about it. Riots Widespread poverty and inequality have left many countries in crisis.

Speaking at the conference, Kuben Naidoo, Acting Head of the Secretariat of the National Planning Commission, said that in the case of the recent London riots, for example, budget cuts, high levels of youth unemployment, mistrust of the police, and low morale among the youth—who feel they can’t get jobs and can’t get heard—have been blamed. He pointed out that these reasons are not unique to the UK or South Africa.Globalisation has also had an impact on poverty and inequality levels and “while it has increased market size and allowed certain countries to ‘export their way out of poverty’ in a sense, it has also significantly contributed to the increase in inequality,” Naidoo said. This was partly because of the expansion of low-skilled workers entering the labour market and partly because wages had dropped in these sectors.

At the same time, salaries of higher skilled workers went up as a result of the global skills shortage and also because capital was mobile. Capital chases the highest return and can invest anywhere, whether it’s a small factory in Vietnam or an IT shop in America,” he said. “These factors have contributed to an unprecedented rise of inequality globally. What is interesting is that the two countries that have recorded the fastest growth in inequality, China and India, have also made the fastest progress in reducing the number of people living in poverty.

This highlights the complexity of the debate and how important it is to understand the linkages between poverty and inequality. Challenges In South Africa, the National Planning Commission’s Diagnostic Overview released in June this year sets out the key challenges that we confront in fighting poverty and inequality and in achieving the objectives set out in our Constitution. It found that, over and above the historical disadvantages which continue to dominate, two of the most pressing challenges facing the country are employment and education.Too few South Africans work (only % of adults are employed), and in spite of the significant improvement of access to education, the quality of education remains very poor.

The PSPPD conference showcased the latest research on employment and education. It also highlighted other critical issues related to poverty­ and inequality (which is considered to be structural in nature because of systems, like apartheid, that have inherently created different opportunities for people based on gender, race or class), including child poverty, social cohesion, and health. Research collaborationThis research came out of research projects which were funded by the EU through the PSPPD with the aim of gaining a deeper understanding of how economic and social policies impact on people’s lives. The research grants were awarded to the Human Sciences Research Council and nine universi­ties.

Many of the studies drew on the data from a complementary programme to the PSPPD, the National Income Dynamic Study (Nids), a national panel study which was implemented by the Southern African Labour and Development Research Unit (Saldru) at the University of Cape Town’s School of Economics.Although a number of national level surveys had been conducted previously, there was very little information available about changes in communities at the household and individual level—how they respond to poverty, how it influences the choices they make, what effect government policies have on them, and who is getting ahead or falling behind in contemporary South Africa. To fill this research gap—and examine critical issues like migration, birth and death, health, education and household spending patterns—NIDS was conceived.The survey was first carried out in in about households across the country and will be repeated with the same households every two years.

By tracking changes in living standards and social mobility, the study hopes to be able to analyse whether households are consistently poor or are going through a temporary setback and, very importantly, whether government policies are effective or not.Crucially, research like this not only answers questions about the nature of issues related to poverty and inequality in South Africa, but also draws out lessons from how they have been addressed elsewhere in the world, and the cost, benefit and effectiveness of the interventions that were used to address them. The goal is that by providing government with this kind of evidence, policy-makers will be given the tools they need to develop appropriate policies and revisit existing ones to effect positive change. ProgressOne key feature emerging from the research evidence is that South Africa has made progress in reducing poverty since , with real earnings at the lower end income groups increasing.

But, as the diagnostic overview explains, “per capita income growth is only one indicator of a country’s wellbeing. It tells us how much income there is to share, but does not communicate the distribution of that income. ” In South Africa, as Murray Leibbrandt from Saldru points out, income shares are stacked towards the top %, with the lowest % of the population getting hardly any of the income.This is a major sign of the growing inequality in our country.

Despite this widening gap between the rich and the poor, social grants like the child support grant have undeniably had a significant impact on the lower and middle income groups. Using a policy scenario in which the grants are removed overnight, research by Leibbrandt and Ingrid Woolard, his partner at the head of the Nids project, demonstrates how the inequality would be much higher without social grants.But while social grants may well have been key in lowering poverty, as long as inequality continues to rise—driven largely by the labour market, through large gaps in wages and alarming unemployment rates—- the grants system cannot get its full return, and won’t necessarily translate into better opportunities for children who have, for example, been able to afford better schooling using the grant income. Even addressing the labour market will not alone solve the problem.

Labour and financial markets, and the way in which they conducted themselves during the economic crisis, have certainly demonstrated that while they have a role to play, they are insufficient to reduce poverty and inequality on their own,” said Naidoo. “Nor can the welfarist model, which says that the state should provide certain services, from education and health to social protection, single-handedly come to the rescue. “As budget deficits have spiralled, governments are just not able to sustain those programmes. The nowledge economy model, which believes that improving educational standards and increasing knowledge can be leveraged to generate income and wealth, can also only work if the labour markets function and the economy creates jobs,” explained Naidoo.

“The bottom line is, none of these models work on their own. ” And this is exactly why studies like the Nids and the research projects are so important. As PSPPD Programme Manager Mastoera Sadan reiterated, “they contribute to a more nuanced understanding of the complex social and economic challenges we face.It reminds us that there are no simple solutions and that an engagement between researchers, policy-makers and broader society is imperative so that we can all make a contribution to improving the lives of all South Africans—because being poor should matter to everyone.

” The solution to poverty View  comments Comment on this story By: The Fox — : Now that it’s practically around the corner, I have a time to do a bit of thinking about the Bigger Picture(tm), and the most relevant topic here will always be the solution to poverty. This article turned into something way longer than I’d anticipated, but hey…

Maybe there’s somebody out there like me with some time to waste and some fresh suggestions. I’m going to concentrate on the solution to South African poverty, but what I’m suggesting here isn’t necessarily unique to the country. First, a re-cap of the South African economic problems as we all know them: : A lack of formal training (from basic schooling right up) : Too few available jobs : Insufficient markets for new jobs and services (linked to point ) : Reinforced social and political problems resulting from Apartheid. I’m sure we’ve all realised that the solution to poverty isn’t to be found in apitalism.

Even if we could invest billions of dollars into factories and training, there are no new markets for the products – we can’t assume that all the newly-employed workers will go out with their first paychecks and perfectly feed the system – and exporting internationally is problematic because A: it relies on exploting cheap mass labour in order to remain competitive B: it links profitability to the volatile exchange rate, and that’s no recipe for long-term stability C: there are limits on the international market as well, and relying on global pressures means we out-source our economic well-being.My personal dislike of capitalism revolves around the in-bred inequality and the lie of the middle-class dream. We’ve all studied the economic pyramid, and can clearly see that there’s not enough space near the top of the pyramid for all the workers. Even if there was some way to pay every unskilled worker a middle-class salary (Cosatu’s dream, no doubt), those people would still be sweeping the streets and cleaning the sewers – not commanding their own companies.

So all of the above is just the context.A perfect economic system in my opinion is one which: : Is stable and controllable – no more economic melt-downs, thanks : Offers all workers a realistic chance to become entrepreneurs or something bigger than an entry-level grunt : Enables access to all the benefits of modern society: healthcare, modern conveniences etc. I’m realistic, okIf it wasn’t for point above, it’d be only too easy to recommend we all move out to the farms, form small  self-sufficient clusters and rely on a basic agricultural barter system for additional benefit.I don’t know about you, but I’m not ready to give up the Internet, my cellphone, my car, my television and everything else which makes my life “normal”.

Also, I somehow doubt we could pull off a mass urban-to-rural shift like that simultaneously, and nobody would do it unless they could see everybody else doing it first. Oh, and there’s the little problem of where the land’s going to come from, but don’t ask Malema! Soooo… where does that leave us?The solution needs to be internal to South Africa, be implemented by Government (following a public vote of course) – and don’t get side-tracked by whether or not the current Government is capable of it – and be able to achieve radical change without sacrificing a semblance of normal life. Not too much to ask for, haha. Let me confess at this point that I didn’t start writing this article with a solution in mind … just a few ideas I’ve been throwing around every time I am approached by another beggar at the traffic lights.The problem really is that we’ve been trying to use the resources of the minority to empower the majority – through informal community development projects – but that approach is immediately defeated by sheer scale. We need to find a way to empower the poor, not by redistributing wealth but by creating it afresh.

Or rather, tapping into what’s always existed but never had the opportunity to materialise. The maximum wealth of the country must be derived by utilising all of its manpower and skills, and the products and services created by that proces should belong to the country.I immediately hear the complaint of ‘Where’s the motivation for self-improvement’ I’ll get to that. First, we want everybody working, and for that we need new businesses to not be restricted by market forces.

So the answer is simple: remove the markets! Or rather, unify the markets: all goods produced belong to South Africa. What this means is that all goods produced by all companies are sent to warehouses which belong to the State. From here, all retail outlets are stocked as needed. TrainingTraining is free to students.

The trainers will be repaid just like all companies and workers: from the Central Bank.What is thisIt’s another State-run institution, which simply acts like a giant calculator. The value of all goods supplied by companies to the Central Repositories is credited to their accounts in the Central Bank, which they transfer out to their employees’ accounts. A system will be derived for service providers to be credited for their services rendered at the point-of-sale, with those accounts again resting with the Central Bank.

If you’re with me so far, my proposal is simple: the problem with capitalism is a lack of money, so remove that lack.Not by printing more money, but rather by linking the financial supply directly to the supply capacity. I’d say ‘do away with money altogether’ if it wasn’t for the need to reward people who work harder and are more skilled. I believe that salaries should be linked directly to skill level and work-hours spent, but that’s a side-topic to this debate.

The two stumbling blocks to the above system are: : How to handle imports : Needless inflation Goods from the Central Repositories could exported, with goods received valued on a one-to-one basis and those imported goods being distributed by the Central Repository.Inflation would need to be curbed by a State-controlled Registry of Prices: all products supplied by the Central Repository would have unchangeable prices attached to them – a fixed mark-up over their cost price. To ensure that businesses are incentivised towards developing their staff’s skills, the Central Repository could establish limits on the quantities of a specific item of goods it would accept – so the whole economy doesn’t just revolve around producing matchsticks by unskilled manual labour. Trading licences wouldn’t be issued to companies not manufacturing towards a specific need by the population.

So anyway, I’m sure there are a lot of problems to the above system. The obvious one is the initial stage at which the consumer demand – every employed person with a salary to blow – exceeds the existing stock levels. That’s really just an operations management problem. It’s a question of breaking the country into clusters and limiting spending: focusing new production on the basic ‘must-have’ items and expanding production lines as soon as the core demand is met.

Please don’t kill me for the above: it’s just conjecture.All I know is that we’re not utilising all of South Africa’s human potential while we have unemployment, and it seems unnecessary if we just throw away some ingrained concepts from capitalism. Causes of Poverty In our short analysis of the many causes of poverty, we shall explore three sections- economic, political, external. Social Overpopulation Overpopulation is defined as the situation of having large numbers of people with too few resources and too little space.

Overpopulation can result from either a high population density (the ratio of people to land area) or from low amounts of resources, or from both.A high population density pressures the available resources in the country, as the resources can only support a certain number of people. Poverty can also depend on the country’s mix of population density and agriculture productivity. For example, Bangladesh has one of the world’s highest population density with , persons per sq km (, persons per sq mi).

A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the countryis extremely high level of poverty. However, this only applies to third-world countries who do not have advanced technologies.High birth rates contribute to overpopulation in many developing countries. Children, especially boys, are assets to many poor families because they provide labor, usually for farming.

Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning (see Birth Control) Families may also not know about family planning due to the lack of education. Hence, most developing countries have high rates of population growth.Population density: A country’s level of poverty can depend greatly on its mix of population density and agricultural productivity.

Bangladesh, for example, has one of the world’s highest population densities, with , persons per sq km (, persons per sq mi). A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the country’s extremely high level of poverty. Some of the smaller countries in western Europe, such as The Netherlands and Belgium, have high population densities as well.These countries practice mechanized farming and are involved in high-tech industries.

On the other hand, many countries in sub-Saharan Africa have population densities of less than persons per sq km ( persons per sq mi). Many people in these countries practice manual subsistence farming. These countries have infertile land and lack the economic resources and technology to boost productivity. As a consequence, these nations are very poor.

Birth rates: High birth rates contribute to overpopulation in many developing countries.Children are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning and birth control.

Distribution of resources: In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success.Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much.

Because people in developed nations may have more wealth and resources than those in developing countries, their standard of living is also generally higher.Thus, people who have what would be considered adequate wealth and resources in developing countries may be considered poor in developed countries. In contrast, people in developing countries may consider themselves to be doing well if they have productive gardens, some livestock, and a house of thatch or mud-brick. In rural areas, people may be accustomed to not having plumbing, electricity, or formal health care.

By the standards of developed countries, such living conditions are considered hallmarks of poverty.According to reports, people’s incomes are not enough to cover the cost of their basic necessities and provide them basic services such as water, electricity, transportation and communication. It pointed out that recent surveys confirm that percent of citizen’s expenses go for to food, most notably among vulnerable groups that are deprived of basic services and luxury means. Lack of education: Illiteracy and lack of education are common in poor countries.

Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas.Whereas virtually all children in industrialized countries have access to an education, only about percent of children in sub-Saharan Africa even attend elementary school. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition,developing countries tend to have few employment opportunities, especially for women.

As a result, people may see little reason to go to school. Reports have also argued that percent of Yemen’s rural population lives on less than two dollars per day, and percent of Yemen’s poor population live in rural areas.It clarified that percent of Yemen’s population are illiterate, which is another reason for poverty and unemployment. In countries with high populations, unemployment levels of only a few percentage points mean that millions of working-age people cannot find work and earn an adequate income.

Because unemployment figures indicate only the number of people eligible to work who have no job but are seeking employment, such figures are not necessarily an accurate indicator of the number of people living in poverty.Other people may not be able to find enough work or may earn wages too low to support themselves. Environmental degradation: Environmental degradation is the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests — is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources.

As forests, land, air, and water are degraded, people who live directly off these natural resources suffer most from the effects.People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation. In developing countries, deforestation has had particularly devastating environmental effects. Many rural people, particularly in tropical regions, depend on forests as a source of food and other resources, and deforestation damages or eliminates these supplies.

Forests also absorb many pollutants and water from extended rains; without forests, pollution increases and massive flooding further decreases the usability of the deforested areas. Economic trends: Poverty in many developed countries can be linked to economic trends. Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased.

Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work. In many developed nations the number of people living in poverty has increased due to rising disparities in the distribution of resources within these countries.Since the s, for instance, the poorest percent of all U. S. households have earned an increasingly smaller percentage of the total national income (generally less than percent) while the wealthiest percent of households have earned an increasingly greater percentage (about percent of the total). Demographic shifts: Some researchers also cite demographic shifts as contributing to increases in overall poverty. In particular, demographic shifts have led to increases in poverty among children.

In the United States, for instance, typical family structures have changed significantly, leading to an increase in single-parent families, which tend to be poorer. There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools.

In addition, many people in developed countries blame cycles of poverty, or the tendency for the poor to remain poor, on overly generous welfare programs.Supporters of this position, including some politicians, argue against government spending and initiatives to help the poor. In the United States, the belief that cash welfare assistance actually encouraged personal decisions leading to poverty dominated policy discussions of the s. In response, in the U. S. Congress created a new welfare program called Temporary Assistance to Needy Families (TANF). This program ended the guarantee of cash benefits for poor families with children, shifted more control to the states, and established stricter work requirements for recipients. The numbers of poor families with children eceiving cash welfare fell dramatically, from million in to . million at the end of . Others: Reports have noted that poverty is also symptomatic a symptom of poor basic services, scarce financial resources and low returns from natural wealth such as oil, gas, minerals and fisheries while revenues from public investments and taxes are exposed to corruption and embezzlement. Economic – High rate of unemployment – Unemployment is rampant now that the global financial crisis has ravaged the world’s economy.

With a higher number of unemployed people, crime rates in these cities will increase as people grow desperate to survive.It is also believed, however, that some governments of the world intentionally keep a “sufficient” number of people out of work as a replacement batch when the need arrives. – Unfair trade High subsidies and protective tariffs for agriculture in the developed world drains the taxed money and increases prices for consumers in the developed world, decreasing competition and efficiency and preventing exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers and undermining the very type of industry in which developing countires do.Corruption (Economically-wise) Corruption often accompanies centralization of power, when leaders are not accountable to those they serve.

More directly, corruption inhibits development when leaders help themselves to money that would otherwise be used for development projects. Corruption, both in government and business, places heavy cost on society. Businesses should enact, publicize and follow codes of conduct banning corruption on the part of their staff and directors.Citizens must demand greater transparency on the part of both government and the corporate sector and create reform movements where needed.

Corruption is both a major cause and a result of poverty around the world. It occurs at all levels of society, from local and national governments, civil society, judiciary functions, large and small businesses, military and other services and so on. Corruption affects the poorest the most, whether in rich or poor nations. The issue of corruption is very much inter-related with other issues.

At a global level, the economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny. A difficult thing to measure or compare, however, is the impact of corruption on poverty against the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies,” free” trade agreements and so on. It is easier to see corruption.It is harder to see these other more formal, even legal forms of “corruption.

” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international communities and many of us will be accustomed to it—it is how it works, so to speak. This is not to belittle the issue of corruption, however, for its impacts are enormous evidently. Tackling corruption A broader way to try and tackle corruption can be made by attempting to provide a more just, democratic and transparent process in terms of relations between donor nations and their creditors:An independent process would have five goals: To restore some justice to a system in which international creditors play the role of plaintiff, judge and jury, in their own court of international finance. To introduce discipline into sovereign lending and borrowing arrangements—and thereby prevent future crises.

To counter corruption in borrowing and lending, by introducing accountability through a free press and greater transparency to civil society in both the creditor and debtor nations. To strengthen local democratic institutions, by empowering them to challenge and influence elites.To encourage greater understanding and economic literacy among citizens, and thereby empower them to question, challenge and hold their elites to account. Poor Governance Governance is defined as the manner in which power is exercised in the management of a country’s social and economic resources for development.

Good governance implies a capacity to turn public income into human development outcomes. Good governance is an essential pre-condition for pro-poor growth as it establishes the enabling regulatory and legal framework essential for the sound functioning of land, labor, capital and other factor markets.Corruption and political instability resulted in weakening of business confidence, deteriorating economic growth, declining public expenditure on basic entitlements, low efficiency in delivery of public services as discussed in the earlier section on human development, and a serious undermining of state institutions and the rule of law. Political Prejudice and inequality Social inequality that stems from cultural ideas about the relative worth of different genders, races, ethnic groups, and social classes.

Ascribed inequality works by placing individuals in different social categories at birth, often based on religious, ethnic, or ‘racial’ characteristics. In certain countries in the world, governments tend to favour a specific creed or race or people. This is evident in South Africa. In South African history, apartheid laws defined a binary caste system that assigned different rights and social spaces to different races, using skin colour to automatically determine the opportunities available to individuals in each group.

These people enjoy educational, social and welfare benefits. For example, the children of these people are able to enjoy education with subsidised school fees; adults are able to obtain high-paying jobs easily etc. Instead of channelling resources to help those at need, the governments of these countries choose to treat different races and creeds with prejudice and will treat others with less favouritism. Hence, this leads to poverty.

Corruption (Politically-wise) Corruption is a rampant problem in the world today, especially in third-world countries.It undermines democracy and good governance by flouting formal processes. Corruption often occurs when leaders are not accountable to those they serve. Corruption usually inhibits development when leaders help themselves to money that would otherwise be used for development projects.

Corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection.Also, it generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. In Nigeria for example, more than Billion dollars was stolen from the National Treasury by Nigeria’s leaders from to . Forms of such corruption include embezzlement, bribery, cronyism, nepotism, graft etc.

Hence, this leads to poverty as leaders should have used the money they usurped to help the poor, which results in a lack of funds. Centralization of Power In many developing countries, political power is disproportionately centralized.Instead of having a network of political representatives distributed equally throughout society, in centralized systems of governance one major party, politician, or region is responsible for decision-making throughout the country,causing development problems. For example, politicians make decisions about places that they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs.

External & Other Causes Civil War Nations experiencing civil war will experience stunted economic growth rate.For example, from to , the period encompassing Desert Storm, per capita GDP in Iraq fell from $ to $. This is significant as it shows the drop in the well being of all citizens in the affected country. It however, fails to capture the broader affects of damages to the infrastructure and social services, such as health care and access to clean water, which are not captured.

The loss of infrastructure and breakdown of society will inevitably lead to the nation having to spend a hefty sum to rebuild and prepare itself for the economy.Furthermore, civil war diverts scarce resources from fighting poverty to maintaining a military. This is evident in the cases of Ethiopia and Eritrea. The most recent conflict over borders between the two countries erupted into war during and , a period when both countries faced food shortages due to droughts.

Historical There is a lack of uniform, basic infrastructure, such as roads and means of communication and hence, development can hardly occur in poor countries. Some scholars have asserted that colonial history was an important factor and reason to the current situation.In most countries with a history of colonization, colonialists used the colonies to provide raw materials and other resources for their own economic growth and development. M. E. Chamberlain once said that the “Industrial revolution depended on raw materials like iron and coal. Africa was likely to be more significant as a supplier than as a market. ” Moreover, David Thompson also asserted that “the special attractions of Africa and Asia were, indeed, that they offered many of the raw materials needed by the multiplying factories of Europe: including cotton, silk, rubber, vegetable oils, and the rarer minerals.

This is significant as the colonialists colonised these countries due to the fact that the colonies would provide natural resources and markets for economic and industrial growth, thus solving their economic woes. Furthermore, H. R. Cowie has also pointed out that “New systems of agricultural production imposed upon colonial communities transformed land owners into wage earners susceptible to the threat of unemployment.

” This is evident in Senegal and Nigeria in which the groundnut-oil mill was restricted.It was also known that the state agricultural export monopolies in Burma and in East and West Africa have withheld from the producers a very large production of the sales proceeds. This is significant as colonialism brought along poverty indirectly as they prevented the colonies from developing. This is again propounded by J. A Hobson, H. N Bralisford, Leonard Woolf and Lenin, who said that colonialism brought about exploitation of economies and resource primarily through conquest of markets for capital and commodities. Professor Gunnar Myrdal also said that colonialism brought bout the retardation of economy by depriving the colonies of the economic benefits of a sovereign state. He elaborated that the inability of locals to pursue active economic development policies, especially in undertaking comprehensive central planning via state control, leading to the retardation of the economy.

Hence, countries that were ex-colonies (such as Ex-colonies Somalia and Uganda) face corruption and poverty. Natural Disasters Natural disasters such as hurricanes and earthquakes have caused millions of dollars worth of infrastructure and the loss of lives.Developing countries often suffer much more extensive and acute crises at the hands of natural disasters, because limited resources become obstacles for the construction of adequate housing, infrastructure, and mechanisms for responding to crises. Natural disasters, being uncontrollable by man, affect annual agricultural output, such as floods destroying the fertility of soils by washing away mineral-rich topsoil, and take away natural decomposing agents, rendering the soil infertile.

Droughts cause the land to become barren and unsuitable for cultivation.The states of the U. S. A situated in Tornado Alley face constant fears of poor harvests in the face of frequent tornado occurrences.

In the case of the Sichuan Earthquake in and The Tsunami catastrophe not only resulted in the loss of agriculture, but the destruction of millions of dollars worth of infrastructure as well. Uneven distribution of resources/lack of adequate resources in the world economy For example, it is known that many countries are facing poverty due to the lack of resources in the country.Why is this the caseOne reason is due to the legacy of colonisation. It was known that many years ago, many countries were colonised, which led to the transportation of many goods to the country which colonised it.

Hence, the colonised country does not have enough food/resources for its people. Moreover, when these once colonised countries start development towards modernisation, they lack raw infrastructure, such as transportation systems and power-generating facilities. These countries also lack raw materials and knowledge skills.As a result of this, the countries must rely on trade with developed countries for manufactured goods, instead of themselves, which burdens them even more.

The lack of materials also leads to lesser jobs for the population, in which will increase the rate of poverty, since most people in that countries will be unemployed, and are unable to earn themselves a living. As this goes on and on, the rate poverty will increase drastically. Some social scientists argue that neocolonisation, a type of colonisation, is also practised in many wealthy countries.The affluence of these countries is based to a large extent on favourable trade with the developing world.

Developed countries have been able to get inexpensive natural resources from poorer countries in Asia, Africa, and Latin America, including oil for power, ores and minerals for manufacturing durable goods, and manufactured goods made by low-wage workers in factories operated by multinational corporations. This practice contributes to the dependency of poorer countries while not raising their standards of living. Conclusion There are things that some people until now can’t apprehend.Aside from the everyday expenditure, many people have vices such as cigarettes and alcohols which we weren’t able to include in our daily expenses.

When people begin to get wages or salaries, they immediately spend the money for worthless and nonsense things instead of saving it. Some of them, if it is not for their vices, they spend their money in stakes, testing their luck and expecting to be rich immediately. As we all know, poverty is a curse. It was written in the Bible that God has curse man, “In toil you will eat of it all the days of your life.

This only means that man can’t eat without working hard. God will only provide for those who are persistent. There’s no place in this world for lazy people. overnment committed to addressing child poverty …

The Symposium brought together high level government officials, researchers, policy makers, international development agencies, and grassroots representatives to debate and think through the challenges of addressing child poverty in South Africa. The Minister for Social Development indicated that it was important to understand poverty as a multidimensional issue that requires a holistic and integrated approach. He further emphasised the importance of government’s strategies to address child poverty such as the child support grant.

He also indicates that one of government’s priorities is to accelerate early childhood development for the current and succeeding periods. UNICEF Regional Policy Advisor Prof Sudhanshu Handa’s presentation dealt with the emerging African model for cash transfers as observed in South Africa, Kenya, Malawi, Zambia and Uganda. He emphasised the social and economic case for early childhood development and summarized the evidence on the impact of early childhood deficits and later life outcomes, and outlined successful strategies to avoid the loss of developmental potential for young children in developing countries.Ms Julianna Lindsey, UNICEF Deputy Representative in South Africa, urged delegates to develop forward looking scenarios to address child poverty in the country.

She also stressed the importance of gathering evidence that can be used to demonstrate that programmes to alleviate child poverty truly have an impact and are worth funding. The symposium created the opportunity to pull recommendations on addressing child poverty from its high level representation. Deputy Minister for Social Development, Dr Jean Benjamin, summarized the recommendations for action.These recommendations will be reviewed by the Ministry and Department of Social Development.

It is evident that recommendations focus on policy, resource mobilization, and practical solutions in addressing child poverty. UNICEF wishes to express our appreciation to the Ministry for Social Development for initiating this important debate on solutions towards ending child poverty in South Africa. This symposium set an important milestone towards the country’s progress in achieving Millennium Development Goal (Eradication of extreme poverty and hunger). Poverty ReductionUNDP South Africa’s work on poverty reduction is governed by several internationally agreed frameworks such as the Millennium Declaration, the MDGs, and the International Development Goals.

Our core services focus on three main areas: Strategies and Policies for Poverty Reduction, Inclusive Globalization, and Support for MDG-Aligned National Development Strategies. In addition, UNDP’s work is reinforced by the International Poverty Centre, a joint project between UNDP and the Brazilian Government that promotes South-South Cooperation on applied poverty research, and by its network of over country offices.Our core services to support national efforts to reduce poverty and inequities involve: () Policy advice and technical support; () Strengthening capacity of institutions and individuals () Advocacy, communications, and public information; () Promoting and brokering dialogue; and () Knowledge networking and sharing of good practices. Through the Millennium Declaration and the Millennium Development Goals the world is addressing the many dimensions of human development, including halving by the proportion of people living in extreme poverty.

Developing countries are working to create their own national poverty eradication strategies based on local needs and priorities. UNDP advocates for these nationally-owned solutions and helps to make them effective through ensuring a greater voice for poor people, expanding access to productive assets and economic opportunities, and linking poverty programmes with countries’ international economic and financial policies. At the same time, UNDP contributes to efforts at reforming trade, debt relief and investment arrangements to better support national poverty reduction and make globalisation work for poor people.UNDP South Africa’s work on poverty reduction is governed by several internationally agreed frameworks such as the Millennium Declaration, the MDGs, and the International Development Goals.

Our core services focus on three main areas: Strategies and Policies for Poverty Reduction, Inclusive Globalization, and Support for MDG-Aligned National Development Strategies. In addition, UNDP’s work is reinforced by the International Poverty Centre, a joint project between UNDP and the Brazilian Government that promotes South-South Cooperation on appliedPovetyAfrica,Poverty,Socialsecurity,Sociology,SouthAfrica,Unemployment,Welfare,WelfareeconomicsPOVERTY IN SOUTH AFRICA – POVERTY WEEK DEBATE This week is Poverty Week. This Bulletin examines the extent and nature of poverty in South Africa and highlights the policies that the ANC is pursuing in Government to fight poverty in our country. What is povertyThe poverty line was defined in as an urban household (two adults and three children) with a monthly income of less than R.

  • In , the poverty line for a rural household (two adults and three children) was defined as a monthly income of less than R. How many people are in poverty in South Africa
  • In , the Centre for Development and Enterprise estimated that over three million households (about per cent) were living in poverty
    Almost one in three people do not have enough to eat
  • In , about two-thirds of all black children were living in poverty. Where is poverty most acuteAbout per cent of South Africa`s poor live in rural areas – especially in the former homelands and TBVC states
  • per cent of South Africa`s poor live in the Eastern Cape
  • per cent of South Africa`s poor live in KwaZulu/Natal
  • per cent of South Africa`s poor live in the Northern Province
  • In , about a third of all black people living in metropolitan areas were in poverty
  • In rural areas, per cent of women and per cent of men are living in poverty.Who is living in poverty
  • nearly per cent of South Africa`s poor are black
  • five per cent are coloured
  • less than one per cent are Asian or white What is the main cause of poverty in South AfricaThe primary cause of poverty is lack of income, and
  • the main cause of a lack of income is the lack of paid work.

More than per cent of South Africa`s poor working-age adults are unemployed. Unemployment is therefore the core cause of poverty in South Africa, and it has a clear race dimension.Unemployment among black South Africans is per cent; among coloureds, it is per cent; among Indians, per cent; and among whites, four per cent.

  • black South Africans have nearly twice the unemployment rate of coloureds
  • black South Africans have more than three times the unemployment rate of Indians
  • black South Africans have almost ten times the unemployment rate of whites.

The Government is fighting poverty through health policies As well as attacking the root causes of poverty, the Government is also dealing with the damage that poverty causes to the health of the poor, particularly among children. Since , the Government has:
guaranteed free health care for all children up to the age of six
introduced school feeding programmes to provide basic nutrition to millions of school children
guaranteed free health care to pregnant women undertaken immunisation programmes against polio and tuberculosis
restructured health services to enable universal and free access to primary care for the poor, especially in rural areas, which were previously overlooked in the provision of health services. The Government is fighting poverty through education policies For South Africa to eliminate poverty, it must ensure that the poor are given the opportunities to help themselves.Education is a key plank of the strategy, to provide all South Africans with the skills and training they need to compete for work and enjoy a higher standard of living than was enjoyed by their parents and grandparents.

The Government is therefore:

  • renovating thousands of existing schools
  • building thousands of new classrooms
  • increasing attendance rates in secondary and tertiary institutions
  • increasing access to all universities for previously disadvantaged racial groups. The Government is fighting poverty through meeting basic needs

The most basic of all needs is clean water.The Government has launched a major programme to supply portable water to the million people who do not have adequate access.

Section : The causes of poverty and addressing the challenges The distribution, extent and characteristics of social exclusion in South Africa have a definite material and structural basis. In short, the economic aspects of social exclusion are linked to the inability to command a sufficient flow of resources to avoid growing inequalities and to prevent deprivation—be it nutritional, medical, in terms of shelter, or a lack of full participation in society. .

Inequalities in the distribution of wealth There are five broad categories of economic flows reflecting different economic positions in an economy. These include income derived from owning property, income received in terms of salaries and wages, economic resources mobilised through subsistence and household activities, transfer payments received from private or government sources and self-employment. Each of these categories is intimately connected to a set of economic relationships that define and structure a modern capitalist economy.Exclusion from, or marginalisation within, these sources of economic resource flows greatly increases the risk of poverty.

A key factor in South Africa is the skewed distribution of economic assets. Apartheid was central to this skewed distribution, driving the social exclusion of the majority and social inclusion of the minority. In particular, the apartheid regime constructed citizenship and subject rights to determine which groups would have access to what level of social protection depending on their functionality to the racially constructed economic and social system.Apartheid gave black South Africans an inferior education, excluded them from ownership of most of the land and the prime residential property, and prevented them from entering many of the more lucrative occupations by prohibiting or severely restricting their access to many economic activities.

The following are all examples of apartheid measures, which excluded the majority of people. The Land Act of , which confined the land area that Africans could legally own or rent to per cent of South Africa The Mines Act, which contained the first of many job reservations policies The Urban Areas Act of Coloured Preference Policy The Group Areas Act of , which restricted African access and African economic activity in the urban areas. White South Africans were from onwards given substantial protection against poverty and vulnerability, partly by measures to exclude black South Africans referred to above, and partly by the introduction of social and economic policies similar to those adopted in the social democratic countries of Europe. Black South Africans were generally either excluded from these positive measures, or were protected to a much lesser extent than the white counterparts.

For example, the Industrial Relations Act that gave employees rights similar to that they were gaining in the Scandinavian countries, but excluded Africans from the definition. In the mid-s the old age pension paid out to Africans was only per cent of that of white South Africans. Substantial maintenance grants were paid to single mothers with low income, but not if they were African. i Over the last few decades of the twentieth century, blacks began to gain access to work related benefits and social insurance institutions primarily due to increasing unionisation and political ressure.

This formed an important pressure that precipitated the breakdown of the citizenship/subject relationship underpinning the apartheid regime. As democracy approached, the expectations of the excluded majority increased in regard to the role of the post-apartheid State in ensuring redress, employment and development. However, as democracy approached, the apartheid regime, seeking to pre-empt effective post-apartheid intervention, sought to push through various pieces of legislation loosening the grip of government over social and economic policy.In some instances they were successful (such as deregulating aspects of private healthcare and food production).

In other areas, such as broader economic policy, social resistance manifested through mass mobilisation and the establishment of tripartite socioeconomic forums restrained them. . Shortcomings in the South African social security system As mentioned above, the apartheid social security system was generally comprehensive and inclusive for whites at the expense of the black majority, who were entirely excluded.

Though the distributional stance has shifted considerably since that period, many distortions remain. First, regarding non-contributory social assistance, there are large gaps resulting in a large proportion of the poor being excluded, and those who are uncovered are often not given appropriate support. The assumptions on which the Social Assistance Act, No. of , is based are the following: There is strategic social security planning capacity, at appropriate government levels, that is able to prioritise, co-ordinate and integrate interventions.

There is administrative capacity to implement legislation and policies. This includes national, provincial and local governments with the requisite staffing levels, skills, systems and procedures, and financial and other necessary resources. It also includes the ability of these different branches of government to enter into and manage public-private partnerships. There is a pre-existing social security infrastructure, both in urban and rural areas, that can be used as a platform from which to roll-out policy and legislative requirements.

Social security development and planning is sequenced with national budgetary planning. The integrity of social security policies and legislation, once reached, need to be maintained by being provided with requisite fiscal support to, for example, ensure that benefits maintain their real values. Significant levels of public debt exist which act as additional limitations on the coverage, extent and characteristics of social security provision that is possible. Significant economic growth with job creating outcomes, thus taking pressure off social security provision.

Capacity of community sector to use new opportunities and to limit their expectations in relation to government programmes The Social Assistance Act covers the following categories of people: Aged Women over years of age, and men over years of age receive a State Old Age grant of R per month. This grant is the largest current social security transfer in the country, and, for those elderly persons who receive it, the grant plays a pivotal poverty alleviation role for the entire household. Disabled There is a disabled grant of R per month for medically-diagnosed disabled persons over years of age.This grant is a de facto poverty grant, as per cent of recipients are also in poverty.

Foster care There is a grant of R per month for caring for foster families caring for children under years of age. Care dependency grant There is a grant of R per month for parents of a disabled child (-) who requires care at home by another person. Thereafter application must be made for the adult disability grant. Child support grant There is a child support grant of R per month, paid to the primary caregiver, for children under seven years of age.

This grant has been afflicted by a slow take-up rate, with only per cent of the targeted group receiving the grant three years after implementation. iii The following categories remain uncovered by social assistance: Children per cent of poor children below seven years of age do not get the child support grant. All children over seven do not get any support. Finally, all children without primary caregivers, and child-headed households (which are in the increase) do not get any grant.

Disabled Those with a chronic illness but who do not meet the strict medically based criteria are excluded.Thus if the disability is not medically complete, but does prevent that person from carrying out their trade, they would not qualify for the grant. Unemployed The UIF covers only per cent of the unemployed. iv Therefore excluding those unemployed getting disability and childcare related grants, about five million unemployed people are without any form of income support from the social security system.

Poverty Those with incomes below the poverty line, including working poor, are without any social security transfers. Currently about per cent of the all the poor, or million people, are uncovered. v ??Non-citizens While the Constitution in S () (c) states that “everyone” has a right to social security, current social assistance mostly excludes non-citizens. In this regard, there will probably be constitutional pressure to ensure all people (including illegal immigrants) have access to certain basic services (such as emergency healthcare), and full access to certain categories such as refugees.

In short, there are large gaps and inadequacies in the social assistance system. Second, regarding contribution-funded social insurance and regulated private schemes, these, too, cover a relatively small number of the population.Moreover, the increasing numbers who fall outside of the formal sector undermine the scope of social insurance’s contribution base, further limiting the system. In addition, there are internal distribution inadequacies within social insurance that provides the most vulnerable workers with a smaller share of benefits.

The better paid generally seem to secure the largest share of benefits. Furthermore, some of the most vulnerable workers are often legally excluded from the system. The limited nature of the publicly provided benefits means that social ecurity costs are, de facto, passed onto employers. This has increased non-wage costs in the economy.

This acts as a disincentive for direct employment, that is, the employment of regular workers. The increase in indirect employment (including casualisation), and the stagnation of net permanent jobs, is partly the result of employers trying to avoid these non-wage costs. The growth of employer-linked benefits necessarily excludes a significant share of the population. The unemployed, informally employed and many temporary workers have no access to these benefits.

A current legal framework that cannot cope with the changing forms of employment aids this. In the South African situation this forces the non-wage costs to be higher still, since workers require more to support many unemployed persons (with no benefits) in their household. Consequently, this contributes to upward pressure on workers’ remuneration. This extreme pressure on the breadwinner effectively undermines any worker support for labour flexibility—since loss of employment equals total loss of income.

Private-provision schemes are contributing to escalating costs of services.Healthcare is a primary example of this. South Africa spends, including both public and private expenditure, about almost twice on health than considered necessary by the World Health Organisation—all this for relatively inadequate public and private service. The national overspend derives primarily from the cost-intensive private medical scheme environment that has created perverse incentives for over-servicing by private providers (who are paid on a fee-for-service basis), massive administrator profit-taking and undermined consumer protection.

The relatively high levels of expenditure is due to two-thirds of health spending going towards the well resourced, private health sector. vi Profit-driven provision of services has often been accompanied by a removal of crosssubsidies to those unable to afford services. There is a tendency to “cherry-pick” highincome, low-risk groups that accordingly increases the difficulty of funding publicly provided social services through contributions. Third, it is important to consider the additional barriers faced by women.

The UN Commission for Social Developmentvii stresses the following: many women are still barred from paid employment because of their homemaking and childcare duties. Inferior access to health, education and training places them in a disadvantageous position in the labour market where many women predominate in low-pay, low-status, part-time or contract-work, which offers limited opportunities for social security coverage. Additionally, unequal access to productive resources such as land, credit, … restricts women’s capacity for self-protection and increasing their dependence on their families.These gender barriers are equally relevant for South Africa, too.

The growing challenges The inadequacy of current interventions, in a context of persistently high risk and deprivation, has contributed to several growing and, potentially, unsustainable challenges. The most important of these are the following: The wage-income relationship is breaking down High unemployment, including the massive net loss of formal sector jobs, and growing shift towards so-called “atypical” work, has reduced the incomes of the poor.

Historically, the working poor have supported the poor and unemployed via remittances and intra-household transfers. However, this relationship between formal sector wages and household incomes has declined due to the considerable loss of net formal jobs, and the downward qualitative shift in formal employment being created. In this period, there has been a decline in the incomes of the poorest per cent. viii The state is increasingly vulnerable to Constitutional Court challenges The Constitutional Court, in its State v.

Grootboom judgement, has increased pressure on the State to put in place a coherent and comprehensive programme for progressively realising the constitutional obligations. This requires devising, formulating, funding, implementing and constantly reviewing relevant measures. The Grootboom judgement opens the way for further constitutional challenges against the State on the basis of not complying with the Constitution’s Bill of Rights. It should also be noted that theConstitutional Court has the power to enforce socio-economic rights, with direct implications for budgetary matters.

The impact of AIDS will exacerbate poverty and inequality Research conducted for the Department of Health indicates that there will be , million people infected with HIV/AIDS by ,ix and the impact will be increasingly felt in society. The impact is apparently already evident on social service institutions (mainly public healthcare).This will increase downward pressure on households and household incomes, and could significantly undermine the country’s medium- to long-term economic growth and social development potential. The racially differentiated composition of public service users reinforces apartheid-style prejudice The poor (mainly black) are dependent on strained public services, if at all available.

The rich (mainly white) make use of private services. There is thus a continuation of the Two Nation divide.This also contributes to a lack of a lack of racial tolerance and understanding, and reduced support among whites and the rich for interventions to bolster the public services. Delivery of key services is affected by inability of poor to pay for inclusion More people have access to important basic service such as telecommunications, water and sanitation, electricity, housing, and primary healthcare.

While these have been hard fought gains, this extension of services has been undermined by an inability of the poor to afford payment. Importantly, this same lack of an ability to pay undermines the possibilities for social insurance to be the key route of including those who are currently excluded. Poverty-related increase in crime and social instability This is potentially undermining to legitimacy of new democracy, and investment strategies. Levels of crime remain far too high, and include an increasing incidence of domestic violence.

This reflects the underlying causality of poverty and the resulting depressed aspirations among the poorest in society. Social development/investment backlogs are now widely recognised as barriers to economic growth and development There is growing recognition among international financial and credit rating institutions, national government and domestic social formations, that insufficient social investment and social development backlogs are a primary barrier to the achievement of sustainable levels of economic growth and development. .

Defining an appropriate social security conceptComprehensive social security … is necessary because traditional familial, communal, or private market welfare arrangements are wholly inadequate. It is also necessary because stable democracy demands a level of social integration that only genuine citizenship can inculcate. (Esping-Andersen, [], p. ) … since the early twentieth century, welfare policies have reached across from public to private and helped uphold a patriarchal structure of familial life … (Cited in O’Connor et al, , p.) . . Comprehensive social protectionThe objective of comprehensive social security is the “provision of a national social security system” with the ultimate goal of ensuring that all South Africans have a minimum income, sufficient to meet basic subsistence needs, and should not have to live below minimum acceptable standards”.

(White Paper for Social Welfare, ) The term “social security” has, internationally, attracted a wide range of meanings, and needs to be clarified at this point. In developed countries, where the term first originated, social security refers mainly to the following: Social assistance This refers to State provided basic minimum protection to relieve poverty, essentially subject to qualifying criteria on a non-contributory basis. Social insurance This refers to a mandatory contributory system of one kind or another, or regulated private sector provision, concerned with the spreading of income over the life cycle or the pooling of risks. Social security, as defined by its European origins, developed as a complement to the formal employment relationship.

The extent to which one an adopt this traditional concept of social security for South Africa can be questioned. First, the contributory-social insurance bias inherent in unemployment benefit schemes will have limited effect in the context of high and persistent levels of unemployment and growing informal work. In such an environment, there would be little possibility of insuring oneself against the “contingency risk” of unemployment—rather the entire environment would be one of uncertainty, in which insurance would be impossible.Further, attempts to get the all of the working poor and socially excluded to contribute to such systems are certain to fall short.

Second, while the non-contributory social assistance aspect can extend to non-contributors, it does so in a residual “safety net” fashion, essentially seeking to ameliorate the difficulties of those that fall through the economic system. However, developing countries such as South Africa, require more active systems that can play a constructive role in promoting economic development and addressing the structural basis of poverty and social exclusion.As a result of these weaknesses in the traditional concept of social security, the concept of “social protection” has originated, largely to accommodate the realities of developing countries. The United Nations (UN) Commission on Social Development describes social protection as: Social protection embodies society’s responses to levels of either risk or deprivation … These include secure access to income, livelihood, employment, health and education services, nutrition and shelter.

Further, the UN Commission notes that:The ultimate purpose of social protection is to increase capabilities and opportunities and, thereby, human development. While by its very nature social protection aims at providing at least minimum standards of well-being to people in dire circumstances enabling them to live with dignity, one should not overlook that social protection should not simply be seen as a residual policy function of assuring the welfare of the poorest—but as a foundation at a societal level for promoting social justice and social cohesion, developing human capabilities and promoting economic dynamism and creativity. xiClearly a broad conceptualisation of social protection has many merits for South Africa. First, it incorporates developmental strategies and programmes more appropriate to a developing country such as South Africa.

For instance, it increases opportunities for people doing “informal” work to gain access to social protective coverage. Second, it provides a coherent framework for integrating existing and proposed social and economic policy interventions. These wider functions and objectives of social protection are better able to address socially and economically embedded problems, new risks and increased vulnerabilities. Third, social protection could create added potential for integrated and linked private, public and community sector interventions and benefit systems.

For these reasons, the Committee of Inquiry has taken on board the concept of social protection. However, such as system in South Africa, even more than suggested by the UN Commission, needs to be embedded in economic organisation and social relations enabling it to address the country’s underlying structural and material basis of social exclusion. For this reason, the Committee of Inquiry has settled on the term Comprehensive Social Protection (CSP).The Committee defines comprehensive social protection thus: Comprehensive social protection for South Africa seeks to provide the basic means for all people living in the country to effectively participate and advance in social and economic life, and in turn to contribute to social and economic development.

Comprehensive social protection is broader than the traditional concept of social security, and incorporates developmental strategies and programmes designed to ensure, collectively, at least a minimum acceptable living standard for all citizens.It embraces the traditional measures of social insurance, social assistance and social services, but goes beyond that to focus on causality through an integrated policy approach including many of the developmental initiatives undertaken by the State. .

A comprehensive social protection “package” CSP will work through a variety of mechanisms, embracing a “package” of social protection interventions and measures. The need for a package derives from an understanding that there are certain basic requirements that should be available to all, and not subject to being traded off against each other.For example, it is not acceptable to ask a poor parent to choose between attaining a certain level of household income or sending their children to school, though this is not an uncommon choice in reality.

Further, a package approach enables one to achieve a degree of balance between measures focused on reducing income, services (capability) and asset poverty. In this way, a dependence on cash benefits, ignoring the potential for basic service cost inflation, is avoided, or vice versa.Rather a poor person is guaranteed some cash support and a basic level of service delivery. This allows comprehensive social protection to better deliver on minimum acceptable living standard outcomes.

The “capabilities” approach developed by Amartya Sen, the recent Nobel-prize-winner has been useful in developing the content of the CSP package. Basic incomes, services, and assets emerge as central components of the “capabilities” approach. This is set out in table .

Matrix of means and endsxii Means Ends to promote Creation of entitlements Improvements in terms of exchange Building capacities Healthy Access to healthcare, water, sanitation Grants and institutional reforms Productive Redistribution of assets Restructuring of markets and redistribution of opportunities Improving access to and affordability of education and economic services Secure lives Tenure rights Social welfare and safety nets Community and individual safety (Source: May, et al. )In identifying the practical aspects of such an approach, and taking into account necessary adaptations for South Africa, the Committee of Inquiry has arrived at the following package form: a) Measures to address “income poverty” This includes measures to ensure that people have adequate incomes throughout their life cycle, covering childhood, working age and old age. Income poverty can be addressed through a range of measures.

However, the CSP package should comprise at least one primarily income transfer which ensures that all South African have some income to mitigate or eradicate destitution and starvation.A basic level of income would also have other developmental spin-offs related to enabling that person to participate more effectively in the economy (for example, afford the bus fare to engage in job search). b) Measures to address “capability poverty” This can be achieved through the provision of certain basic services, deemed crucial to enable a person to live and function in society. This includes the provision of basic (lifeline tariff) water and electricity, free and adequate healthcare, free education, food security, and affordable housing and transport.

Measures to address “asset poverty” This includes income-generating assets, such as land, and social capital such as community infrastructure. This addresses the key underlying structural basis of poverty and inequality in South Africa. d) Measures to address “special needs” This includes mainly standard measures to address special needs such as disability or child support. In the CSP package, (a) + (b) + (c) are core elements, the comprehensive social protection basic platform, that should be available to all South Africans (including certain categories of noncitizens).

To this basic floor, (d), which addresses special needs, and largely as it currently applies, will be added. Crucially, what are the key components of such a CSP packageAfter detailed analysis of the social and economic cost-benefits of possible components,xiii the key income transfers, services, assets and special needs measures put forward by the Committee of Inquiry are set out in table . Table .

Comprehensive social protection package and components Application Key components Income poverty Universal (a) Basic income grant Child support grant (- years) Maintained State Old Age grantCapability poverty Universal/ Eligibility criteria (b) Free and adequate publicly-provided healthcare Free primary and secondary education Free water and sanitation (lifeline) Free electricity (lifeline) Accessible and affordable public transport Access to affordable and adequate housing Asset poverty Universal/ Eligibility criteria (c) Access to productive and income-generating assets such as land and credit Access to social assets such as community infrastructure Special needs Eligibility (d) criteria Reformed disability grant COIDA (injuries) RAFThis package includes mainly publicly provided forms of social protection. On the whole this total package needs to be established as a universal-as-possible package of income transfers, services and access provided in a non work-related manner and whose availability is not primarily dependent on an ability to pay. In addition, the Committee of Inquiry has proposed important reforms to many other, privately provided but State regulated, aspects of social protection. These forms are aimed at improving inclusively, equity, consumer protection and efficiency of the benefit types concerned.

These include the private pension/provident funds and life assurance. .

Determining the “minimum” requirements for the CSP package The Constitution obliges the State to take positive action to meet the needs of those living in extreme conditions of poverty, basic services, and suffering from a lack of access to constitutionally stipulated socio-economic rights. The difficulty for the State, and anyone insisting on the State’s obligations, is that the “minimum essential level” must be described for each of the socio-economic rights (for example, the right to dequate housing). As the Constitutional Court, in The Republic of South Africa et al v. Grootboom et al, has observed: It is not possible to determine the minimum threshold for progressive realisation of the right to access to adequate housing without first identifying the needs and opportunities for the enjoyment of such a right.

This will vary according to factors such as income, unemployment, availability of land and poverty. The differences between city and rural communities will also determine the needs and opportunities for enjoyment of such a right.Variations ultimately depend on the economic and social history and circumstances of the country. Essentially, determining the “minimum essential level” could be a complex and involved process, with the minimum level being determined on a case-by-case basis.

In other words, determining or contesting a minimum essential level may require a Constitutional Court challenge each time, with uncertain outcomes for all concerned. While there is a clear logic to that approach, it does not appear to serve either the interests of the State, which may suffer costly judgements, or those in need of such minimum essential levels of support.This is all the more likely when one considers the State’s current lack of institutional ability to roll out these programmes fast enough. This lack of clarity over “minimum” obligations will therefore not assist effective delivery.

As a result, it may be advisable for the State to stipulate up front its considered minimum obligations for service delivery, such as it is doing with the free water programme, and its intended schedule for progressively realising this. Further, even while the State is rolling out these medium- to long-term programmes, it is has to ensure “temporary” relief for the poor who are “particularly vulnerable”.In all likelihood, the State will be unable to ensure that all of its capability and asset programmes adequately have built-in measures for temporary relief for those most vulnerable. The result is that the State is again exposed to Constitutional Court challenges, and instances where the poor feel forced to take matters into their own hands (such as with land invasions).

In this regard, the “income poverty” aspect of the CSP package is relevant, particularly for three reasons:First, income poverty measures are easier to rollout in the short-term than more infrastructural and institutional intensive “capabilities” and “asset” poverty programmes. Second, people who are in “capability” and “asset” poverty, or for that matter having “special needs”, are invariable also facing “income poverty”. Third, the Constitutional Court has recognised that if the State were providing better social assistance to the poor there would be less pressure on other socio-economic rights. The poor are particularly vulnerable and their needs require special attention.

It is in this context that the relationship between sections (housing) and section (social security) and other socio-economic rights is most apparent. If under section the state has in place programmes to provide adequate social assistance to those who are otherwise unable to support themselves and their dependants, that would be relevant to the State’s other obligations in respect of other socio-economic rights. In other words, the State could buy time for progressive realisation of its other socio-economic rights if it improved income transfers to the poor in the short term.

Social protection can promote sustainable growth The Poverty and Inequality Report concluded that the perpetuation of extreme poverty in South Africa would most likely act as a brake on the government’s economic growth strategy. And where higher growth was achieved, a noticeable reduction in poverty and inequality may not follow. As a result, it proposed that South Africa could pursue more redistributive policies without undermining current growth objectives—and rather that such policies would instead promote economic growth.Indeed, the UN Commission for Social Development finds that: Experiences of countries successful in economic, political and social terms show that economic development and social protection are mutually reinforcing— essentially they are elements of the same paradigm.

Any trade-off between public spending items, between various economic needs and the need for social protection must incorporate recognition of the long-term social pathologies … This approach (of objecting to social protection because it costs too much) has proved to be shortsighted and superficial. xivFurther, the UN Commission states, social protection facilitates the process of social and economic change by moderating the costs of economic transition and structural change. By providing a cushion, it can encourage the necessary economic restructuring.

“Affordability” is not a linear process Internationally, two factors have been important in terms of shaping the limits, or otherwise, of “affordability”. These two factors are: A country’s level of economic development The level of economic development broadly determines the limits of the social security system.

It is clear that, all other things being equal, a rich country can afford to provide a more comprehensive system than a poor one. South Africa, in this regard, is defined as an upper-middle income country. The relative strengths of social forces The relative strength of social forces and institutions determines the distribution of the country’s resources. A rich country may be able to afford to provide for everyone, but may instead develop a system that caters for the wealthy.

Therefore, conceptually, the “affordability” or otherwise of a social protection system is partially dependent on social contestation.However, political and institutional mechanisms can be used to avoid zero-sum trade-offs. For example, a productivity/investment accord could be agreed to in the context of a new comprehensive social protection system.

Fiscal space does exist A further factor is the extent to which “affordability” is determined by a policy decision to reduce public spending as a percentage of GDP from % in to % in . xv In this regard the parameters of “affordability” may be artificially constrained.

Further, research indicates considerable taxable capacity in the South African economy. South African revenue to-GDP is currently ,%, compared to ,% in Organisation for Economic Cooperation and Development (OECD) countries. xvi This indicates that higher taxes, if related to better outcomes, are unlikely to result in immigration from South Africa to OECD countries. Further, the South African revenue to-GDP level is lower than the average for developing countries within per cent of South Africa’s per capita income level.

However, before considering options for increasing tax revenue to-GDP ratios, there is a need to recognise that the current South African fiscal parameters can accommodate increased public spending, if appropriate and sufficient return initiatives can be developed and implemented. In this regard, there has been a reprioritisation away from social spending, without any prior explicit policy decision. The extent to which this has occurred (a shift of about R billion) represents some degree of fiscal space that can be reclaimed without a new policy decision being made. vii There is potentially further fiscal space through the creation of a “contingency reserve” in the National Budget.

Since /, the savings from the reduced debt servicing have been moved into an unallocated reserve. By /, it is estimated that this reserve would be , per cent of the total budget, or approximately R billion. xviii In addition, the State provides numerous tax breaks to regulated private sector providers. Several of these tax arrangements—running into many billions of rands each — are inherited from the past, and do not appear based on any clear rational or equitable basis.

Over time these could be reallocated on a clear, rational and equitable basis in line with the chosen social protection approach. .

Current system and social costs The current cost of social security transfers, based on actual take-up rates, is R billion. Calculations by the Committee of Inquiry show that should the take-up for these targeted schemes reach per cent, an additional R billion would be expended on grant payments. xix Further, in this event, there would be an approximate additional R billion required for the administrative costs based on current grant: administrative cost ratios. x In short, even in the current scenario, the total potential social spend could be increased by that additional R billion liability.

Finally, there is a cost to not acting. It is not always economic to defer important interventions and preventative steps for primarily short-term cost reasons. In this regard, the social backlog and accumulating challenges present a barrier both to social and economic development, and intervention sooner rather than later may be economically and fiscally prudent.Indeed it could be argued that via the negative social externalities generated by lack of State action, the society, or the affected communities bear the cost.

The need to resolve multi-institutional challenges in a short timeframe Given the legacy of apartheid and the relatively short space of time since democracy, much of the institutional framework necessary to address poverty, unemployment and inequality is weak or absent. Therefore the challenge is to rapidly resolve multi-institutional challenges.These challenges include, for example, the design of new policy and legislation; new administrative structures at national, provincial and local level put into place to ensure the inclusion of the previously excluded; a change of mindsets; the establishment of mechanisms to deliver social goods efficiently and equitably; and the establishment of monitoring and evaluation.

Since national government policy initiatives have attempted to finely-target poor and vulnerable groups within South Africa. However, the institutional mechanisms to implement such policies have been uneven, with crucial governance failures resulting.Public spending cutbacks have contributed to growing institutional crises. The current economic strategy has introduced a tighter fiscal approach from government, with less fiscal support for social protection reforms.

There is thus a resulting tension between increasing access to social protection (as required by the constitutional and democratic imperatives) and declining real per capita spending (driven by fiscal policies). Institutions have therefore struggled to both reduce costs and increase access.This declining public spending, concurrent with increasing commercialisation of key services, has pushed many people into the regulated private market. In this regard, the problems related to the health sector (mentioned above) are relevant.

To address this tension, institutional efficiencies clearly need to be improved substantially and/or fiscal support needs to be increased. Regarding institutional efficiencies, efforts to devolve functions and create new responsibilities for provincial and local government have run up against un-funded mandates and uneven institutional capacity. There is clearly more to be done in this area.First, there is a need to explore ways of increasing autonomy, and hence accountability, in delivery institutions (such as public hospitals) as a strategy to increase operational efficiency.

Second, the fiscal federal environment, introduced after the Constitution, needs to be re-examined. Provinces are responsible for implementation, but national government for developing planning and overall budgets. There is often a disjuncture between the two processes, with a tendency for the different roles and responsibilities to become confused and appropriately directed. Further, the means test has negatively affected the bility of the poor to access benefits.

Meanstested schemes invariably have low take-up rates, that is, only a small proportion of those entitled to assistance actually applies for or receives them. Some may argue that if people do not apply for a benefit then they must really not need the benefit very much or do not qualify for it. However, these are often not the reasons for non-application. More likely fear, a lack of public awareness of the schemes, an inability to afford the transport to the welfare offices, stigma, or difficulty inherent to the administrative requirements are the key factors.

In reality, it may be a combination of all of these. Means testing also intensifies the problem of the “welfare-trap”. At its simplest, this arises where you receive a benefit only if you are not earning anything else. As soon as you start earning, you lose the benefit.

While in practice some means tests allow for some income to be earned, the welfare-trap remains, if somewhat reduced. In the South African context, and the tendency for incomes to fluctuate, applying the means test correctly becomes a very complicated and generally impossible task within the available institutional capacity.Crucially, it promotes corruption, where government officials are in a position to waive or overlook certain requirements. In short, it is advisable that, wherever possible, social protection systems avoid the use of means tests.

Related to problems of means testing and screening of applicants is the unevenness and fragmented nature of adjudication measures. In many instances claimants are required to go to the High Court, face undue delays, and much of this without access to any legal aid. xii In this regard, consideration needs to be given to the creation of a social security tribunal able to process all social security claims (both social assistance and social insurance).

Incorporating social mobilisation into social protection Social mobilisation is important in embedding social protection in economic organisation and social relations. It is also important in terms of increasing the level of participatory governance, institutional accountability and, hence, contributing towards institutional effectiveness and efficiency.

In this regard, the Committee of Inquiry supports the notion of a Youth Corp engaged in comprehensive social protection activities. For instance, there is a need for approximately community-based caregivers to assist communities by dealing with the HIV/AIDS outcomes. xxiii Such a necessary scheme could be given to specially trained youth, potentially as part of a learnership programme, supported by existing social programme funds, with contributions from relevant job creation/skills development funds.In this regard non-governmental organisations (NGOs) and community-based organisations (CBOs), with government support, have an important role to play in creating and supporting an environment of social mobilisation.

Such a role seems preferable to NGOs/CBOs as partner delivery agents; these organisations are generally facing funding and capacity constraints, and the attempt to use them, as is the case with for-profit institutions, has exposed several weaknesses in government administrative and management systems.Those government departments using such organisations had the most prevalence of under spending (due to their inability to process the funding), and also limited delivery outcomes (due to their inability to ensure contract compliance). NGOs and CBOs are more likely better suited in social mobilisation roles, and related roles where they can keep a critical perspective and promote the interests of communities and potential beneficiaries.

The need for co-ordination of planning, implementation, monitoring and evaluationCurrent social security functions are, in practice, spread across many different line departments and tiers of government and the State. To the extent that the State needs to deliver a comprehensive social protection system, as suggested by the Committee of Inquiry, or meet its obligation to progressive realisation of its existing constitutional socio-economic obligations, better co-ordination of planning and implementation is needed.

Hand in hand with planning and implementation goes the need for effective monitoring and evaluation of programmes.Government has already recognised the need for this. One instance of improvement in this area has been the announcement of integrated urban and rural development strategies. This reflects an important understanding of the need to integrate service delivery strategies for optimal impact, in this case around development nodes.

These integrated strategies, while at an early stage, should result in more effect delivery at the nodal points. However, these strategies do not, and were not intended to, comprise a sufficiently coherent and co-ordinated response to the constitutional obligations.They are also unable to comprise a wider absence of a comprehensive social protection system. The Committee of Inquiry has thus revisited the notion of a National Social Security Agency.

It is suggested that such an agency be responsible for, in varying degrees, leading the planning and monitoring and evaluating of State programmes for comprehensive social security. While the various tiers of government currently required to implement programmes would largely continue to do so, a single national agency would promote effectiveness and overall State efficacy.The Committee recommends that social security (social assistance and social insurance payments) be a fully-funded mandate within a costed norms approach. This would be administered at a national level while social welfare services remain a concurrent function of national and provincial government.

It is further suggested that there could be provincial involvement in the national agency, representing a commitment to “co-operative governance”, through, for example, provincial secondments to the agency.The Committee envisages the establishment of a Social Protection Commission, that comprises relevant government departments, key stakeholders, and international experts. This Commission would play a policy advisory and evaluation role, and inform the activities of the agency. The Committee has also recognised that the budget processes need to reflect these planning processes.

In this regard, the current Medium-Term Expenditure Framework (MTEF) lacks a prior strategic framework that can shape the overall direction of government spending.The current MTEF process is largely effected on the basis of “competitive budgeting”, where departments compete against one another for resources. This encourages a less holistic and comprehensive approach, and has allowed, for instance, social spending as a whole to decline in relative terms rather than strengthen. For this reason, the Committee of Inquiry suggests a Medium-Term Strategic Framework (recognising the importance of comprehensive social protection) creating an overall framework for the MTEF.

Trends in poverty in Africa Decade after decade, politicians and international organizations have failed to reduce poverty.Nor have they been able to help Africa generate growth or build basic infrastructure. Worse, between and it was the only place on earth where poverty has intensified. It’s only recently that the situation started to slowly improve.

Excluding the African continent from the world In fact, there has been some growth since but it’s been mostly in the very new services sector so it created only a few jobs whereas manufacturing and agriculture could have done much better. As the British prime minister declared in African poverty is “a scar on the conscience of the world”.In recent years, globalization and technological inflation have made it only worse. It only helped further excluding the continent and widening the gaps with the rest of the world.

However development economists and experts from all boards are now approaching the problem from new angles to provide innovative ways to fight African poverty. Better yet, some African countries are now emerging as real economic powers thanks to better leadership and deals with foreign investors to build infrastructure. Let’s see how all that improves our understanding of poverty in Africa, the plague of a continent. Answer:Proper management of resources,prioritizing of needs and the ending of corruption and theft by government officials.

overty and inequality in South Africa Sep : – Sponsored Feature Today, almost half of South Africans are living below the poverty line, surviving on just over R a month — an improvement from . Special Focus Being Poor Matters Being Poor Matters Today, almost half of South Africans are living below the poverty line, surviving on just over R a month—an improvement from , where this was the case for the majority of the population. Yes, poverty has gone down over time—but clearly not enough.And this is only part of the dilemma we face in South Africa, because while poverty levels decline, inequality has increased and the gap between the haves and have-nots continues to grow.

A recent conference entitled Being Poor Matters was held by the Programme to Support Pro-poor Policy Development (PSPPD), a partnership between the Presidency of South Africa and the European Union (EU). The conference served as a platform for policy-makers, academics and development practitioners to interrogate the dynamics of poverty and inequality and explore why we are faced with such high levels of both—and what we can do about it.Riots Widespread poverty and inequality have left many countries in crisis. Speaking at the conference, Kuben Naidoo, Acting Head of the Secretariat of the National Planning Commission, said that in the case of the recent London riots, for example, budget cuts, high levels of youth unemployment, mistrust of the police, and low morale among the youth—who feel they can’t get jobs and can’t get heard—have been blamed.

He pointed out that these reasons are not unique to the UK or South Africa.Globalisation has also had an impact on poverty and inequality levels and “while it has increased market size and allowed certain countries to ‘export their way out of poverty’ in a sense, it has also significantly contributed to the increase in inequality,” Naidoo said. This was partly because of the expansion of low-skilled workers entering the labour market and partly because wages had dropped in these sectors. At the same time, salaries of higher skilled workers went up as a result of the global skills shortage and also because capital was mobile.

Capital chases the highest return and can invest anywhere, whether it’s a small factory in Vietnam or an IT shop in America,” he said. “These factors have contributed to an unprecedented rise of inequality globally. What is interesting is that the two countries that have recorded the fastest growth in inequality, China and India, have also made the fastest progress in reducing the number of people living in poverty. This highlights the complexity of the debate and how important it is to understand the linkages between poverty and inequality.

Challenges In South Africa, the National Planning Commission’s Diagnostic Overview released in June this year sets out the key challenges that we confront in fighting poverty and inequality and in achieving the objectives set out in our Constitution. It found that, over and above the historical disadvantages which continue to dominate, two of the most pressing challenges facing the country are employment and education.Too few South Africans work (only % of adults are employed), and in spite of the significant improvement of access to education, the quality of education remains very poor. The PSPPD conference showcased the latest research on employment and education.

It also highlighted other critical issues related to poverty­ and inequality (which is considered to be structural in nature because of systems, like apartheid, that have inherently created different opportunities for people based on gender, race or class), including child poverty, social cohesion, and health. Research collaborationThis research came out of research projects which were funded by the EU through the PSPPD with the aim of gaining a deeper understanding of how economic and social policies impact on people’s lives. The research grants were awarded to the Human Sciences Research Council and nine universi­ties. Many of the studies drew on the data from a complementary programme to the PSPPD, the National Income Dynamic Study (Nids), a national panel study which was implemented by the Southern African Labour and Development Research Unit (Saldru) at the University of Cape Town’s School of Economics.

Although a number of national level surveys had been conducted previously, there was very little information available about changes in communities at the household and individual level—how they respond to poverty, how it influences the choices they make, what effect government policies have on them, and who is getting ahead or falling behind in contemporary South Africa. To fill this research gap—and examine critical issues like migration, birth and death, health, education and household spending patterns—NIDS was conceived.The survey was first carried out in in about households across the country and will be repeated with the same households every two years. By tracking changes in living standards and social mobility, the study hopes to be able to analyse whether households are consistently poor or are going through a temporary setback and, very importantly, whether government policies are effective or not.

Crucially, research like this not only answers questions about the nature of issues related to poverty and inequality in South Africa, but also draws out lessons from how they have been addressed elsewhere in the world, and the cost, benefit and effectiveness of the interventions that were used to address them. The goal is that by providing government with this kind of evidence, policy-makers will be given the tools they need to develop appropriate policies and revisit existing ones to effect positive change. ProgressOne key feature emerging from the research evidence is that South Africa has made progress in reducing poverty since , with real earnings at the lower end income groups increasing. But, as the diagnostic overview explains, “per capita income growth is only one indicator of a country’s wellbeing.

It tells us how much income there is to share, but does not communicate the distribution of that income. ” In South Africa, as Murray Leibbrandt from Saldru points out, income shares are stacked towards the top %, with the lowest % of the population getting hardly any of the income.This is a major sign of the growing inequality in our country. Despite this widening gap between the rich and the poor, social grants like the child support grant have undeniably had a significant impact on the lower and middle income groups.

Using a policy scenario in which the grants are removed overnight, research by Leibbrandt and Ingrid Woolard, his partner at the head of the Nids project, demonstrates how the inequality would be much higher without social grants.But while social grants may well have been key in lowering poverty, as long as inequality continues to rise—driven largely by the labour market, through large gaps in wages and alarming unemployment rates—- the grants system cannot get its full return, and won’t necessarily translate into better opportunities for children who have, for example, been able to afford better schooling using the grant income. Even addressing the labour market will not alone solve the problem. Labour and financial markets, and the way in which they conducted themselves during the economic crisis, have certainly demonstrated that while they have a role to play, they are insufficient to reduce poverty and inequality on their own,” said Naidoo.

“Nor can the welfarist model, which says that the state should provide certain services, from education and health to social protection, single-handedly come to the rescue. “As budget deficits have spiralled, governments are just not able to sustain those programmes. The nowledge economy model, which believes that improving educational standards and increasing knowledge can be leveraged to generate income and wealth, can also only work if the labour markets function and the economy creates jobs,” explained Naidoo. “The bottom line is, none of these models work on their own.

” And this is exactly why studies like the Nids and the research projects are so important. As PSPPD Programme Manager Mastoera Sadan reiterated, “they contribute to a more nuanced understanding of the complex social and economic challenges we face.It reminds us that there are no simple solutions and that an engagement between researchers, policy-makers and broader society is imperative so that we can all make a contribution to improving the lives of all South Africans—because being poor should matter to everyone. ” The solution to poverty View  comments Comment on this story By: The Fox — : Now that it’s practically around the corner, I have a time to do a bit of thinking about the Bigger Picture(tm), and the most relevant topic here will always be the solution to poverty.

This article turned into something way longer than I’d anticipated, but hey… aybe there’s somebody out there like me with some time to waste and some fresh suggestions.

I’m going to concentrate on the solution to South African poverty, but what I’m suggesting here isn’t necessarily unique to the country. First, a re-cap of the South African economic problems as we all know them: : A lack of formal training (from basic schooling right up) : Too few available jobs : Insufficient markets for new jobs and services (linked to point ) : Reinforced social and political problems resulting from Apartheid. I’m sure we’ve all realised that the solution to poverty isn’t to be found in apitalism. Even if we could invest billions of dollars into factories and training, there are no new markets for the products – we can’t assume that all the newly-employed workers will go out with their first paychecks and perfectly feed the system – and exporting internationally is problematic because A: it relies on exploting cheap mass labour in order to remain competitive B: it links profitability to the volatile exchange rate, and that’s no recipe for long-term stability C: there are limits on the international market as well, and relying on global pressures means we out-source our economic well-being.

My personal dislike of capitalism revolves around the in-bred inequality and the lie of the middle-class dream. We’ve all studied the economic pyramid, and can clearly see that there’s not enough space near the top of the pyramid for all the workers. Even if there was some way to pay every unskilled worker a middle-class salary (Cosatu’s dream, no doubt), those people would still be sweeping the streets and cleaning the sewers – not commanding their own companies. So all of the above is just the context.

A perfect economic system in my opinion is one which: : Is stable and controllable – no more economic melt-downs, thanks : Offers all workers a realistic chance to become entrepreneurs or something bigger than an entry-level grunt : Enables access to all the benefits of modern society: healthcare, modern conveniences etc. I’m realistic, okIf it wasn’t for point above, it’d be only too easy to recommend we all move out to the farms, form small  self-sufficient clusters and rely on a basic agricultural barter system for additional benefit.I don’t know about you, but I’m not ready to give up the Internet, my cellphone, my car, my television and everything else which makes my life “normal”. Also, I somehow doubt we could pull off a mass urban-to-rural shift like that simultaneously, and nobody would do it unless they could see everybody else doing it first.

Oh, and there’s the little problem of where the land’s going to come from, but don’t ask Malema! Soooo… where does that leave us?The solution needs to be internal to South Africa, be implemented by Government (following a public vote of course) – and don’t get side-tracked by whether or not the current Government is capable of it – and be able to achieve radical change without sacrificing a semblance of normal life.

Not too much to ask for, haha. Let me confess at this point that I didn’t start writing this article with a solution in mind …

just a few ideas I’ve been throwing around every time I am approached by another beggar at the traffic lights.The problem really is that we’ve been trying to use the resources of the minority to empower the majority – through informal community development projects – but that approach is immediately defeated by sheer scale. We need to find a way to empower the poor, not by redistributing wealth but by creating it afresh. Or rather, tapping into what’s always existed but never had the opportunity to materialise.

The maximum wealth of the country must be derived by utilising all of its manpower and skills, and the products and services created by that proces should belong to the country.I immediately hear the complaint of ‘Where’s the motivation for self-improvement’ I’ll get to that. First, we want everybody working, and for that we need new businesses to not be restricted by market forces. So the answer is simple: remove the markets! Or rather, unify the markets: all goods produced belong to South Africa.

What this means is that all goods produced by all companies are sent to warehouses which belong to the State. From here, all retail outlets are stocked as needed. TrainingTraining is free to students. The trainers will be repaid just like all companies and workers: from the Central Bank.

What is thisIt’s another State-run institution, which simply acts like a giant calculator. The value of all goods supplied by companies to the Central Repositories is credited to their accounts in the Central Bank, which they transfer out to their employees’ accounts. A system will be derived for service providers to be credited for their services rendered at the point-of-sale, with those accounts again resting with the Central Bank. If you’re with me so far, my proposal is simple: the problem with capitalism is a lack of money, so remove that lack.

Not by printing more money, but rather by linking the financial supply directly to the supply capacity. I’d say ‘do away with money altogether’ if it wasn’t for the need to reward people who work harder and are more skilled. I believe that salaries should be linked directly to skill level and work-hours spent, but that’s a side-topic to this debate. The two stumbling blocks to the above system are: : How to handle imports : Needless inflation Goods from the Central Repositories could exported, with goods received valued on a one-to-one basis and those imported goods being distributed by the Central Repository.

Inflation would need to be curbed by a State-controlled Registry of Prices: all products supplied by the Central Repository would have unchangeable prices attached to them – a fixed mark-up over their cost price. To ensure that businesses are incentivised towards developing their staff’s skills, the Central Repository could establish limits on the quantities of a specific item of goods it would accept – so the whole economy doesn’t just revolve around producing matchsticks by unskilled manual labour. Trading licences wouldn’t be issued to companies not manufacturing towards a specific need by the population.So anyway, I’m sure there are a lot of problems to the above system.

The obvious one is the initial stage at which the consumer demand – every employed person with a salary to blow – exceeds the existing stock levels. That’s really just an operations management problem. It’s a question of breaking the country into clusters and limiting spending: focusing new production on the basic ‘must-have’ items and expanding production lines as soon as the core demand is met. Please don’t kill me for the above: it’s just conjecture.

All I know is that we’re not utilising all of South Africa’s human potential while we have unemployment, and it seems unnecessary if we just throw away some ingrained concepts from capitalism. Causes of Poverty In our short analysis of the many causes of poverty, we shall explore three sections- economic, political, external. Social Overpopulation Overpopulation is defined as the situation of having large numbers of people with too few resources and too little space. Overpopulation can result from either a high population density (the ratio of people to land area) or from low amounts of resources, or from both.

A high population density pressures the available resources in the country, as the resources can only support a certain number of people. Poverty can also depend on the country’s mix of population density and agriculture productivity. For example, Bangladesh has one of the world’s highest population density with , persons per sq km (, persons per sq mi). A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the countryis extremely high level of poverty.

However, this only applies to third-world countries who do not have advanced technologies.High birth rates contribute to overpopulation in many developing countries. Children, especially boys, are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families.

Also, the governments of developing countries often provide little or no support, financial or political, for family planning (see Birth Control) Families may also not know about family planning due to the lack of education. Hence, most developing countries have high rates of population growth.Population density: A country’s level of poverty can depend greatly on its mix of population density and agricultural productivity. Bangladesh, for example, has one of the world’s highest population densities, with , persons per sq km (, persons per sq mi).

A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the country’s extremely high level of poverty. Some of the smaller countries in western Europe, such as The Netherlands and Belgium, have high population densities as well.These countries practice mechanized farming and are involved in high-tech industries. On the other hand, many countries in sub-Saharan Africa have population densities of less than persons per sq km ( persons per sq mi).

Many people in these countries practice manual subsistence farming. These countries have infertile land and lack the economic resources and technology to boost productivity. As a consequence, these nations are very poor. Birth rates: High birth rates contribute to overpopulation in many developing countries.

Children are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning and birth control. Distribution of resources: In many developing countries, the problems of poverty are massive and pervasive.

In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success.Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much. Because people in developed nations may have more wealth and resources than those in developing countries, their standard of living is also generally higher.

Thus, people who have what would be considered adequate wealth and resources in developing countries may be considered poor in developed countries. In contrast, people in developing countries may consider themselves to be doing well if they have productive gardens, some livestock, and a house of thatch or mud-brick. In rural areas, people may be accustomed to not having plumbing, electricity, or formal health care. By the standards of developed countries, such living conditions are considered hallmarks of poverty.

According to reports, people’s incomes are not enough to cover the cost of their basic necessities and provide them basic services such as water, electricity, transportation and communication. It pointed out that recent surveys confirm that percent of citizen’s expenses go for to food, most notably among vulnerable groups that are deprived of basic services and luxury means. Lack of education: Illiteracy and lack of education are common in poor countries. Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas.

Whereas virtually all children in industrialized countries have access to an education, only about percent of children in sub-Saharan Africa even attend elementary school. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition,developing countries tend to have few employment opportunities, especially for women. As a result, people may see little reason to go to school.

Reports have also argued that percent of Yemen’s rural population lives on less than two dollars per day, and percent of Yemen’s poor population live in rural areas.It clarified that percent of Yemen’s population are illiterate, which is another reason for poverty and unemployment. In countries with high populations, unemployment levels of only a few percentage points mean that millions of working-age people cannot find work and earn an adequate income. Because unemployment figures indicate only the number of people eligible to work who have no job but are seeking employment, such figures are not necessarily an accurate indicator of the number of people living in poverty.

Other people may not be able to find enough work or may earn wages too low to support themselves. Environmental degradation: Environmental degradation is the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests — is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources. As forests, land, air, and water are degraded, people who live directly off these natural resources suffer most from the effects.

People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation. In developing countries, deforestation has had particularly devastating environmental effects. Many rural people, particularly in tropical regions, depend on forests as a source of food and other resources, and deforestation damages or eliminates these supplies.Forests also absorb many pollutants and water from extended rains; without forests, pollution increases and massive flooding further decreases the usability of the deforested areas.

Economic trends: Poverty in many developed countries can be linked to economic trends. Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased.Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs.

As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work. In many developed nations the number of people living in poverty has increased due to rising disparities in the distribution of resources within these countries.Since the s, for instance, the poorest percent of all U. S.

households have earned an increasingly smaller percentage of the total national income (generally less than percent) while the wealthiest percent of households have earned an increasingly greater percentage (about percent of the total). Demographic shifts: Some researchers also cite demographic shifts as contributing to increases in overall poverty. In particular, demographic shifts have led to increases in poverty among children.In the United States, for instance, typical family structures have changed significantly, leading to an increase in single-parent families, which tend to be poorer.

There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools. In addition, many people in developed countries blame cycles of poverty, or the tendency for the poor to remain poor, on overly generous welfare programs.

Supporters of this position, including some politicians, argue against government spending and initiatives to help the poor. In the United States, the belief that cash welfare assistance actually encouraged personal decisions leading to poverty dominated policy discussions of the s. In response, in the U. S.

Congress created a new welfare program called Temporary Assistance to Needy Families (TANF). This program ended the guarantee of cash benefits for poor families with children, shifted more control to the states, and established stricter work requirements for recipients. The numbers of poor families with children eceiving cash welfare fell dramatically, from . million in to million at the end of . Others: Reports have noted that poverty is also symptomatic a symptom of poor basic services, scarce financial resources and low returns from natural wealth such as oil, gas, minerals and fisheries while revenues from public investments and taxes are exposed to corruption and embezzlement. Economic – High rate of unemployment – Unemployment is rampant now that the global financial crisis has ravaged the world’s economy. With a higher number of unemployed people, crime rates in these cities will increase as people grow desperate to survive.

It is also believed, however, that some governments of the world intentionally keep a “sufficient” number of people out of work as a replacement batch when the need arrives. – Unfair trade High subsidies and protective tariffs for agriculture in the developed world drains the taxed money and increases prices for consumers in the developed world, decreasing competition and efficiency and preventing exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers and undermining the very type of industry in which developing countires do.Corruption (Economically-wise) Corruption often accompanies centralization of power, when leaders are not accountable to those they serve. More directly, corruption inhibits development when leaders help themselves to money that would otherwise be used for development projects.

Corruption, both in government and business, places heavy cost on society. Businesses should enact, publicize and follow codes of conduct banning corruption on the part of their staff and directors.Citizens must demand greater transparency on the part of both government and the corporate sector and create reform movements where needed. Corruption is both a major cause and a result of poverty around the world.

It occurs at all levels of society, from local and national governments, civil society, judiciary functions, large and small businesses, military and other services and so on. Corruption affects the poorest the most, whether in rich or poor nations. The issue of corruption is very much inter-related with other issues.At a global level, the economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny.

A difficult thing to measure or compare, however, is the impact of corruption on poverty against the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies,” free” trade agreements and so on. It is easier to see corruption.It is harder to see these other more formal, even legal forms of “corruption. ” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international communities and many of us will be accustomed to it—it is how it works, so to speak.

This is not to belittle the issue of corruption, however, for its impacts are enormous evidently. Tackling corruption A broader way to try and tackle corruption can be made by attempting to provide a more just, democratic and transparent process in terms of relations between donor nations and their creditors:An independent process would have five goals: To restore some justice to a system in which international creditors play the role of plaintiff, judge and jury, in their own court of international finance. To introduce discipline into sovereign lending and borrowing arrangements—and thereby prevent future crises. To counter corruption in borrowing and lending, by introducing accountability through a free press and greater transparency to civil society in both the creditor and debtor nations.

To strengthen local democratic institutions, by empowering them to challenge and influence elites.To encourage greater understanding and economic literacy among citizens, and thereby empower them to question, challenge and hold their elites to account. Poor Governance Governance is defined as the manner in which power is exercised in the management of a country’s social and economic resources for development. Good governance implies a capacity to turn public income into human development outcomes.

Good governance is an essential pre-condition for pro-poor growth as it establishes the enabling regulatory and legal framework essential for the sound functioning of land, labor, capital and other factor markets.Corruption and political instability resulted in weakening of business confidence, deteriorating economic growth, declining public expenditure on basic entitlements, low efficiency in delivery of public services as discussed in the earlier section on human development, and a serious undermining of state institutions and the rule of law. Political Prejudice and inequality Social inequality that stems from cultural ideas about the relative worth of different genders, races, ethnic groups, and social classes.Ascribed inequality works by placing individuals in different social categories at birth, often based on religious, ethnic, or ‘racial’ characteristics.

In certain countries in the world, governments tend to favour a specific creed or race or people. This is evident in South Africa. In South African history, apartheid laws defined a binary caste system that assigned different rights and social spaces to different races, using skin colour to automatically determine the opportunities available to individuals in each group.These people enjoy educational, social and welfare benefits.

For example, the children of these people are able to enjoy education with subsidised school fees; adults are able to obtain high-paying jobs easily etc. Instead of channelling resources to help those at need, the governments of these countries choose to treat different races and creeds with prejudice and will treat others with less favouritism. Hence, this leads to poverty. Corruption (Politically-wise) Corruption is a rampant problem in the world today, especially in third-world countries.

It undermines democracy and good governance by flouting formal processes. Corruption often occurs when leaders are not accountable to those they serve. Corruption usually inhibits development when leaders help themselves to money that would otherwise be used for development projects. Corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection.

Also, it generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. In Nigeria for example, more than Billion dollars was stolen from the National Treasury by Nigeria’s leaders from to . Forms of such corruption include embezzlement, bribery, cronyism, nepotism, graft etc. Hence, this leads to poverty as leaders should have used the money they usurped to help the poor, which results in a lack of funds.

Centralization of Power In many developing countries, political power is disproportionately centralized.Instead of having a network of political representatives distributed equally throughout society, in centralized systems of governance one major party, politician, or region is responsible for decision-making throughout the country,causing development problems. For example, politicians make decisions about places that they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs. External & Other Causes Civil War Nations experiencing civil war will experience stunted economic growth rate.

For example, from to , the period encompassing Desert Storm, per capita GDP in Iraq fell from $ to $. This is significant as it shows the drop in the well being of all citizens in the affected country. It however, fails to capture the broader affects of damages to the infrastructure and social services, such as health care and access to clean water, which are not captured. The loss of infrastructure and breakdown of society will inevitably lead to the nation having to spend a hefty sum to rebuild and prepare itself for the economy.

Furthermore, civil war diverts scarce resources from fighting poverty to maintaining a military. This is evident in the cases of Ethiopia and Eritrea. The most recent conflict over borders between the two countries erupted into war during and , a period when both countries faced food shortages due to droughts. Historical There is a lack of uniform, basic infrastructure, such as roads and means of communication and hence, development can hardly occur in poor countries.

Some scholars have asserted that colonial history was an important factor and reason to the current situation.In most countries with a history of colonization, colonialists used the colonies to provide raw materials and other resources for their own economic growth and development. M. E.

Chamberlain once said that the “Industrial revolution depended on raw materials like iron and coal. Africa was likely to be more significant as a supplier than as a market. ” Moreover, David Thompson also asserted that “the special attractions of Africa and Asia were, indeed, that they offered many of the raw materials needed by the multiplying factories of Europe: including cotton, silk, rubber, vegetable oils, and the rarer minerals. This is significant as the colonialists colonised these countries due to the fact that the colonies would provide natural resources and markets for economic and industrial growth, thus solving their economic woes.

Furthermore, H. R. Cowie has also pointed out that “New systems of agricultural production imposed upon colonial communities transformed land owners into wage earners susceptible to the threat of unemployment. ” This is evident in Senegal and Nigeria in which the groundnut-oil mill was restricted.

It was also known that the state agricultural export monopolies in Burma and in East and West Africa have withheld from the producers a very large production of the sales proceeds. This is significant as colonialism brought along poverty indirectly as they prevented the colonies from developing. This is again propounded by J. A Hobson, H. N Bralisford, Leonard Woolf and Lenin, who said that colonialism brought about exploitation of economies and resource primarily through conquest of markets for capital and commodities. Professor Gunnar Myrdal also said that colonialism brought bout the retardation of economy by depriving the colonies of the economic benefits of a sovereign state. He elaborated that the inability of locals to pursue active economic development policies, especially in undertaking comprehensive central planning via state control, leading to the retardation of the economy. Hence, countries that were ex-colonies (such as Ex-colonies Somalia and Uganda) face corruption and poverty.

Natural Disasters Natural disasters such as hurricanes and earthquakes have caused millions of dollars worth of infrastructure and the loss of lives.Developing countries often suffer much more extensive and acute crises at the hands of natural disasters, because limited resources become obstacles for the construction of adequate housing, infrastructure, and mechanisms for responding to crises. Natural disasters, being uncontrollable by man, affect annual agricultural output, such as floods destroying the fertility of soils by washing away mineral-rich topsoil, and take away natural decomposing agents, rendering the soil infertile. Droughts cause the land to become barren and unsuitable for cultivation.

The states of the U. S. A situated in Tornado Alley face constant fears of poor harvests in the face of frequent tornado occurrences. In the case of the Sichuan Earthquake in and The Tsunami catastrophe not only resulted in the loss of agriculture, but the destruction of millions of dollars worth of infrastructure as well.

Uneven distribution of resources/lack of adequate resources in the world economy For example, it is known that many countries are facing poverty due to the lack of resources in the country.Why is this the caseOne reason is due to the legacy of colonisation. It was known that many years ago, many countries were colonised, which led to the transportation of many goods to the country which colonised it. Hence, the colonised country does not have enough food/resources for its people.

Moreover, when these once colonised countries start development towards modernisation, they lack raw infrastructure, such as transportation systems and power-generating facilities. These countries also lack raw materials and knowledge skills.As a result of this, the countries must rely on trade with developed countries for manufactured goods, instead of themselves, which burdens them even more. The lack of materials also leads to lesser jobs for the population, in which will increase the rate of poverty, since most people in that countries will be unemployed, and are unable to earn themselves a living.

As this goes on and on, the rate poverty will increase drastically. Some social scientists argue that neocolonisation, a type of colonisation, is also practised in many wealthy countries.The affluence of these countries is based to a large extent on favourable trade with the developing world. Developed countries have been able to get inexpensive natural resources from poorer countries in Asia, Africa, and Latin America, including oil for power, ores and minerals for manufacturing durable goods, and manufactured goods made by low-wage workers in factories operated by multinational corporations.

This practice contributes to the dependency of poorer countries while not raising their standards of living. Conclusion There are things that some people until now can’t apprehend.Aside from the everyday expenditure, many people have vices such as cigarettes and alcohols which we weren’t able to include in our daily expenses. When people begin to get wages or salaries, they immediately spend the money for worthless and nonsense things instead of saving it.

Some of them, if it is not for their vices, they spend their money in stakes, testing their luck and expecting to be rich immediately. As we all know, poverty is a curse. It was written in the Bible that God has curse man, “In toil you will eat of it all the days of your life. This only means that man can’t eat without working hard.

God will only provide for those who are persistent. There’s no place in this world for lazy people. overnment committed to addressing child poverty … Minister Skweyiya | © UNICEF/South Africa/Rheeder| The Minister for Social Development indicated that it was important to understand poverty as a multidimensional issue that requires a holistic and integrated approach. | May – The National Symposium on Child Poverty kicked off Child Protection Week under the lead of the Ministry for Social Development on and May .

The Symposium brought together high level government officials, researchers, policy makers, international development agencies, and grassroots representatives to debate and think through the challenges of addressing child poverty in South Africa. The Minister for Social Development indicated that it was important to understand poverty as a multidimensional issue that requires a holistic and integrated approach. He further emphasised the importance of government’s strategies to address child poverty such as the child support grant.He also indicates that one of government’s priorities is to accelerate early childhood development for the current and succeeding periods.

UNICEF Regional Policy Advisor Prof Sudhanshu Handa’s presentation dealt with the emerging African model for cash transfers as observed in South Africa, Kenya, Malawi, Zambia and Uganda. He emphasised the social and economic case for early childhood development and summarized the evidence on the impact of early childhood deficits and later life outcomes, and outlined successful strategies to avoid the loss of developmental potential for young children in developing countries.Ms Julianna Lindsey, UNICEF Deputy Representative in South Africa, urged delegates to develop forward looking scenarios to address child poverty in the country. She also stressed the importance of gathering evidence that can be used to demonstrate that programmes to alleviate child poverty truly have an impact and are worth funding.

The symposium created the opportunity to pull recommendations on addressing child poverty from its high level representation. Deputy Minister for Social Development, Dr Jean Benjamin, summarized the recommendations for action.These recommendations will be reviewed by the Ministry and Department of Social Development. It is evident that recommendations focus on policy, resource mobilization, and practical solutions in addressing child poverty.

UNICEF wishes to express our appreciation to the Ministry for Social Development for initiating this important debate on solutions towards ending child poverty in South Africa. This symposium set an important milestone towards the country’s progress in achieving Millennium Development Goal (Eradication of extreme poverty and hunger). Poverty ReductionUNDP South Africa’s work on poverty reduction is governed by several internationally agreed frameworks such as the Millennium Declaration, the MDGs, and the International Development Goals. Our core services focus on three main areas: Strategies and Policies for Poverty Reduction, Inclusive Globalization, and Support for MDG-Aligned National Development Strategies.

In addition, UNDP’s work is reinforced by the International Poverty Centre, a joint project between UNDP and the Brazilian Government that promotes South-South Cooperation on applied poverty research, and by its network of over country offices.Our core services to support national efforts to reduce poverty and inequities involve: () Policy advice and technical support; () Strengthening capacity of institutions and individuals () Advocacy, communications, and public information; () Promoting and brokering dialogue; and () Knowledge networking and sharing of good practices. Through the Millennium Declaration and the Millennium Development Goals the world is addressing the many dimensions of human development, including halving by the proportion of people living in extreme poverty.Developing countries are working to create their own national poverty eradication strategies based on local needs and priorities.

UNDP advocates for these nationally-owned solutions and helps to make them effective through ensuring a greater voice for poor people, expanding access to productive assets and economic opportunities, and linking poverty programmes with countries’ international economic and financial policies. At the same time, UNDP contributes to efforts at reforming trade, debt relief and investment arrangements to better support national poverty reduction and make globalisation work for poor people.UNDP South Africa’s work on poverty reduction is governed by several internationally agreed frameworks such as the Millennium Declaration, the MDGs, and the International Development Goals. Our core services focus on three main areas: Strategies and Policies for Poverty Reduction, Inclusive Globalization, and Support for MDG-Aligned National Development Strategies.

In addition, UNDP’s work is reinforced by the International Poverty Centre, a joint project between UNDP and the Brazilian Government that promotes South-South Cooperation on applied

Cite this The Problem of Poverty in South Africa

The Problem of Poverty in South Africa. (2016, Sep 15). Retrieved from https://graduateway.com/the-problem-of-poverty-in-south-africa/

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