What is the context of poverty in South Africa? Drawing from development theory, what would you say the focus should be of development interventions in South Africa?
Comment on the development approach you would advise the South African government apply within the context of development thought, how poverty and inequality is defined and measured and the role of government in development.
You can use the following questions to guide the development of your argument:
• What is the context of poverty in South Africa?
•Drawing from development theory, what would you say the focus should be of development interventions in South Africa?
•What would you say should the role be of the South African government in South Africa and why do you say this?
•What is needed to improve the strategies to development by the South African government?
Poverty can be placed in context most easily by focusing on the bipolar nature of the South African economy—a bipolarity that was maintained until recently by the legal regime of apartheid.
It manifests itself in a basic split between the high living standard enjoyed overwhelmingly by the white minority and the condition of poverty in which the majority of the black population lives. Aggregate social and economic indicators clearly underline these differences.
Although, based on GNP per capita and the structure of production, South Africa is considered to be an upper-middle-income country, the benefits deriving from the economy accrue disproportionately to the white minority.
The income levels of the black population and the social indicators pertaining to this sector of the community—such as life expectancy at birth and infant mortality—are comparable to those of the poorer countries that border South Africa.
A feature of South African poverty is that it follows the traditional urban/rural split observed in many developing countries. However, absolute poverty is concentrated in regions created by administrative flat—namely, the “homelands,” which are largely the repository of women, children, and the aged, who are not engaged in the formal sector of the economy. The income per capita in these outer-peripheral areas is but a fraction of that prevailing in the metropolitan areas of the country.
In the 1970s, the black population made some progress in catching up with the living standards of the white population by moving to the economically active sectors and regions of the economy. In many respects, this progress was the result of the vigorous growth of the South African economy and its concomitant labor shortages, which enabled blacks not only to increase their employment (a trend favored by labor-starved white companies) but also to unionize and thereby to achieve real wage increases.
However, the reduction in economic growth throughout the 1980s—associated with a worsening in the investment climate brought about by heightened political uncertainty and the imposition of sanctions against South Africa—particularly affected black employment and wage growth, thereby curbing the earlier trend toward income equalization.
Thus, GDP growth slowed to about 1½ percent a year in the 1980s, well short of the 2½ percent a year growth in the population. This decline helped to increase the proportion of the economically active population that was without employment opportunities in the formal sector of the economy from 25 percent in 1974 to about 42 percent by the end of 1989.
Given that incomes in South Africa vary widely according to race, discussions of income distribution have mainly concentrated on the distribution of income shares by race, which provides some insight into the evolution of South African society. As Table 1 shows, the share of overall income accruing to the white minority has declined steadily over the past two decades while that accruing to the black majority has increased correspondingly.