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ABSTRACT
This article deals with the problem of fixed mind sets concerning the issue of poverty in South Africa. Circumstances in a new South Africa demand the redress of economic imbalances that contribute to the continuing poverty of the masses. Since poverty concerns everyone, superficial attempts to overcome it will be detrimental to both rich and poor. Opportunities and obstacles in the new context are discussed. The customary quantitative approach to poverty must be complemented by a qualitative rethinking of economic theories and policies. To facilitate this, poverty talk needs to be deconstructed and alibis for not making progress dealt with. Dealing with poverty is impossible without overcoming the vicious cycle of the reproduction of poverty. Attention is given to dominant market models and factors contributing to the possible acceptance of a multiplicity of market models. The article concludes with a consideration of available options in restructuring the African market.
INTRODUCTION
Poverty seems to change the evolutionary idea of "the survival of the fittest" to "the survival of the weak," since it seems to abide from the time of creation. Although the poor represent the evolutionary weak, they tenaciously remain on the agenda of the human survival programme. Whatever the financial system, economic model, form of government, political order or welfare scheme, poverty seems to remain a problem. But hope rhetoric also remains. The poor are always being promised a better future in the name of technology and progress, especially by new governments and opposition parties. The question is whether we can believe that any form of linear progress towards better living conditions is possible, whether new systems can be implemented and if they will make any real difference. At present the neo-liberal free market system doubts its ability to overcome poverty. The prospects for creating wealth, let alone redistributing it, are not very bright (Taylor 1995:142). The Robin Hood idea of taking from the rich and giving to the poor will not really change the situation. For every 10 per cent of the total household income of the richest 10 per cent of the South African population that is diverted to the poorest 40 per cent, the income per capita of this section would be raised by roughly R455,00 per annum or R38,00 a month (Lichthelm 1993:100).
It must be kept in mind that South Africa is a low-income country, where the growth rate is below that of the population growth rate,3 where the labour absorption capacity of the formal economy is plummeting, and where the gap between the expectancies of the poor and the capacity of the economy to satisfy these demands is widening. These and similar discouraging factors seem to limit the options of improving living conditions where everything is determined in terms of the market. But must this be the case? Western societies have become so powerful4 that we have come to believe that they mark the boundaries of human existence itself. The social and the economic have colonised the existential (Blackwell & Seabrook 1993:101). The spirit of a people cannot be measured exclusively in terms of some economic and social principles. It is, however, impossible to deny the weight given to successful economic policies and the interdependence of economic systems in what has come to be known as the global village. Economic reform talk cannot divert from accepted normative universal models. The political and economic worlds are closely connected, as the close relationship between economic development and liberal democracy shows. The acceptance of only some universal economic models restricts initiatives taken within an African economic reform endeavour (Fukuyama 1992:125, 205).5
In this article attention will be given to the available options in a new South African political situation, the impasse of well-established but sterile poverty talk, and to some of the latest arguments about the issue and how it affects us.
OPPORTUNITIES IN A NEW CLIMATE
Incentives for dealing with poverty in post-apartheid South Africa
South Africa, in the wake of 2 February 1990,6 is being willed back into the capitalist world by a collective modernistic effort of great social and political force. The pre-2 February "people" have now become the post-2 February "civil society" (Muller & Cloete 1993:155, 158). To what extent will this civil society conform to a democratic capitalism and to what extent will it better its circumstances? Liberation movements accustomed to opposing the state must now re-adjust their position. The challenge facing a New South Africa is not to conform exclusively to existing market models for the benefit of optimal economic growth, but to develop a multiplicity of alternative, realistic models that can be implemented which will make a real difference. The development of a so-called mixed economy must be seen as an open pro cess that must not only develop from above, but also – and especially – from a grassroots level.
Adopting the problem
In South Africa, as in most countries, there are close links between the economic and political realms. The change to a post-apartheid system in South Africa can to a great extent be attributed to the influence of sanctions and isolation, a weak currency and high inflation, the cost of war and so on, which forced the previous government into negotiations. Economic success will, to a large degree, guarantee political stability in future. The assets of this country – ranging from its mineral wealth to agricultural possibilities to human capital and expertise to spiritual strength and vibrancy – will have to be uti lised to the full to overcome its limitations.
The new government focused first of all on the problem of poverty, which is a highly politicised subject in South Africa. The Reconstruction and Development Programme (RDP) was introduced with the intention of in volving all the people in the country, rich and poor. The RDP will fail if it means that houses and jobs will simply be made available. It has been emphasised by many leaders that a spiritual RDP must be developed, helping people to revive cultural and religious values, motivating them to be courageous and to take responsibility. The accepted manifesto of human rights,7 a new political and social dispensation, and new initiatives in education and health care are some of the steps on this important road. The poverty profile in this country is co-determined by the fact that, excluding the white segment of the population, human capital has not been invested in the past. In 1989, 14 million people or an estimated 38 per cent of the population were functionally illiterate (Lichthelm 1993:V, 83-87).
RDP efforts must include programmes that aid communities in job creation, caring, co-responsibility and the development of entrepreneurial skills. Government has committed itself through the RDP to introducing effective changes through tax reform and by pressurising business and other sectors. A government committed to overcoming the problem of poverty does make a difference as was proven in the 1930s when the South African government uprooted white poverty.
Poverty talk cannot be the hobbyhorse of a few philanthropically minded RDP supporters, or the favourite topic of politicians campaigning for support. Poverty concerns us all because it threatens everyone. Government's insistence that state and semi-state institutions, business, NGOs and every sector of society should concern themselves with poverty, initially met with agreement, but there is a real danger that efforts will be limited to a few token stunts. The present high crime rate8 in South Africa is linked to poverty and is aggravated by the rapid migration of poor people from rural areas and the former homelands to the cities. The politicised poor have high expectations for rapid change, harbour feelings of injustices done to them and demand reparation. It has been shown by Fukuyama (1992:123) that while voters in democratic countries may theoretically affirm free-market principles, they are all too ready to abandon them when their own short-term, economic interest is at stake. This makes the new government more vulnerable to budget deficits than the previous one, which was not accountable to black workers.
Opportunities and obstacles in a new context
Poverty has never been dealt with in South Africa on such a scale as now. If we fail, then the hope of ever making a significant difference will fade. There are thus good reasons for keeping our focus on the problem while it enjoys such wide attention.
The new political structure in South Africa may be criticised as being only a new facade because it is constructed on the same old economic foundations with their well-known constraints and determinations. It is true that in the post-apartheid environment black people can, for the first time, participate on a meaningful level in co-determining the market. It is hoped that this will restore some confidence in the free-market system, which did not benefit them so conspicuously in the past. But how will the majority of the uneducated, the poor and the unemployed experience this? The fear that we may simply change from a race-based to a class-based society, which will once again leave the poor behind, is very real.
New incentives should not be limited to inviting some black people to become part of middle-class society, or having some blacks in managerial positions. Incentives must include all people, especially those living on the extreme periphery of society. Poverty in South Africa is regarded predom inantly as a black problem and therefore as a racial dilemma which did not attract the concern of the white "haves" in the past. The ideal is to make it a colourless and classless issue concerning all because it implicates and even threatens the whole of society.
There are good reasons to believe that changes will not be superficial and that real progress will be made to uproot the vicious cycle of poverty. We are in the process of constructing a new social order. Several dynamic factors are rapidly changing the scene. A significant one is the growing importance of trade unions. Trade unions are one of the very few groups who succeeded in bringing a degree of democracy to the economic world. They introduced a culture-participatory democracy. We cannot, however, simply depend on a demand culture but must contribute towards a producing culture. Too much hope is being placed upon the inflow of capital from foreign investments. Well-focused efforts must be made in self-help programmes which can, among others, make land and other means of production available to the poor. This may contribute to establishing a culture of production, economic independence and responsibility. But there is no programme which coordi nates these efforts.
Many well-educated and well-provided-for retired whites could, for example, be encouraged by churches and organisations to become involved in combating poverty. Poverty has come under white attention more than ever before. Not only have whites been affected by affirmative action9 but they also have to take co-responsibility for the poor, who have been well hidden in townships and homelands during the apartheid era. Poverty has appeared on white doorsteps in the form of squatters who are swarming to the cities. For the first time one has become aware of poor whites, constituting the "new poor" in South Africa, struggling for survival. After many years of job security, whites are confronted with unemployment and affirmative action. This must be read in the light of the fact that whites still enjoy the highest income, as is indicated in the household expenditure of whites which was 7,2 times higher than black, 3,6 times higher than coloured and 2,9 times higher than Asian household expenditure in metropolitan areas in 1990 (Lichthelm 1993:III, 11- 15).
The massive migration of blacks to the cities emphasises the needs of these people. The migration of people from rural areas to the cities – which occurred on a worldwide scale in the sixties – was prevented in South Africa because of the apartheid system, its pass-law system, the law on job reser vation and so on. As far back as 1921 it was argued that blacks should only be allowed into the towns as temporary workers. From 1916 to 1986, when the pass laws were formally abolished, over 17 million black people were prosecuted for being in a place without official permission (Wilson & Ramphele 1989:207-208).
It is to be expected that mass migration to the cities under a new govern ment will cause a reshaping of social conditions in the cities for some time. This varies from squatter camps to a tremendous increase in the crime rate, to violence and acute unemployment. It is not possible to measure poverty in terms of the centre-periphery distinction as it was done in the past (cf Nürnberger 1988), because the poor, who were restricted to the rural boundary areas, are now rapidly becoming part of the industrial and economic centre. This, together with immigration from many other countries in Africa, poses a challenge for job-creation and the establishment of self-subsistence schemes. Poverty in the cities may become more devastating than in rural areas if migration to the cities continues unabated. People flee from the poverty of rural areas to a different kind of poverty in the cities, which they are less capable of dealing with (Blackwell & Seabrook 1993:42-50).
The most important obstacle to poverty alleviation is the seeming inability of the economy to engender the growth that is needed. Is South Africa's existing stock of national wealth large enough to significantly raise the welfare levels of the poor? The economic picture is rather sombre. The labour absorption capacity of the formal economy is decreasing rapidly. In the early 1960s 90 per cent of new entrants to the labour market were provided with job opportunities. This figure dropped to 8,5 per cent between 1985 and 1988 (Lichthelm 1993:65-66; 93-94). One must, however, reckon with the influence of sanctions and the well-known restrictions in the apartheid era. One must also critically evaluate our dependence on a specific market model.
Looking at the scoreboard
We have already questioned the tendency to limit poverty talk to numbers. Quoting statistics usually has the function to confirm the impossibility of breaking the poverty cycle. One must also bear in mind that the available statistics concerning the South African scene by and large still portray the situation under an apartheid government, which was conducive to poverty.
Poverty statistics often reflect only a segment of the picture. They deal with population growth numbers, per capita income, debt, unemployment, crime statistics and so on. On a holistic level factors such as education, health, social conditions, discriminatory market factors and ideologies all contribute to the specific face of poverty in a given situation. Poverty must also be seen in the light of ecology, the depletion of natural resources and the negative impact of technology.
Let us ponder some of these statistics. The 1992 Human Development Report of the United Nations states that creditor banks and countries extract an annual US $50 billion in debt servicing alone from indebted countries. Through present rules governing world markets, poor countries lose at least US $500 billion to the rich countries annually – ten times as much as they receive in aid (Duchrow 1995:13-14).
According to the South African population census of 1991 (which excludes the data of the former "homeland" republics of Transkei, Bophuthatswana and Ciskei) the total population numbered 31 522 723. South Africa has a projected growth rate of 2,06 per cent for 1991-1995 (Asians rating at 1,40 per cent, coloureds at 1,43 per cent, blacks at 2,40 per cent and whites at 0,67 per cent).
Of the potentially economic active population of 25 694 254, 14 283 247 (or 55,5%) lived in urban areas and 11 411 008 (or 44,5%) in non-urban areas. Of the total of potentially economic active people 11 397 207 (or 44,3%) were not economically active; 9 640 972 (or 37,5%) were active; and 4 656 076 (or 18,1%) were unemployed. These figures cannot be taken as a true reflection of the situation and a figure of 50% unemployed can be taken as more realistic for 1996. The inclusion of the former republics of Transkei, Bophuthatswana and Ciskei, as well as migrant workers from Africa, drasti cally changes the unemployment figure.
Profile of the poor in South Africa
Some distinctive characteristics of the absolute poor have been identified by Lichthelm (1993:7-8, 21-22, 35, 45). These people are typically situated in the former national states (especially the rural areas, where 63,3% of the black population fell below the minimum living level in 1989).10 Families tend to be large, having many children or other economically dependent members. Household heads are mostly women, as the men are migrant workers in the cities. These households are dependent on large intra-household transfers. Government transfers, particularly pension payments, make up a large proportion of their income, especially in the former national states. Income generating assets are lacking, and so is human capital, as these people are mostly illiterate. They suffer from inadequate kilojoule intake (below 80% of the generally accepted poverty threshold), insufficient health care, lack of sufficient land and other assets, shortages of training and skills. They spend the major part of their income (70-80%) on food, mostly inexpensive starchy staple foods.
APPROACHING POVERTY
Definitions, measurements and methods
There are various possible approaches to the problem of poverty. Each is indicative of the belief system underlying it. Each approach points to what we mean by poverty. In a sense, the definition of poverty should be restricted to those dire living conditions where the basic means of survival are absent. Apart from this, poverty becomes relative as the breadline differs from individual to individual and even the rich never have 2
Professor Cornel W. du Toit is the Head of the Research Institute for Theology and Religion at the University of South Africa, P.O. Box 392, Pretoria 0003. 3
The annual growth rate in the economy fell from 5,6 per cent between 1960 and 1970 to 3,3 per cent between 1970 and 1980 and to only 1,3 per cent between 1980 and 1990. This downward trend in domestic output has accelerated in the last three years, producing negative growth rates in 1990 (-0,6 per cent), in 1991 (-0,5 per cent) and 1992 (-2,4 per cent) (see Lichthelm 1993:94). 4
Arrighi (1994:84ff) has indicated that capitalist history may be seen as a succession of world hegemonies because of the succession of systemic cycles of capital accumulation. The process started with the huge accumulation of money in the hands of northern Italian city-states who gained control over the trade route to India in the twelfth and thirteenth centuries. Money interests took over the city-states and this caused public debt, job losses and wage cuts. He indicates how world finance centres changed hands through historical developments from the Spanish to the Dutch to the British and eventually the Americans. Two forms that capital takes on in this process are state capitalism and finance capitalism. 5
Fukuyama (1992:205) finds no economic rationale for democracy. If anything, according to him, democratic politics is a drag on economic efficiency. 6
This is the date on which former State President F.W. de Klerk announced in parliament the unbanning of the South African 'liberation movements' (African National Congress, Pan Africanist Congress and South African Communist Party) and the impending release of political prisoners like Nelson Mandela. 7
Human rights grant people a minimum income as citizens but should also give attention to minimum rights to resources that people have (see Townsend 1993:46). The efforts to make more land available to black farmers can function as an example. 8
Crime cannot always be attributed to poverty. In many countries, crime rose at times of recession and expansion alike (Blackwell & Seabrook 1993:59). In South Africa crime is often the only option open to the poor. The poor normally use unemployment to justify crime. The extent of white collar crime proves that greed, materialism, a high standard of living, etc, also incite crime.
9
The income gap between whites and other population groups has narrowed dramatically over the past two decades. It is estimated that the wage gap declined from 90 per cent at the beginning of the 1970s to about 14 per cent at present. This can be attributed, among others, to the rise in education level, increased labour militancy and increase in transfer payments, such as pensions to blacks (Lichthelm 1993:56). 10
Lichthelm (1993:45) shows that in 1987 61% of all people living in rural areas in sub-Saharan Africa were earning an income below the poverty line. This figure was 34% for people in urban areas. In 1988 70% of the population lived in rural areas, which shows that poverty remains a rural phenomenon in sub-Saharan Africa. This figure, however, may change dramatically over the next few years in South Africa. In 1990 approximately 50% of the de facto population was urbanised (Lichthelm 1993:75).
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This article has already appeared in the conference volume Empowering the poor (Du Toit 1996).
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Started: 26 June 2000
Updated: 5 August 2009