A quarter of a century after apartheid ended, South Africa remained one of the most unequal countries in the world, by class, race and gender. Inequality emerged in unusually stark differences in household incomes; asset ownership, including both concentrated business ownership and household resources; access to quality education, which still largely reflected family wealth and race; and municipal infrastructure. In general, the historic labour-sending regions continued to lag far behind the rest of the country.
The core question becomes why inequality persisted in these different areas long after overtly racial laws were eliminated. This paper first reviews the extent of inequality along each dimension. It then analyses how and why these persisted, including the effects of government policies. On this basis, it proposes strategic responses that, if carried out rigorously and on a large enough scale, could go further towards overcoming the deep inequalities that have effectively blocked both social development and economic growth in South Africa.
As South Africa responds to COVID-19 and aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits, not only for the economy but also for the poor communities that need the infrastructure and services as well as municipalities that require strengthening of their water and wastewater infrastructure. This policy brief looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.
Download a copy of the Policy Brief or read online.
This policy brief is a summary of a Working Paper available here: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package
As South Africa responds to COVID-19 as well as aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits not only to the economy but also the poor communities that need the infrastructure and services, as well as municipalities that require strengthening of their water and wastewater infrastructure. This working paper looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.
For a summary version of the working paper see Policy Brief: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package
Daily Maverick - 2 April 2020 by Shakespear Mudombi (TIPS Economist)
Although many issues affect the water and sanitation sector, this Working Paper focuses on the access to those services. An in-depth assessment of the progress made in providing water and sanitation services can help inform various stakeholders and decision-makers about the need for renewed effort towards universal access. Against this backdrop, the objective is to meaningfully understand the extent of access and the quality of access to water and sanitation services at the household level in South Africa.
To avoid a one step forward, two steps backwards scenario, which would erode gains already made, the situation demands renewed effort, coordination and collaboration by various stakeholders, supported by significant resources targeted towards the unserved as well as paying attention to those already served. It is imperative to focus on both the quantity and quality of access to water and sanitation services, as neglect of one will further reinforce the overall backlog. This is particularly relevant with the increasing need to prevent the outbreak of waterborne diseases and the spread of new and less known pathogens and diseases such as coronavirus disease (COVID-19). These demand well-functioning water and sanitation systems that allow proper washing of hands as well as cleaning of contaminated items and spaces. In this regard, embracing the systems and multidimensional view on access to water and sanitation will contribute to improved, appropriate, and sustainable access to water and sanitation services for all.
Session 11: Inclusive innovation to address poverty, unemployment and inequality
Session 3: Regional manufacturing and industrial policy 2
In 2014, South Africa remained one of the most unequal countries in the world, an outlier by global standards in terms of both overall inequality as measured by the Gini coefficient and levels of joblessness. For proponents of industrialisation as central to long-term development, this situation raises two questions. First, how does manufacturing as presently constituted affect employment and the distribution of income and assets directly and indirectly? Second, is the traditional industrial-policy paradigm sufficiently geared to supporting inclusive growth?
These questions are explored in this working paper by Neva Makgetla, TIPS Trade and Industrial Policy Programme Manager.
This paper looks at the role that potential poverty-reducing impact that the CWP could have is expanded. While acknowledging that there are significant non-monetary impacts, the focus is on measuring the impact that earning the CWP wage would have on household poverty and inequality. (The Employment Promotion Programme (EPP) Research)
Unemployment and earnings inequality in South Africa have declined in recent years, while the trend in overall income inequality is unclear. Inequality and unemployment both remain at extremely high levels by historical and international standards. There has been a very close relationship between trends in unemployment and earnings inequality in recent years. The decomposition of earnings inequality by employment status reveals the importance of unemployment in accounting for the level and trend of earnings inequality. The distribution of employment in the formal and informal sectors is also found to be important in explaining earnings inequality, as is wage dispersion within each of these sectors. Decomposing overall income inequality by income source confirms the overwhelming importance of earnings in income inequality more generally. Inequality is only likely to be dramatically reduced through a significant expansion of decent work for the low- and semi-skilled. Simulations of an expansion of low-wage employment show that this would reduce inequality, but the effect would be limited if wages are too low. While the introduction of a minimum wage would be expected to reduce inequality, its overall effects are contingent on the extent of any associated job losses.
The promise of asset-based approaches to poverty, as well as its limitations can be summarised with reference to the popular idiom: “teach a person to fish, rather than giving him a fish”. If the idiom were a development programme or project, it would aim to undertake two interventions (i.e. 1. training a person to fish and 2. availability of fishing tackle and equipment to fish). The objective of the intervention could recorded in some project plan as follows.
Through introduction of training and making equipment available the programme will contribute to supporting the sustainable livelihoods of X number of people.
However, development practice tells us that it is never so easy, because there is almost never a strong causal relationship between interventions and the intended outcomes, which can be demonstrated with reference to successful and unsuccessful outcomes. These are visualised in Box 1 below.
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In the face of a long-standing unemployment crisis that increasingly threatens social and economic stability, employment has at last taken centre stage in South African policy, and with this, focus is shifting to the structural constraints on employment creation within the economy. The New Growth Path, approved by Cabinet in November 2010, starts to tackle these issues.
Its emphasis on inclusive growth places issues of distribution more clearly on the agenda than they have been; and the Competition Commission has become poor consumers' knight in shining armour, tackling collusion and highlighting the negative economic (and employment) consequences of South Africa's highly centralized core economy.
What does this mean, however, for what used to be called 'the second economy'?
While much scholarship has focused on critiquing the concept of the second economy – with good reason – the stark inequalities that characterize South African society and its economy mean that policy-making processes still struggle to straddle both ends of the spectrum. What is good for the developed end of the economy can seem to be far removed from concerns in more marginalised contexts.
This article argues that the sharp divides in access and opportunity need to be located within the context of structural inequality. It focuses in particular on how the highly unequal structure of the economy impacts on economic opportunities at the more marginalised end of the economy, and how common sets of processes within a single economy produce and reproduce these outcomes. This locks people into poverty in ways that cannot simply be dismissed as a problem of 'dependency' - despite a growing tendency to do so. The article concludes by considering what this analysis means for development strategies targeting the unemployed and those eking out survivalist incomes.
Access to adequate water and sanitation services in South Africa still remain a pipe dream for the millions who are trapped at the bottom of the class structures in the country. The poverty stricken communities living in Townships such as Motherwell, everyday long for water services infrastructure to be built in their places of residence. The costs of accessing water services also becomes a setback for many consumers in the area, this is after the infrastructure has been installed in their areas. The high unemployment rate plays an enormous role in many consumers not affording water services. Bureaucracy between the government department of Housing and the NMMBM also impedes delivery of water services for without formal housing, water and sanitation is impossible to be accessed within the households.
The study revealed from the semi-structured interviews which were held with Mayoral Council official and Ward Councillors as well as with members of the communities NU 12 and 29 that access to adequate water services was not successful and satisfactory. The findings of the research demonstrate that the Municipality has a problem with retaining staff members in the portfolio of Infrastructure, Engineering, Electricity and Energy, which is the responsible department for providing water and sanitation services to the local inhabitants. This study was conducted from April 2009 to November 2009 and it was aimed at finding the Barriers to accessing water services in the Motherwell Township.
This paper was submitted for a Masters Degree Programme in Development Studies at the Nelson Mandela Metropolitan University. The paper was supervised by Dr. Deon Pretorius.
To receive a copy of this paper please send your request to sithembiso@tips.org.za
Session 3A: Social Grants, State Expenditure and Welfare Outcomes
Session 3A: Social Grants, State Expenditure and Welfare Outcomes
Session 2B: Inflation Dynamics
Session 8A: Wage Dynamics
Session 7A: Survey Data Quality Assessments
Session 5B: Employment Opportunities and Outcomes
Session 5A: Poverty and Household Welfare