Friday, April 4, 2008

Poverty and Inequality after Apartheid

A new study from Prof Jeremy Seekings at Centre for Social Science Research, University of Cape Town argues that income poverty is persistent (although slightly decreasing) and inequality worsening. The prospects for pro-poor policy reform does not look that rosy either. 

This is the full abstract:

Democratic South Africa was born amidst high hopes for the reduction of income 

poverty and inequality from their high levels under apartheid.  The reality has been 

disappointing: despite steady economic growth, income poverty probably rose in 

the late 1990s before a muted decline in the early 2000s, income inequality has 

probably grown, and life expectancy has declined. The proximate causes are clear: 

persistent unemployment and low demand for unskilled labour, strong demand for 

skilled labour, an unequal education system, and a social safety net that is 

unusually widespread but nonetheless has large holes. It is also clear that 

economic growth alone will not reduce poverty or inequality. Pro-poor social 

policies are important, but not as important as a pro-poor economic growth path.  

Unfortunately, there is little sign of the political conditions changing to push the 

state towards the promotion of a more pro-poor pattern of economic growth.  

There is some chance of parametric reforms of the welfare state. Overall, however, 

it is likely that, after another ten years of democracy, unemployment and poverty 

rates will remain high, despite significant redistribution through cash transfers, 

and incomes will continue to be distributed extremely unequally. 


See also earlier post Poverty Data continues to make headlines in South Africa

No comments: