Parliamentary Question: Presidency: War on Poverty

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10. Mr D B Feldman (Congress of the People (COPE) – Gauteng) to ask the Deputy President:

Whether, regarding his sustained and high profile leadership of the War on Poverty Campaign, South Africa is no longer the world’s most unequal nation as determined by the Gini coefficient;

if not; by when will this campaign help the 4.5 million persons or the 36.5% of the workforce to find sustainable jobs seeing that during the past eleven years only 350 000 new jobs were created; if so, what measures did he employ to (a) increase employment, (b) defeat widespread and poverty endemic and (c) bring South Africa down on the list of most unequal nations? CO390E

Reply

I would like to thank Honourable Feldman for raising the important question of the high level of inequality in our society. Whether we measure this inequality by means of the distribution of income, assets, access to services, or access to opportunities, it is true that the differences we see in our society between and within various groups of the population is undesirable whether we are the world’s most unequal society or not.

It is undoubtedly true that South Africa remains one of the more unequal societies amongst those that are reliably measured. It is a consolation, however, that we have considerably reduced the poverty rate since the early 1990s, mainly through initiatives that I will mention shortly.

The reasons for persistent inequality are not hard to find:

In contexts of high inequality, growth is often concentrated among sectors that benefit the advantaged; the poor, on the other hand, are likely to be excluded from market opportunities or lack the resources to benefit from growth and participate meaningfully in the economy;

High levels of inequality make it harder to reduce poverty even when economies are growing;

Inequality makes it harder to incorporate the poor and disadvantaged in the growth process; inequalities constrain their productive capacity and their potential contribution to development;

In highly unequal societies, the poor are more likely to be locked in the informal and subsistence economy. This may limit the size of the domestic market and thus retard the potential for sustained growth; and

High levels of inequality may undermine the realisation of civil, political and social rights; they may raise the level of deviant behaviour and sow disharmony.

Thus, when you grow in a historically unequal society, unless you deliberately intervene to reduce inequality, the situation will remain unequal or even worsen.

It is for these reasons that we find the current levels of inequality undesirable.

In understanding the multidimensional nature of poverty and inequality, government has adopted a multi-faceted response that simultaneously deals with deprivation and exclusion.

Accordingly, we have programmes to encourage investment in job creation by the private sector in urban and rural areas; we have temporary public employment programmes such as the Community Work Programme and the Expanded Public Works Programme; we have programmes to improve the quality of health care and education as a basis for growth; we have very substantial social security programmes including child support and old age pensions, and we have major investment programmes in infrastructure to increase our competitiveness and our quality of life.

These programmes have helped us to reduce poverty, especially amongst the poorest, even if inequality remains unacceptably high.

Many jobs were created in the past decade. In March 2001 employment stood at 11.1 million and the rate of unemployment was 29 per cent.

In the first quarter of 2011, even after losing close to a million jobs in the worldwide recession, employment stood at 13.1 million and the unemployment rate was 25%. So, in fact, close to three million jobs were created, but sadly nearly one million of those were lost in the worldwide recession.

Honourable Members,

While much progress was made in the area of job creation up to 2008, the global economic crisis has had a significant impact on the South African labour market and consequently reversed some of the gains in the fight against poverty and equality. Nevertheless, we still have much higher levels of employment and lower levels of poverty than we had in the South Africa we inherited.

Looking ahead, achieving the necessary decreases in unemployment, poverty and inequality requires strong, sustainable and inclusive growth that underpins much faster job creation.

In this regard, the New Growth Path targets five million jobs by 2020 and provides a framework within which we can address the critical challenges of unemployment, poverty and inequality, and in addition improve the pace and quality of service delivery.

We are confident that the policies and programmes of this government, including the New Growth Path, will help us to roll back unemployment and considerably reduce inequality.



I thank you.