HEADLINES:
R/€ Research missed poverty line
April 18, 2006 Edition 1
vusi gumede
The annual South Africa Survey by the South African Institute of Race Relations (SAIRR) contains much useful information on social dynamics within our society. But in some respects the authors get it wrong, and miss the extent to which we have as a country come a long way. The latest survey just released is a case in point.
In a statement released by the SAIRR to profile the publication, headlined "Poor left behind as black middle class grows", the SAIRR explains that "levels of inequality measured by the gini coefficient, had increased for all race groups except whites since 1996."
Barely acknowledging this to be a consequence of many black people breaking through the glass ceiling of apartheid, the statement express concern that "such growth has been accompanied by an increase in poverty among the lowest income groups".
Besides the issue of relativity - where growth in inequality does not necessarily translate into the poor getting poorer - recent academic studies show that in fact there has been a marked reduction in poverty, especially since about 2000.
In terms of methodology, the use of mainly money-metric measures to gauge poverty and inequality has been widely questioned by amongst others, renowned scholars such as Amartya Sen and Nanak Kwakwane.
Yet even within the narrow money-metric approach of income poverty, SAIRR seems to get it wrong.
Statistics SA releases various data series on income and expenditure, series that many researchers utilise in calculating the extent of income poverty and inequality.
Notably, the SAIRR report does not refer to StatsSA datasets. Though such data has some debated problems, it is widely used.
Despite the fact that numbers and proportions of income-poor people shows a clear decline, the SAIRR report says that "people living in poverty have increased, peaking in 2002". In fact, the report shows and says that the rate of poverty "decreased by 0,7% between 1997 and 2002".
The critical point however is that there are various dimensions of poverty - apart from income - all of which are important. We should take into account not only the income at people's disposal but also the "social wage", namely the value of those services provided by the state which enhance people's lives - such as education, health, housing and free basic services. The ten-year review of government demonstrated that the impact of social spending substantially reduced inequality.
More recent studies also, contrary to the conclusion of the SAIRR report, point to the fact that poverty has declined.
A study by Haroon Bhorat, Pranushka Naidoo and Carlene van der Westhuizen analysing welfare shifts between 1993 and 2004 indicates, for example, that access to formal housing grew by 42% and 34% for income deciles 1 and 2 between 1993 and 2004, and 21% and 16% for deciles 3 and 4. Access to piped water increased by 187% in decile 1, while the growth was 31% in the 4th decile. Access to electricity for lighting for the poorest households - those in decile 1 - grew by a phenomenal 578%. These statistics make very clear that delivery of these services has been strongly pro-poor.
But perhaps the most succinct measure of our country's performance is the dramatic decline since 1994 in the levels of asset and service poverty as well as asset and service inequality. While in 1993, 40% of households were asset- (and service-) poor, by 2004 this figure had been almost halved to 22%. While the level of asset- and service-inequality (measured by the Gini coefficient) was 0,32 in 1993, by 2004 it stood at 0,24.
A separate study by Servaas van der Berg, Ronelle Burger, Rulof Burger, Megan Louw and Derek Yu finds that poverty has stabilised since the political transition and decreased sharply since 2000.
Utilising a lower poverty line set at R250 household income per month or R3 000 per year in 2000 rands, they conclude that in more recent years, the proportion of people living in poverty appears to have declined substantially - from 18,5-million in 2000 to 15,4-million in 2004. Those who are not poor increased from 26,2-million in 2000 to 31-million in 2004.
The study also shows that the per capita real incomes of people in the poorest two population quintiles rose by more than 30% during 2000-2004. The authors conclude that wherever you draw the income poverty line in the range from R2 000 to R4 000 per capita income per annum, poverty decreased sharply since about 2002 after a modest rise at the end of the previous decade. They argue that the impact on the poor of the recent expansion of social grants is likely to have been major, considering that real transfers from government increased by some R22-billion in the last two years (in 2000 rands). By the end of last year the number of beneficiaries of social grants had reached 10,5-million.
With regard to upward mobility of the black population, the authors conclude that the numbers of the higher middle class increased almost threefold from about almost 400 000 to almost 1,2-million in 11 years over the period 1993-2004.
So, there has been progress in reducing poverty. However, we cannot be complacent, because there is still much to be done, and it needs to be done faster and better. But the progress we have made is grounds for confidence that South Africa will indeed halve poverty by 2014.
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