National Conference on Inequality and Poverty in South Africa

Deep and structural inequality is one of the most serious obstacles to reducing poverty, ensuring political stability and attaining long-term sustainable growth in South Africa. Overcoming this obstacle will be difficult: it requires that we go beyond the band-aid of poverty alleviation, and that we address how the structure of our core economy itself causes unemployment and poverty.

But there is still significant room to manoeuvre, and much can be learned from looking at innovative solutions and by reviewing unrealistic and badly conceptualised policies. These were some of the key messages coming out of the recent Conference on Inequality and Structural Poverty in South Africa that took place in Boksburg from 20–22 September 2010, hosted by PLAAS (Institute for Poverty, Land and Agrarian Studies), the Chronic Poverty Research Centre, Isandla, SPII (Studies in Poverty and Inequality Institute) and the Presidency’s Programme to Support Pro-Poor Policy Development.

The conference sought to go beyond the limits and assumptions of mainstream poverty conferences. It sought to link scholarly research to the lessons of experience, and brought together activists, practitioners, policymakers and academics to consider what they could learn from one another. Furthermore, it tried to show that a coherent anti-poverty strategy needs to address inequality.

Dominant approaches to poverty often approach it narrowly, as if the aim is to lift the incomes of a certain section of society above the poverty line. Such approaches miss the fact that poverty in South Africa is not ‘residual’ in nature: it is not the problem of a small minority of the population, and neither does it result from there not being enough growth. Rather, poverty and inequality are caused by the nature and path of economic growth itself. Our economy is a poverty and inequality machine, allowing the enrichment of a small minority while failing to generate the kinds of employment opportunities needed by the majority of the working-age population.

Many of the presentations at the conference explored the ramifications of this problem. Neva Makgetla’s and Seeraj Mohammed’s presentations showed how mass unemployment was linked to the capital-intensive and highly concentrated nature of the core economy, the disproportionately important role of the mining and heavy manufacturing sectors, and the distorting incentives created by the provision of artificially cheap energy to these sectors.

Kate Phillip showed the negative impact of this on rural development: the overdeveloped, highly centralised core dominated the entire economy, crowding rural entrepreneurs out of niches that could otherwise be used to kickstart rural employment. Vusi Gumede showed the deep racial disparities in human development created by this growth path. Adam Habib traced the links between the marginalisation of the poor and the disabling effects of the electoral system, which rendered parliamentarians accountable to party whips, not constituents.

Is a different, employment-intensive growth path possible, one that would benefit millions of South Africans that are currently marginalised by the nature of our core economy? From the discussions at the conference, it became clear that there are no easy answers. Some of the more optimistic presentations focused on the potential for expanded public work initiatives like the Community Work Programmes that are currently being piloted. If these are scaled up to make possible a South African variant of India’s employment guarantee scheme, they would indeed be a big step towards addressing the holes in our social protection system. But without inclusive growth in the core economy, they can only function as a limited band-aid.

Meeting this challenge is in part a technical question: viable answers have to be found as to whether and how the economy can be restructured so as to encourage growth in directions that will absorb more labour. Government has at its disposal the ability to change the environment, and remove many of the incentives that encourage capital-intensive growth.

Many of the presentations at the conference emphasised the importance of rural development and suggested that smallholder farming and agro-processing may potentially create the right kind of jobs in the right places.

Certainly, urban bias in economic thinking has emphasised the importance of an efficient agricultural sector and cheap food – and has indirectly destroyed many thousands of livelihoods as a result. But fresh thinking is needed about rural development: as Ruth Hall pointed out, current approaches are not guided by any coherent vision of what is possible or needed in rural areas.

But the biggest challenge is political. Even if viable and practical regulatory and policy changes can be proposed, implementing them will require trade-offs. Powerful vested interests have a stake in perpetuating the environment that has encouraged our current growth path. That does not mean change is impossible. As many of the presentations and contributions at the conference attested, the desire and interest in creating a better South Africa still runs deep in many parts of society.

• ***AUTHOR GUIDELINES FOR DSA ARTICLES***
• Conference participants
• Conference papers
• Conference presentations
• Conference blog
• A video: Tomorrow's cities
• Conference programme
• Conference Concept Note
• Background document from UNRISD
• Background document from IMF and ILO