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Poverty in South Africa: Progress Since Apartheid

Poverty in South Africa
Known today as the “rainbow nation,” South Africa has a fast-paced economy with a pluralistic and diverse culture and history. However, the ramifications of the apartheid regime still continue to be an impediment to social and economic development and alleviating poverty in South Africa due to its impacts on the social structure, security nets and family life.

Poverty Statistics

Due to the apartheid legacy, income inequality remains prevalent with 1% of the population owning nearly 70.9% of the nation’s wealth. The unemployment rate currently stands at nearly 28% due to the recessionary conditions in the country.

According to a report by the Children’s Institute (CI) at the University of Cape Town, 6 million children still continue to live below the food poverty line. Despite the efforts of the organizations like Child Support grant, the administration in South Africa struggles to deal with the implementation of care arrangements for these children especially those who live in more remote and rural communities.

Failed Economic Reforms

Since the collapse of apartheid in the country, the African National Congress (ANC) party has embarked on a variety of neo-liberal and market reforms to liberalize the trade and commerce of the economy to avoid a potential poverty trap. Yet, these policies exacerbated disparities and inequalities in the economy and cast a great degree of skepticism about mainstream economics and neo-liberal policies centered around deregulation and privatization. Unregulated market approaches to financial flows and capital were a breeding ground for corruption and bribery among top levels of state and private institutions in the country, particularly during the era of President Jacob Zuma.

Government Actions

However, along with the continued efforts from the Child Support Grant and similar outreach programs, a deeper collaboration between families and the state is being recommended as a solution to the problem. Under the policy, more than 12 million children benefit every month. Access to more information about relevant childcare arrangements and health care programs will also be effective in improving awareness among families.

Moreover, state income support is being recommended to decrease inequalities measured in Gini values from 0.69 to 0.6 and to decrease the number of people who live on a monthly income lower than $30 from 39% to zero. The implementation of the National Development Plan (NDP) is a government agenda that aims to address poverty in South Africa by allocating budgets and improving public services and infrastructure by 2030.

Chances for Growth

Under the administration of new President Cyril Ramaphosa, the country is implementing investments in more ambitious infrastructure projects. Expectations have determined that foreign investment from countries like China, Saudi Arabia and the United Arab Emirates could be worth a collective $100 billion.

Furthermore, education reform is vital to not only address poverty in South Africa but also to help townships progress from the apartheid-era Bantu education system, which was an aspect of the law that enforced racial segregation in schools. Yet, efforts to change the current situation are underway, with an increase in pre-school enrollment and the number of university graduates.

In 2011, the multidimensional poverty index emerged to better analyze poverty in South Africa and recommend sustainable solutions for remediating some of its associated issues. One can now assess a combination of social indicators like education, health care and quality of life. Fortunately, under this poverty index, there was a decline in poverty by more than 13% between the years 2001 and 2011. The sample could improve further by combining a series of other factors like financial, transport and other assets as well.

To conclude, even though South Africa continues to be a modern economically developing country grappling with problems from a complicated history, a strong foundation will yield good progress in the long run and help the country overcome its many economic and social challenges.

– Shivani Ekkanath

Photo: Flickr

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Major Poverty Measurements

Poverty_Measurements
Different organizations and governments measure poverty differently. This makes it difficult to establish an understanding of which people should be categorized as poor. Below are some measurements that have been developed to set worldwide standards for the poverty line.

Absolute Poverty Measurement

This measurement refers to the amount of resources a person needs to maintain a minimum standard of living. The absolute poverty line can remain the same regardless of how much the overall standard of living or income distribution changes in a society. The World Bank’s poverty line of $1.25 worldwide is an example of an absolute poverty measurement.

Advantages: It allows for easy comparison between different countries.

Disadvantages: It does not always accurately represent the different costs of subsistence from country to country. It is simplistic and does not reflect indebtedness, health, education, housing or access to public services. Measurements do not take into account the amount of consecutive years people live under the poverty line.

Relative Poverty Measurement

This measurement refers to the living standard of a person relative to the rest of society, and changes as the standard of living in society shifts. Peter Townsend, a pioneering figure in defining relative poverty standards, defined people living in relative poverty as unable to “play the roles, participate in the relationships, and follow the customary behavior which is expected of them by virtue of their membership in society.” The EU calculates poverty using relative poverty measurements. Usually this means that people who earn only 40 to 70 percent of the average household income are categorized as under the poverty line.

Advantages: Reflects conditions in society at a specific time.

Disadvantages: It can give a skewed understanding of who lives in poverty, as people can be categorized as poor even if they are well-off simply because they have much less income relative to the rest of the population. It is simplistic and does not reflect indebtedness, health, education, housing or access to public services. Measurements do not take into account the amount of consecutive years people live under the poverty line.

Multidimensional Poverty Index

This measurement was established in 2010 to replace the Human Poverty Index of the United Nations Development program. It aimed to ameliorate the downsides of the absolute and relative poverty measurements. It measures poverty through three indicators: health, education level and standard of living. Each indicator has multiple sub-indicators. People are categorized as poor if they are deprived of more than a third of each indicator, while those who are deprived of half or more are in extreme poverty.

Advantages: The MPI allows measurements that can be compared accurately across different regions, countries, ethnic groups and other community characteristics.

Disadvantages: Measurements do not usually take into account the amount of consecutive years people live under the poverty line.

– Radhika Singh

Sources: University of Pennsylvania, The European Anti-Poverty Network, Instituto Nacional De Estadistica, Oxford Poverty & Human Development, United Nations Development Program
Photo: United Nations Development Program

How Many People Live in Poverty?

people_live_in_poverty
According to the World Bank, “in 2011, 17 percent of people in the developing world lived at or below $1.25 a day.” However, there is speculation about whether or not these numbers are valid. Measuring household income can be a reasonable approach when determining how many people live in poverty. But there are also other factors to consider when calculating the number of inadequate living conditions.

The Oxford Poverty and Human Development Initiative has released The Global Multidimensional Poverty Index of 2014. This new way to measure poverty focuses on individuals in poverty rather than families. It also narrows its search to different countries and regions across the globe. The importance of this poverty measurement strategy is to understand which regions really need the most help.

While this new way to measure poverty is more effective, other organizations are recognizing important factors that are being missed. The International Women’s Development Agency has introduced the Individual Deprivation Measure, or IDM. While calculations are being made on individual income, the IDM focuses on what people are deprived of. Whether it is equality or education, the IDM stresses the importance of recognizing aspects that have placed people in poverty.

The Overseas Development Institute has released “The Data Revolution: Finding the Missing Millions,” a report that also focuses on what is still unknown in the developing world. According to The Guardian, “The report also says that, globally, we do not accurately know how many people live in cities.” Without this knowledge, proper resources are not equally being distributed.

It is difficult to measure how educated a country is and what its citizens need to survive. However, as technology advances and as more people join the fight to end global poverty, these new procedures can help end this global issue.

– Kimberly Quitzon

Sources: The Guardian, OPHI, The World Bank
Photo: Independent UK

Most Destitute Places in Middle-Income Nations

destitute middle income
A new study from the Oxford Poverty and Human Development Initiative (OPHI) indicates that several of the world’s poorest areas are not located in Least Developed Countries, but in countries classified as middle-income nations.

The OPHI study used a newly updated form of a system of measurement called the Multidimensional Poverty Index (MPI) to determine the world’s most impoverished areas. MPI looks at a variety of categories, from education to healthcare; those found deficient in at least one-third of the 10 barometers are considered multi-dimensionally poor. The study team measured MPI in 71 developing countries, hoping to hone in on the world’s most pervasively destitute locales.

According to the study, 60 percent of the people living in the world’s poorest locales are not living in Least Developed Countries. What’s more, several of the world’s poorest regions are in fact located in middle-income nations like India, Nigeria, Pakistan, Cameroon, Cote d’Ivoire, Ghana, Namibia and the Republic of the Congo.

While considered middle-income countries, places like Namibia, Nigeria and Ghana are also home to rampant economic inequality. According to World Bank’s GINI index, Namibia had the most extreme wealth disparity in the world in 2010.

By highlighting the prevalence of extreme poverty in middle-income countries, the study underscores the shortcomings of aggregate barometers like national average income. According to Dr. Sabina Alkire, director of OPHI, MPI provides a more nuanced scan of poverty across regions.

“The MPI enables us to examine poverty within regions of a country as well as nationally, and compare the interlocking deprivations people experience. It can reveal experiences across rural and urban areas, and across different ethnic populations,” Alkire said.

According to Alkire, the MPI is an indispensible tool in ensuring that no stone goes unturned in the effort to fight global poverty. OPHI researchers believe that MPI measurements will be invaluable in helping policy makers to target their efforts more appropriately, and more accurately.

– Parker Carroll

Photo: Oxford Poverty and Human Development Initiative, Phys.org, Time Magazine World Bank
Photo: WordPress

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How do you Accurately Measure Extreme Poverty?

New Definition of Extreme Poverty
We currently measure poverty by quantifying it as existing on less than $1.25 USD a day. Not only is that an inaccurate capture monetarily, the true cost or measure of poverty often exists on parallels outside of the economic benchmarks given to development and poverty.

A recent event organized by ActionAid described the $1.25 a day or less benchmark as a starvation line, not a poverty line.

Lant Pritchett of the Center for Global Development has argued that a single monolithic figure to indicate extreme poverty is not only flawed, but fails the poor on an additional level. He has suggested employing a range to indicate and understand extreme poverty, and identifies those living in the range of existing on $10 USD a day or less as those living in extreme poverty.

The current definition of extreme poverty would suggest that only 6% of the world’s population is poor. Taking Pritchett’s range of $10 a day or less, it expands to 5 billion of the 7 billion global population as living in poverty.

Keeping the definition to an economic understanding still does not account for the reality of what poverty means to those who are trapped in it. Consider how even if someone earns enough to live off $1.25 or even $10 a day, without education and access to healthcare or social services, he or she will still exist in a state of extreme poverty.

Not only do they lack the same access to key factors of human development and progress, they are just as likely to be trapped in its cyclical and systemic nature as someone who is numerically counted as living in extreme poverty.

In wealthy countries, the Pritchett range does not account for many who would obviously be identified as part of the global poor and as living in extreme poverty. The economic measurement of poverty varies between national borders and rests on the value of a given currency.

Those who live in extreme poverty, regardless of the borders surrounding them, face similar risks and lack similar basic needs. If development can be universally measured, why can’t poverty?

The Oxford Poverty and Human Development Initiative along with ministers from several countries in the developing world have pushed for the adoption of a multidimensional poverty index (MPI). An MPI could be utilized alongside economic indicators to present a more dynamic and nuanced understanding of poverty, how to address it, and how to measure progress when combating it.

The MPI would measure individuals and households across a series of parallels, including access to healthcare and education.  This would create a profile of deprivations to not only measure extreme poverty, but to offer a structural analysis of the ways in which people are impoverished and what is being denied to them.

The data would also provide indicators for points of investment in development, so that suffering and the ways in which it can be eliminated can be measured.

– Nina Verfaillie
Feature Writer

Sources: The Guardian, National Review, World Bank
Photo: Awareness Bali