Redistribution – of assets and other forms of wealth p2

In a review of poverty and policy in South Africa in the first ten years of democracy, Bhorat and Kanpur (2006: 12-13) identify five main trends, which are largely hostile to the poor, albeit with some ameliorative effects:An increase in both absolute and relative income poverty.

An increase in both absolute and relative income poverty

An increase in income inequality

Increased unemployment rates (as growth in the labour force outstrips growth in employment)

A large fiscal resource shift that has engendered wider access to assets and basic services for poor households

‘Tepid’ economic growth rates, which have failed to keep pace with population growth.

“The first ten years have seen rising unemployment, rising income poverty and rising income inequality, all in the context of a lack lustre performance in economic growth” (Bhorat and Kanpur 2006: 1).

Policies to increase participation in the rural economy and diversify incomes are key to addressing rural poverty. Rural poverty in South Africa appears to differ from other countries in three ways:

  1. among the rural poor, income generated directly from agricultural activities and food consumed from own farm production are minor components of household resources (estimated at 10% to 20% of the total);
  2. many households continuously rotate between rural and urban base;
  3. and rural society is closely linked to the social and health problems of urban
    areas.

 The main potential to reduce rural poverty and inequity lies in the development of overall frameworks providing social security, education and training as well as health care, and in developing adequate infrastructures in rural areas. There is a need to examine how recent and ongoing sectoral and economy-wide policies contribute to poverty reduction by integrating poor population in broader economic activities.
OECD 2006: 25

Redistributionof assets and other forms of wealth – has been a prominent feature of the economic and political debate in South Africa both before and after 1994, captured in the competing slogans of ‘growth through redistribution’ and ‘redistribution through growth’. Redistribution was at the heart of the 1955 Freedom Charter, described by Seekings and Nattrass (2005) as the closest the ANC had to an economic policy prior to 1990, and the Reconstruction and Development Programme (RDP), which was effectively the manifesto on which the ANC came to power in 1994 (ANC 1994).

Debates about the relationship between redistribution and growth, and the means by which redistribution should be brought about, have not abated, despite the ANC’s decisive turn in favour of growth (now seen as a precondition for redistribution) from around 1996 (Marais 1998). Nonetheless, important forms of redistribution have occurred. Notable amongst these are significant increase in government spending on infrastructure, welfare and social services aimed at the poorest sections of the population, significant increases in earnings for those in formal employment, and opening up of opportunities for share-holding and business opportunities in the corporate world for previously disadvantaged people through the BEE programme. While this has led to a substantial de- racialisation of the upper and middle socio-economic classes, it has had remarkably little impact on overall income inequality or poverty.

Redistribution of assets – notably land – has a special place within the discourse on redistribution, both in South Africa and internationally. Land redistribution (including the associated processes of restitution and tenure reform) has been an important component of policy since 1994 and features prominently in the 1996 Constitution. Yet, an explicit link between land reform and poverty is difficult to find in official policy pronouncements, especially since the change from the Mandela to the Mbeki presidency in 1999.

The arguments for land reform in South Africa have been dominated since the outset by a discourse of restorative justice which seeks to return land to its previous owners and redress racial imbalance in landholding, with relatively little attention to the economic dimensions of land use, in general, and the links between land reform and poverty alleviation (or economic growth) in particular.

It is important to consider the theoretical arguments for land reform and the ways in which redistribution is linked to poverty alleviation, both in South Africa and internationally.

 

 

Source:Bhorat, H. and Kanbur, R. 2006. ‘Poverty and well-being in post-apartheid South Africa’, in Haroon, and Kanbur, R. (eds), Poverty and Policy in Post Apartheid South Africa. Cape Town,: HSRC Press.2.Seekings, J. and Nattrass, N. 2005. Class, Race, And Inequality In South Africa. Yale University Press.3.Marais, H. 1998. Limits to Change: The Political Economy of Transformation. London and New York: Zed Press.4.http://r4d.dfid.gov.uk/PDF/Outputs/ESRC_DFID/60332_Lahiff_Redistributive.

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