Joel Netshitenzhe

Article: Pushing back the frontiers of poverty

27 August 2002

When Cabinet emerged from its mid-year lekgotla a fortnight ago, it declared that the country was on course, in pushing back the frontiers of poverty and broadening access to a better life for all.

Cabinet also asserted that one of the main reasons for its confidence is that integrated governance is becoming a reality, structures and systems to attain this are in place, and the national statistical system is being improved.

All too self-indulgent - to emphasise what should otherwise be housekeeping matters? Of what relevance, some would ask, are these structures and systems to poverty eradication?

The most obvious explanation to government's focus on integrated governance is a simple one. A year ago, one of the modern high-security prisons was completed in Kokstad. Yet for months it stood empty because the municipality had not planned for bulk services. And so, for lack of integration across departments and spheres of government, the edifice stood there, celebrated, but for the time being just a white elephant.

Of what use would building a clinic be, if relevant departments have not put in a road, water services and electricity? Would Alexandra in Johannesburg be making progress in Urban Renewal if vertical and horizontal integration had not informed the project proposal from the start?

So, integrated planning and implementation is about efficiency of service provision; it's a qualitatively new stage of delivery.

Without proper planning, the temptation is for "rabbit-from-the-hat governance": always to emerge from major meetings with some new policy announcement, dazzling the public with a new sensation that is quickly forgotten.

In January 2002 Cabinet set out the year's programme and dealt with the medium-term three-year expenditure period that starts in April 2003. As the July lekgotla sealed the three-year strategy, it also had to start reflecting on major issues that would be discussed in detail in January 2003, to plan for the three-year expenditure period starting April 2004.

All too confusing, perhaps? But proper planning ensures that allocation of resources is not just an act of pruning wish-lists from departments, but addresses in a coherent way the strategic objectives of reconstruction and development.

Further, it allows for serious reflection on the context of planning and implementation.

To illustrate: The January 2003 lekgotla will address the medium-term 3-year period which starts in April 2004. This is the end of the First Decade of Freedom and the beginning of the Second Decade. A question that will naturally arise is, where do we want the county to be in 2014, at the end of the Second Decade! Major reviews and long-term forward planning would have to be conducted in preparation for that discussion.

Proper planning also ensures that programmes are assessed on the basis of when they would start making an impact.

In this way, government is able to withstand the temptation to change policies when in fact the full impact of existing ones has not played itself out.

For instance, last week the Department of Trade and Industry announced new mega-investments which will total over R10-bn in the coming period, all responding to the incentive schemes (Strategic Investment Programme) announced in 2000 and introduced into the government budget in February 2001, almost 18 months ago. Besides other weaknesses, there was insufficient public debate on when the scheme would start to make an impact. Thus, in the intervening period, some started to question the wisdom of such incentives, arguing "lack of delivery". The same applies to debates on macro-economic policy and micro-economic reforms.

Why should so much attention be paid to building an efficient statistical system?

By coincidence, the week that the lekgotla met also saw the publication by the UN Development Programme of its latest Human Development Report.

Much attention is focused on its Human Development Index (HDI), which takes into account three dimensions - life expectancy at birth, knowledge as measured by adult literacy and the proportion of people in education, and GDP per capita. Using this measure South Africa is ranked 107 in the world.

The report also reviews other aspects, not included in the HDI, which South Africans would consider critical to the fight against poverty. These include a Gender-Related Development Index (SA ranked 88); number of mainline telephone lines and cell-phones per thousand people (top 70); electricity fuel consumption per capita (top 60); access to improved water sources (top 90). And according to the UNDP, South Africa is among the 80 most democratic states in the world.

These critical indicators broadly reflect progress made since 1994 in restoring the dignity of the majority; bringing clean running water to more than 9,3-million people; making over 3,5-million electricity connections; housing more than 5-million people and so on.

The UN Report asserts that GDP per capita has never again been as high as in 1981. What this bald statistic hides is that that year was the height of a gold boom when the country reaped enormous benefits. Yet it was also a historical period in which South Africa was another country: excluding many "citizens of independent states", where levels of poverty are much higher. Besides, we were dealing then with a system based on deliberate neglect of the majority.

The lesson here, for policy makers and analysts, is that repetition of statistical data without proper interrogation, can thoroughly mislead. This is not to underplay the challenges we face. Poverty at the level of income and assets, including access to loans, is staggering. The confluence of our "two nations" of rich and poor is still a long way off. The challenge remains that of eliminating the "exclusion/inclusion" dynamic, both in material terms and in public discourse.

This chasm in material conditions and outlook is shown starkly in the reporting and analysis of the recent BER Consumer Confidence Index. The middle strata in various positions of influence celebrated the news that Consumer Confidence had improved, period. However, little notice was taken of the fact that, while the confidence of high income earners is at its highest since 1996, the confidence of low income earners is lower than that of higher earners - the inverse of the trend for most of the past six years. Recent massive food price hikes have something to do with this, for the poor spend more of their earnings on these goods.

It is in part to address this "inclusion/exclusion" dynamic that the July Cabinet lekgotla put quite a high premium on job creation, to which discussion it will return in the next few weeks. Such a strategy would need to take into account trends in the restructuring of the economy, performance of labour-intensive industries, skills requirements and implementation of the Human Resource Development Strategy, a massive expanded public works programme and better assistance to SMME's including micro-credit.

Decisions emerging from this discussion will form part of government's input to the Growth and Development Summit to be held in the new year.

This will be coupled with finalisation of the issue of comprehensive social security: to expand assistance to the most vulnerable, especially children, the disabled and the aged.

Emphasis on pushing back the frontiers of poverty arises also because there is much cause and effect between poverty reduction and all other areas of policy endeavour. Poverty reduction cannot just be a passive consequence of economic growth. Given its implications for long-term social stability, it is in fact a critical condition for investment and growth.

As such, when Cabinet's July lekgotla reflected on matters of systems and structures, integration and statistics, this was about delivery, dispassionate review of successes and weaknesses, and proper long-term planning.

And the over-arching conclusion is: Steady progress is being made towards a humane society. There are no short cuts. The policies are in place. The critical challenge in this period is one of implementation.

Joel Netshitenzhe
CEO: Government Communications (GCIS) and Head: Policy Unit (PCAS) in The Presidency

Published in The Star

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