Forty-four percent of all South Africans are classified poor — with whites making up only a fraction of this figure, reports Andrew Whitefield
LESS than half a percent of whites, or 20 000 individuals, were living in poverty in South Africa in 1993. This estimate, from the World Bank-funded Living Standards and Development Survey, flies in the face of the often stated opinions that political transformation in South Africa is driving working class whites into the poorhouse.
Previous estimates of white poverty have been much higher and this has tended to support the contention of a burgeoning poor white problem. These estimates were, however, based on surveys which measured the income of households. Often fairly well-off white households that suffered a business failure or other short-term income loss would be recorded with a low income, and would hence be classified as poor. In reality they were able to cushion that loss and sustain reasonable levels of consumption through drawing on savings or borrowing on future expected earnings.
So it is often argued that a household’s expenditure should rather be measured and if the level of expenditure is lower than the poverty datum line then that household is living in poverty. The World Bank survey was a nationwide, representative survey of households, which measured both income and expenditure, and provides researchers with the most accurate profile of poverty in South Africa to date.
The survey shows that at the other end of the spectrum a huge 54 percent of Africans were living on a level of spending below the poverty datum line. The figures for coloureds and Asians were much lower at 25 and eight percent respectively. Collectively, 44 percent of South Africans are classified as poor.
That such a high proportion of the population is living in poverty has prompted some researchers to suggest that the poverty line — which in 1993 was roughly R180 a person a month — is too generous and that it has really become a measure of relative poverty rather than absolute poverty. Research from the survey suggests, however, that individuals are showing signs of malnourishment in being underweight and stunted at income levels much higher than the poverty line.
A provincial analysis of poverty shows that the Northern Transvaal and the Eastern Cape are the basket cases among the provinces with poverty rates of 74 and 71 percent respectively. The Western Cape and Gauteng have the lowest rates of 21 and 26 percent respectively, with the remaining provinces bunched in the middle.
An analysis of poverty should go beyond mere poverty head count ratios and the question of how poor are the poor should be answered. Such an investigation reveals that although Gauteng has the second lowest percentage of households living in poverty, the poor households in the province — most likely squatters — are among the poorest in the country.
The poverty gap — calculated by totalling the difference between the income of each poor household and the poverty line — amounted to R18-billion in 1993. In other words, if the government brought each poor household’s income up to the poverty line through a transfer payment, it would cost the state R18-billion in payments a year. This amounts to about five percent of GDP, on paper not an insuperable problem. If the economy were to grow by five percent in one year and the entire growth increment was perfectly directed towards poor households poverty could be eliminated. Poor people, however, generally lack the capacity to partake in and contribute to economic growth, and part of the solution to combatting poverty lies in empowering these people with education and skills which enable them to compete in a sophisticated economy.
The R18-billion poverty gap can be broken down again to investigate who is shouldering the biggest burden of poverty. A breakdown by old region shows that 43 percent of the poverty gap arose within the former TBVC states, 31 percent in the self-governing territories (such as kwaZulu and Lebowa) and the historically white provinces account for the remaining 26 percent.
Looking at poverty in terms of race and metropolitan (large cities), urban (towns) and rural areas shows that 70 percent of the poverty gap arises from rural African households. Africans living in the towns and metropolitan areas account for a relatively small proportion of total poverty — amounting to 15 percent and 11 percent respectively. This finding has an important implication for policy and suggests that the lion’s share of anti-poverty spending should be directed towards the rural poor.
Given the weak lobbying powers of rural dwellers one suspects this will never happen and that city dwellers will continue to enjoy the focus of development programmes.