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South Africa |
SOCIAL CONDITIONS
The South African government is determined to speed up
the implementation
of job creation programmes and eradicate poverty
In President Thabo Mbeki‘s Third State of the Nation Address and the presentation of the national budget for 2001 by Finance Minister, Trevor Manuel, various government initiatives, projects and programmes were spelt out on how the gap between poverty and job creation will be narrowed.
Each year, these two important events mark the start of South Africa’s political and economic calender. The relevance of both events should be assessed in terms of its timing and the context in which certain pronouncements were made.
The presidential address was made in mid-term, and with no significant electoral test on the horizon. Mbeki has some time to deal with the specifics of his government policies. As a result, he could afford to leave out specifics on a range of issues, for example, his policy outlines on rural development strategy, labour intensive industries; and the commitment to a comprehensive social security review.
Specific responses required
However, the compelling crisis that South Africa faces with the HIV/AIDS pandemic as well as growing corruption, and the problem of unemployment, required specific responses from the President. Instead, he mentioned them only in passing.
The year 2000 was particularly a difficult one for the Presidency, and the President’s speech reflected this. Mbeki avoided the controversies around HIV/AIDS, regional democratic trends in countries such as Zimbabwe, Swaziland, Lesotho and Angola (despite the fact that it is crucial to stability in the Southern African region), as well as the ongoing saga around the defence procurement package.
Defence researcher, Malik Patel, says Mbeki avoided mention of the arms’ deal to minimise further political pronouncements around the controversy. Patel says potential investors were being deterred because of the handling of the investigation into the R43 billion arms deal. «The arms deal investigation process has a very negative impact on offset investments. People read about this in Europe, and, even if all the accusations are groundless, the investment climate can suffer,» he said.
Positive aspects to the speech
There were several positive aspects to Mbeki’s speech. It was reasonably comprehensive in its depth and range, touching on a range of issues, providing a progress report on government initiatives in several sectors and pointing to the Mbeki government’s future policy direction.
Specifically, the speech contained significant remarks on nation-building and reconciliation. Adopting a conciliatory tone, Mbeki highlighted the non-racial aspirations of South Africa, and made positive overtures to the country’s white population, who had in earlier years doubted his sincerity, unfavourably and unfairly comparing him to his predecessor Nelson Mandela.
On the economy and industrial policy, he was very specific on the sectors that should drive economic growth — privatisation, the energy sector, tourism and telecommunications.
Compared with last year, Mbeki dwelt far more on tourism — a sector of the economy with massive growth potential — and spelled out concrete plans to boost the Lebombo and Wild Coast regions, as well as national parks.
He announced progressive commitments on infrastructural investments, rural development and urban renewal. He also emphasised the urgency of a review of the financial sector and ordinary people’s access to resources in this sector. He continued to single out the mobilisation of the micro-financing industry to stimulate growth in the SMME sector.
In a significant response to public opinion, reflected in the low voter turnout in the 2000 local elections, he attempted to allay perceptions of government inaction on crime — most notably as it affects the country’s black majority. Specifically in this regard, he mentioned the recruitment of 30,000 police reservists in high crime areas; lifting the moratorium on crime statistics in June; focus on high crime areas; organised crime, including urban terrorism; corruption; cross border crime; and bolstering the efficiency of the criminal justice system.
His speech contained an honest admission in terms of the worsening levels of socio-economic inequalities. The ability to reduce this chasm will, however, be the true test of government’s commitment to deliver to its people. He mentioned the Cabinet’s new «Action Plan for Growth», which aims to set the economy on a more competitive footing by, first and foremost, reducing the cost of doing business through cheaper energy,transport and telecommunications.
Attracting investment and jobs
Mbeki’s economic adviser, Wiseman Nkuhlu, said that by lowering costs, the government aimed to attract investment and jobs. «The tendency in managing an economy is to focus on macro issues — the monetary policy, the debt situation. We have done all that but it has not produced jobs, possibly because the cost of doing business in South Africa is higher than in other countries,» he said.
The Mbeki government is under pressure from a coalition of labour unions and NGOs, to address the structural causes of poverty and unemployment.
The People’s Budget Campaign, led by COSATU, the South African Council of Churches and the South African NGO Coalition, has however welcomed the reversal of Budget cuts and Manuel’s commitment to greater spending to fight poverty.
«By setting aside substantial supplementary resources for infrastructure investment and maintenance, we seek to broaden access to opportunities, lower the costs of transport and communication, and improve standards of living in poor communities», said Manuel.
From April, the government will give up R 400 million by zero-rating paraffin for VAT purposes. Paraffin is an important energy source for low-income households, especially in rural areas.
Despite claims of more spending on poverty relief, the social welfare department has decided to reduce the amounts it will spend on these projects to focus on effective service delivery. The department intends to spend R51 million on developing poverty eradication programmes and R14.9 million on HIV/AIDS programmes. From July, old age and disability grants will increase by up to R30 from R540 to the maximum of R570 a month, while the child support grant will increase from R100 to R110. The Finance Minister hinted that future adjustments to the grants, which support more than 3 million South Africans, would be inflation-related.
Needs
But Non-governmental and community-based organisations are yet to be pleased. The South African Council of Churches said that while the Finance Minister was «at pains» to explain how, because of inflation, there was a need to increase such things as fuel levies, Manuel seemed to have forgotten that the same was true for welfare grants. Lynette Schreuder, director of programmes at the South Africa National Council for Childcare, said the R10 increase in the monthly child support grant, was not enough to look after poor children. The Council was also concerned that only children under seven years qualified for the grant. Under the previous maintenance grant, older children were also catered for.
«We are campaigning quite seriously so the state doesn’t forget about that group of children,» Schreuder said. Not taking care of them could lead to an increase in the number of street children and deprived children, as well as a rise in juvenile delinquency and child prostitution. The R100 child support grant was increased three years ago, and did not change until the current new allocation. The increase does not match the erosion of this grant over the last two years.
Both presidential address and the Budget review statement identified the government’s key goals — raising growth, increasing domestic savings and investment and fighting poverty. The challenge is to monitor the implementation of programmes and projects aimed at poverty alleviation, job creation in labour intensive industries and the delivery of social services to the marginalised communities who despite their plight, are hopeful that change is around the corner.
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