UNDP Poverty Report 2000

Putting Poverty at the Top of the Development Agenda

Deep class and racial divisions mark South Africa - a legacy of apartheid. While 40% of the total population is income-poor, the percentage for black South Africans is 60%. Almost three-fourths of the poor live in woefully underdeveloped rural areas. Many people lack adequate housing and access to basic social services.

One by-product of the widespread impoverishment is a rising crime rate, now a major national problem. And HIV/AIDS is spreading rapidly: one in every four citizens is expected to be infected with HIV by 2010.

The democratic governments elected since 1994 have placed poverty and inequality at the centre of their development agendas. South Africa's anti-poverty policies were part of its Reconstruction and Development Programme, begun in 1996 to engineer growth through increased public expenditures on such items as housing, electricity, water, education and health. Since then anti-poverty policies have been more explicitly incorporated in the Growth, Employment and Redistribution Strategy, which relies more on market-led growth to increase the resources for redistribution. The challenge is to translate economic growth into job creation, human development and economic power for the poor.

Better Access to Social Services

The government puts priority on addressing the lack of access to basic social services. Four and a half million people have gained access to potable water, and 600,000 inexpensive houses are under construction. There are now free and compulsory 10-year education and free medical care for pregnant women and for children under six years of age. Many of these gains are due to reallocation of resources, but budget constraints mean that further progress will depend on greater efficiency of expenditures.

There has been progress in provid-ing secure land tenure to labour tenants, who were previously subject to arbitrary and unfair evictions, actions that are now rare. There has been less progress in land reform. Less than 1% of the country's farmland has been redistributed to poor black households. A minuscule percentage of people dispossessed of their land by apartheid's racially discriminatory laws have gotten it back.

The government's anti-poverty policies are comprehensive, but a major stumbling block appears to be in coordinating implementation. To promote a more integrated approach, the Office of the President established the Coordination Implementation Unit. The unit operates through the Interdepartmental Committee on Poverty and is chaired by the minister of welfare. Through this mechanism the government coordinates poverty reduction activities across line depart-ments and throughout the three levels of government, national, regional and local - no easy task.

Budgeting for Poverty

South Africa does not have a separate general poverty fund: most of the financing for poverty reduction occurs through the regular government budget. But for urgent measures the Department of Finance created a Poverty Relief Fund. Government departments can apply to the fund to finance specific programmes if they have reallocated their own budgets to reduce poverty and promote development. The fund also elicits assistance from external donors.

South Africa has been trying to move to a more decentralized system of governance, but the central government continues to raise the lion's share of revenue (provinces generate only 5% of their revenue needs). The central government sets the policy framework and disburses funds to lower levels in accord with the responsibilities devolved to them for supplying basic education and health care. As in other cases of decentralization, lower levels of government have increased responsibilities but not increased control over funds. They also need capacity building to carry out their new functions.

In partnership with government, civil society organizations have been vocal participants in the public forums regularly held on major laws and government policies. Several departments have used civil society organizations to implement their programmes, and the National Development Agency has provided special grant funding to civil society and community organizations to start projects in poor areas. The goal is to help poor communities mobilize to begin choosing, designing and implementing their own local anti-poverty activities. The poor now have more of a voice at the community level. But stronger mechanisms need to be set up to enable the poor to have a voice in policy-making at the national level.

Because an effective system of monitoring has not yet been put in place, little is known about the overall impact of the government's poverty programmes. UNDP has worked with the Department of Welfare and civil society organizations to start such a system, but the loose interdepartmental structure has not functioned well.