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REFLECTIONS ON SOUTH AFRICA’S OIKOS JOURNEY: FROM
APARTHEID TO DEMOCRACY, BY THE REVEREND FRANK
CHIKANE1, ON THE OCCASION OF A DISCUSSION ON THE OIKOS
JOURNEY DOCUMENT
18 October 2006
Dennis Hurley Hall, Diakonia Centre
Diakonia Council of Churches, Durban
It is an honour to be to be part of this august gathering. I also feel privileged to be
offered the opportunity to give a South African perspective in response to such
an important ground breaking theological document, The Oikos Journey: A
Theological reflection on the Economic Crisis in South Africa. It is also a great
honour to be sharing a platform with a distinguished scholar and a stalwart of our
struggle such as Dr. Theo Kneifel who is better placed to given a European and a
global perspective of the Oikos Journey.
The Oikos Journey document that you have compiled and which I had the
privilege to read and reflect on says that, “In this document we share the
experiences of poor people, we look at the world economy, examine the South
African economy, reflect current thinking in the churches, and offer a vision of
what would be needed for the economy to benefit the poor in line with God’s
economy… We invite you to take up the challenge of the Oikos Journey with us”.
I see this as a challenge not only for the churches, but also for Government, for
business, for individuals, for our communities – in fact for the whole society. I
know the churches have always been in the forefront of and continue to reach
out especially to those ‘at the periphery of society’.
1
Rev. Frank Chikane is the Director General in The Presidency; Secretary of the Cabinet, Pastor of the
Apostolic Faith Mission of South Africa and Chairperson of the International Council of the AFM
International.
1
May I take this opportunity to thank you on behalf of Government for the
contribution of the churches to an issue that is so central to the Government’s
development agenda, that is, economic justice to the plight of the poorest and
marginalized people in our nation. Indeed, in the next few minutes I would like to
reflect on the development path that South Africa took since 1994 to address the
economic injustice the vast majority of the population suffered from the colonial
and apartheid policies. Perhaps, what is instructive is not only the reflection on
the events themselves but equally important is the lens/framework that one
chooses to use. The lens I use here is simple: - challenges back then at the time,
steps undertaken to address those challenges, and progress made against the
challenges.
Poverty and Inequality in South Africa
Poverty and inequality is a global phenomenon and the wide disparities between
the poor and the rich characterize the societies in developing countries. Poverty
is characterised by the inability of individuals and households to command
sufficient resources to satisfy a socially acceptable minimum standard of living.
Inequality can be defined in terms of being the opposite of “equality”, a state of
social organization that enables or gives equal access to resources and
opportunities to all members. The conditions of poverty and inequality stem from
diverse sources that are common to many countries. The specificity of the
unequal distribution of income and wealth in South Africa is that of four decades
of apartheid legislation built on the earlier policies of the Colonial and Union
Government directed at the extraction of cheap labour. This history has to be
taken into account when analysing the path that South Africa chose to take.
South Africa’s history introduces a number of context specific causes of our
challenges some of which are still with us today. These include:
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i.
The impact of apartheid which stripped people of their assets, especially
land, distorted economic markets and social institutions through racial
discrimination. This resulted in violence and destabilisation;
ii.
The undermining of the asset base of individuals, households and
communities through ill health, over-crowding, environmental degradation,
the mis-match of resources and opportunities, race and gender
discrimination and social isolation;
iii.
The impact of a disabling state, which included the behaviour and
attitudes of Government officials, the absence of information concerning
rights, roles and responsibilities, and the lack of accountability by all levels
of government.
These factors have shaped the nature of South Africa’s economy and society,
and represent apartheid’s legacy of inequality and poverty. Importantly, they
have the potential to ensure the persistence of poverty even though many other
aspects of the South African political economy are being transformed. The result
of this institutionalised discrimination can be thought of as a process of statedriven underdevelopment that encompassed dispossession and exclusion for the
majority of South Africans. In describing the impact of ‘apartheid’s assault on the
poor’, Wilson and Ramphele (1989:204, 230) conclude that such policies of
deliberate impoverishment distinguished the experience and dynamics of poverty
in South Africa. As such, apartheid, and the legislation and institutions through
which this ideology was implemented, operated to produce persistent poverty
and extreme inequality.
Consequently, when the new Government took over in 1994:
i.
Estimates of the housing backlog ranged from 1,4 million to 3 million
units and people living in shacks numbered between 5 million and 7,7
million;
ii.
60% of the population of South Africa had no access to electricity;
iii.
6 million people had no access to clean water;
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iv.
22 million people did not have access to adequate sanitation;
v.
There were 17 fragmented departments of education with a
disproportionately high allocation of resources to white schools;
vi.
70% of those who should be in secondary schools
vii.
South Africa was in its twenty-first year of double-digit inflation;
viii.
The country had had three years of negative growth - the economy and
the wealth of the nation was shrinking;
ix.
South Africa had experienced more than a decade of declining growth
per capita - the average income of South Africans had been falling
since the 1980s and the overall wealth of the country declined by
nearly one third:
x.
From 1985 to the middle of 1994, total net capital outflow from our
country amounted to almost R50 billion;
xi.
Government had run up a budget deficit equal to 9,5% of the Gross
Domestic Product, including the debt of the so-called independent
homelands;
xii.
The net open forward position of the South African Reserve Bank was
$25 billion in deficit; Public sector debt was equal to 64% of the Gross
Domestic Product.
The consequences have been far-reaching, especially on those that were
previously oppressed with regard to self-identity, sense of belonging, values,
norms, worldview, confidence, trust, culture, respect, social cohesion, caring for
one another, coherence, integrity, dignity, etc. The Oikos Journey document
precisely laments about the breakdown of these very fundamentals of a society.
Given the situation that has been described above, it was more than clear that
our task to change the situation around was not going to be an easy one. Our
task was twofold: to ensure that we turn the situation around in terms of
addressing the backlogs we inherited then; and ensure that whatever challenges
would arise as we traveled on the path of democracy are also addressed. This is
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still our task today. Sometimes, one’s analysis of what it is that Government is
faced with does not make this important distinction.
South Africa’s Human Development Trajectory after 1994
South Africa’ journey of transformation since 1994 can be depicted as a
trajectory of redress, reconciliation, nation building, reconstruction, redistribution
and growth and indeed a holistic and integrated process in which political and
economic forces interacted with one another in dynamic and diverse ways to
improve the lives of the poorest people.
The development path the country
chose to improve the lot of the historically disadvantaged and poorest of our
people was informed by the human development paradigm which is at the centre
of the development philosophy of the United Nations Development Programme
(UNDP). The central challenge faced by the new Government in 1994 was the
achievement of the overall improvement of the quality of life for all the people and
how to give priority to those who are the poorest and excluded from mainstream
social and economic activities. Also, equally challenging was the apartheid debt
which stood at R189, 9 billion in 1994 and by March 1999 had ballooned to
R375, 9 billion. Unlike many African countries and others elsewhere that turned
to the International Monetary Fund (IMF) and the World Bank for help because of
the crushing weight of debt, South Africa adopted its own measures of fiscal
discipline or prudence. The lessons from countries that were heavily indebted to
the International Financial Institutions and were therefore forced to undergo
structural adjustment or IMF imposed stabilisation programmes in order to
service their debt were starkly vivid in the minds of South African policy makers.
It was also clear to them that high interest payments siphon off funds that could
be and should be directed at social spending and through fiscal discipline
Government was determined to lower the amounts devoted to debt servicing by
reducing the budget deficit. The new democracy also had to contend with the
imperatives of globalisation that demands a minimal role for the state in the
economy.
As an emerging market, South Africa was compelled to take
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cognizance of this structural shift in the global economic system with it emphasis
on economic integration into the global system. The Government’s economic
policies thus had to be reengineered within the logic of growth with redistribution
to achieve an effective balance between social development needs and
macroeconomic stability.
Globalisation, Poverty and Inequality
Not long ago, globalization was a word seldom seen in the popular press,
although academic and public policy journals had long examined this complex
process that bears upon economics, society, culture and information. Since the
World Trade Organization in Seattle in December 1999, globalization has
demanded the attention of journalists because of the demonstrations by the
environmentalists, trade unionists, human rights activists and riots by some
radical groups.. Today there is an obvious backlash against globalization, as the
protests by the anti-globalization groups continue to disrupt the meetings of the
G8 countries. Why does globalization generate anger and accusations against
the rich countries?
The reasons for this backlash are not too difficult to
understand.
Widening disparities between the rich and poor countries and deteriorating social
conditions in the poorest countries are accompanying trends in globalisation.
According to one observer, the assets of the top three billionaires in the world are
more than the combined Gross Domestic Product (GDP) of the least developed
countries, which have a total population of more tan 600 million. In 2000 the
world’s richest person, Microsoft chief, Bill Gates, was worth well over US$60
billion, more than the combined Gross National Product of Costa Rica, Panama,
Honduras, Nicaragua, Belize, Jamaica and Bolivia.
The 1992 Human
Development Report of the UNDP documented that the richest 20% of the
world’s population receive 82.7% of global income, while the poorest 20%
receive 1.4%.
Obviously this gap has widened since the publication of this
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report, and least developed countries, most of which are in Africa, are no doubt
affected by the increasing inequalities between them and the developed
countries.
The paradox of globalization in the context of South Africa is that while the
industrialized areas are benefiting, there is rising poverty and inequality in the
rural areas. Millions of South Africans in the rural areas live below the poverty
line and are increasingly marginalised in the process of globalization. In the
Eastern Cape 65% of the population reside in rural areas. Women form the bulk
of the population and suffer more than men, because they carry out most of the
household maintenance work, such as gathering firewood, hauling water from
rivers and wells and cooking and cleaning.
In his address to big business in December 2000, President Thabo Mbeki was
very conscious of the inequalities between the core areas and the periphery in
South Africa. While applauding the advances made by the South African
companies in mastering and utilizing modern technology, he nevertheless
cautioned that the challenge facing South Africa “is to free our mothers and
sisters in the rural areas from the backbreaking routine of gathering wood and
carrying it on their heads and backs for many kilometers and from the burden of
having to fetch water from wells and rivers”.
Across the African Continent, women are the backbone of national economies.
Yet they are often on the margins of society than men. The UNDP Human
Development Report of 1997 has argued that women experience poverty
differently from men. The feminization of poverty is not so much the numbers of
women who are poorer than men, but rather the severity of poverty and the
greater hardship women face in lifting themselves and their children out of
poverty. In a situation of high levels of illiteracy and lack of access to health
care, women are likely to suffer more because they constitute a large percentage
of the illiterate in many African countries. When these services are not
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accessible, women are likely to find themselves totally crushed by the weight of
suffering. In the words of a World Bank report globalization could either
revolutionize prospects for human development or could lead to chaos and
increased human suffering. According to the World Bank’s estimates, 1, 5 billion
people would be living in absolute poverty at the turn of the century, compared to
1, 2 billion in 1987. In many rural areas in South Africa, people live permanently
hungry and are forced to walk miles each day to fetch water and wood for fire.
South Africa’s Pro-Poor Growth Strategy
The underlying logic of South Africa’s pro-poor growth strategy is that shared
growth is the key to poverty eradication. Given the importance of growth for
poverty eradication, an important question is how to shape the character of
growth in such a way that it channels a disproportionate share of resources to the
poor. In South Africa in the early 1990s, the Reconstruction and Development
Programme (RDP) correctly prioritised the importance of achieving growth
through redistribution and the Government’s role in actively investing in social
services and infrastructure to eradicate poverty. Since then the pro-poor growth
strategy was incorporated in the Growth, Employment and Redistribution
Strategy, which tended to emphasise stabilisation of the economy to avoid the
run on the rand in the context of rumours around the health of Mandela and the
appointment of the first black Finance Minister. It did not represent a retreat from
the RDP as so much an emphasis at a particular point.
In acknowledging that sustained poverty reduction is not possible without
sustained and rapid economic growth Government adopted a set of programmes
within the framework of Accelerated and Shared Growth Initiative for South Africa
(ASGI-SA) whose primary goal is to halve poverty and unemployment by 2014.
When President Thabo Mbeki unveiled ASGI-SA in his State of the Nation
Address, he made it clear that ASGI-SA is not a “development strategy” but
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rather consists of “a limited set of interventions that are intended to serve as
catalysts to accelerated and shared growth and development”. An important
principle of ASGI-SA is that economic growth cannot be at any cost: it must be
sustainable and must be shared among all South Africans. At the centre of
ASGI-SA is the strategy to restructure the growth process towards the adoption
of investment in infrastructure, skills development and labour intensive
techniques such as the Expanded Public Works Programmes.
The Age of Hope
The progress made towards the realisation of the goal of a Better Life for All
since 1994 was defined by the President in his State of the Nation Address as
the Age of Hope.
In making this remarkable statement, the President was
emboldened by the findings of a Markinor survey which revealed that 71%
people in South Africa believe that government is generally performing well.
Further, it showed that 72% approve of the government’s efforts in various areas
of social delivery.
The President also alluded to a survey conducted by the Government
Communication and Information System (GCIS) that shows that 90% of our
population is proud of our country, our flag and National Anthem, while 60%
consider Freedom Day, April 27th, as the most important national day.
He
therefore concluded that “the outcomes of these surveys communicate the
unequivocal message that our people expect that:

we should move faster to address the challenges of poverty,
underdevelopment and marginalisation confronting those caught within the
Second Economy, to ensure that the poor in our country share in our
growing prosperity;

we should make the necessary interventions with regard to the First
Economy to accelerate progress towards the achievement of higher levels
of economic growth and development of at least 6% a year;
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
we must sustain and improve the effectiveness of our social security
programmes targeted at providing a cushion of support to those most
exposed to the threat of abject poverty;. at the same time we need to by
creating jobs reduce the number of people depended on social transfers;

we must act more aggressively with regard to our criminal justice system
to improve the safety and security of our people, especially by improving
the capacity of the law enforcement agencies and the functioning of our
courts and thereby increase our conviction rates to strengthen the
message that crime does not pay;

we must ensure that the machinery of government, especially the local
government sphere, discharges its responsibilities effectively and
efficiently, honouring the precepts of Batho Pele; and,

we must harness the Proudly South African spirit that is abroad among the
people to build the strongest possible partnership between all sections of
our population to accelerate our advance towards the realisation of the
important goal of a better life for all”.
The Age of Hope is therefore integral to the trajectory the developmental state is
following in steering the country’s economy to a path that will create objective
conditions for not only accelerated and shared growth but also for accelerated
land reform and radical transformation of social relations. The economy in South
Africa is still dominated by a developed, but largely white capitalist class and we
therefore need to strategically engage the private sector to ensure that the wealth
of the nation is equitably shared through redistributive policies that encompass
land and all other commanding heights of the economy.
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Progress made in Poverty Eradication
The big question is whether the path we have chosen is taking us to our desired
destination. Simple as this may sound, often the method one employs to answer
this big question has major impact on the conclusions arrived at. For the social
sector, I propose that it is more useful to examine the achievements made with
regard to addressing the needs of the poor at a disaggregated level. I will
therefore highlight some of the progress made.
Research shows that government’s programme has been profoundly pro poor.
For example, the total population receiving free basic water is 74.7% (i.e. 35.72
million people out of a total population of 47.80 million people). The total poor
population receiving free basic water is 68% (i.e. 15.2 million poor people who
receive free basic water out of a total poor population of 22.4 million people). Of
the national total of 5 517 090 Indigent/poor households, 2 901 134 (52%) with
infrastructure have access to Free Basic Electricity. Access to basic sanitation
services has improved from 48% (1994) to 69% (2006).
As of 9 October 2006, 11 657 460 beneficiaries received social assistance
grants. The number of beneficiaries is broken down as follows: Old Age – 2 174
983; Child Support Grant – 7 596 278; Disability – 1 383 876; Foster Care – 378
187; Care Dependency – 94 749; and Grant in Aid – 29 387.
Gross primary enrolment rates stood at 104 % in 2004 and for secondary at 89%.
In addition, the male to female enrolment ratio is around 97% indicating the
higher overall participation rate. The learner to facility ratio has also declined
from 43 to 1 in 1996 to the current 38 to 1 as a result of the emphasis on
relieving backlogs, and indicating that more children are getting access to
classroom facilities than before. Since 1994, South Africa has seen massive
shifts of resources in the education sector, and its budget allocation stands at
R81.995 billion in the current financial year rising to R89.537 billion and R96.732
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billion respectively in the outer two years of the current MTEF – making
education the single largest budget item (about 6% of GDP). As a proportion, this
is amongst the highest in the world.
For South Africa, the gross enrolment ratios (GERs) suggest that a relatively
small percentage of primary school aged children are not at school. Data from
the General Household Survey of 2005 confirm that over 95% of both boys and
girls aged 7 – 13 years were reported to be attending school.
400 schools were identified as DINALEDI schools for 2006. These schools will be
central to increasing the number of grade 12 learners passing mathematics and
science at higher grade. Calculators and computers have been provided to all
schools. A monitoring instrument has been developed and utilized. To promote
reading 5 233 primary schools that have foundation phase classes have been
provided with sets of hundred story books. During 2006 approximately 9500
schools agreed to become no fees schools. This will benefit about 3 million poor
learners. Most schools will be determined in 2007. The National School Nutrition
Programme, including social mobilisation for food gardens is reaching 298 323
learners in 801 ordinary schools and about 1 479 766 learners in 5 902 nodal
schools respectively. 236 and 875 food gardens are available in urban and rural
nodal schools, respectively.
As a result of the malaria control programme the number of malaria cases
dropped from 64 622 in 2000 to 26 506 in 2001 and 15 619 in 2002. Malaria
deaths in 2001 were 74% less than 2000. Reported malaria cases decreased
from 227 cases and 2 deaths In June 2006 to 173 cases and 1 death in July
2006
In South Africa it is recommended that children under the age of five be
immunised against the most common childhood diseases. Immunisation should
be administered at birth, 6 weeks, 10 weeks, 14 weeks, nine months, 18 months
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and five years of age. Childhood immunisations are given to prevent polio,
tuberculosis, diphtheria, pertussis, tetanus, haemophilus influenzae type B,
hepatitis B and measles. The set routine immunisation coverage target for fully
immunised children under one year is 90%.The overall routine immunisation
coverage for South Africa stands at 82% but some of districts are still lagging
behind with less than 60% immunisation coverage.
Expenditure on dedicated programmes for HIV and AIDS within provincial health
budgets has grown strongly from R330million in 2002/03 to R1.7billion in 2005/06
and is projected to increase to R2.4billion by 2008/09.
With regard to the economy, a decade later in 2004:
i.
Inflation was down to four percent if one uses the (CPIX) excluding
Interest Rates excluding interest rates on mortgage bonds
2
, or less than
one percent if one uses the Consumer Price Index;
ii.
The country was experiencing the longest period of consistent positive
growth since the GDP was properly recorded in the 1940s;
iii.
The net open forward position of the South African Reserve Bank rose
from a deficit of R21 billion to $4,7 billion in surplus by the end of 2003;
We have brought our economic house in order. As a result we have increased
average rate of growth from about 1 percent per year in the decade before 1994,
to 3 percent per year in our first decade of freedom and on average around 4
percent since 2004. Employment has grown, especially in the last two years,
even though we still have a very high unemployment rate. The economy for the
year March 2005 to March 2006 has created over 544 000 jobs. The rate of
unemployment has fallen from a high point of over 32 percent to 26 percent. And
the signs are indicating that our efforts to increase the rate of investment are
2
The Consumer Price Index reflects the price of a representative basket of consumer goods and
services
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beginning to bear fruit with investment rising from a low point of 14 percent of
GDP to 18, 5 percent.
Government and the Faith Based Organisations in the Fight against
Poverty
The question raised in the Oikos Journey presents a challenge not only to
Government but to society at large. The question posed is: Is the suffering of the
poor part of a natural order, regrettable but inevitable? This question together
with other poignant issues raised in the document depicting the conditions of the
poor in South Africa and the world form the basis of the Government’s strategic
objective in forging co-operation and partnerships with formations of civil society.
Government
acknowledges
the
undisputed
fact
that
the
Faith
Based
Organizations enjoy a special bond with the poor and the marginalized.
Specifically, it sees a pivotal role of the religious communities in the poverty
eradication strategy because of their proximity to the communities. It is against
this background that Government has forged a partnership with the Faith Based
Organizations under the leadership of the National Religious Leaders Forum
(NRLF) in an effort to pool resources in pushing back the frontiers of poverty.
Their close proximity to the poor positions ensures that Government goods and
services reach the poorest in the communities. To this end, Government has
signed a Memorandum of Understanding with the NRLF which formalises
partnership between Government and the religious communities to jointly
develop a sustainable, long-term programme to eradicate poverty in South Africa.
Conclusion
There is constant debate on what types of policies benefit the poor in the most
direct fashion. Latin American countries have adopted a set of policies that are
different from those adopted by China and very different from those adopted by
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India. All these countries are making progress in reducing poverty, all using
different types of economic policies and radically different approaches.
Let’s look at two countries similar to us. South Africa, Venezuela and Brazil are
all highly unequal countries. Depending on which set of data used, these three
countries are always in the top five most unequal countries on the planet. The
fact that all three countries have had a history of economic development
dominated by the export of resources combined by social and political systems
that entrenched minority rule goes to explain, in part, why we are all so unequal.
If we compare South Africa, Brazil and Venezuela the proportion of our budget
spent on the poorest 40 percent of the population is 45 percent compared to 21
percent in Brazil and 27 percent in Venezuela. South Africa spends more as a
share of GDP on education than both Brazil and Venezuela. On health care,
Brazil spends more than us but Venezuela spends just 2% of GDP on (public)
health care. South Africa has the largest non-contributory social security system
in the world. Almost a quarter of the population receive some kind of social grant.
In Brazil, the Lula government has also broadened social security payments to
poor households, but has been more limited in its ambition. The number of
people receiving social security payment in Brazil has risen from about 2%
before Lula came to power to about 5% at present. The value of the payment is
far less than our child support grant, but does include a component paid in milk
and food. Venezuela has not traditionally had a non-contributory social security
system but has also recently introduced cash grants, though this system is still
new and does not have wide reach.
This comparison is not to say this policy or that policy route is the correct one to
follow but to show that the policy route chosen by the by South Africa has
allowed us to rapidly implement pro-poor policies to address the problem of
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poverty and unemployment and to lay the foundations for the establishment of
our non-racial, non-sexist democratic society.
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