South Africa 2000 en
South Africa 2000 en
South Africa 2000 en
Foreword ii i
overview
contents
Acknowledgements v
Overview vi
References 193
Appendices 204
Acronyms 218
Glossary 220
h u m a n d e v e l o p m e n t r e p o r t 2000
Foreword
(HDR), contributing
facts, figures and analysis
to the discourse on people-
centred approaches to develop-
ment. Challenging the world-
view that economic growth
alone can lead to develop-
ment, the reports have illus-
trated the importance of pro-
moting national policies that
expand peoples’ choices, en-
hance their capabilities and
broaden opportunities to
ensure that all can achieve
their full potential, contribute
to and benefit from human
development.
h u m a n d e v e l o p m e n t r e p o r t 2000
Each year, the reports have provided all in an equitable manner. The report for
insight into a particular theme that is the year 2000 focuses on transformation
relevant at a global level, ranging from and human development. It challenges all
gender inequality to human rights, South Africans to commit themselves
poverty and the nature of economic anew to a shared vision that transcends
growth itself. The series has served as a the deep inequalities that remain so tragic
catalyst for dialogue all over the world, and deep-seated an aspect of the legacy
prompting nations to review their per- of apartheid.
formance in human development against The 2000 report reviews the funda- iii
the data and the facts of other nations mental changes and significant achieve-
with similar resources, helping to set ments made in the political sphere,
foreword
overview
realistic targets and encouraging im- mainly through the adaptation and reform
proved performance and achievements in of institutions in both the public and the
the future. private sector. Impressive institutions of
The success of the global reports in democracy, such as the Constitutional
promoting dialogue on human develop- Court, one of the most representative
ment has been replicated at national Parliaments in the world and one of its
level. Over 120 countries have prepared most progressive Constitutions have justly
National Human Development Reports filled South Africans with pride. These
that review progress and setbacks in achievements have been applauded by
human development while exploring, in the international community and have
depth, the particular challenges faced by won the profound admiration of those,
the country. including myself, who have had the
In South Africa, the first Human privilege of observing the process and
Development Report jointly sponsored by discreetly contributing to practical expres-
the UNDP and UNAIDS focused on the sions of international solidarity with the
devastating impact of HIV/AIDS and its new South Africa.
potential to reverse recent gains in The report also highlights transforma-
human development. The main message tion in the public service as well as some
of the report was one of hope – hope of the new sites and instruments for
that the further rapid spread of the change established by government in
epidemic could be contained if national partnership with civil society, labour and
leadership combined with the active business, notably NEDLAC.
participation of people living with HIV/ But this impressive record and the
AIDS, others affected by it and all rel- general rhetoric of transformation masks
evant civil society and public service the continuing inequalities experienced in
partners channelled their resources to accessing the new opportunities that these
fight the scourge. The report highlighted institutions represent. Those who are
the fact that, with South Africa’s history of better equipped or positioned to have
social mobilisation against the seemingly ready access to the processes of change,
insurmountable odds of the apartheid either through better education or through
system, it could equally address and positions of privilege in political move-
overcome the threat of HIV and AIDS. ments, have benefited most. The vast
The present report takes on a very majority of the population remains, in
different challenge. It is one that again many essential respects, isolated from the
calls on South African society to reach country’s historic renewal. Levels of
deep into the experiences of the struggle poverty and inequality are still growing.
against apartheid, this time to ensure that The economy continues to shed jobs –
the gains celebrated in the short period reducing the choices and opportunities of
of democratic governance are shared by those who are already deprived.
h u m a n d e v e l o p m e n t r e p o r t 2000
Successes in the political sphere need ship in the discourse and the application
to be monitored against the broader of human development in South Africa.
objective of building a society that Both here and internationally, she contin-
prioritises human development. The 2000 ues to guide many researchers and stu-
report suggests that these political dents in this growing field.
achievements can indeed be echoed in Preparations have included consulta-
the economic and social spheres if the tions with eminent members of an Advi-
development path is adjusted to promote sory Panel, with representatives of gov-
feasible, realistic changes that ensure ernment and civil society and of the
iv
positive outcomes for all. The report United Nations system in South Africa.
underlines the need for shared responsi- The independence of views, the profes-
overview
foreword
h u m a n d e v e l o p m e n t r e p o r t 2000
Acknowledgements for the 2000
Human Development Report
acknowledgements
overview
support and valuable contributions of a Mqweba, Jacob Zitha, Virginia Lebea,
large number of individuals and organi- Andre Marais, Elliot Nduzulwa, Ishmael
sations. Kangware, Thabo Mosikidi, Longa Mosidi,
and Saki Mofokeng. We acknowledge the
Advisory panel contributions made by various individuals
The report benefited greatly from advice from the UN family in South Africa, in
and suggestions provided by a broad particular Sue Godt, Mandla Dube,
advisory panel of specialists in human Giacomo Pirozzi from UNICEF who
development. Members of the Advisory shared all their photographs; Ursula
Panel were Frene Ginwala, Ruth Bengu, Wagner and Johanna Lengwati from
Saki Macozoma, Mampela Ramphela, UNDP. A special word of thanks to
Blade Nzimande, Vukani Mthintso, Mark Lynette Pritchard and Monica Adams for
Orkin, Ben Turok, Allan Taylor, Phumzile their dedicated administrative support.
Ntombela-Nzimande and Pundy Pillay. Acknowledgements must also be made
to the University of Cape Town, Depart-
Contributors ment of Social Development, and SADEP,
Research contributions were made by for their support. Various government
Deevy Holcomb, Alta Folscher, Shaun departments provided information and
Jacobs, Warren Kraftchik, Siyabonga assistance in the research process, but
Memela and Albert van Zyl, Keyan G. particular mention must be made of the
Tomaselli, Dirk and Claudia Haarman Policy Coordination Unit of the Office of
and Peter La Roux. the President and the National Minister of
Others who contributed through Social Development (formerly Social
participation at a main messages work- Welfare and Population Development),
shop included Seatla Nkosi, Phekwane Dr. Z.S.T. Skweyiya.
Mashilwane, Mark Hefferman, Kiari The author and principal co-ordinator
Liman-Tinguiri, Tarik Muftic, Richard wishes to express her sincere appreciation
Humphries, Akua Dua-Agyeman, Jay to David Whaley, former Resident Repre-
Parsons, Rozanne Chorlton, Neville Josie, sentative of the UNDP South Africa
Luis Honwana, Metsi Makhetha, Natalie country office, for his commitment to and
Jacklin, Julia de Bruyn, Ros Hirshowitz, support for an independent and stimulat-
John de Beer, Lipalesa Motjope and ing report. Anne Githuku-Shongwe
Lynette Hlongwane. contributed throughout, setting up sys-
A special word of thanks is also tems and processes to support and en-
extended to participants who contributed courage thinking about human develop-
to the process of identifying transforma- ment, both within UNDP and more
tion indicators. The list includes Koos broadly. Her assistance is also gratefully
Mogotsi, Sibongile Makhanya, J. Makita, appreciated. The team wishes to thank
Maria van Driel, Joe Matshete, Maud everyone who supported the writing of
Dlomo, Andrew Mogoai, Maria Molatji, this report and assumes full responsibility
Rose Molokoane, Andrius Kamaomang, for the opinions it expresses.
h u m a n d e v e l o p m e n t r e p o r t 2000
Overview
H uman Development is
about transformation
to promote the interests
vi
of all, especially the most
marginalised and poorest
overview
members of society.While
South Africa’s first na-
tional Human Develop-
ment Report in 1998 focused
on HIV/AIDS and its devastat-
ing impacts on all spheres of
life, this Report focuses on trans-
formation. Six years after its
first democratic elections, South
Africa is moving from the
politics of transition to the
consolidation of state power
within a representative democ-
racy. Government has em-
barked on a significant pro-
gramme of state restructuring
in order to advance and protect
the fledgling democracy. That
South Africa is being trans-
formed is beyond dispute. But
what is the character of this
transformation? Can it be
sustained under current condi-
tions? Does it contain fractures
and fissures? And if so, what
can be done to repair them?
South Africa’s Human Develop-
ment Report 2000 provides a
critical analysis of these ques-
tions.
h u m a n d e v e l o p m e n t r e p o r t 2000
The Report reviews the processes of
transformation through the institutional The Report reviews the
frameworks established by government,
processes of transformation
as well as through the prism of race,
class, gender and spatial inequalities. It through institutional frame-
also looks at the question of who works, as well as through the
determines the transformation agenda
prism of race, class, gender and
and who benefits from the outcomes.
spatial inequalities.
vii
The Changed Geo-Political
overview
Environment system remains. A disdainful and indif-
As it takes its place in a changed geo- ferent civil service is slowly being
political landscape, South Africa is transformed into a servant of the public.
confronted with multiple challenges. State institutions are being modified to
New alignments amongst regional and perform tasks they were previously
global institutions of, largely, economic explicitly designed to prevent. For
governance pose complex challenges millions of South Africans, there is
for the democratic state. Globalisation evidence of change and improvement –
creates new opportunities and generates from a de-racialised school system and
greater risks as national borders become free medical care for small children and
permeable and the traditional role of the pregnant mothers, to electricity grids
nation state is challenged. At the same and water lines that now reach house-
time, processes of social transformation holds living in new houses built with
and poverty eradication depend on the state subsidies.
extent to which South Africa is able to This Report reveals some of the main
manage the process of global integration elements of transformation and democ-
in the interests of human development. ratisation and their relationship to
This Report reflects on how transform- governance in South Africa. It highlights
ing the state within a global system that key features of the state, its instruments
increasingly sets the pace of develop- and the way it engages with civil society
ment has created new tensions and and market forces as it responds to
modes of engagement between the human development imperatives at the
state, civil society and the business beginning of the new millennium. The
sector. analysis of the state of human develop-
ment in South Africa is located within
From Racial Discrimination to South Africa’s experiences of colonial-
ism, racism, patriarchy and cultural
‘Rainbow Nation’ and domination. It is precisely because of
Democratic Governance the fragmentation and gross inequalities
South Africa travelled a remarkable path that characterise South Africa that the
in the 1990s. It avoided the civil war Report calls for the implementation of a
many had thought inevitable and, in six shared vision of transformation, one that
short years, established a new, demo- may be implemented through collective
cratic political order, buttressed by social endeavours. As broadly sketched by
and political stability. The rights and former President Nelson Mandela,
liberties enshrined in its Constitution government committed itself:
have justifiably earned respect all over to bring fundamental change to the
the world. Only a shadow of the legal lives of all South Africans, especially the
edifice that supported the apartheid poor; to recognise the actual
h u m a n d e v e l o p m e n t r e p o r t 2000
• Alleviating poverty, low wages and
Formal democratisation, extreme inequalities in wages and
wealth;
state reform, expanded
• Meeting basic needs and ensuring
delivery of social services, that every citizen enjoys a decent
job creation, poverty allevia- standard of living and economic
tion and all aspects of develop- security;
• Democratising the economy and
ment may constitute elements of transforma- empowering the historically op-
viii
tion. pressed, particularly workers and
their organisations;
overview
h u m a n d e v e l o p m e n t r e p o r t 2000
An Agenda for a Human the household sphere. The application
of conventional measures not only
Development Driven Society depoliticises, but also desocialises, the
economy, in line with a logic that sepa-
by 2010 rates the economic from the social. The
The promise of the struggle for emanci- challenge posed in this Report is for
pation will ring hollow if South Africa government to go beyond measuring
does not translate political freedom into the aggregate well-being of individuals
human development. Human develop- and to measure, in addition, changes in ix
ment is not an option. Indeed, if there institutional and structural conditions.
is to be social and political stability and Furthermore, an attempt is made to
overview
economic growth, it is an imperative. develop both objective and subjective
Human development is the process of criteria in order to measure human
enlarging people’s choices and raising progress and transformation.
levels of well-being.4 It is a holistic, The central question is, therefore,
integrated process in which economic how to measure transformation and
and political forces continually interact sustainable human development? What
with one other in dynamic and diverse types of proxy indicators can be used to
ways to improve the lives of and op- measure development and transforma-
portunities available to the poorest tion? In this Report institutional/struc-
people. tural (policies/systems), normative
For South Africa, sustainable human (values, standards, attitudinal or change
development implies a rapid process of in organisational behaviour/culture,
redress, social reconciliation, nation- social solidarity/cohesion) or functional
building and economic growth with (service delivery/distribution of goods
equity, alongside the sustainable utilisa- and services) measures are used as
tion of natural resources. South Africa’s indicators of development and transfor-
journey of liberation and transformation mation. Further, in order to provide a
highlights the importance of pursuing human face to the indicators used, the
the human development process in an views of people are profiled.
environment that promotes equity, South Africa is considered to have a
affirmation, self-respect, participation medium human development ranking,
and human rights. If this is not done, comparing well with other countries.
the time bomb of poverty, accompanied The 1999 Human Development Report
by related pathologies and some of the ranks South Africa at 101 behind Brazil.
worst forms of violence – particularly The estimated Human Development
against children, women and the eld- Index value of 0.628 (calculated with
erly – will erode the legitimacy and 1997 statistics) placed South Africa at
power of the democratic state. The 116 in the ranking. Based on this esti-
general rhetoric of transformation can mate, South Africa compares well with
no longer mask the continuing inequali- other African countries and ranks sev-
ties and pain visited on families, house- enth behind Mauritius, Tunisia, Cape
holds and communities, where fear, Verde, Algeria, Swaziland and Namibia.
survival, food security and violence are In the southern African region, South
pervasive. Africa ranks third behind Swaziland and
The Report also cautions against the Namibia. South Africa’s estimated HDI
use of conventional economic indica- of 0.628 is also higher relative to the
tors to provide evaluations and fore- average HDI of 0.430 for Sub-Saharan
casts of economic performance without Africa, but slightly lower than the aver-
examining what is happening within age of 0.637 for all developing coun-
h u m a n d e v e l o p m e n t r e p o r t 2000
male-headed households. This under-
Macroeconomic policies lines the need to prioritise African
women in social welfare, job creation,
leave existing power rela-
training and small business develop-
tions intact and reinforce ment programmes.
the subordinate position of Views of a cross section of some of
the poorest citizens canvassed during
women and poor people.
the preparation of the Report were also
illuminating. Their perceptions of trans-
x
formation since 1994 – of what has
tries. If one assumes no HIV and a changed and what has remained the
overview
constant growth rate in population and same for the poorest in the country –
incomes, then South Africa’s human were mixed. All those interviewed
development is expected to be 0.645 in indicated that there are fundamental
1999 and 0.654 by the year 20105 – changes at the political level. People are
based on a growth rate of 0.3 percent beginning to see themselves as citizens
per year between 1996 and 2010. with the right (if not the ability) to
However, this prediction drops drasti- participate actively in all aspects of life.
cally with HIV/AIDS. However, they indicated that this right is
South Africa’s rate of poverty6 (a meaningless when, for many, grinding
measurement of the extent of absolute poverty remains the reality. People
poverty) is 45 percent. This translates experience transformation as slow,
into 3,126,000 households or more than contradictory and insufficiently partici-
18-million citizens living below the patory (inclusive of ordinary people). A
poverty line (pegged at an income of significant trend that emerges is a deep
R353). In mainly rural provinces, the sense of despondency, alienation and
figure rises above 50 percent. disenchantment and the sense of a slow
A closer look at measures of human pace of change.
development reveals more precise Significant advances have been
contours of inequality and poverty. The achieved in establishing democratic
experience of extreme poverty is dra- institutions, transforming policies and
matically concentrated among Africans: legislation and developing new proc-
57.2 percent of Africans live below the esses for labour, business, and govern-
poverty threshold, compared to 2.1 ment to negotiate competing interests.
percent of whites. The poorest 40 Yet, although these gains entailed
percent of citizens remain overwhelm- politically acceptable risks, the realisa-
ingly African, female and rural. Accord- tion of some of these rights may be
ing to Statistics South Africa, twice as stymied by retreats made in other policy
many female-headed as male-headed areas, especially that of macroeconomic
households are in the bottom quintile policy. The power of international and
(26 percent compared to 13 percent). local organised business to set the pace
When race and gender are aggregated, of change in a market economy im-
the figure rises to 31 percent of African, poses severe constraints on govern-
female-headed households in the ment’s capacity to reduce social in-
lowest quintile, compared to 19 percent equality. The extent to which macro-
of African, male-headed households.7 economic policies leave existing power
Overall, the poverty rate among female- relations intact and reinforce the subor-
headed households is 60 percent, dinate position of women and poor
compared with 31 percent for people remains a concern.
h u m a n d e v e l o p m e n t r e p o r t 2000
Overcoming the Constraints obligations to the Civil Service Pension
Fund swelled from R31-billion in 1989
and Understanding the to R136-billion in 1996.9
The result was to strengthen calls for
Contradictions fiscal stringency dramatically. High
At the heart of the transition stood two, interest payments siphon off funds that
potentially contradictory, imperatives: a could and should be directed at social
formative break with the old order and, spending. The contradiction is that,
at the same time, a considerable degree while government is determined to
of continuity with it. In some cases, the xi
lower the amounts devoted to debt
contradictions could be resolved. For servicing by reducing the budget deficit,
overview
example, the protection of minority this has a direct impact on its ability to
groups’ cultural and language rights lever funds for much needed basic
could fit neatly into the liberal-demo- social infrastructure and poverty eradi-
cratic frame of the new political system. cation.
Other constraints related to the retain- Another important factor influencing
ing of the apartheid civil service and South Africa’s development path is the
the internal government debt. prevailing view that there are no alter-
The purpose of the ‘sunset clause’ natives to the orthodoxies that shaped
that protected incumbent civil servants development directions in the past.
from retrenchment was to remove South Africa marched the final steps
insecurities that might stoke ‘counter- of its liberation struggle in an era
revolutionary’ mobilisation. However, marked by the collapse or decay of the
while much has been made of the three main development models that
effects of this ‘sunset clause’ on initia- held sway for most of the century.
tives to transform state structures, its These were the Soviet model (associ-
cost to the fiscus has been its most ated with ‘really existing socialist’
debilitating outcome. Voluntary re- states), the welfarist model (that at times
trenchments and golden handshakes characterised North America, the United
became the only ‘broom’ with which Kingdom and Western Europe) and the
the new government could ‘clean out’ developmentalist model (expressed in a
the civil service bureaucracies. variety of experiments in Africa, Asia
Linked to this was one of the most and Latin America). The lack of an
far-reaching oversights (or compro- appropriate model that, theoretically,
mises) of the negotiations period: the privileged human development over
leaving intact of the 1989 conversion of pure economic growth (or at least
the Civil Service Pension Fund from a attempted a ‘humane’ balance between
pay-as-you-go system into a fully the two imperatives) and the hindsight
funded entity. This guaranteed full afforded by the dissolution of these
payouts to as many civil servants as development models has severely
chose to leave the service. The effect constrained government in its search for
was to inflate government debt hugely. a development path.
In 1994, the debt stood at R189,9- The perception was that, in the
billion; by March 1999, it had bal- current phase of globalisation, an
looned to R375,9-billion. Approximately economy stricken with weaknesses has
96 percent of the debt is owed to South no choice but to bend visibly to market
African creditors. Crucially, 40 percent sentiments if it is to avoid chronic
of the debt load is absorbed by the instability. Government’s overarching
Civil Service Pension Fund.8 Debt framework and vision for development,
h u m a n d e v e l o p m e n t r e p o r t 2000
the RDP, was consequently adapted ably to an attractive policy environment.
through the GEAR strategy. There is international debate about
Stripped to basics, GEAR sand- what combinations of factors attract
wiched government spending between investment, with strong evidence that,
two stringent and fundamental prescrip- rather than being a direct function of
tions. First, fiscal austerity (reflected in investor sentiment, investment is “pri-
a drive to bring the budget deficit down marily determined by profitability of
to 3 percent of gross domestic product investment and the complementarity
by the year 2000) is pursued in order to between investment by the state and the
xii
reduce the total public sector debt, private sector”.12 Another consideration
which stood at 56 percent of gross concerns what attracts specific kinds of
overview
h u m a n d e v e l o p m e n t r e p o r t 2000
the growth potential of the local manu- regime. South Africa’s economic poten-
facturing sector. However, a demand- tial – and importance – within the
led growth path requires significant African context, its low levels of foreign
levels of state intervention. debt and the organised, popular support
Statistics seemed to support the that can be harnessed behind a quest
need to boost savings levels. Savings for alternatives constitute a sound basis
overall had sunk from 30 percent of for such an endeavour.
GDP in 1979-80 to 16.5 percent in This work must be converted into a
1996, while government dissaving rose call for urgent shared action to reverse xiii
as high as 5 percent of GDP in the mid- the economy’s job-shedding character, a
structural feature that predates the
overview
1990s. Private sector saving had also
dropped – from 25 percent of GDP in introduction of GEAR and the advent of
the late 1970s to 19.2 percent in 1996. the democratic order.
Along with the HIV/AIDS pandemic,
In line with a monetarist view, positive
unemployment poses the gravest threat
real interest rates came to be seen as
to South Africa’s developmental
an essential instrument for boosting
achievements and goals. Successfully
savings levels, with little regard for
addressing these crises requires urgent
their throttling effect on investment,
action that extends beyond the labour
output growth and job creation. A high
market to macroeconomic policy,
degree of continuity with post-1989
industrial strategy, investment frame-
Reserve Bank policies was affirmed.
works, poverty eradication, an inte-
Importantly, these measures enjoyed grated HIV/AIDS strategy and a rural
the approval of local and international development strategy. In all these
financial networks. respects, there seems to be a substantial
need and latitude for more directive
Working towards a state intervention. This must be sup-
Development Framework to ported by civil society and business,
which must share responsibility for such
Promote Growth and Equity interventions.
At the same time, the socio-economic
New advocacy agenda to respond to hardships and disruption that radiate
old problems through households, families and com-
The possibility of marshalling new munities when jobs are lost make the
South-South (and even South-North) protection of existing formal employ-
alliances in pursuit of a more equitable ment a priority for government. The
global economic order exists and
protection and promotion of work
should be pursued with vigour. Simul-
opportunities as an effective measure to
taneously, practicable, realistic revisions
address income poverty must be sup-
are possible at the national level. This
ported by agreements between labour,
entails a review of the assumptions that
business and the community sectors.
underpin current economic policy.
Government’s ability to come up with
These assumptions range from the
truism that the economy is ‘savings coherent consensus-based strategies and
constrained’ (as opposed to ‘investment to manage its responsibilities is a crucial
constrained’) to the utility of current variable in any development path. The
monetary policy, the relaxation of transformation achieved in the political
capital controls, the role of foreign sphere can be extended to the eco-
investment in the economy and the nomic and social spheres, provided that
envisaged revisions to the labour government, business and civil society
h u m a n d e v e l o p m e n t r e p o r t 2000
overarching development path that is
The protection and promo- geared to reducing inequality and
poverty
tion of work opportunities
as an effective measure to Monetary policy
address income poverty must Progressive adjustments to monetary
be supported by agreements policy are part of a realistic route.
During 1998, a broad consensus devel-
between labour, business and the commu-
xiv oped around the need to revise mon-
nity sectors. etary policy.
overview
Capital controls
organisations, including labour, share At the moment, government remains
the responsibility for negotiating and committed to the gradual but eventual
implementing the required changes. complete lifting of capital controls.
There is a pressing case for a revision of
this stance.
Strategies Available for
Sustained Economic Growth Industrial policy
Industrial policy needs to be synchro-
with Human Development nised more closely with macroeconomic
Strategies available include proposals14 adjustments. The current broad frame-
aimed at addressing systemic con- work already offers several opportuni-
straints on economic growth, job crea- ties for more directive steps. Incentives
tion and redistribution in the economy. built into investment promotion and
These hinge on a set of integrated industrial development programmes
(short- and long-term) policies that seek (particularly SDIs) should explicitly and
to link macroeconomic policy and strongly favour job creation.
industrial strategy with human develop-
ment. Prominent in them are recom- Effective labour market policies
mendations that: Labour market policies critically require
• the fiscal deficit be allowed to fluctu-
shared commitment. A piecemeal dis-
ate within a band – depending on
mantling of the post-apartheid labour
the size of the social deficit and the
regime must be prevented. It is in the
level of unemployment – rather than
crucible of labour relations that the
observe the rigid target of 3 percent
enigmatic dynamics of class, gender and
currently pursued by government;
race in South Africa become manifest.
• a ‘solidarity tax’ be levied on
wealthier South Africans as a The guiding principle must be the
short-term measure to deal with the recognition that the “transformation of the
financing of apartheid backlogs; apartheid labour market, characterised by
• a prescribed asset requirement be segmentation, inequality and exploitative
imposed on the financial sector, relationships is an important aspect of
including worker provident/pension broader social transformation”.15
funds, to raise capital for social
investment. National budget
The primary challenge for govern- Another essential element of macro
ment is to devise ways to lever higher policy management is the national
levels of domestic private investment budget. The budget has the potential to
and to harmonise them with an become one of the most effective
h u m a n d e v e l o p m e n t r e p o r t 2000
redistributive policy instruments. How- strategy that is responsive to the needs
ever, while government actively pro- of the most vulnerable and excluded
motes budget reprioritisation in favour people. Such a response must include
of critical social and political impera- the following features:
tives, the budget process itself needs to
be transformed in order to promote Addressing income poverty
greater transparency, accountability and Measures to ensure that there is ad-
negotiation on priorities between govern- equate social protection for all, includ-
ment, Parliament and civil society. ing the working poor and those not in xv
paid work, are critical interventions
Addressing inter- and intra-provincial required of government, business and
overview
inequalities citizens. Such measures should combine
Neither inter- nor intra-provincial employer/employee-based contribu-
inequalities have been fully addressed. tions, as well as social assistance or
While the former may be addressed at transfers provided by the state where
the national level by making adjust- paid work is not available.
ments in the allocation formula, the
latter lies within the control of prov- Generating sustainable livelihoods
inces and is thus more difficult to There must be concerted attempts to
address through national policy. The ensure that the majority of the poor in
national norms and standards provi- South Africa gain access to remunerative
sion, designed to deal with intra- employment. Central to such attempts is
provincial inequalities, has not been the need to ensure economic access
implemented. Addressing staffing and productive returns for those who
rigidities could provide more opportu- have been outside mainstream eco-
nities for defining national norms and nomic activity. Livelihood generation
standards. must involve sustained and creative
ways of securing both income and
Strengthening intergovernmental meaningful work roles that build on the
capacity and ingenuity of poor people
financial relations themselves.
The use of the section 100 constitu-
tional powers of oversight and supervi-
Asset development and effective redistribution
sion by the national government when Income measures and sustainable
allocating ‘bailouts’ to assist provinces livelihoods depend on the asset base of
with expenditure shortfalls points to households and communities. Access to
uneven relationships between national land, credit, training and education is
and provincial governments. Stringent critical. Furthermore, effective redistri-
conditions have been attached to these bution of assets requires that poor
‘bailouts’. Asymmetry is acceptable and women are able to acquire assets as
may even be required to build the well as have control over them. Build-
capacity of provinces, provided the ing the asset base of households and
bounds of intervention are strictly communities also involves providing
defined and their mode supportive. tenure (land, housing) and the capacity
for household and community self-
Prioritising collective responsibility for management. Such measures are key to
poverty eradication both economic empowerment and food
The scale and depth of poverty and its security. In this regard, government
related problems calls for shared action needs to accelerate its land redistribu-
within an integrated comprehensive tion initiative.
h u m a n d e v e l o p m e n t r e p o r t 2000
Promoting capability measures (Green and White Papers) and legisla-
Access to education (both formal and tive interventions. These are designed to
non-formal), health care, basic social transform the public sector into an
services and social infrastructure are agency that is coherent, transparent and
essential requirements for human devel- representative, as well as capable of
opment and effective participation by achieving the crucial goals set for it by
people in all spheres of activity. Na- the people and government of South
tional agreement on minimum require- Africa.
ments in respect of social service provi- Many of these policy initiatives have
xvi
sion is urgently required. been in line with, and have sometimes
exceeded, international best practice. In
overview
Facilitating social and economic integration addition, the 1996 Constitution (includ-
High levels of violence, crime and social ing the Bill of Rights) has been widely
alienation are the result of the wanton acclaimed as one of the most liberal and
breakdown of black family and commu- progressive examples of its kind. The
nity life during apartheid. They remain a government’s new labour legislation
feature of South African society. Growing conforms to ILO standards. The promo-
and persistent inequalities and joblessness tion of women’s empowerment and
have eroded the moral and social values gender equality (as exemplified, for
of communities. Crushing poverty, fuelled example, in the establishment of the
by anger that the benefits of democracy Gender Commission, the ratification of
have not resulted in tangible gains for the CEDAW) is a significant milestone. In
poorest, perpetuates an environment of addition, South Africa has risen from
fear and increases social marginalisation. 141st to seventh in the world in terms of
Government, business and civil society representation of female MPs.
organisations need to come together to Moreover, the move to establish
negotiate policy and programme shifts to transparent and accountable govern-
ensure that economic growth strategies ment has been demonstrated by Gov-
within a market economy do not lead to ernment’s willingness to submit itself to
a market-driven society. Promoting a scrutiny not only through a free press,
competitive environment in which the but also through critical investigations
‘survival of the fittest’ is ensured will and the enactment of the Open Democ-
simply reinforce and reproduce the racy and Administrative Justice Acts.
inequalities of apartheid. Consequently, Impressive though some of these
the promotion of social integration needs achievements have been, they have, in
to be understood as a national imperative many ways, done little more than
and to become a shared responsibility scratch the surface of the many socio-
that spans all sectors of society. economic problems and imbalances
bequeathed by apartheid. Serious
The Challenge: Reclaiming problems of unemployment, poverty
and inequality continue to exist and, as
Governance for Humane the government itself has acknowl-
Development edged, much more needs to be done to
address them. This is, in many respects,
Extending the achievements and hardly surprising, given the daunting
successes in transformation task faced by the new democratic
Government’s commitment to institu- regime in tackling the apartheid legacy.
tional transformation has been demon- The challenges are many. They
strated at the policy level through a set include the urgent need to satisfy the
of wide-ranging policy documents popular expectations raised by the
h u m a n d e v e l o p m e n t r e p o r t 2000
transition to democratic rule. Effective has privileged business and labour over
ways of mediating the wide range of other civil society organisations.
competing political, social and eco- The need for more effective forms of
nomic pressures that continue to be partnership between the state and civil
advanced by different social forces in society has been bolstered by recent
the country must be strengthened. research,16 which has demonstrated that
There is a need to work together to the increased capacity of the state is
reconcile the almost universal tension positively, rather than inversely, corre-
between the internal needs of bureauc- lated with the increased vitality of civil xvii
racy and the needs of citizens, in order society. As civil society grows more
to accelerate service provision within a robust, the capacity of the state to
overview
caring society. There is also a need to govern is increased.
negotiate the difficult path between During the period of negotiations
political democratisation and economic and the government’s first term in office,
liberalisation and to confront the many efforts were made to build a consensual
challenges posed by South Africa’s basis for post-apartheid rule and trans-
integration into the region and global formation endeavours. Institutionally,
economy. these attempts were most marked in the
Moreover, if government is to re- realm of labour relations and economic
solve the discontinuity between policy policy, with various mediation and
objectives and outcomes, it will need to arbitration structures and the National
distinguish more clearly between inef- Economic, Development and Labour
fective implementation (resulting from a Council (NEDLAC) constituting the flag-
lack of capacity, particularly funds, ships of those efforts. Although transfor-
rather than a commitment to the imple- mation in the first six years of post-
mentation of government policy) and apartheid South Africa has been domi-
non-implementation (resulting from a nated – indeed, defined – by govern-
lack of compliance with such policy). ment-initiated and -managed changes,
As the decentralisation process moves there are strong signs that the next few
forward, it will be important to devise years will be shaped more decisively by
appropriate and differentiated strategies struggles mounted from within civil
for addressing these two issues. Whilst society, in particular the labour and
more effective forms of support for civic movements. There are cracks in
departmental, provincial and local the edifice of the progressive alliance
government capacity building will help that shaped post-apartheid social and
address the issue of ineffective imple- political organisation. This must also be
mentation, it is also necessary to intro- examined alongside the demobilisation
duce a more rigorous system to tackle and depoliticisation of the non-govern-
the issue of non-compliance with the mental development sector.
transformation agenda. The participation of community
Greater energy needs to be devoted representatives and organisations in
to forging the kinds of creative partner- new partnerships with government and
ships between the state and civil society business could be enhanced through
envisaged in the RDP. Since 1994, there the provision of financial assistance and
has been discernible movement from by identifying connecting points for
the inclusive civil society forums that engagement. Furthermore, the tendency
characterised the early phases of the to substitute issues of distribution
transition towards a more social (power and resources) with the need
corporatist approach (particularly for efficient management within the
through the NEDLAC framework) that public and non-governmental sectors is
h u m a n d e v e l o p m e n t r e p o r t 2000
cause for concern. In developing a stability have encountered the enduring
shared responsibility for transformation, reality that post-apartheid society is
it is important for all partners to under- shaped not only by the activities of a
stand that different sectors bring differ- benign state committed to fulfilling the
ent but critical qualities to the process. aspirations of the majority, but also by the
The role of government cannot be activated interests and demands of con-
substituted by civil society organisations flicting social forces. It is within this reality
or by market forces on the basis of that the priorities outlined in the Report
efficiency arguments. call for shared responsibility if democratic
xviii
Attempts to shore up a platform of gains are to be experienced by all.
overview
h u m a n d e v e l o p m e n t r e p o r t 2000
The political economy
1
1
h u m a n d e v e l o p m e n t r e p o r t 2000
“
T he liberation of
South Africa was
both a local expression
of a changing world and
part of the catalyst to
2
renewed efforts aimed at
political economy of transformation
attaining international
consensus on the most urgent
questions facing humanity.
Our transition took place in
the context of a dynamic and
changing political process...” 1
h u m a n d e v e l o p m e n t r e p o r t 2000
Introduction
h u m a n d e v e l o p m e n t r e p o r t 2000
Transformation as a process must, Led by the pioneering work of the
however, take account of the fact that United Nations Development Pro-
societies are not homogenous. In South gramme (UNDP), the United Nations
Africa, society is stratified along four (UN) system has presented a significant
major lines of inequality: ‘race’, class, challenge to mainstream development
gender and spatial. The degree to perspectives focusing purely on eco-
which change can occur in a given nomic growth. A central contribution to
society is dependent on the balance of the process has been the UN’s advocacy
forces between social classes or interest of a sustainable human development
4
groups, as well as its relationship to the perspective (SHD) as an essential strat-
balance of forces between and among egy for the future of human existence.
political economy of transformation
other countries in the world. There are For South Africa, SHD implies a rapid
different interpretations of transforma- process of redress, social reconciliation,
tion. These are dependent on and nation building, economic growth and
shaped by the social location, social human development alongside the sus-
experience and social interests of a tainable utilisation of natural resources.
given social class or formation. The process of enlarging people’s
choices is central to human develop-
Human development ment. Such choices are related, not only
Human development is the process of to goods and services, but to expanding
enlarging people’s choices and raising human capabilities. The human devel-
levels of well-being.5 It is a holistic, opment index measures a person’s
integrated process in which economic capability to lead a healthy life, to have
and political forces continually interact access to resources and opportunities
with one another in dynamic and and to be knowledgeable. Human
diverse ways to improve the lives of, development is also about political,
and opportunities available to, the social, economic and cultural freedom,
poorest people. a sense of community and opportunities
to be creative and productive. In short,
human development is about what
people do and can do in their lives6 .
South Africa’s journey of liberation and
Box 1 transformation provides an explicit
The human development paradigm example of the importance of pursuing
contains four main components7 : the human development process in an
environment that promotes equity,
• Productivity. People must be affirmation, self-respect, participation
enabled to increase their
and human rights.
productivity and to participate
fully in the process of income
generation and remunerative
Human development in South Africa
employment ... Human development in South Africa is
about achieving an overall improvement
• Equity. People must have access to equal opportunities in the quality of life for all people,
… giving priority to those who are the
• Sustainability. Access to opportunities must be ensured poorest and most excluded from main-
not only for the present generations but for future genera- stream society. The human develop-
tions as well … ment framework, therefore, needs to be
• Empowerment. Development must be by people, not only sensitive to the multi-dimensional
for them ... character of South African society. This
means that the historical, political and
h u m a n d e v e l o p m e n t r e p o r t 2000
economic arrangements that lie at the
core of the social system (relations
The Environment for
between groups) must be analysed. Transformation: Factors and
Thus, poverty and other social issues
must be examined against a landscape
Constraints
of colonialism, apartheid, inequality,
power, class, gender and ‘race’. Using
A negotiated political settlement
the human development framework is Far from constructing a new South
necessary to encourage new forms of Africa on the ruins of a defeated order,
the ANC and its allies found themselves 5
social mobilisation and social organisa-
tion in order to effect fundamental trying to shape the terms on which they
h u m a n d e v e l o p m e n t r e p o r t 2000
for KwaZulu-Natal, if necessary by democratic frame of the new political
violent means. Far-right paramilitary system. Accordingly, a cultural commis-
mobilisation and attacks became com- sion was set up to ensure that the
monplace, spurred by motives ranging various cultural interests of these groups
from Afrikaner homeland fantasies to would be respected. This deflected and
scorched earth objectives. Elements of channelled the more extensive demand
the apartheid security forces were for a territorial Afrikaner volkstaat.
involved in violence that engulfed The impressive gains in women’s
hundreds of black townships as they rights could also occur with minor risk
6
sided with IFP forces and vigilante to stability. This was demonstrated by
gangs. Widespread, too, was the view the relatively weak and fragmented,
political economy of transformation
that a military coup could not be ruled opposition to the guarantee of repro-
out. ductive rights. The establishment of a
The ANC continued to regard the Commission for Gender Equality, the
spectre of a ‘counter-revolutionary’ Office on the Status of Women within
campaign by opponents of change as the Presidency, the requirement that
one of the main obstacles to transfor- each government department appoint a
mation. Thus, the eventual settlement gender officer or unit – all these ad-
must be understood “as an attempt to vances were greeted with wide acclaim.
hold it all together and avoid a Such advances were not considered
Bosnia”.8 As a result, during the politi- threats to the existing power relations.
cal negotiations, agreement was Yet, although these gains entailed
reached on some thirty-three constitu- politically acceptable risks, the realisa-
tional principles that had to be incorpo- tion of some of these rights may be
rated, in one form or another, into the stymied by retreats made in other policy
final Constitution. They were all com- areas, especially that of macro-eco-
promises, aimed at addressing poten- nomic policy. The power of interna-
tially destabilising demands and anxie- tional and local organised business to
ties. set the pace of change in a market
economy imposes severe constraints on
Threats to delivery government’s capacity to reduce social
Stressing the overarching goals of the inequality. The extent to which macro-
RDP and its six basic principles9 , the economic policies leave existing power
trade union movement, the South relations intact and reinforce the subor-
African Communist Party (SACP), com- dinate position of women and poor
munity based organisations and reli- people is of particular concern.
gious and development organisations
contend that the economic policies
adopted by government – specifically The Government of National Unity
the GEAR strategy – conflict with, and The ANC’s exercise of political power
even negate the RDP. was limited by the creation of a five-
At the heart of the transition stood year government of national unity,
two, potentially contradictory impera- which included in the executive repre-
tives: a formative break with the old sentatives of the National Party (NP)
order and, at the same time, a consider- and the IFP.
able degree of continuity with it. In There were other, more powerful
some cases, the contradiction could be constraints on the exercise of political
resolved. For example, the protection of power. Chief amongst these was the
minority groups’ cultural and language need to shore up stability and avoid
rights could fit neatly into the liberal- potentially destabilising reactions from
h u m a n d e v e l o p m e n t r e p o r t 2000
other social, political and economic leaving intact of the 1989 conversion of
forces, especially in the light of the the Civil Service Pension Fund from a
(temporary) shortfall of policy frame- pay-as-you-go system into a fully
works, institutional systems and per- funded entity. This guaranteed full
sonnel capacity required to translate payouts to as many civil servants as
will into action. Indeed, the Congress chose to leave the service, hugely
of South African Trade Unions inflating government debt. In 1994, the
(COSATU) 1996 Programme for the debt stood at R189,9-billion; by March
Alliance discussion paper noted that: 1999, it had ballooned to R375,9-billion. 7
the power of the apartheid-era ruling Approximately 96 percent of the debt is
h u m a n d e v e l o p m e n t r e p o r t 2000
policymakers in a society-in-transition, be seen as highly conservative and
where the swift achievement of social, accommodating of the interests of
political and economic stability ranks as capital.15
an overriding priority. There was, The sentiments of local capital to-
further, a need to lever a weakened wards the new government were seen
economy rapidly out of a prolonged as one of the key variables in the proc-
phase of stagnation. Acquiescence to ess of compromise. While political
BWI prescriptions seemed to hold the negotiators worked towards a settle-
promise of boosted investment levels. It ment to usher in the new South Africa,
8
was assumed that these, in concert with the short-term fortunes of the new order
an array of supply-side adjustments and were being engineered elsewhere – in a
political economy of transformation
initiatives, would lay the foundation for series of engagements with local and
sustained economic revival. From a international business representatives in
human development perspective, the the early 1990s. The ANC was demon-
critical question is whether South strably disadvantaged in these early
Africa’s emphasis on economic integra- encounters by its lack of an agreed
tion into the global system and the post-apartheid economic framework.
securing of markets takes full account The report of the Macro-Economic
of the social, cultural and political Research Group (MERG) – Making
consequences of this strategy. Democracy Work – provided a compre-
Another influential factor was the hensive framework. However, by the
structural shift in the global economic time it was completed in late 1993, the
system. From the early 1970s, falling key principles of a post-apartheid
profit margins led to severe adjustments economic policy had already been
– most notably in production. Further established with the business sector.
changes were triggered by the startling
surge in financial transactions and the A dearth of appropriate development
‘transnationalisation’ of production and models
distribution. South Africa marched the final steps of
its liberation struggle in an era marked
Local and international business by the collapse or decay of the three
South African business recognised that main development models that had held
“economic growth would not occur sway for most of the century. These
without a political settlement, and long- were the Soviet model (associated with
term peace and stability demands ‘really existing socialist’ states), the
policies that can restore political and welfarist model (that at times character-
social conditions for economic ised North America, the United King-
growth”.14 Merely resolving one aspect dom and Western Europe) and the
was insufficient. developmentalist model (expressed in a
The first requirement was a political variety of experiments in Africa, Asia
settlement that was inclusive and con- and Latin America). The lack of an
sensual, managed thereafter by (a) appropriate, approved model that,
political force(s) capable of marshalling theoretically, privileged human develop-
compliance and stability. The second ment over pure economic growth (or at
was a development path that would least attempted a ‘humane’ balance
guide South Africa out of its economic between the two imperatives) and the
and social malaise. Its character, too, hindsight afforded by the dissolution of
would be determined by an overriding these development models severely
need to maintain stability. The macro- disarmed the ANC in its search for a
economic parameters of that path may development path.
h u m a n d e v e l o p m e n t r e p o r t 2000
In this environment, the ANC’s The broad commitments of govern-
vision for transformation and its devel- ment are, as described by former Presi-
opment path as represented in the dent Nelson Mandela, to:
Reconstruction and Development
bring fundamental change to the lives
Programme retain their significance. of all South Africans, especially the
However, government’s attempts to poor; to recognise the actual contradic-
implement a development path that tions in our society and to state them
would be responsive to poverty, social boldly, the better to search for their
inequality and economic growth have resolution; to avoid steps that further
worsen social conflict, and to build our 9
been disjointed. While espousing the
new nation by continually and con-
need for a democratic developmental
h u m a n d e v e l o p m e n t r e p o r t 2000
The Reconstruction and Development the centrepiece of what this Govern-
ment will seek to achieve, the focal
Programme point on which our attention will be
In early 1994, the ANC adopted the continuously focused.19
Reconstruction and Development
This vision is entirely consistent with
Programme (RDP) as a detailed map for
a human development perspective (see
transformation. The RDP sought to
Box 1 above).
reorder politics, the economy and
The RDP reflected the imperatives of
society along democratic and highly
building consensus, compromise and
10 participatory lines. The original RDP, an
stability that guided the quest for a
ANC alliance document, captured the
political settlement. It was the outcome
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
The RDP White Paper
The ambiguities in the RDP became As a vision for transformation,
even more pronounced when it was the RDP hinged on a mutually
translated into a White Paper (released
by government in late 1994). The White reinforcing dynamic between
Paper also laid more emphasis on the basic needs provision, eco-
constraints that would determine how nomic growth, vigorous civil society
economic growth and redistribution
participation and initiative and a democra-
would be pursued. RDP objectives 11
would be “achieved through the lead- tised state servicing the needs of all citizens.
h u m a n d e v e l o p m e n t r e p o r t 2000
The Economy and stability, which are, in turn, outcomes of
human development and a reduction in
Transformation poverty and inequality. In implementing
As indicated earlier, even before assum- GEAR, the challenge for government is
ing power, the ANC became highly to achieve an effective balance between
sensitive to the potential reactions of social development needs and macr-
market forces. This sensitivity deter- oeconomic stability.
mined the design of the parameters of
12
economic policy and, hence, the frame- Launching GEAR
work of reconstruction and development. A prime characteristic of post-1994
Official ANC speeches and docu- economic policies has been the desire
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
that are required to achieve higher and
more labour-absorbing economic Even within the logic of GEAR, it
growth, thereby reducing poverty
levels. According to the GEAR docu- is acknowledged that economic
ment33 , its core elements are: growth and development are
• a renewed focus on budget reform dependent on social and political
to strengthen the redistributive thrust
stability, which are, in turn, outcomes
of expenditure;
• a faster fiscal deficit reduction pro- of human development and a reduction in
13
gramme to contain debt service poverty and inequality. In implementing GEAR,
obligations, counter inflation and
h u m a n d e v e l o p m e n t r e p o r t 2000
document describes the nub of the Growth would be propelled mainly
strategy as follows: by an anticipated massive increase in
private investment, with real govern-
The higher growth path depends in
part on attracting foreign direct invest- ment investment increasing only in the
ment, but also requires a higher last two years of the five-year plan.
domestic saving effort. Greater indus- Overall, the plan hopes to shift the
trial competitiveness, a tighter fiscal economy from a dependency on pri-
stance, moderation of wage increases, mary commodities onto a path charac-
accelerated public investment, efficient
14 service delivery and a major expansion
terised by strong, export-led growth in
of private investment are integral the manufacturing sector. Government
has attempted to achieve advances in
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
projects, creating a concentrated disper- The Chair of the parliamentary
sion of advantages. Portfolio Committee on Trade and
Industry, Rob Davies, has said that
GEAR’s various measures do not mesh
Criticisms of GEAR into a coherent, integrated strategy:
Growth that does not feed the poor The integrated scenario projections do
will collapse in on itself, economic not guarantee that if the above-described
progress without social development measures are implemented we will
will be both hollow and short-lived, achieve (GEAR’s targets). These results 15
redistribution without expanded depend on assumptions that lie beyond
production cannot be sustained, and the macro-economic policy measures
h u m a n d e v e l o p m e n t r e p o r t 2000
While government initially declared Recognising the economy’s failure to
the GEAR plan to be ‘non-negotiable’, respond to the need for higher growth
as opposition grew the arguments made and job creation, government officials
in its defence appeared to vacillate. have, since 1997, preferred to empha-
During 1997, official faith in the essen- sise the plan’s contribution to economic
tial soundness of the policy was shad- stability and the achievement of ‘sound
owed by explanations that the drop in fundamentals’. Indeed, the declaration
the currency’s value in the first half of that “it was employment creation that
1996 had required an immediate and became the central focus of the macro-
16
emphatic effort to calm the markets. economic strategy”50 has subsequently
Overall, government’s defence of been replaced by claims that the plan
political economy of transformation
GEAR rests on two arguments – the one has steeled the economy against the
political, the other economic. Politically, upheavals and instabilities that have
the GEAR plan is presented as an rocked other emerging markets since
elaboration of the principles and per- 1997. Sound economic policies and
spectives contained in the RDP. The economic institutions are seen, there-
more pliant version of this argument fore, as the most formidable defence
holds that the overriding goals of the against the kinds of tremors that rocked
RDP and GEAR are identical – attacking Thailand, Malaysia, South Korea, Indo-
poverty and deprivation. By launching nesia and later Russia and Brazil.51 The
the economy quickly into a new growth liberalising and deregulatory adjust-
cycle, GEAR “provides a foundation to ments codified in the GEAR plan are
underpin accelerated RDP delivery”.46 not, it is argued, negative factors, but
However, ANC government leaders take key ingredients in a successful defence
this argument further, saying that the against upheaval:
measures in the GEAR plan are merely
Since our own savings levels are
refinements of positions established in inadequate, we have to attract foreign
the RDP. As Thabo Mbeki put it in mid- savings … in a rapidly globalising
1998: world where capital moves relatively
freely across borders ... We are a small
In clear and straight forward language,
open economy and … shall remain
the RDP identified a high deficit, a
caught in this vortex of rapid capital
high level of borrowing and the
movement until we can successfully
general taxation level as … ‘part of our
address all of the structural difficulties
macro-economic problem’ … For some
... The lesson we draw from all these
strange reason, when work is then
experiences is that what matters are
done to translate the perspective
sound economic policies and solid
contained in the RDP into actual
economic institutions.52
figures, this is then interpreted as a
replacement of the RDP by Gear.47 This emphasis on economic adjust-
Thus, it is argued, far from deviating ments in response to financial market
from the RDP, the GEAR plan is intrinsi- volatility appears to relegate the human
cally loyal to its goals and injunctions. development side of the strategy to the
GEAR “simply seeks to set out clearly background. It also does not recognise
and unambiguously the key economic that, in countries with similar character-
requirement for achieving [the RDP] istics to South Africa, economic growth
goals”48 These allegedly identical goals initiatives were underpinned by signifi-
can be achieved only “in the context of cant land reform, land redistribution
sustained economic growth, a stable and education programmes as well as
macroeconomic environment and a effective social safety nets to meet the
thriving competitive sector”.49 basic needs of the poor majority.
h u m a n d e v e l o p m e n t r e p o r t 2000
Economic Trends Sound economic policies and
Foreign direct investment economic institutions are seen
There is international debate about what as the most formidable defence
combinations of factors attract invest- against the kinds of tremors that
ment, with strong evidence that, rather
than being a direct function of investor
rocked Thailand, Malaysia, South
sentiment, investment is “primarily Korea, Indonesia and later Russia and Brazil.
determined by profitability of investment 17
and the complementarity between invest-
GDP in 1996 to 4.2 percent in 1997. latter is a finite variable that 2.5
h u m a n d e v e l o p m e n t r e p o r t 2000
ment rate, a sustained annual GDP
Within the current economic growth rate of about 6 percent is re-
framework, FDI will remain quired. This, in turn, demands high
highly inconsistent and driven, levels of total investment – exceeding 25
percent of GDP. Yet in the 1990s, do-
not by South Africa’s job crea- mestic fixed investment hovered be-
tion needs, but by external factors. tween 15.5 and 17.8 percent of GDP,
reflecting the reluctance of South Afri-
can firms to invest in the productive
18
markets. Their value increased five-fold sectors of the local economy and the
since 1996-97, overshadowing FDI. state’s gradual retreat from a similar role.
political economy of transformation
The provisional benefits of net short- This trend was fuelled in the early to
term capital inflows register mainly in mid-1990s by declining profit rates and
the capital account of the balance of trepidation about the political future of
payments. However, their volatile the country.
nature was confirmed in the third Economic policy shifts in line with
quarter of 1998, when R5,4-billion left market needs were designed to end
the country. This triggered serious what has been described as an ‘invest-
exchange rate instability and prompted ment strike’ by the domestic private
a series of interest rate hikes that badly sector. Real private sector investment
depressed economic growth and again growth was forecast to rise by more
encouraged short-term capital inflows. than 9 percent between 1996 and 1998,
Conditions were stabilised in the fourth before soaring by 13.9 percent in 1999.
quarter of 1998, although this was Instead, it has dropped sharply in the
almost exclusively due to bond and past three years – from a 6.1 percent
equity purchases. This ‘revolving door’ growth rate in 1996 to -0.7 percent in
phenomenon is supported by the 1998. Overall, the sector’s share of total
relaxation of capital controls. fixed investment has fallen from 73 to
As asserted by the ANC: 68 percent.59 Most of this investment is
The preoccupation of the previous in the category of ‘machinery and
period was to open the economy to equipment’. According to the Reserve
trade and capital markets, and to Bank, this is “in all likelihood a reflec-
remove the structural distortions that tion of the continuous process of substi-
were causing stagnation and would tuting capital for labour”60 . Except in
have caused deindustrialisation. This
the mining and construction sectors,
was accompanied by the pressing need
to deliver social infrastructure to those says the Bank, “the private sector held
previously deprived of it….we now need back its fixed investment spending in all
to ensure that we attain higher levels of the other major sectors of economic
direct investment, accelerated economic activity”. It attributes this tendency to
growth and a greater degree weak domestic demand conditions,
of job creation.”58
Figure 1.3: Private sector poor prospects for an immediate recov-
investment growth, 1996–8
The critical challenge of ery in export demand, falling output
8 ensuring investment that volumes, greater under-utilisation of
6.1%
6
creates jobs and addresses production capacity and the high user
issues of poverty remains. cost of capital. This validates Gibson
Percentage
4
and Van Seventer’s conclusion:
2
Private sector investment The critical element necessary to
0 In order to make signifi- motivate private investment, whether
-2 -0.7% cant inroads into the domestic or foreign, are markets.
1996 1998 South African unemploy- Ultimately it is the ability to sell what is
h u m a n d e v e l o p m e n t r e p o r t 2000
produced that guides the investment (roads, bridges and dams) was incorpo-
decision, not available savings, either rated into calculations, while informal
private or government ... Fiscal policy
activities in respective sectors are alleg-
which increasingly withdraws demand
and shrinks markets will lead to a edly better measured.63 GDP over the
contraction in the level of economic five-year period has consequently
activity.61 increased from 2.2 to 2.7 percent a year
– though it is still well short of the 6
Meanwhile, local corporations are
percent annual growth needed for the
showing a strong propensity for off-
significant reduction of poverty levels.64 19
shore investments, a tendency facili-
Presenting the figures, the Department
tated by the lifting of capital controls.
of Finance claimed that the economy
h u m a n d e v e l o p m e n t r e p o r t 2000
ture provision. The shortage of formal depended to a large extent on mineral
housing and lack of access to electricity, exports (at volatile prices determined in
for example, stymies demand for dura- the metropoles of the industrialised
ble and semi-durable goods, stunting world) and the economy’s heavy reli-
the growth potential of the local manu- ance on capital goods imports67 .
facturing sector. However, a demand-led Historically, South Africa has coped
growth path required levels of state with deficits on the current account of
intervention that, ANC economic policy- the balance of payments by encourag-
makers feared, would undermine inves- ing foreign capital inflows and, occa-
20
tor confidence in a period dominated sionally, inhibiting import demand. In
by the orthodox policies associated with the 1990s, high real interest rates have
political economy of transformation
the Washington Consensus. Steadily, the been used to help finance current account
emphasis shifted towards the introduc- deficits, but at the cost of restricting
tion of supply-side stimulants. investment and retarding economic
growth. Government sees robust export
Low domestic savings growth and large foreign capital inflows
In stark contrast to a Keynesian, invest- as the main counterweights to chronic
ment-led approach (where rapid growth balance of payment difficulties.
is promoted “through a low and stable
cost of capital and a high expected Other structural weaknesses
growth rate in effective demand”66 ), the Among the other structural weaknesses
ANC adopted a neo-liberal view, high- plaguing the South African economy
lighting low savings levels as one of the were:
main growth constraints in the • a dependency on strong perform-
economy. In this analysis, low savings ance in the agricultural and mining
means less investment. Statistics seemed sectors (the former notoriously
to support this view. Savings overall had inconsistent; the latter in long-term
sunk from 30 percent of GDP in 1979-80 decline);
to 16.5 percent in 1996, while govern- • vulnerability to declining prices of
ment dissaving rose as high as 5 percent gold and other precious minerals on
of GDP in the mid-1990s. Private sector the world market;
saving had also dropped – from 25 • poor labour, managerial and capital
percent of GDP in the late 1970s to 19.2 productivity (although assessments
percent in 1996. generally tend to focus only on the
In line with a monetarist view, first area);
positive real interest rates came to be • a very low rate of labour absorption;
seen as an essential instrument for • an industrial sector exhibiting very
boosting savings levels, with little uneven competitiveness and depend-
regard for their throttling effect on ent on imported technologies, capital
investment, output growth and job goods and even product components.
creation. A high degree of continuity Remedies to address these weak-
with post-1989 Reserve Bank policies nesses have been heavily influenced by
was affirmed. Importantly, these meas- the sentiments, analyses and pressures
ures enjoyed the approval of local and of corporate business, international
international financial networks. investment and credit ratings agencies
and international finance institutions.68
Balance of payments constraints They are based on the perception that,
South Africa’s unstable balance of in the current phase of globalisation,
payments situation stems in part from there is minimal scope for risk-taking or
the fact that foreign revenue generation even selective ‘violation’ of dominant
h u m a n d e v e l o p m e n t r e p o r t 2000
economic forces for an emerging dynamic and competitive economy …
market like South Africa. Market volatil- • … to work for the construction of a
caring society, sensitive to the needs of
ity, chronic balance of payments con-
the most vulnerable, including children,
straints and low levels of domestic the youth and the disabled …
savings and investment seemed to • … to place ourselves among the forces
underline the need to ‘play by the in Africa and act together with these
rules’. This stance was underscored by forces for peace, democracy and the
the sudden currency devaluation in reconstruction and development of our
continent …
early 1996 and the instability that 21
• … to act together with all other like-
coursed through emerging markets in minded forces to impact on the process
the wake of the so-called Asian Finan-
h u m a n d e v e l o p m e n t r e p o r t 2000
electoral politics set the scene for a range
In countries like South Korea and of tensions among former allies. These
Malaysia economic strategies tensions are seen as a part of the normal
processes of transition as well as a neces-
were supported by strong social
sary factor in the alliance.
development programmes that For decades, South Africa represented
included basic needs provision, land perhaps the paradigmatic case of racist
redistribution and agricultural development discrimination and discord. Without an
enveloping national identity to subsume
22 as well as human resource development. or at least muffle narrower racial and
ethnic identities, there is still the danger
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
Labour Council (NEDLAC) offer inclu-
sive arenas where broad agreement on
Unity and reconciliation
policies can be negotiated. Bilateral,
voluntary bodies like the Gold Crisis became the beacons of post-
Committee (comprising the mining apartheid South Africa, and
houses and major mineworkers’ un- the ‘rainbow nation’ became the
ions) exist to hammer out and monitor
sector-specific agreements. In theory, as metaphor for the desired outcome.
long as difference and conflict can be 23
funnelled into such bodies – and as
long as they retain legitimacy and trust
h u m a n d e v e l o p m e n t r e p o r t 2000
one analyst, “a form of tax arbitrage
Post-apartheid South Africa’s practised in the 1960s and 1970s (and)
most resounding accomplish- widely felt to offer unfair advantage to
ments reside in the high earners”76 . This revenue cap (struc-
tured around a bias towards the private
deracialisation of the political-
sector) limits the funding pool available
institutional realm. for government expenditure in favour of
stimulating an ideological climate for
stronger private investment. Far from
24
COSATU, however, it “has become being over-taxed, the private business
obvious that it is not possible to have a sector is dramatically under-taxed by
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
15 national programmes, assisting Social spending as a proportion of
11,197 women, 2,904 men, and 2,055 total non-interest expenditure remains
youth. Also assisted were older persons, slightly above 60 percent. However, it
people with disabilities and those in drops in real terms by 2.6 percent in the
poor rural communities, particularly in 1999/2000 Budget (at the average 1998
Kwa-Zulu Natal, Eastern Cape and the inflation rate of 7.6 percent) or by 0.5
Northern Province. Poverty relief pro- percent (at the Department of Finance’s
grammes are beset by a number of projection of a 5.5 percent inflation
problems including government’s ability rate), while state personnel expenditure 25
to disburse the funds and a lack of growth falls from 9.5 to 5.1 percent. At
community and government capacity.
h u m a n d e v e l o p m e n t r e p o r t 2000
tion of GEAR. The social sector’s share ment and the democratisation of
of total government expenditure is worker-management relations.
nonetheless over 60 per cent, reflecting The social impact of large-scale
government’s desire to combat poverty. public service cuts has been consider-
The question is whether govern- able, particularly in provinces saddled
ment’s economic policies will give real with the remnants of several homeland
effect to the twin strategies of economic administrations. Northern Province and
growth and human development. In a Eastern Cape rank among the poorest
country trapped in a low-growth track and most depressed regions of the
26
and requiring massive funding infusions country and, in provinces such as these,
to reduce inherited social backlogs, the government has been the only net
political economy of transformation
development template must give equal employer over the past five years. “The
emphasis to both. wages and benefits the public service
provides have a massive impact on
Down-sizing the public sector effective demand”, says Adler83 . Accord-
Government intends reducing the ing to the provincial audit reports, re-
public service wage bill substantially. leased in August 1997, provincial adminis-
Personnel costs account for about 40 trations are plagued by inefficiency,
percent of total expenditure (or 51 surplus staff, poor management, lack of
percent of non-interest spending). The skills and corruption. Adjustments need to
ratio is even higher in the social serv- be tied to the specific realities of particular
ices as reflected in education for exam- sections of these administrations, with the
ple, which accounts for roughly 75 overriding aim of expanding and improv-
percent of total expenditure. ing services to the public.
There are approximately 1,1-million The direct relationship between the
civil servants – a national ratio of one ‘sunset clause’ protecting civil servants
civil servant to every thirty-six citizens, and the tightened fiscal squeeze in the
which is consistent with international public sector is often overlooked. Yet,
standards.81 Moreover, social services despite a drop of nearly 13 per cent in
are, by their nature, personnel inten- the number of public servants in Sep-
sive. If driven strictly by fiscal consid- tember 1995, government’s wage bill
erations, labour cuts may substantially increased.84 It is instructive to
compromise service provision. COSATU disaggregate that bill, which comprises
argues that, rather than ‘down-sizing’, payments in four main areas:
government should be ‘right-sizing’, • non-wage benefits like pension
which: contributions, medical aid and 13th
cheques;
entails that expenditure be guided (for
• often lucrative voluntary retrenchment
example) by targeted teacher/pupil
ratios rather than these ratios simply packages and golden handshakes
being determined – devoid of issued in line with the ‘sunset clause’;
reconstructive vision – by expenditure • an elite layer of highly-paid techno-
levels.82 crats, appointed to restructure state
Workforce reduction needs to be institutions and draft new policies;
assessed holistically. Cuts should ob- • above-inflation wage increases won
serve the service delivery objectives by rank-and-file public servants,
outlined in the RDP and should occur ranging from the publicly demonised
in tandem with or follow adjustments ‘pen-pushers’ and ‘paper-shufflers’
aimed at improving work performance. (in reality only 10 percent of the civil
These should include the overhaul of service) to teachers, health workers,
management systems, skills develop- police officers and the like.
h u m a n d e v e l o p m e n t r e p o r t 2000
The government-commissioned 1998 many departments and provincial
Poverty and Inequality in South Africa administrations”, and procedures to
report notes that “the attempt to manage misconduct are ineffective. The
refocus the budget and reduce costs primary cause was the lack of invest-
simultaneously may prove very difficult ment in skills development in preceding
to achieve”. The report proposes: decades. The reports found that govern-
a mechanism to monitor the impact of ment had made “a lot of dangerous
policies very closely to ensure that assumptions” in 1994, thinking it could
poverty and inequality reduction is an depend for skills on the country’s 27
integral part of the focus of the poli- 1,27-million public servants.
cies and their implementation. Further- Another factor was the centralisation
h u m a n d e v e l o p m e n t r e p o r t 2000
responsible for policymaking and two million connections, 63 percent of
resource allocations. households are connected to the
Initiatives are also underway to electricity grid.
strengthen the capacity of local govern- • In 1994, about a quarter of homes had
ment to accelerate service delivery. In telephones. Today, after 1.3-million
July 1999, the Department of Local connections, 35 percent are linked to
Government and Housing announced a the telephone system.
transfer of more than 2,800 civil serv- • On an average, each day since 1994 a
ants to local councils. This was accom- further 1,300 homes have been electri-
28
panied by a transfer of assets held by fied, a further 750 telephones have
national and provincial departments “in been installed and a further 1,700
political economy of transformation
order to restructure and facilitate local people have gained access to clean
government, [in ways that would ensure water.
they are] better placed to address • The Primary School Nutrition Pro-
developmental needs of the new mil- gramme reaches about five million
lennium”.87 children, and about 10,000 classrooms
have been built or repaired.
Human Development • Pregnant women and children under
six years qualify for free medical care,
Achievements and Trends and 638 clinics have been built since
1994.
It would be difficult to find examples
elsewhere in the world where a • The government has now developed
negotiated transfer of power took the capacity to build 15,000 houses
place, where such progress was every month. At March 1999, the
achieved in so short a period of time housing subsidy scheme had contrib-
to redefine the nature of the new uted to the building of 630,000 houses.
society.88
Almost 40 percent of approved subsi-
Despite many difficulties, government dies were registered to women.
has made admirable progress towards
fulfilling many of its 1994 election Setbacks in advancing human
promises. According to the Minister of development
Finance, “we now deliver more and Yet, despite significant advances,
better services to more people (and) sustainability has proved a problem.
importantly, we are doing this within an Thousands of electricity and water
affordable budget framework”.89 Gov- connections are being cut off because
ernment says it has made good on users cannot afford to pay service fees.
about 60 percent of its 1994 election Three out of four newly installed tel-
promises, as the following snapshot of ephone lines in rural areas are discon-
delivery successes by early 1999 nected each month because users
shows:90 cannot afford to pay their bills.91 The
• In 1994, some 30 percent of South housing tally reflects both built (brick
Africans lacked access to a safe and mortar) homes and the transfer of
supply of water near their homes. title deeds for tiny serviced stands.
Today, three million people have According to news reports92 , the Minister
benefited from the government’s of Housing has declared many of these
water supply programme, reducing houses substandard (either poorly con-
the figure to 20 percent. structed or smaller than the minimum size
• In 1994, fewer than 40 percent of designated by government). In the mean-
South African households had access while, the total housing backlog has long
to electricity. Today, after more than passed the 2,5-million mark.
h u m a n d e v e l o p m e n t r e p o r t 2000
Water
A May 1999 study by the Department of Estimates indicated that it
Water Affairs reported that several of its would take a decade to nurture
water provision projects had become
the management skills needed
dysfunctional or fallen into disrepair.
According to the South African Munici- to reverse the sometimes-chaotic
pal Workers’ Union (SAMWU), as many state of provincial administrations.
as two million of the taps installed have
fallen into disrepair. Government is also 29
concerned with problems in the mainte- tributed to poor, black households. The
nance of new connections.
h u m a n d e v e l o p m e n t r e p o r t 2000
the economic growth path pursued by will be measured in the social realm – in
government could diminish the realisa- job creation and income redistribution.
tion of new rights and replicate existing The indicators are of concern.
contours of inequality within social Rising unemployment has serious
groups. implications for South Africa’s develop-
Once the yardstick of human develop- ment path. Since 1994, more than half a
ment is applied, positive changes and million jobs have been lost, many of
achievements appear to be eclipsed by them during the mild economic recov-
30 other, overwhelmingly negative, develop- ery of 1994-96. Because black wage
ments. Because of their cascading direct packets tend to be shared extensively
within family and kin circles, the effect
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
able. There are persistent, long-term so-called ‘grey economy’ of informal
vigorous contrary trends in the manu- trading and other small-scale enterprises
facturing sector, including the continu- which, he claimed, had resulted both in
ing substitution of machinery for labour job creation and growth.100 According to
and a strong shift towards outsourcing, Manuel, much employment growth is
casual and contract labour. These not being captured in conventional
support business leaders’ explicit statistical measurements.101 Govern-
reminders that the manufacturing sector ment’s efforts to stimulate the develop-
will not become a key source for job ment of small, medium, micro enter- 31
creation in the near future. Between prises is linked (though not reducible)
to such thinking.102
h u m a n d e v e l o p m e n t r e p o r t 2000
and business opportunities that provide gender discrimination is acute and perva-
a reasonable income that can continue sive in the informal sector:
over time.105
We are competing with men who are
Informal sector activities are numerous selling. Some of them are fresh from
and varied, ranging from street sellers to employment so they have money with
small-scale manufacturing. Although the which to buy stock. But we have none.
most common activities are retail and If a buyer sees what you, as a woman,
service-oriented, a relatively small propor- are selling, he will hurry to buy from a
tion of self-employment is in manufactur- man. We are unable to go to the banks
32 and get a loan, no matter how meagre.
ing. Competition is intense, with most
So it’s impossible for us to purchase
informal ‘entrepreneurs’ providing similar
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
of alleged rigidities in the labour market.
Despite this, business leaders have The fact that 69 percent of
criticised the ‘labour-friendly’ bills passed unemployed workers have
since 1995,111 and pressure is mounting never held a formal job testifies
for the relaxation of aspects of the La-
to the structural nature of
bour Relations Act (LRA), aimed at giving
the Minister of Labour greater discretion unemployment.
on whether collective bargaining agree-
ments should be extended to non-parties. 33
Yet, according to COSATU’s research, this
a similar fate. Although grand expecta-
h u m a n d e v e l o p m e n t r e p o r t 2000
in late 1998, when it announced plans fold rise in HIV infection levels in
to spend between R170 and R323- KwaZulu-Natal, home to more than a
billion on public infrastructure in the fifth of the population. The trend is
next five years. If executed, the plans being repeated in the rest of the coun-
could increase gross domestic fixed try, albeit it at a slightly slower pace121 .
investment three- to five-fold.119 It is clear that South Africa stands on
The adjustments agreed to at the Job the brink of a major social and eco-
Summit may contribute to an effective nomic disaster. Already HIV is having
job creation strategy. However, in the an incremental impact on GDP and it is
34
immediate term, the unemployment estimated that growth rates will plum-
Photo: Courtesy EMG
crisis and its effect on the poorest met from 3.2 to 2 percent per annum.
political economy of transformation
remain a daunting blot on South Afri- Projected life expectancy has fallen
ca’s development path. from 68.2 years in the absence of AIDS
to 48. Already, a sharp reduction in life
The HIV/AIDS Pandemic expectancy has dropped South Africa
Advances in human development are fourteen slots down the UNDP’s human
threatened by the spread of the HIV/ development index: it now ranks 103rd
AIDS pandemic. Even if more concerted out of 174 countries. UNDP’s 2000
and effective counter-measures are Human Development Report estimated
rapidly introduced, its effects on the that 25.9 percent of South Africans were
human development prospects of South not expected to live to the age of forty,
Africa’s citizens will be traumatic. These compared with 3.9 percent of those
impacts have been thoroughly docu- living in industrialised countries and an
mented elsewhere, including in the average of 14.3 percent for all develop-
HIV/AIDS and Human Development in ing countries.122
South Africa Report (1998). The efforts mounted by government
Currently there are approximately and civil society organisations have
3.5 million South Africans living with failed to curb the spread of the disease.
HIV.120 It is reported that the virus is Until 1999, combating HIV/AIDS was
spreading at a rate of 1,500 new infec- not demonstrably elevated to the status
tions every day, though this may be a of a national priority by government or
gross under-count. According to an civil society. This represents a sad
UNAIDS report, fewer than 10 per cent deterioration of the constructive climate
of all people with HIV in Africa have in 1994. In the early 1990s, the impetus
been tested and know their HIV status. for a cogent AIDS prevention strategy
More than 100,000 people will was generated within the NGO sector
develop full-blown AIDS this year and revolved around the National AIDS
alone. Unless the disease is checked, Co-ordinating Committee of South
one in every four citizens is expected to Africa (NACOSA). Its National AIDS Plan
be HIV-positive by the year 2010. More would eventually form the basis of
than half of the new tuberculosis cases government’s 1995/96 strategy, business
being reported in South Africa are and structure plans within the HIV/AIDS
attributable to HIV. Clearly, South and STD (Sexually Transmitted Dis-
Africa’s formal health system will be eases) programme.
unable to cope with increasing demand. However, the plan met with a number
New research shows that the HIV/AIDS of difficulties. Implementation proved
pandemic is spreading at such a rate difficult, particularly at the provincial
that deaths now outstrip births for the level, and the national Department of
first time in the country’s most popu- Health displayed a gradually diminishing
lous province. There is an almost four- enthusiasm for the AIDS plan. Matters
h u m a n d e v e l o p m e n t r e p o r t 2000
were compounded by mishaps. One fifth
of the Department’s AIDS budget went The most disadvantaged among
towards the abortive Sarafina II musical. the self-employed are African
Next, it became involved in the Virodene women aged 15-24 living in
controversy, throwing its weight behind
rural areas, of whom 80 percent
the alleged ‘wonder drug’. In October
1998, the Department announced that it earn less than the SLL.
would not be funding an R80-million
programme offering free AZT treatment 35
to HIV-positive pregnant women (part of the world economic system – and of
a bid to reduce mother-to-child HIV
h u m a n d e v e l o p m e n t r e p o r t 2000
dimension of this stance should not be and credit rating agencies. As argued
overlooked. In one view: earlier, these indicators closely match
emphasis on the loss of sovereignty the “standard set of policy prescriptions
makes it possible to shift some of the associated with the Washington Consen-
blame for domestically unpopular sus”.125
policies to faceless international forces Thus, government policy positions
(while convincing) doubters that what are shaped by the conditions set for
is happening is to a large extent engagement in a global system domi-
36 inevitable.124 nated by the powerful northern coun-
tries. President Thabo Mbeki has em-
Consequently, government’s eco-
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
not merely invited, but demanded. The implies staying within the fiscal envelope
key to integration in Africa is the estab- by cutting other spending functions).
lishment of South Africa as the “anchor” Social spending is seen to be occurring at
for a “chain of economies that, with the expense of lower expenditure on
time, might become the African equiva- economic services, which business be-
lent of the Asian Tigers… through the lieves should be increased – specifically
development of trade, strategic partner- capital investment. Some economists have
ships and the like”.129 suggested that government should be
Prominent in such pronouncements borrowing to finance more investment on 37
is the view that conformity to economic that front.
h u m a n d e v e l o p m e n t r e p o r t 2000
enjoy constitutional and legislative protec-
Government’s economic policies tion. The Labour Relations Act, the Em-
exhibit a determination to ployment Equity Bill and the Basic Condi-
tions of Employment Bill constitute the
maintain ‘sound economic legislative pillars of a post-apartheid
fundamentals’ by complying with labour market, benefiting millions of
the checklists drafted by international workers. Under the banner of black
investment and credit rating agencies. economic empowerment, government has
38 enthusiastically promoted the ascent and
growth of an African corporate class, as
well as creating space and support for the
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
If left unrevised, the development map those that should be followed. The
path embarked upon seems destined to charts foisted upon countries of the
yield what historian Colin Bundy has South since the late 1970s have failed
called “a lop-sided structure - two emphatically to improve the lives of the
nations disguised as one, a hybrid majority of citizens. The disintegration
social formation consisting of increas- of the economic consensus that has
ingly deracialised insiders and persist- defined and, in many cases, further
ently black outsiders”.137 Such an ruined societal developmental around
outcome would bear little resemblance the globe offers great scope for alterna- 39
to the visions that informed the long tives which, a decade ago, seemed
h u m a n d e v e l o p m e n t r e p o r t 2000
Notes 37 In OECD countries, the average at the time
was 72 percent of GDP, begging the ques-
1 ANC [2000a]
tion as to whether this was unacceptably
2 Taylor [1997]
high.
3 Taylor [2000]
38 See Jourdan, Gordhan, Arkwright & De Beer
4 Oxford Advanced Learners Dictionary [1995]
[1997]
5 UNDP [1997], 15
39 Manuel [1996]
6 Streeten [1999], 16-17
40 Gibson & Van Seventer [1995], 21
7 UNDP [1995], 12
41 Nattrass, N. [1996], 38
8 Jeremy Cronin quoted in Marais [1998], 87
42 Davies [1997]
9 Government of South Africa [1994], 6-7
43 Nattrass [1996], Davies [1997], Adelzadeh
10 Cosatu [1996], 3
40 [1998] and Marais [1998].
11 When fears that it would not hold the
44 Manuel [1996], 4
redistributive demands of its constituency in
45 Manuel [1998b], 3
political economy of transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
rose from 7.4 to 8.9 percent between 1993 81 ‘Less means more - and more less’. Business
and 1998); finance, real estate and business Day, 28 July 1999
services (up from 14.5 to 16.4 percent); 82 Creamer [1998], 3
general government services (up from 13.8 83 Glen Adler, Quoted in SouthScan, Vol 14 No
to 16.2 percent). Opposite trends held in the 14. London: 23 July 1999
traditional mainstay sectors of the economy: 84 ‘Less means more - and more less’. Business
agriculture (down from 5.3 to 3.9 percent); Day, 28 July 1999
mining and quarrying (down from 9.7 to 7 85 ‘Three provinces on verge of collapse’.
percent); manufacturing (down from 25.2 to Business Day, 21 August 1997
21.2 percent). Thus, the relative output of 86 ‘Administration of provinces chaotic’.
goods-producing sectors continues to Business Day, 14 August 1997
decline, while that of service sectors is on 87 Department of Local Government and 41
the rise. Housing [1999]
65 Statements attributed to Department of 88 Mbeki [1998a], 4
h u m a n d e v e l o p m e n t r e p o r t 2000
111 The sentiment is not restricted to domi- fresh thinking, new leadership and greater
nant white business. Speaking as SA flexibility in economic policy-making’.
Breweries’ acting chairperson, former 118 ‘First cracks appear in official
trade union and ANC leader Cyril macro-economic strategy’. SouthScan Vol
Ramaphosa, for instance, has described 13 No 22. 30 October 1998.
aspects of the new labour regime as 119 SouthScan, 30 October 1998, as above.
“unduly prescriptive, let alone 120 This is according to a government “HIV/
cost-burdensome”. The Johannesburg AIDS Strategic Plan for South Africa, 2000
Chamber of Commerce and Industry’s – 2005”, published in May 2000. On the
1999 Survey of Member Companies asked other hand, a UNAIDS “Report o the
members for their opinion of the effects Global HIV/AIDS Epidemic”, published in
42 on their businesses of the Labour Rela- June 2000, estimates that at the end of
tions Act (LRA), the Basic Conditions of 1999, more than 4,2 million South Africans
Employment Act and the Employment were living with HIV/AIDS.
political economy of transformation
Equity Bill. The results revealed that over 121 UNDP [1998a]
60 percent of them believed the new 122 UNDP [2000]
labour laws would further shrink the 123 Manuel [1999], 1
labour market, reduce productivity and 124 Nel [1999], 23
retard new investment. {‘Business pessi- 125 Maziya [1999]
mism on laws’. SouthScan Vol 13 No 22, 126 The document was issued after Mbeki
30 October 1998.) The small business attended meetings of the World Bank’s
sector, especially, indicated that it would Forum for Development in Africa. Quoted
reduce dependence on labour by cutting in Nel, P [1999], 23
staff, mechanising and using contractors. 127 Mbeki [1997], 36
112 Creamer, K [1998], 4 128 Maseko & Vale [1998], 6
113 A shibboleth, according to the ILO’s 1996 129 Maseko & Vale [1998], 8
and 1998 studies of the South African 130 Amin, S [1993], 79
labour market. 131 SG Frankel Pollak Securities. Czypionka
114 Mandela [1998], 5 [1999]
115 In 1998, Mandela estimated that the 132 FBC Fidelity Investment Bank’s Hania
industry could create 300,000 new jobs by Farhan in Czypionka [1999]
the turn of the century. 133 Manuel [1999], 2
116 ‘Job creation projects planned as more 134 ‘Africa must embrace globalisation –
losses loom’. SouthScan Vol 13 No 23, 13 Mbeki’. Business Day. 14 July 1999.
November 1998. 135 Which foundered in the OECD in 1998,
117 This provision grew out of a tripartite but is due to be revived in the Millennium
alliance meeting a few weeks earlier and Round of the World Trade Organisation.
reflected an attempt to accommodate the 136 Galbraith, James K., 1999, “The Crisis of
views and concerns of the ANC’s main Globalization”, Dissent Vol 46 No 3
allies to the GEAR plan. The meeting (summer), New York, p 2
endorsed an economic discussion paper 137 Bundy, C., 1999, “Truth .... or Reconcilia-
that highlighted the ‘paradigm crisis for tion”, Southern Africa Report (August),
the simplistic ‘one-size-fits-all’ strictures of Toronto, p 11.
the so-called ‘Washington Consensus’’ and 138 “Mbeki says race riots ahead if whites fail
added that ‘world-wide ... there is an to redistribute wealth”, SouthScan Vol 12
acknowledgement that there is a need for No 41, 7 November 1997.
h u m a n d e v e l o p m e n t r e p o r t 2000
2 The state of human
43
h u m a n d e v e l o p m e n t r e p o r t 2000
T he winds of change are
not blowing for every-
body
The fresh smell of hope is
not breezing through the
44 mud hut
In Xitlakati
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
Introduction
h u m a n d e v e l o p m e n t r e p o r t 2000
equal distribution, nor does a growth in counting of formal economic transactions.
GDP mean an improvement in stand- Not only is the value of total produc-
ards of living. Indeed, a higher GDP tion undercounted, but errors are also
may even imply lower standards of made in comparisons across time and
living for the majority of the people. In across countries. For example, GDP has
many countries, economic growth has been rising in the United States and
been followed by widespread inequali- many other northern countries, largely
ties, with the rich getting richer and the because more and more women are
poor getting poorer. leaving the home to join the labour
46
Thus, the application of conventional force and participate in market produc-
measures means that the economy is tion. It is misleading to count the in-
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
nised consequence of economic nity to live decent lives. This implies that
globalisation has been the tendency human development is not about
towards increased cultural and social prioritising one aspect of life – such as the
uniformity resulting from a consumer economy – over others. It is the recogni-
culture mediated through movies, tion that, for human beings to develop to
television, music, sport, fashion and so their fullest and lead meaningful lives,
forth. Brand names, such as Nike, Coca- they must have economic, social, cultural,
Cola, Wrangler, MacDonalds, Philips political and human rights.
and Toyota, are the high priests of this 47
global consumer culture. Accordingly,
economists might define development
Exploring New Measures of
h u m a n d e v e l o p m e n t r e p o r t 2000
When considering alternative or The list in Table 2.1 reveals a view of
people-centred indicators of human transformation as understood by ordi-
development that go beyond normative nary South Africans, demonstrating that
or expert-driven criteria, it is important people are able to articulate a vision of
to examine the perceptions that people change and transformation which is
themselves have of change and trans- practical, passionate and searches for
formation. empirical, visible evidence of progres-
sive change at local (community) level.
48
How ordinary South Africans view Such a vision and understanding links
transformation in South Africa to that of the Freedom Charter and the
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
‘People’s indicators’ and social policy makers to understand the extent
capacity measures of alienation or lack of social capacity
As noted, conventional indicators of that exists in communities. Social capac-
transformation and social progress are ity measures include the capacity of
not seen to relate directly to the lives individuals and communities to partici-
and experiences of ordinary citizens. pate, as active and informed citizens or
Since transformation and human devel- organised formations, in decision-
opment are more than just indicators making structures at every level of
and statistics, they need to be under- society. 49
stood against the lived experiences and ‘People’s indicators’ or social capac-
In
comtern
pa ation
rab al
ility
Na
tio
na
l ld
eve
l
Human
Pro
vin
cia Development Indicators
l le
vel
(co
Pe
o
– Provincial comparisons,
mm ple’s
un in trends in basic needs provision
ity dica
lev to
el) rs
(ho Ho
us u
eh seh
old old Participation in decision making, organisational
lev capacity
el)
h u m a n d e v e l o p m e n t r e p o r t 2000
improved standard of living. Normative
Social capacity measures measures (qualitative through puts of
government) also provide an indication
include the capacity of indi-
of the types of values, standards, or
viduals and communities to attitudinal change that are required in
participate, as active and organisational behaviour/culture to
informed citizens or organised formations, promote social solidarity and cohesion.
Functional measures (quantitative and
in decision-making structures at every level
50 qualitative inputs and outputs of gov-
of society. ernment) are used in this NHDR as tools
to analyse the extent to which service
indicators of development and transformation
All developing
countries
South Africa
Sierra Leone
Africa
Sub-Saharan
h u m a n d e v e l o p m e n t r e p o r t 2000
South Africa is considered to have a This cautious upward trend will only
medium human development ranking, acquire real significance if South Africa
comparing well with other countries. is able to translate economic growth
The estimated HDI value of 0.697 for into improvements in the quality of life
199811 placed South Africa at 103 in the of the poorest people and address the
HDI ranking. Based on this estimate, HIV/AIDS pandemic in a significant
South Africa compares well with other way.
African countries and ranks fourth in
Africa behind Seychelles, Mauritius and The provincial human development 51
Tunisia. However, calculations done in indices
h u m a n d e v e l o p m e n t r e p o r t 2000
inequality between rich and poor in the population of South Africans living in
provinces is blurred in the aggregate former homeland areas. These two
indicators. provinces also have the lowest HDI in
There is also a close relationship the country. Gauteng, Western Cape and
between HDI values and rural areas. Northern Cape have no former home-
Although HDI has not been computed land areas incorporated into their prov-
for rural and urban areas, a close look inces and have relatively high HDI
at the provincial HDI values gives some values compared to the other six prov-
52 indication of the relationship between inces. Low human development corre-
human development status and the lates with high levels of poverty and
quality of life of rural people. As illus- inequality as shown in the next section.
indicators of development and transformation
trated in Table 2.3 below, Northern Further, lack of access to basic services
Province has the highest proportion of and infrastructure, including housing,
rural population and the lowest HDI. In water, electricity, roads and transport,
Gauteng and Western Cape, where only also has a devastating impact on poor
3 percent and 11 percent respectively of people.
the populations are rural, there are
relatively high corresponding HDI Poverty and Human
values of 0.712 and 0.702. This is no
coincidence. Poverty is very closely Development
related to unequal development in
terms of infrastructural and administra- How poor is South Africa?
tive capacity, assets, access to informa- South Africa’s rate of poverty13 (a meas-
tion, knowledge and opportunities. urement of the extent of absolute pov-
There is, furthermore, a clear rela- erty) is 45 percent. This translates into
tionship between former homeland 3,126,000 households or more than 18-
areas and HDI values. According to the million citizens living below the poverty
1996 Census, Northern Province and line (pegged at an income of R353). In
Eastern Cape account for 32 percent mainly rural provinces, the figure rises
and 29 percent respectively of the above 50 percent. These differences are
Northern Province
Mpumalanga
KwaZulu-Natal
Eastern Cape
South Africa
Gauteng
Western Cape
Free State
Northern Cape
Mpumalanga
KwaZulu-Natal
Eastern Cape
South Africa
h u m a n d e v e l o p m e n t r e p o r t 2000
discussed in a 1999 study by Whiteford • three in five children live in poor
and Van Seventer14 and are illustrated households15.
in Figures 2.3 and 2.4 Poverty has spatial, racial and gender
Another study, the Poverty and dimensions. The human development
Inequality Report (PIR) concluded that, indices for the provinces vary consider-
although South Africa is an upper- ably. Provincial poverty rates are high-
middle-income country in per capita est for the Northern Province (77.9%),
terms, most households experience Eastern Cape (74.3%), and Mpumalanga
either outright poverty or vulnerability (63.9%), and lowest for Western Cape 53
to poverty. It found that: (29.1%) and Gauteng (32.3%). Thus,
h u m a n d e v e l o p m e n t r e p o r t 2000
(and the accompanying realities of mielie meal, I won’t eat at all if I am
violence and abuse vented mainly on thinking of the children. They say:
women and children) and perform “Mum, you are going to die”.19
harsh and dangerous work for low
incomes. There is pervasive demoralisa- Poverty and resource allocation
tion and fatalism. A sense of hopeless- Poverty and standard of living are
ness and an inability to alter the condi- directly related to resource allocation
tions of life is a defining feature. Yet all and income. Improved accessibility to
54 this is matched by the courage and resources can contribute to improve-
perseverance with which South Africa’s ments in standards of living for many
indicators of development and transformation
Dwelling-houses 357 792 321 943 1 572 508 479 430 262 610 110 747 208 675 150 802 1 269 788 4 734 295
Flats 9 394 10 902 98 323 36 849 1 673 - - 6 587 177 536 341 264
Townhouses 38 153 22 733 584 008 225 771 32 165 4 047 15 305 45 574 265 294 1 233 050
Other 18 902 762 142 740 354 933 20 942 950 11 198 - 193 792 744 219
7 052 828
Total 424 241 356 340 2 397 579 1 096 983 317 390 115 744 235 178 202 963 1 906 410
1
Estimates.
- Nil or not applicable.
Source: Stats SA
h u m a n d e v e l o p m e n t r e p o r t 2000
• 20 percent of the total health budget have access to tap Figure 2.7: Access to water
is spent on basic health care; water and about 12.5
100
• there is free health care for pregnant percent of the popula- 90 87%
81%
women and children under six; tion still draw water 80
70
• 12 000 primary schools are reached from dams, rivers and
60
by a nutrition programme; streams. Forty-five 50 45%
• two million people have access to percent of South 40
30
safe water; Africa’s population 20 12.5%
• 491 000 houses have been built have piped water in 10
0 55
since 1994; their dwellings.
African
Indian
White
Access to clean water is a necessity. Western Cape can
About 87 percent of the population access clean water,
have access to safe water21,22. Approxi- compared to only 59
mately 81 percent of the population percent in the Eastern Cape.
Dwelling-houses 8 460 13 992 17 240 5 349 5 123 3 480 9 374 6 659 11 682 81 359
Flats (units) 78 111 935 188 15 - - 161 2 287 3 775
Townhouses
420 184 4 728 1 628 314 31 105 448 1 653 9 511
(units)
Total 8 973 14 290 22 913 7 269 5 468 3 515 9 490 7 268 15 685 94 871
1
Estimates.
- Nil or not applicable.
Source: Stats SA
h u m a n d e v e l o p m e n t r e p o r t 2000
Table 2.6: Distribution of services by population group of head of household, 19961
Africans Coloureds Indians Whites Unspecified/ Total
other
Energy source for cooking
Electricity direct from authority 1 973 996 557 655 237 670 1 437 864 39 503 4 246 688
Electricity from other source 13 687 1 880 274 2 641 136 18 617
Gas 212 989 42 618 2 600 26 723 1 727 286 657
Paraffin 1 886 002 49 117 1 228 1 714 5 800 1 943 862
Wood 1 981 251 80 553 640 3 084 7 692 2 073 219
Coal 314 074 4 046 145 1 623 943 320 830
56 Animal dung 105 345 351 29 125 219 106 068
Unspecified/Other 46 652 4 987 1 055 8 717 2 218 63 629
Total 6 533 998 741 206 243 639 1 482 492 58 237 9 059 571
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
Education dealing with Figure 2.8: Schooling and access to higher education
The 1996 Census shows that 19.3 cases of land
alienation 30
percent of the population of twenty 24.3% 24.1%
years and over have had no access to that resulted
20
schooling. Schooling also varies across from the
population groups. About 24.3 percent of enactment of 10
the African population of twenty years the Land Act 3%
1.2%
and over have had no schooling, com- of 1913 and 0
pared to only 1.2 percent of the white other related African White
57
population. Only 3 percent of the African pieces of % of population over 20 who have had no
schooling
apartheid
h u m a n d e v e l o p m e n t r e p o r t 2000
sustainable livelihoods. In addition, of sixty (females) and sixty-five years
land reform and redistribution has not (males). While these forms of assistance
been used as a potential instrument to are important targeted contributions to
transform gender relations within poverty alleviation, they are insufficient
households by addressing women’s lack and do not, in any case, reach all those
of access and control over assets (land) living with no income. Furthermore,
and resources. even if all the intended beneficiaries
were to be reached by the current
58 Poverty and social security system, 30 percent of the very poor and
The government highlights the fact that 40 percent of poor households would
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
Poverty and human resource ployed in 1997), while Figure 2.10: Unemployment
women
African
African
men
ment. This, it claims, is evidenced by examined against poverty
increased levels of expenditure on indicators. According to
education and training, skills develop- Labour absorption rate
estimated calculations, R28-
ment initiatives, fundamental curricu- billion would be needed 80
lum reforms, the initiatives on the merely to increase the 70 68%
National Qualifications Framework and income of those South 60
the Further Education and Training 50 44%
Africans living below the 40 35%
Green Paper.
poverty line to R353 per 30
Youth training and the retraining of 22%
month. Fully 76 percent of 20
unemployed people for entrepreneurial
this money would have to 10
activity have yet to make an impact on 0
be spent in rural areas.
levels of poverty, income earning
women
women
African
African
Current definitions of
White
White
men
men
capacity and overall improvements in
living standards. poverty include several
deprivation factors such as
Poverty and job creation lack of access to basic resources and
services. The Human Poverty Index
Government views job creation as the
most urgent challenge facing society. It (HPI) is an attempt to capture a broader
sees its role as providing an enabling measure of poverty, going beyond
environment for the creation of jobs by money or income. Whereas HDI meas-
ensuring macro-economic stability to ures progress in a country in general,
encourage investment. The govern- the HPI is used to measure deprivations
ment’s community-based Public Works in basic dimensions of human develop-
Programme aims to provide short-term ment and the proportion of the people
job creation and skills training.26 left out of progress. The HPI was com-
Unemployment is highest among puted on the basis of deprivation in
African women (52%, measured by longevity29, deprivation in living stand-
broad definition27 ), followed by African ards30 and deprivation in knowledge31.
men (42.5%). The labour absorption South Africa’s HPI is estimated at
rate differs widely between population 20.232 percent. This indicates that hu-
groups. In 1997, it ranged between 35 man poverty affects at least 20.2 percent
percent for African men and 68 percent of the population. Moreover, South
for white men and between 22 percent Africa is lagging in terms of poverty
for African women and 44 percent for alleviation. In 1998, HPI ranged from
white women. Urban men were most 3.9 percent in Uruguay to 64.7 percent
likely to find jobs (40 percent of those in Niger. Several countries have an HPI
of working age were formally em- value of less than 10 percent33 .
h u m a n d e v e l o p m e n t r e p o r t 2000
Table 2.8: Human Development Indices for South Africa percent of the population in Western
and provinces, 1996* Cape are affected by human poverty.
HDI GDI GEM HPI-1
Northern Province has an HPI value of
South Africa 0.628 0.625 0.573 17.46
28.34 percent, implying that more than
Eastern Cape 0.596 (8) 0.586 (8) 0.618 (5) 23.34 (8)
28 percent of the population are af-
Free State 0.650 (3) 0.646 (3) 0.567 (7) 15.01 (3)
fected by human poverty. Only three
Gauteng 0.712(1) 0.708 (1) 0.659 (1) 10.45 (2)
provinces, Free State, Gauteng and
KwaZulu-Natal 0.602 (7) 0.596 (7) 0.634 (3) 21.12 (6)
Western Cape, have HPI values lower
Mpumalanga 0.628 (4) 0.619 (6) 0.549 (9) 21.71 (7)
60 than the national average. The provin-
Northern Cape 0.632 (5) 0.626 (4) 0.614 (6) 17.95 (4)
cial HPI values also show that Northern
Northern Province 0.531 (9) 0.525 (9) 0.620 (4) 28.34 (9)
Province, Eastern Cape, Mpumalanga
indicators of development and transformation
Northern Province
Gauteng
Free State
Northern Cape
KwaZulu-Natal
Eastern Cape
Mpumalanga
South Africa
h u m a n d e v e l o p m e n t r e p o r t 2000
Figure 2.12: Gini coefficient: 1975–1996 Figure 2.13: Growth of per household income, 1991–1996
0.8
30%
0.7 0.66 0.68 0.68 0.69
0.62 20%
0.6 0.56
0.52 10%
0.51 0.52
0.5 0.49
0.5 0.47 0.46 0.45 0%
0.4 0.36
-10%
0.3
61
-20%
African White Coloured Asian
Source: Whiteford and van Seventer - 1999: p18 Source: Whiteford and van Seventer - 1999: I
Table 2.11: Annual per houshold income of various income classes: 1991 and 1996
African White Coloured Asian Total
1991 1996 1991 1996 199 1996 1991 1996 1991 1996
Poorest 50% 3001 2383 35028 29549 8203 8214 18776 17878 4208 3572
41–60% 9519 9120 96444 83506 24392 25967 47155 49569 16956 15624
61–80% 18497 19183 155763 134821 42856 46463 71489 80882 39342 36797
81–90% 33843 37093 228018 207243 70765 77866 104838 125962 83693 78620
Richest 10% 93124 108568 407010 406091 144989 168005 201462 258244 233836 222734
Total 19500 21180 127955 116818 38306 42359 61869 71662 44698 42048
Source: Whiteford and van Seventer, 1999:20
The final fifteen years of the apart- ‘between’ race inequality. Recent studies
heid era saw a massive transfer of indicate that, at the upper income
wealth from the poor to the rich: levels, racial boundaries of income
between 1975 and 1991, the income of inequality are falling away.37
the poorest 60 percent of the popula-
tion dropped by about 35 percent. By Race and income inequality
1996, the gulf between rich and poor Inequality of income between race
had grown even larger. The poorest groups is considerable, and accounts for
quintile received 1.5 percent of total 37 percent of total income inequality.
income, compared to the 65 percent Most in the top income quintile are
received by the richest quintile and the whites (65% of households) and Indians
48 percent by the richest 10 percent. (45%). Only 17 percent of coloureds
Also startling was the extent of poverty: and 10 percent of Africans earn incomes
in 1996, the poorest half of households sufficient to put them into that category.
earned a mere 11 percent of household Viewed from the other end of the scale,
income.36 Figure 2.13 represents this one finds 23 percent of all African
graphically. households in the poorest quintile,
Indications are that ‘within race’ compared with 11 percent of coloureds
inequality is beginning to outstrip and 1 percent of Indians and whites.
h u m a n d e v e l o p m e n t r e p o r t 2000
Figure 2.14: Top and A closer look at Figure 2.15: Racial shares of income,1970–1996
bottom income quintile, by race
measures of human
development reveals
Top income quintile 80%
more precise contours of
70 65% 60%
inequality and poverty.
60 The experience of ex- 40%
Indian
Coloured
African
Indian
Coloured
African
h u m a n d e v e l o p m e n t r e p o r t 2000
Figure 2.17:
percent. In the Figure 2.18: Gainers from redistribution:
Increase in public services in 1991–1996
numbers of
black senior 1997, whites still
and middle Asians:
managers in held 62 percent of richest Other
the private 10%
sector, management Africans:
1995–1997 41-60% Africans:
positions, although Coloureds: richest
they only com- richest 10% 10%
20%
prised 21 percent Whites:
richest
2.30%
1.60%
managers
in senior manage-
Middle
Senior
h u m a n d e v e l o p m e n t r e p o r t 2000
Figure 2.20: Source of income for redistribution Figure 2.21: Destination of redistributed income
11%
Africans: Africans:
Economic growth 61%–80% 81%–90%
91.6% 11% 12%
Source: Whiteford and van Seventer - 1999: pp25 Source: Whiteford and van Seventer - 1999: pp25
Figure 2.19:
to 0.51 in 1995.43 A 1998
Percentage of children who live inreport showed even have no toilet facilities. In the Eastern
poor households
greater levels of disparity – Cape, 78 percent of children live in
80 78%
with a Gini coefficient of poor households, compared with 20
60 0.54, almost as high as the percent in Gauteng.
40
national figure of 0.58.44
20
20% Such indicators may Human Development and
give rise to concerns that
0
“the national struggle is Gender
Eastern Cape Gauteng
stopped in its tracks and is There are inequalities in human devel-
satisfied with the co-option opment between men and women in
of a small black elite into many countries and South Africa is no
the presently forbidden areas of eco- exception. As discussed above, women
nomic and political power”.45 As the are more likely to be unemployed than
statistics suggest, if: men, average incomes are lower for
women, and women are not usually
left unchecked, the defining trends of
represented in political, administrative
the transition seem destined to shape a
revised division of society, with the
and managerial positions.
current order stabilised around, at best About 21 percent of the female
30% of the population. For the rest population of twenty years and older
(overwhelmingly young, female and have no schooling compared to 17
African) the best hope would be some percent of the male population. The
trickle-down from a ‘modernised’ and adult literacy rate for women is 79
‘normalised’ South Africa.46
percent compared to 83 percent for
Rural/urban inequality is significant, men. The combined gross education
with African and coloured median enrolment ratio for women is 81 per-
incomes in rural areas about half that of cent, which is slightly higher than that
their counterparts in urban areas. of males (80%). However, the enrolment
In the mainly rural Northern Prov- ratio for women at the tertiary educa-
ince, almost two-thirds of residents tion level is only 13 percent against 15
cook with wood fires, while only 17.8 percent for men47 . It is therefore impor-
percent have running water in their tant to examine the circumstances that
homes and 7.5 percent have tele- result in a higher drop out rate for
phones. More than one-fifth of residents women at tertiary levels.
h u m a n d e v e l o p m e n t r e p o r t 2000
Measuring gender inequality Table 2.12: Comparisons of GDI estimates with Southern African countries h
The gender-related develop- GDI Life expectancy Adult literacy Real GDP per
value capita (PPP$)
ment index (GDI) and the HDI rank Value Female Male Female Male Female Male
Gender Empowerment Meas-
South Africa 0.689 56.2 50.3 83.9 85.4 5,205 11,886
ure (GEM) are composite South Africa* 0.625* 58.1 51.5 81* 80* 2,436 r
4178 r
measures developed to Swaziland 0.646 63 58.4 77.3 79.5 2,267 5,485
capture gender inequalities in Namibia 0.624 50.6 49.5 79.7 81.9 3,513 6,852
human development. The Botswana 0.584 47.1 45.1 78.2 72.8 3,747 8,550
GDI is a measure of achieve- 65
Lesotho 0.556 56.4 54.0 92.9 71.0 982 2,291
ments in basic human devel- Zimbabwe 0.551 44.0 43.1 82.9 91.7 1,990 3,359
h u m a n d e v e l o p m e n t r e p o r t 2000
Figure 2.23: Figure 2.24:
Denmark, Norway, Finland, Nether-
Economically active population: Administrative/management lands, Germany and New Zealand.
% who are unemployed, positions, by gender
by gender More women were elected to Parlia-
42% 80 73.85%
ment after the June 1999 elections,
45
40 60% increasing the proportion of women
35 60 parliamentarians to about 30 percent.
30 27% 40% Women hold only 26.15 percent of
40
25
26.15% administrative and management posi-
20
15 20 tions.51 This is minimal in relation to
66
10 the fact that 40 percent of the employed
5 0
Men as % of employed
Women in administrative/
management positions
Women as % of
employed population
Men in administrative/
management positions
population
indicators of development and transformation
h u m a n d e v e l o p m e n t r e p o r t 2000
related to basic needs and governance. to wipe out recent gains in human
In human and development terms, the development. The devastation wrought
negative effects of the pandemic will on the poorest has created more frag-
have long-term consequences for the mentation, isolation and a change in
economy, demographic patterns, social social relations as evidenced by child-
structure and political stability. The headed households and AIDS orphans.
estimates indicate that HDI will de-
crease by 11.4 percent over the next
eleven years. Conclusion 67
The effects of HIV on human devel- Key indicators of human development
respectively, 79 percent and 92 percent HDI with HIV 0.626 0.605 0.565 0.542
of their potential values. Beyond these HDI without HIV 0.628 0.646 0.650 0.654
indicators, HIV/AIDS has the potential Ratio 0.990 0.937 0.869 0.839
0.8
Figure 2.25:
Human 0.6
HDI
Development No HIV
0.4
Indices for South
HIV
Africa, 0.2
1996–2010
0
1996 2000 2005 2010
Year
h u m a n d e v e l o p m e n t r e p o r t 2000
indicators of development against the poorest if the gains achieved
human development and people’s through political and institutional trans-
experiences. It provides a more accu- formation are to transcend the legacy of
rate reflection of the social develop- apartheid. It is against this backdrop –
ment impulses that lead to and rein- of the indicators of human develop-
force patterns of powerlessness and ment, of persistent and growing pov-
alienation from mainstream society. erty, of social inequality as reflected in
Remarkable though South Africa’s road race, income and gender imbalances
68 to transformation has been, all the and the lack of social capacity – that
indicators reveal the need for an accel- institutional transformation and govern-
indicators of development and transformation
eration of the pace of development for ance are examined in the next chapter.
h u m a n d e v e l o p m e n t r e p o r t 2000
Notes 30 This is estimated as an average of the
1 UNDP [1997], 15 percentage of severely and moderately
2 GDP is often used to rank nations in underweight children under 5 years,
relation to one another, particularly for percentage of people without access to
investment purposes. safe water and percentage of people
3 Manuel [1998a], 4 without access to health services as a
4 Manuel [1999], 19. As suggested above, the measure.
authenticity of that claim is also controver- 31 This is measured as the percentage of
sial. adults who are illiterate.
5 To avoid double counting, they aim to 32 UNDP [2000] 69
count only “final product”, excluding 33 UNDP [2000]
h u m a n d e v e l o p m e n t r e p o r t 2000
3 Transforming governance:
70
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
“
O ur people, with
their aspirations
and collective determi-
nation, are our most
important resources. In
linking democracy, de- 71
velopment, human rights
transforming governance
and a people-centred ap-
proach, we are paving the way
for a new democratic order.
The thorough-going democrati-
sation of our society…that
must transform both the state
and civil society, is, therefore,
an active process enabling
everybody to contribute.” 1
h u m a n d e ve l o p m e n t r e p o r t 2000
Introduction
h u m a n d e v e l o p m e n t r e p o r t 2000
our society by relying on the old race-based politics, the task of consoli-
apartheid state machinery. One of the dating various interest groups into
central tasks of the democratic revolu-
coherent political forms and relations is
tion is the abolition of the apartheid
state and its replacement by a demo- essential. Transformation in South Africa
cratic state. A complicating factor is must include the provision of channels
that we must accomplish this task at of access, patterns of inclusion, re-
the same time as we continue to use sources for action and norms about
the existing state machinery to imple- decision–making that conform to the
ment our programmes.4
promotion of active citizenship6 . 73
That transformation is seen as an
ongoing process is evident in govern- The “People’s Government”:
transforming governance
ment and ANC documents. According to transforming structures, policies, rules
the Speaker of the National Assembly, and procedures
Frene Ginwala:
At the national level, the objectives of
Transformation is not a static thing, not transformation have been and continue
a technical thing that you pull out of a to be implemented in the legislative and
textbook. It is an organisational culture.
executive branches of government. The
It is the components, the ways in
which you function, the objectives you transformation of Parliament is dealt
serve, the degree of participation you with in detail below. At the executive
have. These are all part of the process. level, an important instrument was the
It’s democratising the institution itself.5 appointment of a Presidential commis-
These statements clearly anchor sion to study the reform of the Presi-
government’s vision of transformation dent’s Office and the workings of the
within a human development perspec- Cabinet. Some of its recommendations
tive. Transformation is expressed as the were considered in the reorganisation of
process through which institutions of the President’s Office after the 1999
the apartheid government are trans- elections. Even before this, the Presi-
formed into accessible, open and inclu- dency housed a number of special
sive institutions of a democratic state. initiatives focusing on poverty, disabil-
ity, women and children.7
Institutional Transformation at In this regard, the Constitution
established a number of independent
National Level institutions to support constitutional
Central to transformation and human democracy. These ‘Chapter 9 Institu-
development are the conceptual links tions’8 are designed to protect, promote
between institutional transformation and and monitor human rights, accountabil-
issues of equity, participation and the ity and equality within their specific
distribution of power and resources. areas of remit. They are the Human
Hence, an examination of the results of Rights Commission9 , the Public Protec-
six years of political democracy requires tor10 and the Commission for Gender
a review of the extent of democratic Equality. In addition, the Office of the
consolidation by the legislative, execu- Auditor-General audits and reports on
tive, independent constitutional bodies the financial statements and financial
and civil society arms of governance. management of all national and provin-
In countries where democracy is cial state departments and all munici-
usually understood as the promotion of palities. Clearly, these bodies have an
plural political relations, such consoli- essential role to play in achieving
dation may appear contradictory. How- democracy and accountability. Their
ever, in the context of South Africa’s mandates explicitly include monitoring,
apartheid past, with its divide-and-rule investigating and reporting on govern-
h u m a n d e ve l o p m e n t r e p o r t 2000
the National Council of Provinces
Transformation is defined as an (NCOP) replaced the Senate, with the
active process of developing aim of involving provincial interests
more effectively at national level.
accountability, openness and The two houses of Parliament have
public participation in govern- distinct functions. The role of the National
ment institutions and activity. Assembly is direct representation of the
people. This is achieved through the
74 national legislative process and by provid-
ing a national forum for raising issues and
ment activity, helping to ensure the exercising oversight of the executive. The
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
democracy, providing a forum for
different interests and social forces. This Today, committees play a central
is particularly important for South
role in the promotion of parlia-
Africans who were formerly denied the
political and economic power to make mentary democracy, providing a
decisions affecting their lives. It also forum for different interests and
contributes to the effective participation
social forces.
of poor people as a critical element in
the promotion of human development. 75
The Constitution gives parliamentary mittee on private members’ legislative
committees considerable powers. Na- proposals. Of the eleven select (NCOP)
transforming governance
tional Assembly committees may initiate committees, nine broadly correspond to
and prepare legislation. They must also government departments, one deals
maintain political oversight of the with private members’ legislative pro-
national executive. This includes moni- posals and one with public accounts.
toring the implementation of legislation There are also joint committees, com-
and ensuring that all executive organs prising members from both houses, ad
of state are accountable to Parliament hoc and ‘housekeeping’ committees.
for their actions. The rules of the Na- Party political representation on the
tional Assembly provide additional committees is proportional to the
powers for their committees. These number of seats each party has in
include the ability to, “monitor, investi- Parliament.
gate, enquire into, and make recom- Changes in the executive, however,
mendations relating to any aspect of the may require a review of the existing
legislative programme, budget, rationali- committee system. The executive no
sation, restructuring, functioning, or- longer operates exclusively within the
ganisation, structure, personnel, policy various departmental portfolios; its
formulation or any other matter it may decision-making processes now tend to
consider relevant, [to] government cut across portfolios. Joint interdepart-
department or departments falling mental committees are commonly
within the category of affairs consigned established to consider policy of com-
to the committee.” 12 mon concern, such as the treatment of
Although NCOP committees may juveniles in custody. Furthermore,
initiate or prepare certain types of under President Thabo Mbeki’s direc-
legislation affecting the provinces, the tion, a system of cabinet clusters or
NCOP has no oversight function. How- committees brings ministries together
ever, committees of both houses have according to their functional areas, with
the power to summon people to give the aim of promoting better coordina-
evidence or to produce documents. tion between sectoral initiatives. If they
They may ask any person or institution are to maintain effective policy coher-
to report to them on specific matters ence and oversight of the executive,
and receive petitions, representations or parliamentary committees will need to
submissions from any interested people respond and adapt to these changes.
or institutions. The transformed committee system
There are forty-four parliamentary has been instrumental in increasing the
committees, each with a membership of national Parliament’s legislative produc-
between fifteen and thirty. Twenty-six tivity over the past six years. It has also
are portfolio (National Assembly) com- helped reinforce the links between
mittees, one for each of the twenty-five efficiency and democracy and has
government departments, and a com- substantially improved the quality of
h u m a n d e ve l o p m e n t r e p o r t 2000
legislation. Much of the legislation government is accountable, open and
passed during this period has been transparent – not only during elections
transformative in nature, bringing South (when citizens typically have the most
Africa’s old system of government into direct input into the character of their
line with the new constitutional and government), but also between them.
political order. A significant number of Both national and provincial legisla-
Acts (87 of the 532) passed between tures have attempted to establish sys-
1994-1999 dealt with the realisation of tems to facilitate public participation, as
the social and economic rights con- required by the Constitution.14 While the
76
tained in the Constitution.13 This cre- committee system provides the prime
ates an enabling legislative environ- platform for public participation, Parlia-
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
centres of government, not to mention This was an important achievement
constraints of time and money, preclude for civil society and demonstrates the
meaningful participation by much of strong role that public participation can
society. However, although those with play in the policy process. Because of
resources and expertise are often better the strength and persuasiveness of the
able and more likely to participate in evidence presented by civil society
government activity, there are a number organisations, Parliament was able to
of notable examples where civil society overcome the constraints of inadequate
has successfully impacted on the gov- resources, lack of experience and lack 77
ernment process in a way that benefits of expertise. It asserted the powerful
its most disadvantaged members. oversight role that is envisioned for
transforming governance
A specific example was the expres- parliamentary committees by the Consti-
sion of public concern about the intro- tution and demonstrates both the rela-
duction of a Child Support Grant, tionship between democracy and the
introduced to replace the racially dis- promotion of human development and
criminatory State Maintenance Grant. the impact of institutional transformation
Following an enquiry, government had in South Africa.
announced the adoption of a R75 flat
rate grant per month for each child Transformation at Provincial
younger than six years of age, targeting
30 percent of poor children (three Level
million individuals). The new democratic government has
Convinced that this was woefully also sought to transform provincial
inadequate, the Congress of South structures of governance. The NCOP,
African Trade Unions (COSATU), the which represents provincial interests at
Black Sash, the Community Law Centre, national level, and the provincial legisla-
the South African Non-Governmental tures were created to bring government
Organisations Coalition, the Commission closer to the people. The NCOP is made
for Gender Equality, the Institute for up of 10-member delegations from each
Social Development and the Institute for of the nine provincial legislatures.
Democratic Alternatives in South Africa Transformation at the provincial level
(Idasa) decided to lobby the Portfolio is necessarily intertwined with issues of
Committee for a better deal. Through co-operative governance and intergov-
their submissions, they were also able ernmental relations. The basis for inter-
to show that government figures and governmental relations is established in
calculations were incorrect because the Chapter 3 of the Constitution, entitled
underlying assumptions about phasing “Co-operative Government.” Chapter 3
in the new scheme were wrong. states that government is constituted as
As a consequence, the Portfolio national, provincial and local spheres
Committee chose not to support the that are distinctive, interdependent and
government’s policy, but proposed an interrelated. Section 41(1) states that the
option that set the benefit at R135, different spheres of government co-
targeting 80 percent of children be- operate by “… assisting and supporting
tween zero–nine years of age. The one another; informing one another of,
President’s Office brokered a deal and consulting one another on matters
between the Ministers of Welfare, Popu- of common interest,” as well as by “co-
lation and Development and Finance ordinating their actions and legislation
and the grant was increased to R100 – with one another.”
33 percent more than the government’s The decentralisation of power and
original offer of R75. decision-making offers greater potential
h u m a n d e ve l o p m e n t r e p o r t 2000
committee, consisting of representatives
All those involved in co-operative from local government, civil society
organisations, majority party researchers
governance should be committed
and senior civil servants. A three-phase
to the eradication of poverty, process (Green Paper, White Paper and
building the capacity of poor Bill) was devised, with comment periods
for each.
people and actively promoting
Section 76 legislation represents an-
human development. other important area for interaction and
78
collaboration between national and
provincial government. Section 76 of the
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
formation of state institutions. Section devolved to local authorities without the
100(1) of the Constitution states that, provision of the requisite resources for
when a province cannot or does not the discharge of responsibilities. It is
fulfil its obligations in terms of legisla- obviously essential that the concomitant
tion or the Constitution, the national funds and the necessary training accom-
executive may intervene, taking what- pany mandates to local government.
ever steps are appropriate to ensure the It has been argued that most provin-
fulfilment of that obligation. The na- cial governments perform administrative
tional government may also, to the functions already delivered either by 79
extent necessary, assume responsibility local or national government and that
for the unfulfilled obligation. It may act their powers need, consequently, to be
transforming governance
to ensure established minimum stand- reviewed. Accusations of corruption and
ards for the rendering of a service, to inefficiency have also contributed to the
maintain national security or to prevent call to alter the status of the provinces
the province from taking unreasonable through a constitutional amendment. In
action that is prejudicial to the interests 1999, the Constitutional Review Commit-
of another province or to the country. tee in Parliament focused on the powers
One example of this is the assistance of the provinces, with the aim of deter-
given by the national government to the mining their role in relation to other
Free State Province when it had a spheres of government and providing
serious problem of over-expenditure. clarity on issues related to concurrent
Provincial government is, in turn, powers. Although the outcome of these
required to monitor local government discussions has not yet been released, it
performance. This also involves capacitat- is by no means certain that the powers
ing municipalities and empowering of the provinces will be cut back. In-
them to fulfil their constitutional deed, new legislation is currently being
mandate. Formal monitoring takes place prepared to clarify and grant borrowing
through the SALGA as well as through and taxation powers to the provinces,
regular MINMEC (Ministers and MEC) which will enhance their autonomy.
forums. At these forums, the national
Minister responsible for a portfolio Local Government
meets with the nine MECs responsible
for that portfolio at provincial level to Transformation
discuss issues of national-to-provincial In line with the principles of decentrali-
co-operation within their shared man- sation and the devolution of state
date. The rationale for MINMEC forums power, South Africa adopted the princi-
is effective service delivery. ple of local government as a distinct
Where effective service delivery does sphere of government. The RDP argued,
not take place within a municipality, further, that local development is contin-
either provincial or national government gent on strong local government.
may intervene. For example, the Eastern Local government structures have
Cape province took over the operation undergone extensive reforms over the
of the council of Butterworth when past six years. The Local Government
local political squabbles brought effec- Transition Act (LGTA) of 1993 provided
tive service delivery to a halt. Some the framework for initial reform. For-
interventions have been the result of a merly segregated areas were integrated
failure by national or provincial govern- into transitional local councils with
ment to capacitate local governments nominated councillors. Following
effectively. These are known as ‘un- countrywide elections during 1995 and
funded mandates’, where functions are 1996, nominated councillors were
h u m a n d e ve l o p m e n t r e p o r t 2000
approach to local government. This is
Local government structures reflected in the developmental role
prescribed for local government and in
have undergone extensive re-
its promotion of the participation of the
forms over the past six years... poorest in development and decision-
The transitional process will be making structures. Municipalities are
urged to “adopt inclusive approaches to
completed later this year (2000),
foster community participation, includ-
when new councillors are elected in terms ing strategies aimed at removing obsta-
80
of the new legal framework for local govern- cles to, and actively encouraging, the
ment and the final Constitution. participation of marginalised groups in
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
Another concern is the fact that are able to access work, contracts and
almost 70 percent of the more than 800 the necessary training. The role of
municipalities are in financial trouble women is central to effective local
and almost a quarter of them are simply government. Not only do they under-
not viable. This means they have little stand the issues, they continue to be the
or no capacity to address the many force that generates social cohesion and
needs of the citizens they serve, espe- supports human development against all
cially the poor. In areas that amalga- odds. They should not, however, simply
mated former homelands, local authori- be used as vehicles for development; 81
ties are burdened with large salary bills they must benefit directly and partici-
and have almost no resources to spend pate fully in all spheres of life.
transforming governance
on the community. Effectively, this means Another essential to a people-centred
that no new infrastructure investment is process is making the rules for engage-
possible in poor areas, despite the dra- ment and procurement of tenders and
matic scale of poverty. other resources simple, accessible and
If these factors are not addressed, available in languages that people can
claims of community participation and understand.
developmental local government be-
come meaningless. Recognising this, Traditional leadership and governance
national government is working on a The transformation of local government
number of remedies. First, it aims to and the ex-officio inclusion of Amakhosi
rationalise the number of municipalities (traditional leaders) in local government
to reduce the problem of financially councils have resulted in a degree of
unviable (without an adequate tax conflict between traditional structures of
base) local government. Secondly, it power and the formal structures of local
seeks to encourage municipalities to government.
engage in a systematic assessment of At a fundamental level, systems of
their core functions, strengths and traditional leadership (characterised by
weaknesses in service delivery and to inherited rather than elected leadership,
develop appropriate and efficient ways deference to authority and emphasis on
of meeting needs. Thirdly, once munici- the good of the collective over that of
palities have developed a sound under- the individual) seem inherently incon-
standing of the development needs and sistent with the principles of democratic
challenges, they are expected to formu- governance. However, Amakhosi often
late a coherent and holistic strategy to provide a voice that represents the
address these in the short, medium and interests of rural and traditional commu-
long term within a clear financial plan. In nities that may not be heard through
doing so, they are expected to use a other means.
‘partnership approach’. A regulatory Section 211 of the Constitution recog-
framework for both public-private and nises traditional leadership according to
community-municipal partnerships is customary law, subject to the Bill of
currently being finalised. Rights and other constitutional protec-
In order to achieve effective govern- tions. The Section states that legislation
ance at the local level, organisations of must provide for the role of traditional
poor women and people need to be leadership at a local level on matters
strengthened through capacity building, affecting local communities. In addition,
resource mobilisation and development legislation may provide for the establish-
education. Significant infrastructural ment of national and provincial houses
development should be accompanied of traditional leaders. The White Paper
by programmes to ensure that women on Local Government identifies the
h u m a n d e ve l o p m e n t r e p o r t 2000
interests. It must be noted, however,
Of particular concern in local that, when it comes to the promotion of
gender equality and women’s rights,
government is lack of recogni-
traditional authorities and custom oper-
tion of the many ways in which ate in a profoundly patriarchal system.
patriarchy, custom, religion and As noted above, the Constitution
provides that legislation “may” be en-
other social forces combine to oppress
acted to establish national and provin-
and exploit women. cial houses of traditional leaders to
82
advise national and provincial govern-
ment. Traditional leaders complain that
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
Thus, regulations or even legislation to tion, functional committees should be
clarify procedures for parliamentary given the power to suggest amendments
oversight are urgently required. to the floor of the house.23 Rescheduling
Furthermore, the capacity of parlia- the release of the draft budget would
mentary committees needs to be en- greatly enhance the capacity of Parlia-
hanced so that their members fully ment and civil society to debate and
understand the links between the critique budget recommendations:24 a
different spheres of government, par- release date in December or January
ticularly in relation to concurrent and should provide sufficient time for these 83
separate powers. If parliamentary groups to voice their concerns and
committees are to play an enduring role develop informed alternative propos-
transforming governance
in the consolidation and enhancement als.25 The release of the budget should
of democracy by promoting human be preceded by the release of the
development in the interests of the Medium Term Budget Policy Statement
poorest citizens, they must develop and in November (as at present), but with
use their limited resources carefully, more time allocated to the discussion of
nurturing expertise and policy speciali- its macroeconomic implications than is
sation among support staff and within presently allowed. In order to facilitate a
committees and improving access to greater role for functional committees,
basic research and technical support. more time could be allocated for com-
mittee debate relative to that presently
Creating space for greater involvement allocated for general debate on the floor
in budgetary processes of the house.
The research capacity of Parliament
Presently legislatures and civil society
could be boosted, firstly, by drawing the
have very limited opportunity for input
Finance and Fiscal Commission (FFC)
into the formulation of the national
more closely into the process and,
budget. Reasons for this include a lack
secondly, by collaborating with univer-
of parliamentary amendment powers for
sity departments. Chapter 9 institutions
money bills, restricted time available for
(such as the Human Rights Commission
comment and insufficient supporting
and the FFC) play a critical role in
information. Parliament also has limited
providing independent assessments of
independent budgetary research capac-
government policy and delivery per-
ity and the position of government-
formance.26 Under the present arrange-
established monitoring commissions –
ments, each of their budgets is located
the so-called Chapter 9 institutions – is
with the department to which they have
somewhat compromised (see below).19
the greatest affinity – the very bodies
A number of attempts to build the
they are required to monitor with the
capacity of legislatures and civil society
greatest intensity. The obvious conflicts
are underway. Most derive from outside
of interest in this arrangement should be
of Parliament and consist, on the one
eliminated.
hand, of research projects that analyse
budgetary trends and the social impact
of government spending20 and, on the Strengthening public participation
other, of education and training projects The public participation system favours
aimed at improving budget literacy21 . organised and well-resourced sectors of
Parliament needs to be given amend- civil society. “The person we must all
ment powers in line with international have in mind when we think of public
best practice, which suggests, as a participation is a black African, rural,
minimum, the power to decrease ex- illiterate woman. We must aspire to
penditure and increase tax.22 In addi- reach her,”27 said Frene Ginwala in
h u m a n d e ve l o p m e n t r e p o r t 2000
1995. Three years later, she conceded systems remain biased towards tracking
that this ambition had not been input data and have yet to be given an
achieved; thus far, only organised output and outcome orientation; input
interest groups participate. Government data is commonly not formatted to allow
must persist in its attempts to find ways for comparison, and analysis across
to encourage public participation by spending agencies and actual expendi-
both unorganised and organised sectors ture figures are commonly not available.
of society. Taking these information management
constraints into account, this section
84
Promoting links between traditional and focuses on provincial and local govern-
constitutional forms of government ment – the two spheres most involved in
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
have power. Provinces generate only 5 Table 3.1: Nominal equitable shares for each sphere
percent of their revenue needs and (conditional grants have been excluded)
receive the other 95 percent in the form
R' 000 000 % of
of unconditional and conditional trans- total
fers from national government. The Nominal 1998/9 1999/00 1998/9 1999/00
relationships between the different National Equitable share 81312 80833 37.7% 37.3%
spheres of government are set out in Provincial Equitable share 84069 84202 39.0% 38.8%
the Constitution and given financial Local Govt Equitable share 2316 1673 1.1% 0.8%
effect by the FFC, which determines the "Top slice" 48000 50072 22.3% 23.1% 85
financial allocations for provinces in Total Expenditure 215697 216780 100.0% 100.0%
accordance with agreed formulas. When
transforming governance
Source: Dept of Finance Budget Review 1999/2000
making provincial allocations for the
delivery of services, the FFC and gov-
ernment take into account both demo- Table 3.2: Per capita real provincial conditional and unconditional
transfers budgeted for 1999 and 2000 and projected for the MTEF
graphic factors and the unequal revenue period 34
base of provinces. 1998 Rands 1998/9 1999/00 2000/1 2001/2
Although local government has a Northern Cape 2520 2486 2510 2516
broader range of revenue sources at its Eastern Cape 2374 2276 2265 2227
disposal, there is also an unequal distri- N. Province 2223 2142 2180 2166
bution of wealth between municipali- Free State 2281 2181 2199 2169
ties. The erstwhile Department of Western Cape 2388 2285 2228 2162
Constitutional Development and Provin- KwaZulu-Natal 2029 1969 2019 2007
cial Affairs29 estimated that local govern- North-West 2132 2029 2023 1983
ment could generate over 90 percent of Mpumalanga 1946 1908 1950 1960
its revenue,30 a calculation based on Gauteng 1899 1862 1866 1862
budgeted income and expenditure for Total 2160 2086 2107 2086
1996/97. However, since municipalities
cannot budget for an operating deficit,
this estimate must be seriously ques- Table 3.3: Provincial department budgets
(as % of total provincial budget)
tioned. The aggregate also hides mas-
1996/97 1997/98 1998/9 1999/00
sive variations in the revenue bases of
Health 20.31% 21.59% 23.60% 24.32%
municipalities. The fact that 151 out of
Welfare 17.71% 18.74% 20.12% 19.53%
843 municipalities are in deep financial
Education 37.09% 36.48% 40.51% 40.79%
crisis calls their financial viability into
Other 24.88% 23.18% 15.77% 15.36%
question.31
Source: Provincial estimates of expenditure (own calculations)
In order to facilitate a more equitable
allocation of resources, all revenue
collected by the national government repayments32 . The relative share of each
goes into a common revenue pool from sphere is declining while the top slice is
which each sphere has a right to an increasing. Provinces receive the largest
‘equitable share’. According to the share of the pool and local government
Constitution, the equitable share should a significantly smaller portion. The
be large enough to permit each sphere shares are based on historical patterns
to perform its functions. of expenditure. This allocation has been
Table 3.1 shows the relative shares of criticised by the FFC and other group-
each sphere’s allocation of the total ings, including the local government
national revenue pool. The “top slice” is association, SALGA.33
the amount subtracted from the total Table 3.2 shows the real per capita
pool before division. By far its largest transfers to provinces. The trend in per
components are debt and interest capita share for all provinces is down-
h u m a n d e ve l o p m e n t r e p o r t 2000
The imperative is to match national
The absence of accessible and transfers with expenditure obligations in
a manner that reflects national govern-
uniformly detailed information
ment policy. Although national priority
makes it extremely difficult to areas require the co-ordination of
examine the linkages between national government, this should not
compromise the ability of sub-national
social need, public policy, resource
governments to respond to regional and
allocations through the fiscus, actual ex- local needs.
86
penditure and social impact across all
sectors entailed in human development. Provincial services: health, welfare and
transforming governance
education
Health, welfare and education are the
three delivery sectors that critically
ward over the medium term period, with underpin human development36 . This
some of the poorest provinces amongst section focuses on the social effect of
the most severely hit (Eastern Cape, public delivery on two of the poorest
Northern Province and the North-West social sectors, women and children.
province)35 . The lack of movement There have been two broad objec-
towards equality demonstrated by this tives in social service delivery in the
table suggests that there are deficiencies immediate post apartheid period: firstly,
in both the horizontal formula and the the redirection of resources to key
manner in which new demographic social sectors from sectors previously
information flowing from the 1996 census aimed at bolstering apartheid and,
is being phased into the formula. secondly, the redistribution of resources
Three provinces (Eastern Cape, within sectors to services geared to
KwaZulu-Natal and the Free State) have serving the poor. There has been some
been ‘bailed out’ by national govern- success in addressing the first objective.
ment since the discretionary provincial Fifty-five percent of the national budget
budgeting and equitable share system (after interest and debt deductions) is
was introduced in 1997/98. While it is spent on social services – a high pro-
certain that poor financial management portion compared to social spending in
contributed to the shortfall, deficits similar middle-income developing
were confined to particular sectors countries.37 When compared with these
where expenditure did not match the countries, however, outcomes are much
sector specific grants in the horizontal weaker, implying that success in respect
formula. This suggests that the formula of the second objective has been lim-
needs to be revised. ited.
Table 3.3 shows that Health, Welfare There are substantial inherited in-
and Education (HEW) are by far the equalities between and within prov-
most significant expenditure depart- inces38 , implying that the second objec-
ments at provincial level. Their aggre- tive can also be expressed as the re-
gate share has grown dramatically since dressing of geographic inequalities. This
1996 and currently makes up almost 85 section provides some evidence to
percent of provincial budgets. National suggest that the elimination of inter-
government expenditure on HEW is provincial inequalities is not complete.
relatively insignificant, except for Very little information exists regarding
tertiary education (excluded from the intra-provincial inequalities, although
scope of the study). one example is given below.
h u m a n d e v e l o p m e n t r e p o r t 2000
Health Table 3.4: Provincial Health programmes
The most important policy goal for as percentage of the total health budget
1996/97 1997/98 1998/9 1999/00
health is to shift resources from tertiary
Administration 3.76% 3.34% 3.73% 3.37%
and secondary health care to primary
District Health Services 37.68% 39.15% 39.13% 38.44%
health care, increasing proportional
Provincial Hospital Services 29.64% 27.42% 28.64% 28.60%
expenditure on primary health care
Academic Health Services 20.35% 21.38% 21.27% 21.84%
clinics in relation to provincial and
Health Sciences 2.19% 1.82% 2.07% 2.03%
academic hospitals. Primary health care
Health Care support services 2.87% 3.01% 1.89% 3.28%
is said to be more effective in achieving 87
Health Facilities Development
health outcomes, as it is more efficient and Maintenance
4.06% 4.12% 3.54% 2.66%
and accessible to dispersed
transforming governance
Source: Provincial estimates of expenditure (own calculations)
populations. Provinces have, accord-
ingly, been instructed to make this shift
in their budgets. The national impor-
tance of tertiary services and their ‘spill- stunting is a major problem in the
over’ into other provinces has been poorer provinces, pointing to severe
accommodated through a ‘health condi- child health and nutrition problems in
tional grant’, administered by the na- these areas. Although the average infant
tional Health Department and ear- mortality rate (IMR) for South Africa
marked specifically for academic hospi- compares well to that for Latin America
tals in four provinces. Recipient prov- and East Asia, extreme provincial dis-
inces explicitly budget for these grants. parities mean that a child born in the
Table 3.4 shows that, in practice, Western Cape has a 37 percent better
provinces have spent only marginally chance of survival past
larger proportions of their budgets on the age of one year than
Figure 3.1: Population infected
primary health care facilities39 , while its counterpart in the with HIV, 1995–97
the proportion allocated to academic Eastern Cape.
18
hospitals has increased proportionately Children are particu- 16.1
16
faster. Hence, cuts have occurred in larly susceptible to the
14.1
secondary hospital and maintenance ravages of the HIV/AIDS 14
Percentage of population
h u m a n d e ve l o p m e n t r e p o r t 2000
Welfare available to provincial welfare budgets –
Welfare policy has two broad policy both of which seem unlikely. This
objectives: firstly, the extension of dilemma is heightened by the increased
social security to all eligible citizens demand for social security in the face of
and, secondly, the shift away from growing unemployment and joblessness.
expensive institution-based models of The only available ‘outcome’ indica-
care towards community-based services tor for the welfare sector is the child
and prevention strategies. poverty rate, which currently stands at
In practice, emphasis has been 60 percent.43 Again, there are stark
88
placed on achieving the first objective, provincial disparities: in the Eastern
with positive impacts in provinces Cape, 78 percent of children live in poor
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
group and is located in the area where Table 3.6: Provincial Education Budget expenditure by programme
that group resides. Rich schools rely on
parents and the private sector for the 1996/97 1997/98 1998/99 1999/00
majority of their funds. Thus, although a Administration 5.95% 5.48% 6.22% 4.49%
disproportionate share of public funds Public Ordinary School
82.33% 81.58% 82.67% 84.50%
Education
is being channelled to poor schools,
Private Ordinary School
there is no clear reduction of inequality Education
0.76% 0.90% 0.65% 0.61%
between schools in richer and poorer Education in Specialised
2.74% 2.97% 2.89% 2.94%
areas. Schools
89
Table 3.6 shows that, although Teacher Training 2.40% 2.35% 2.08% 1.97%
provinces have allocated progressively
transforming governance
Technical School Education 1.96% 2.18% 2.01% 1.98%
larger portions of their budgets to Non-formal Education 0.68% 0.95% 0.83% 0.89%
primary and secondary schools, there Other 3.18% 3.58% 2.63% 2.62%
has been little systematic shift in ex- Source: Provincial estimates of expenditure (own calculations)
penditure to non-formal education.
Given these constraints, there is
every reason to believe that intra- autonomous, were highly dependent on
provincial inequalities in provinces transfers from the national government.
formed from the core of old provinces45 Provinces were merely administrative
(in which there were pockets of high- extensions of national government, from
level service delivery) have still not which they received all policy instruc-
been addressed. This conclusion is tions and sector-specific funding.
supported by the finding of the Me- Since 1994, all provinces except the
dium-Term Expenditure Framework Western Cape and Gauteng have had to
Education Sectoral Review Team. While, divert considerable resources into
on average, the Western Cape complies merging and rationalising disparate
with suggested norms for the learner- systems and administrations into single,
teacher ratio of 35:1, there are rich areas coherent administrations. The histori-
with ratios as low as 26:1 and poor cally uneven distribution of resources
areas where ratios are as high as 70:1 during the apartheid years has, however,
(1998). resulted in provinces of vastly different
The most widely available education economic and demographic profiles.
indicator is the matriculation pass rate, These differences affect the demand for
which shows a disturbing decline services, the ability to provide them and
towards the 50 percent level.46 Provin- the skills-bases of provinces. Provinces
cial disparities in matriculation pass incorporating former homelands have
rates are even more disconcerting. above-average population densities and
Better resourced provinces – Western largely rural populations. These factors
Cape, Northern Cape and Gauteng – result in a relatively higher demand for
achieve the highest pass rates while social services, a lower ability to pay
pass rates in poorer provinces like the user charges and higher service provi-
Northern Province and the Eastern Cape sion costs. A further feature of these
consistently fall below 50 percent. provinces is the lack of basic social
infrastructure to support government or
An assessment of provinces as delivery private sector interventions.
institutions At least four of the current provinces
Before 1994, the public administration (Northern Province, North-West,
was extremely fragmented, with four- KwaZulu-Natal, and Eastern Cape) were
teen different race-based administra- economically underdeveloped by previ-
tions. Homelands, although nominally ous governments47 . The national gov-
h u m a n d e ve l o p m e n t r e p o r t 2000
ernment has introduced measures to Another factor behind escalating
address these disparities, including personnel expenditure is the presence
linking per capita funding of provinces of ‘ghost workers’ – that is, ‘workers’
inversely to the wealth of the province officially on the books of a province,
and initiating and driving ‘spatial devel- but not providing labour services.
opment initiatives’ (SDIs) in those Salaries are embezzled in this manner.
provinces. The outcome of these initia- ‘Ghost workers’ are confined to the
tives has yet to be assessed. Northern Province, the Eastern Cape
90 and KwaZulu-Natal. In 1997, the gov-
Factors inhibiting reprioritisation ernment estimated that there were 47
000 ghost workers in the public service
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
The government has embarked on a ties because of the large number of
far-reaching plan to reform budget municipalities (843) involved, huge
processes and systems in South Africa. differences in capacity, the array of
Despite the absence of a budget reform different types of communities they
White Paper, the broad approach is serve, as well as the ongoing restructur-
identifiable in several budget policy ing of this sphere of government. These
documents, including the recent Public problems are aggravated by a paucity of
Finance Management Act (Act 1 of information, both aggregated and
1999) and the annual Medium Term disaggregated, on municipal objectives, 91
Budget Policy Statements. These docu- outputs and outcomes. This section
looks at four national and municipal
transforming governance
ments, among others, are closely related
to the public finance reforms adopted policy goals (water, electricity, sanita-
first by New Zealand and Australia.50 As tion, and roads/transportation) and
is the case in several countries pursuing gauges the extent to which five munici-
budget reform, the Finance Department palities of differing size and capacity are
has taken a lead in designing and able to budget for and deliver them.52
facilitating the process. These reforms Each municipality has been labelled
may promote transparency and civil according to the type of settlement it
society participation in the budget serves. These are listed below:
process. • Rural municipality (a ‘deep’ rural
There is a close relationship between area)
budget reform and civil service reform. • Semi-urban municipality (a former-
Unless reprioritisation of expenditure is homeland capital consisting of a
matched with a transformed delivery largely residential core surrounded
structure, South Africa will not be able by rural areas)
to improve the flow of resources to- • Medium-sized town municipality
wards poverty eradication. • Secondary city municipality
• Metropolitan (local) municipality (a
region within a metropolitan area)
Municipal Services: Electricity,
Water, Sanitation, Roads and Water and sanitation
National guidelines define a basic level
Transport of water service as the provision of a
As with provinces, the Constitution clean, safe water supply of 25 litres per
defines local government’s exclusive capita per day within 200 metres of each
and shared competencies in relation to household, and basic sanitation as the
the powers of other spheres. However, provision of an on-site service (venti-
the vision for local government con- lated improved pit latrine).
tained in the White Paper on Local A study conducted in the Western
Government appears to be widely used Cape Province highlights key issues
as a working definition, both internally affecting the provision of basic services
and externally. “Local government is and equity. It shows that the three ‘most
responsible for the services and infra- urban’ municipalities provide water to
structure so essential to our people’s their communities at a profit. The metro-
well being, and is tasked with ensuring politan municipality increased its water
growth and development of communi- budget by 300 percent in 1998/99,
ties in a manner that embraces commu- reflecting the large number of infrastruc-
nity participation and accountability”.51 ture projects completed in informal
It is difficult to assess whether local areas in the preceding four years.53 The
government is fulfilling its responsibili- medium-sized town cross-subsidises a
h u m a n d e ve l o p m e n t r e p o r t 2000
basic level capital investment for water is extremely low.60 In the semi-urban
from within the water service, and area, the suburban residential part of
showed similar budgetary growth.54 the municipality is electrified and serv-
Through a similar cross-subsidy mecha- iced directly by Eskom, while the rural
nism (supplemented by international part of the council is not electrified.
donor assistance), an upgrade scheme Neither the district council (a regional
was extended to 6 351 households in local government body composed of
the secondary city in the period 1994 to both urban and rural local councils) nor
1998.55 There are still, however, 20 000 the local councils have budgeted for
92
houses without metered water and electrification. Despite the subsidies at
basic levels of sanitation. its disposal, Eskom does not appear to be
transforming governance
Due to negligible revenue bases, the extending electricity into the rural parts of
two most rural municipalities in the these councils, probably because it has
study rely on transfers to fund both judged the investment non-viable.
operating and capital expenditure. The In contrast, the three ‘most urban’
rural municipality budgeted for an councils are able to provide electricity
amount of R580 000 in 1997/98, with at a profit. In financial terms, electricity
the aim of increasing water access for departments are the largest departments
approximately 10 percent of its popula- in these municipalities. The metropoli-
tion. The required transfers were, tan municipality generates over 50
however, delayed.56 Water in the semi- percent of its total operating budget
urban area is provided by a water from electricity, while electricity ac-
committee, which oversees a project counts for over 45 percent of the coun-
funded and established by the provin- cil’s total operating expenditure.61 The
cial Department of Water Affairs.57 With secondary city generates 46 percent of
the exception of hospitals, clinics and its total revenue from the trading serv-
schools, there is no formal sanitation ice.62 It also spent just under R7 million
provision in the rural municipality.58 in 1997/98 on the extension and up-
On the advice of the Department of grading of electricity in informal areas,
Water Affairs, the council budgeted for approximately 3 percent of its total
a Department grant in 1998/99. Water capital budget.
Affairs has since reduced the grant offer
to R600 000. Roads and transportation
Because of the dispersed nature of
Electricity South Africa’s settlement system, the
Eskom (the electricity generating and provision of good roads and public
transmission public utility) and the transport is critical to economic and
National Electricity Regulator are cur- social integration and performance.
rently promoting an ambitious electrifi- Informal townships and rural areas are
cation programme with some success. especially inaccessible. Local govern-
The aim of the programme was to ment’s responsibilities include the
electrify 450 000 households a year provision and maintenance of municipal
from 1996 to 1999.59 While municipali- roads (and associated storm water
ties have first rights to distribute elec- drainage), the provision of public
tricity in their areas, Eskom distributes transport and the management and
to areas not covered by municipalities, regulation of traffic, including public
such as former township and rural transport. Yet, except in some of the
areas. larger urban areas, local government
In the rural municipality, although has reduced its provision of public
no figures are available, electrification transport. Municipalities with a revenue
h u m a n d e v e l o p m e n t r e p o r t 2000
base rely on tax revenues and any
surplus on trading services for most of
The Effect of Donor Funding on
their funding of this service, although Social Service Delivery
some subsidies are available from This section examines the contribution
provinces for the maintenance of roads made to government programmes in
designated as provincial. key social sectors by official develop-
The policy of the metropolitan ment assistance (ODA).66 A study on the
municipality is to “reconstruct roads, impact of ODA in promoting gender
foot-ways and storm-water infrastructure equity is used to demonstrate issues of 93
in disadvantaged areas according to a concern.67 Despite efforts by the govern-
programme based on local community
transforming governance
ment to create formal channels for
needs, environmental upliftment and donor financing and control its flows,
available funds”.63 In 1998/99, R87 very little information on the source,
million, or 12 percent, of the metropoli- destination and outcome of ODA funds
tan capital budget was spent on extend- has been released into the public do-
ing and upgrading roads. main. Compared with other developing
Most roads in rural areas are gravel, countries, ODA in South Africa contrib-
which is more maintenance-intensive
utes a relatively small portion to the
than tar. These roads are frequently not
government’s budget (around 2 per-
maintained and are commonly in very
cent).68 Given the budget rigidities
poor condition. Extending road infra-
described above, however, this could
structure is extremely costly in rural
play a vital role in reprioritising delivery
areas. In the semi-urban area, the only
activities towards poverty eradication.
recent road investment was in 1997/98,
ODA takes three basic forms: techni-
where a capital transfer of R6.3million
cal assistance, concessional loans and
was used to extend a gravel bus route
outright financial grants. The interna-
by three kilometres.64 In the rural
tional shift away from technical assist-
municipality, a recent case concerns the
allocation of a R8.2 million grant ance has not affected South Africa. This
accessed by the District Council from may be because of the mix of donors,
the province across its area of jurisdic- the need for managerial expertise during
tion.65 The length and condition of the transition, the relative availability of
existing roads and population per government funds for direct service
municipal area were used as allocation delivery and the availability of contract-
criteria. This effectively confined funding ible local expertise.69 Another reason is
to district roads; local roads connecting the relative ease in providing technical
villages to social facilities were not con- assistance, given the RDP controls on
sidered for upgrade, although these may financial transfers to government.
be more beneficial to residents. Concessional loans amounted to about a
Institutional change has resulted in third of the total amounts pledged for
some gains for poor communities the period 1994-9. The government has
through the extension of basic social generally discouraged loans in an effort
services. However, if democratic divi- to avoid the debt trap experienced by
dends are to be experienced by the other developing countries.
majority in a more tangible way, better Funds from the European Union
articulation between the different (EU), USAID and Japan together account
spheres of government is required. In for 70 percent of the total.70 South Africa
addition the governance process must receives a significant share of the pie
include a clear commitment to develop- from the EU, USAID, the United King-
ment goals and people. dom, most Scandinavian countries,
h u m a n d e ve l o p m e n t r e p o r t 2000
Australia and New Zealand. For in- government and NGOs, the final destina-
stance, the EU’s assistance71 represents tion of these funds is difficult to track.
its largest programme anywhere in the The use of the RDP Fund as a conduit
world.72 In 1996, South Africa received for ODA allows government to regulate
55 percent of the total of US$500 mil- the flow of donor aid in accordance with
lion allocated by USAID to nine South- its priorities.77 This, together with South
ern African countries.73 Japan and Africa’s lesser dependency on aid, limits
Germany, however, give below average donors’ influence on policy.78 An example
amounts to South Africa. of this independence was the introduction
94
After 1994, most donors shifted a of free health care for pregnant women
large part of their funding from NGOs and children, which ran counter to donor
transforming governance
20
given the finite life span of funding.
the fact that significant
amounts of ODA-funded
15 12.5%
policy work and institu-
The Effect of Debt on Social
10
tional transformation in Service Delivery
government are carried South Africa’s total loan debt declined
5 out by NGOs. Hence, from a high 56,2 percent of gross domes-
although the majority of tic product (GDP) in March 1996 to an
0 donors claim to split their anticipated 55,6 percent at the end of
1990/1 1999/00 funds equally between 1998-9 fiscal year.81 Government has
h u m a n d e v e l o p m e n t r e p o r t 2000
achieved stability after steep increases of
the debt to GDP ratio in the first half of The government has generally
the 1990s.82 Most of this debt was accu-
discouraged loans in an effort to
mulated at national government level.
However, R14.8 billion worth was in- avoid the debt trap experienced
curred by the former homelands and by other developing countries.
R13.9 billion by the former regional
authorities and was incorporated into
national government’s debt portfolio in 95
1994.83 Based on the adjusted GDP, the is de facto owed to individual South
average total national government debt as Africans. A task team established at the
transforming governance
a percentage of GDP in 1998 was 47,3%.84 1998 Job Summit was asked to investi-
The overwhelming share of South gate ways to restructure the Govern-
Africa’s debt is internal.85 As at 31 ment Employees’ Pension Fund as a
March 1999, domestic debt totalled means of freeing up resources.89
R347,9 billion and foreign debt amounted The Constitution prescribes that local
to R16 billion (at an exchange rate of and provincial governments may raise
R6,03:US$ 1 prevailing at 29 January loans for capital expenditure and bridg-
1999). Total debt at that time stood at ing purposes during a fiscal year, to be
R377,4 billion (due to forward cover repaid within twelve months (section
losses of R13,5 billion). Although for- 230 of Act 108 of 1996). So far, the nine
eign debt increased from 2,7 percent of provincial governments have not en-
loan debt at the end of March 1994, it gaged in formal borrowing and new
reached a mere 4,4 percent at the end of legislation to regulate provinces’ bor-
March 1999.86 This puts South Africa in a rowing powers is currently being
more favourable position than a number drafted. Although municipal debt
of African countries, many of which face amounted to R16 billion at the end of
substantial foreign debts while relying on the third quarter of 1998,90 a general
unstable currencies for repayment. constraint on local government borrow-
Consolidated national and provincial ing is the fact that only 150 out of 843
expenditure figures indicate that debt- municipalities in the country are consid-
servicing costs consumed 22 percent of ered credit-worthy.91 A re-demarcation
consolidated spending in the 1999/2000 process, currently underway, may
fiscal year – up from 12.5 percent in facilitate better access to the borrowing
1990/91 – making interest payments the market. Carefully planned and
second largest item of consolidated monitored borrowing by provincial and
government expenditure. By the begin- local governments may be one way of
ning of 2000, government had spent boosting developmental expenditure.
about as much on debt servicing as it
allocates to education, the largest ex- Concluding Comments
penditure item on the consolidated South Africa’s debt burden has emerged
budget over the past years.87 as a substantial constraint in responding
Civil society organisations have to poverty eradication and other devel-
called for the cancellation of govern- opment priorities. The debt burden
ment debt in order to free up money for prevents increases in social expenditure
social and developmental expenditure.88 on health, welfare and education. While
The Department of Finance has rejected the national government has stabilised
this call. It argues that, because govern- the debt to GDP ratio, it faces increasing
ment has borrowed heavily from its debt-servicing costs in years to come.
own pension fund, most of this money Thus, while substantial budget
h u m a n d e ve l o p m e n t r e p o r t 2000
systems for recording and processing
The ultimate test as to whether output and outcome data already exist
and are in use. The crucial missing
institutional change is element in the system is the design and
transformative in content and implementation of effective output and
outcomes is the extent to which outcome measures.
such change is underpinned by national
Promoting policy co-ordination and
budget allocations that reflect redistribu- coherence
96
tion to the poorest sectors of society. Clear guidelines for policy and pro-
gramme co-ordination of development
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
provincial governments. Stringent national budget allocations that reflect
conditions have been attached to these redistribution to the poorest sectors of
‘bailouts’. Asymmetry is acceptable and society. This is also central to how
may even be required to build the government promotes a human or
capacity of provinces, provided the people-centred development approach.
bounds of intervention are strictly The power and influence of political
defined and the mode supportive. representatives can also be measured by
the manner in which they advance the
Creating an enabling institutional cause of their constituencies through 97
environment for human development parliamentary processes. If it is to have
meaning for the excluded, institutional
transforming governance
The ultimate test as to whether institu-
tional change is transformative in transformation should be based both on
content and outcomes is the extent to the redirection of resources and on the
which such change is underpinned by redistribution of power to ensure equity.
h u m a n d e ve l o p m e n t r e p o r t 2000
36 The housing sector is also critical to human 54 Perreira [1999]
development; this report, however, focuses 55 Moodliar [1999]
on the social services in which the highest 56 Coopoo [1999]
public expenditure occurs. South Africa 57 Holcomb [1999]
spends approximately 2 to 3 percent of the 58 Coopoo [1999]
national budget (after debt servicing and 59 National Electricity Regulator [1997]
redemption) on housing, 2 or 3 percent 60 Coopoo [1999]
below what other middle income develop- 61 Hewu [1999]
ing countries spend, suggesting that 62 Moodliar [1999]
government could give more attention to 63 Hewu [1999]
this sector. Housing, together with job 64 Holcomb [1999]
98 creation, crime fighting and education, is a 65 Coopoo [1999]
top public priority for government action. 66 This excludes assistance provided by
See IDASA [1998] international and local trust funds, founda-
transforming governance
h u m a n d e v e l o p m e n t r e p o r t 2000
4
99
Transforming the public
h u m a n d e v e l o p m e n t r e p o r t 2000
“
L oskop has water,
but not for us. It is
only 10 km away, but
the water passes us. It
goes to Groblersdal and
100
Marble Hall. They are 85
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
Introduction
h u m a n d e v e l o p m e n t r e p o r t 2000
Transforming Policies the Public Service (WPTPS), which
established a national policy framework
for the introduction and implementation
The vision for public sector of new policies and legislation aimed at
transformation transforming the South African public
The Government began its transforma- service in line with the following vision:
tion of the public sector with a radical
The Government of National Unity is
overhaul of the policy framework. The
committed to continually improving the
public service inherited by the govern-
102 lives of the people of South Africa by a
ment in 1994 was designed to promote
transformed public service that is
and defend the social and economic
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
partnerships rather than the antagonis- Independent monitoring of the public
tic relations of the past. They reflected service
a major shift from a mechanical model The South African Constitution did away
of public administration towards a with the Provincial Commissions en-
more strategic, decentralised, develop- tirely and limited the role of a restruc-
mental and adaptive model of govern- tured national Public Service Commis-
ance, broadly in line with ‘international sion (PSC) to that of an independent
best practice’. monitoring body responsible for the
Significantly, while ‘international promotion and maintenance of several 103
best practice’ has frequently empha- key values and principles of public
administration. These values and princi-
h u m a n d e v e l o p m e n t r e p o r t 2000
and legislative interventions designed to tions of employment, and skills
give the transformation process addi- development.4
tional momentum. A substantial body of • The introduction from the 1998/99
new policy and legislation has been financial year onwards of the Me-
developed since the promulgation of dium Term Expenditure Framework
the WPTPS, including inter alia: (MTEF). This replaces the previous
• An increasing number of DPSA system of annual budgeting with its
public service policy documents, rolling three-year budget cycle and is
designed to give effect to many of designed to enable departments and
104
the proposals contained in the provinces to prioritise and plan their
WPTPS. These include the White service delivery programmes more
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
The Human Development and well-regulated banking and finan-
cial services system, and financing
Imperatives for Public Sector requirements on the balance of pay-
ments that are currently less than 2
Transformation percent of GDP.
Although classified as a middle-income The debates and controversies sur-
country, the inequalities of apartheid rounding the RDP and GEAR revolve
have resulted in levels of poverty, around the issue of balancing domestic
unemployment and general social social justice with international competi- 105
deprivation more characteristic of tiveness and macroeconomic stability.
lower-income countries. High levels of Many observers argue that GEAR repre-
h u m a n d e v e l o p m e n t r e p o r t 2000
was completed in slightly less than two continuous review of programmes
years. Staffing the rationalised posts aimed at realigning personnel require-
took slightly longer, but was largely ments more closely towards the delivery
completed by early 1997. Given the of services. This, it was envisaged,
technical complexity and sheer enor- would result in ‘downsizing’ in some
mity of the task, the rationalisation departments or sections and ‘upsizing’
process was, for the most part, handled in others, within the parameters of a
efficiently. However, the integration of gradual reduction in the overall size of
structures and personnel in some prov- the service.
106
inces proved cumbersome, particularly In his budget speech to Parliament in
where it involved the integration of staff March 1996, the Minister of Finance
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
public service and eventually admitted proach, placing greater emphasis on
that the VSP had been a failure.10 ,11 service delivery needs. The unions
Government’s early experiments in agreed to the introduction of skills,
‘rightsizing’ also had a number of service delivery and personnel audits,
unintended and undesired effects. They and pilot audits began in the Northern
impacted on staff morale, motivation Province and the Eastern Cape in March
and productivity (by fostering anxiety 1998. Audits across all provinces were
and uncertainty); on service delivery completed in early 2000 and are in-
(through the loss of skilled personnel tended to assist in decision-making on 107
and the inability to redeploy staff to service delivery needs, retraining and
areas of greatest need); on affirmative redeployment of personnel and
h u m a n d e v e l o p m e n t r e p o r t 2000
Given the problems facing local Co-ordination and intergovernmental
government, including non-payment for relations
services, mismanagement and corrup-
Co-ordination at national level is the
tion, it is likely that interventions will
responsibility of Cabinet – through a
continue to take place to activate serv-
cabinet secretariat and a number of
ice delivery and improve administrative
cabinet committees or clusters. Intergov-
capacity in this sphere.
ernmental relations are managed
through the Intergovernmental Forum
108 (IGF) and the Ministerial Forums
Box 2 (MINMECs). The IGF was established to
National government inter-
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
dations led to the establishment of a
Co-ordination and Implementation Unit Co-ordination at national level
(CIU), the Offices on the Status of is the responsibility of Cabinet –
Women and People with Disabilities through a cabinet secretariat
and a new co-ordinating agency for
and a number of cabinet com-
Government Communication Informa-
tion Management, Systems and Tech- mittees or clusters.
nology. The PRC argued that the loca-
tion of these agencies in a new Office 109
of the President would give them the
Services, Defence, Safety and Security
h u m a n d e v e l o p m e n t r e p o r t 2000
aimed at supporting and enhancing
Box 4 service delivery.
Piloting service delivery
improvements Alternative forms of service delivery:
In 1997, the national departments of partnerships for development
Home Affairs and Health and five The development of alternative forms of
departments of the North-West service delivery – through outsourcing or
Province were selected for pilot the establishment of public-private or
110
projects in respect of service delivery public-community partnerships – is one of
improvement programmes. In May 1998, the DPSA reported government’s key transformation priorities
that, whilst the Batho Pele policy had been well received by
transforming the public sector
for 1999-2004.
politicians and top management, the pilot departments had
Despite the fact that no clear or
achieved only varying degrees of success and difficulties
coherent policy has been developed to
were being experienced in communicating the Batho Pele
principles effectively throughout the service. The Department guide departments and provinces in this
of Home Affairs was the first to announce its new service regard, a number of ad hoc, but fairly
standards in June 1998; since then, seven out of the nine innovative, initiatives are beginning to
provinces have publicly launched their service standards. emerge. One such example is the
A detailed study of service delivery in the Northern Cape23 Boipatong-Bophalong integrated pilot
demonstrated some progress in relation to the Batho Pele project, a public-community partnership
principles, particularly in respect of improved consultation initiated by the Department of Public
through the establishment of community and local develop- Works.
ment forums. Another encouraging sign was the setting up of A number of local councils have
‘one-stop’ service centres in Kimberley’s Black townships. outsourced their refuse-collection serv-
However, many of the community members interviewed
ices to the private sector, and the
claimed they were far from satisfied with the accessibility of
Benoni Town Council has contracted
services, courtesy, information, transparency and redress24
The 1998 Presidential Review Commission report similarly out its fire and emergency services
highlighted a number of important constraints (structural, operation to a private company.
financial, process, and human resources) impeding the Across South Africa as a whole,
effective realisation of the Batho Pele principles.25 business partnerships between munici-
palities and private concerns for the
financing, operation and management
and elaborates eight principles of serv- of infrastructure attracted R1 billion in
ice delivery: consultation, service stand- private sector investment during 1997.
ards, access, courtesy, information, An important objective of alternative
openness and transparency, redress and service delivery strategies is to promote
value for money. These principles are community empowerment in general,
also intended to inform service delivery and the development of black-owned
in other parts of the public sector, small, medium and micro enterprises
particularly in local government. (SMMEs) in particular.
The successful implementation of the The procurement reforms introduced
Batho Pele policy in the national, pro- by the Department of Public Works in
vincial and local spheres is central to 1997 were intended to support this objec-
the transformation of service delivery tive, tilting the balance in favour of
and government. Policies on human emerging contractors and SMMEs.
resources management, development However, national and provincial
and affirmative action and revamped governments need to provide SMMEs
legislative, regulatory and management with much more advice and capacity
frameworks are all designed to bring building to enable them to tender more
about a “management revolution”22 , successfully for government contracts.26
h u m a n d e v e l o p m e n t r e p o r t 2000
Representivity and Gender Box 5
Equality Boipatong-Bophalong –
partnership with the community
Representivity and affirmative action In Boipatong-Bophalong, physical
Before 1994, the public service was assets – such as schools, clinics
seriously unrepresentative of the popula- and roads – are created and
tion, especially at managerial levels. The maintained through the direct
new government believes that, if it is to involvement and participation of the 111
improve the quality and equity of service community. This R15 million project is
administered by community project committees. Active
h u m a n d e v e l o p m e n t r e p o r t 2000
Table 4.1: Changing profile of management echelon in the public African Revenue Services and the Free
service by population group and gender, March 1994 to December State province) have performed well
1998, in percentages
below average in terms of both race
Africans Coloureds Asians Whites Males Females
and gender. These departments and
31/03/94 2.0 1.0 3.0 94.0 95.0 5.0
provinces have proffered a number of
31/01/96 30.0 3.0 4.0 63.0 90.0 10.0
reasons to explain their slow rate of
30/11/96 33.0 3.0 3.0 61.0 90.0 10.0
progress. These include the lack of
31/12/97 33.2 3.8 4.5 58.5 87.0 13.0
appropriately skilled and qualified black
31/12/98 34.9 4.3 5.2 55.6 85.8 14.2
and female applicants for posts, finan-
112 Sources: PSC, 1995; PSC, 1996; DPSA 1997b; DPSA, 1998
cial constraints (in terms of establishing
new positions) and fears about “lower-
transforming the public sector
Table 4.2: Profile of management echelon in the public service by population group, 31.10.97 (selected Departments and
all provinces) – in percentages
African Coloured Asian White Race Gender
Department/Province M F M F M F M F B W M F
Department
Education 28.0 8.0 8.0 4.0 8.0 4.0 36.0 4.0 60.0 40.0 80.0 20.0
Foreign Affairs 21.3 6.6 1.6 0.0 6.6 1.6 57.4 4.9 37.7 62.3 86.9 13.1
Health 23.1 23.1 0.0 7.7 0.0 0.0 38.5 7.7 53.8 46.2 61.5 38.5
Home Affairs 46.7 0.0 0.0 0.0 0.0 0.0 53.3 0.0 46.7 53.3 100 0.0
Housing 21.4 0.0 0.0 0.0 0.0 0.0 78.6 0.0 21.4 78.6 100 0.0
Justice 19.6 1.5 0.8 0.0 1.2 1.9 71.5 3.5 25.0 75.0 93.1 6.9
Labour 17.4 0.0 4.3 0.0 4.3 4.3 56.5 13.0 30.5 69.5 82.7 17.3
DPSA 38.5 15.4 0.0 0.0 0.0 7.7 15.4 23.1 61.5 38.5 61.5 38.5
Public Works 16.7 25.0 8.3 0.0 8.3 0.0 41.7 0.0 58.3 41.7 75.0 25.0
Safety and Security 16.4 0.0 2.5 0.3 2.3 0.3 75.6 2.8 21.2 78.8 96.6 3.4
Revenue Services 1.4 0.0 1.4 0.0 1.4 0.0 88.9 6.9 4.2 95.8 93.1 6.9
Welfare 11.2 22.2 0.0 22.2 0.0 0.0 22.2 22.2 55.6 44.4 33.4 66.6
Provinces
Eastern Cape 74.1 12.1 0.0 0.0 0.0 0.0 12.1 1.7 86.2 13.8 86.2 13.8
Free State 18.0 4.0 0.0 0.0 0.0 0.0 76.0 2.0 22.0 78.0 94.0 6.0
Gauteng 17.4 5.8 2.2 1.4 3.6 1.4 63.0 5.1 31.9 68.1 86.3 13.7
KwaZulu-Natal 37.3 1.3 1.3 0.0 4.0 1.3 52.0 2.7 45.3 54.7 94.7 5.3
Mpumalanga 58.6 20.7 6.9 0.0 6.9 0.0 6.9 0.0 93.1 6.9 79.3 20.7
Northern Cape 20.0 10.0 25.0 0.0 5.0 0.0 40.0 0.0 60.0 40.0 90.0 10.0
Northern Province 84.9 7.5 0.0 0.0 1.9 0.0 5.7 0.0 94.3 5.7 92.5 7.5
North West 53.3 16.7 0.0 0.0 1.9 0.0 26.7 0.0 73.3 26.7 83.3 16.7
Western Cape 0.0 0.0 23.4 2.1 8.5 0.0 57.4 8.5 34.1 65.8 89.4 10.6
All Departments and Provinces 23.4 3.8 2.8 0.7 2.8 0.7 61.8 4.0 34.2 65.8 90.8 9.2
h u m a n d e v e l o p m e n t r e p o r t 2000
ments. Nor do they justify non-compli- Managing diversity is more than just
ance with affirmative action guidelines a paper exercise. It needs to be ab-
laid down in the WPTPS.28 sorbed into the management styles of
Government’s 1996 Integrated public service managers and supervi-
National Disability Strategy estimates sors. Representivity and organisational
that approximately 5 percent of South diversity are constitutional obligations.
Africans have a disability. Yet, accord- Integration in terms of race, gender and
ing to the White Paper on Affirmative disability in the Public Service will also
Action in the Public Service (WPAAPS), contribute to integration in society at 113
people with disabilities constitute only large.
h u m a n d e v e l o p m e n t r e p o r t 2000
• the establishment of Gender Desks on gender issues taking place in govern-
(or Gender Focal Points) in national ment departments.32
and provincial line departments;
• the introduction of measures and Democratising the State
targets to increase the representivity
of women in the public service, Democratising the workplace
especially at senior management In order to promote greater internal
levels; democracy, the White Paper on the
• the promulgation of legislation that Transformation of the Public Service
114
promotes the rights of women and (WPTPS) advocated the establishment of
prohibits unfair discrimination (includ-
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
cally in the formulation, implementa-
tion and monitoring of public policy. The government is committed to
Yet, despite the importance attached to transforming the state into an
the promotion of people-centred gov-
enabling agency that will serve
ernance in both the RDP and the
WPTPS, progress towards the setting up and empower all the people of
of the PSTF has been slow. the country in an accountable way
The WPTPS and the Constitution
emphasise the importance of promot- 115
ing public accountability and transpar-
ency in the national and provincial Justice Act broadens access to these
h u m a n d e v e l o p m e n t r e p o r t 2000
powers allocated to the Public Service
The powers of public service Commission (PSC) to “executing au-
thorities” (the President, Deputy Presi-
managers to lead and direct dent, Ministers, Premiers and MECs) and
change in a creative and vi- gave regulatory and policy-making
sionary way are constrained by powers to the Minister for Public Service
and Administration. “Executive powers”
the rule-bound and procedure-laden
(with reference to executing authorities)
culture inherited from the past. means autonomy over personnel and
116
organisational matters within their
departments. The legislation also requires
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
process, but there are some inherent Infoplan (a division of the armaments
risks in the move towards decentralisa- parastatal Denel), Central Computer
tion and deregulation. There is a possi- Services (a component within the Depart-
bility that conservative forces in some ment of State Expenditure) and the South
provinces may use their delegated African Police Services IT division. SITA
powers to block rather than accelerate provides IT services to national and
the transformation process. Of equal provincial departments on request, al-
concern is the possibility that some though Cabinet has the power to make
national and provincial departments the service compulsory. In its new trans- 117
may not have the capacity to respond formation priorities issued on 7 July 1999,
the Ministry for Public Service and Admin-
h u m a n d e v e l o p m e n t r e p o r t 2000
White Paper on the Transformation of ment and training process are critical
the Public Service (WPTPS) and is devel- factors that limit transformation.
oped in much greater detail in a number A framework for a new and improved
of subsequent policy documents, espe- training system was set out in the 1998
cially the White Papers on Human Re- White Paper on Public Service Training
sources Management in the Public Service and Education (WPPSTE). The aim is to
(WPHRM 1997) and Public Service Train- replace the ad hoc, over-centralised,
ing and Education (WPPSTE, 1998). supply-driven and poorly resourced
Collectively, these documents form the system of public service training with a
118
basis for human resources management new system. The new system will be
and development towards building the decentralised and flexible, strategically
transforming the public sector
capacity and career development oppor- planned, well co-ordinated and effectively
tunities of all public servants, particularly resourced, demand-led and competency-
those from previously disadvantaged and outcomes-based. It will be linked to
groups. Such a system needs to be effec- the Department of Labour’s new national
tively and strategically planned, skills development strategy and the
prioritised, resourced and monitored in Department of Education’s national
line with the individual needs of staff and qualifications framework.
the service delivery needs of individual The 1998 Report of the Parliamentary
departments. Moreover, the policy docu- Portfolio Committee on Public Service
ments pay special attention to the devel- and Administration shows where there
opment of flexible working patterns, a is progress and where there is not. It
career public service with increased acknowledges progress made in devel-
competition and lateral entry and the oping a consultative implementation
introduction of effective performance programme for the WPPSTE and, in
management and appraisal systems. particular, the establishment of a Public
Other aspects include the use of incen- Service Education and Training Authority
tives to promote individual and team (in line with the proposals in the national
performance and recruitment, and pro- Skills Development Act). It also notes
motion and career advancement based on significant progress towards the develop-
performance and competence. ment of the Capacity Development Stand-
While some progress has been made ard (CDS).
by a number of national and provincial The Report also expressed some
departments, overall progress has been concerns. One of these relates to the lack
generally slow, variable and limited.38 of a strategic, needs-based and outcomes-
Problems include a fragmented and based approach to training and education
uncoordinated approach to human in a number of national and provincial
resources management (HRM) and departments. Another concerns the quality
human resources development (HRD) and relevance of several of the training
across the public service, the lack of programmes provided by in-service and
effective systems for strategic planning external providers. It also noted slow
and budgeting of HRM/HRD and the progress by the DPSA in producing the
inability to link HR plans to service. The planned strategic guidelines for training
lack of effective systems for performance and education and the fact that national
management and appraisal, slow progress departments spend less than the mini-
in multi-skilling, delays and blockages in mum 1 percent of payroll on training
the systems of recruitment and selection recommended in the Skills Development
and persistent discrimination in the Act. A particular concern related to the
recruitment, promotion, staff develop- role of the South African Management
h u m a n d e v e l o p m e n t r e p o r t 2000
and Development Institute (SAMDI): for
example, 67 out of 102 of SAMDI’s pre- The DPSA’s Provincial Review
planned courses for the first half of 1998 Report in 1997 revealed that
were withdrawn or cancelled. some provinces had skills short-
The DPSA’s Provincial Review Report
in 1997 revealed that some provinces had ages of crisis proportions.
skills shortages of crisis proportions. This
has created a greater sense of urgency in
respect of training and capacity building. 119
The decisive restructuring of SAMDI in Annual salary increases for the three
1998 and 1999 is expected to pay divi- financial years were to be funded by
h u m a n d e v e l o p m e n t r e p o r t 2000
and leg promotions. Other aspects to be shortage of qualified staff in depart-
reviewed include the restructuring of ments and provinces to prosecute and
the pension fund (to permit greater adjudicate disciplinary inquiries. Follow-
mobility), current bargaining processes ing an investigation41 , the DPSA re-
(to ensure the increased utilisation of a pealed these outdated procedures and
sectoral approach) and the narrowing of drafted a new disciplinary code and
the wage gap. At the same time, strate- procedures in line with the Labour
gies to retain professionals and senior Relations Act. These were made a
staff are being developed. Resolution of the Public Service Co-
120
ordinating Bargaining Council in January
Developing a Professional 1999. The new streamlined code pro-
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
Unit and Tribunal42 to investigate
serious malpractice and Corruption seriously jeopardises
maladministration. The Special Tribunal
the capacity of the public service
adjudicates on matters referred to it by
the Unit (led by Judge Willem Heath) to deliver improved services and
and uses civil proceedings to recover undermines public credibility and
state assets and public money and trust in institutions entrusted with
prevent further misappropriation. By delivery.
November 1998, according to its unau- 121
dited accounts, the Special Investigating
h u m a n d e v e l o p m e n t r e p o r t 2000
such as education, health, housing and
water has increased. At the same time,
Box 7
tighter financial discipline has overcome
The National Anti-Corruption
serious problems associated with pro-
Summit: steps towards vincial over-spending during the 1997/
public service integrity 98 financial year. Yet, despite these
As part of its ongoing efforts to achievements, there are still a number
address the problem of corruption, of major financial problems and many
the government convened a National departments and provinces complain
122
Anti-Corruption Summit in April 1999. that financial constraints are seriously
The Summit was preceded by conferences at the impeding their efforts to improve serv-
transforming the public sector
sectoral level. These included the Public Sector Anti- ice delivery and achieve the govern-
Corruption Conference, held in Parliament in November ment’s transformation goals.
1998 and attended by Ministers, Premiers, MECs, The lack of effective financial plan-
senior government officials, chief executives of ning and prioritisation is a continuing
parastatals, trade unions and a wide range of institu- problem. Most provinces do not
tions engaged in anti-corruption initiatives. Conference prioritise their budgets in accordance
resolutions were submitted to Cabinet and forwarded to with their policy objectives, nor do they
the National Summit.44 link them sufficiently with their activi-
Delegates to the National Summit included repre- ties. Hence, when cuts are made, they
sentatives from business, organised labour, religious are often carried out in an arbitrary
bodies, NGOs and community-based organisations manner without real consideration for
(CBOs), financial institutions, academic, professional the effects on service delivery.46
and sports bodies, the media, organised labour and the
public sector. Parastatals: The Private
The Summit resolved, amongst other things, that
urgent action should be taken to:
Provision of Public Services
In July 1995, the Minister for Public
• review and revise current anti-corruption legislation; Enterprises released the Discussion
• develop and implement ‘whistle-blowing’ mecha- Document on the Consultative and
nisms; Implementation Framework for the
• support the speedy enactment of the Open Democ- Restructuring of State Assets. The main
racy Bill; objectives of restructuring are:
• establish special courts to prosecute corruption; • to facilitate economic growth;
• establish sectoral co-ordinating structures and a • to fund the Reconstruction and
national co-ordinating structure to lead, co-ordinate, Development Programme;
monitor and manage the anti-corruption campaign; • to create wider ownership in the
• publicise and promote the blacklisting of busi- South African economy;
nesses, organisations and individuals proved to be • to mobilise private sector capital;
involved in corruption and unethical conduct; • to reduce state debt;
• establish national and sectoral anti-corruption • to enhance the competitiveness of
hotlines, and state enterprises;
• develop, support and enforce codes of good • to promote fair competition, and
conduct and disciplinary codes in the public and • to finance growth and the require-
private spheres. ments for competitiveness.
The Discussion Document divided
The resolutions of the Summit were discussed at the 9th
parastatals into three categories, in
International Anti-Corruption Conference, hosted by
relation to the broad transformational
South Africa in Durban in October 1999.
goals and thrust of the RDP. The first
h u m a n d e v e l o p m e n t r e p o r t 2000
category consists of state-owned enter- also creates substructures to take the
prises (SOEs) whose explicit role it is to process forward, including a ‘six-a-side’
provide basic services. The document forum (government and labour) for the
argued that a change in the controlling mediation of conflicts and sectoral
ownership of these SOEs from public forums. The NFA’s approach is that
to private without effective regulatory public enterprises have a key role to
protection could emasculate the ability play in transformation and develop-
of the state to realise RDP targets. SOEs ment, particularly in extending service
in this category included Transnet, provision to the previously disadvan- 123
Telkom and Eskom. The second cat- taged.
egory consists of SOEs that have a The political imperatives of transfor-
h u m a n d e v e l o p m e n t r e p o r t 2000
Conclusions: Reclaiming
A number of assets have been
Government for Human
sold to strategic equity partners
during the past six years. Development
Achievements and successes in public
that Safcol, the forestry parastatal with sector transformation
assets of R1-1,5 billion, would be priva- At the policy level, government’s com-
124
tised. Seventy-five percent has been mitment to institutional transformation
offered to the private sector, 10 percent has been demonstrated through a set of
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
at the senior management levels and record to date in fully transforming the
the reprioritisation of national budget public sector into the efficient and
priorities. effective instrument for policy imple-
In respect of service delivery, there mentation envisaged in the White Paper
has been considerable progress in the on Public Service Transformation
areas of education and health and in (WPTPS). Progress has been particularly
the provision of subsidised housing slow in relation to ‘rightsizing’ (rather
and basic services such as water and than ‘downsizing’); the representation of
electricity. women and people with disabilities; 125
public involvement and participation;
Weaknesses and limitations the development of a professional
h u m a n d e v e l o p m e n t r e p o r t 2000
dations contained in the report of the
Strategies will be required to Presidential Review Commission, a
address the tendency to privi- number of which have been referred to in
earlier sections of this report. Greater
lege the consolidation of bu-
political will and decisiveness is necessary
reaucratic power and prestige to implement the goals of the WPTPS
over comprehensive reform (not more effectively. If it is to resolve the
only amongst the ‘old guard’, but also disjuncture between policy objectives and
outcomes, government will need to
126 amongst some new incumbents). distinguish between ineffective implemen-
tation (resulting rather from a lack of
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
1994, there has been discernible move- the increased capacity of the state is
ment from the inclusive civil society positively, rather than inversely, correlated
forums that characterised the early phases with the increased vitality of civil society.
of the transition towards a more social As civil society grows more robust, the
corporatist approach (particularly through capacity of the state to govern is in-
the NEDLAC framework) that has privi- creased. This research challenges the
leged business and labour over other civil hitherto dominant neo-liberal policy
society organisations. The WPTPS recom- prescription that democratic governance
mendation of a transformation forum, depends on the ‘insulation’ of the state 127
through which civil society organisations from society. In his opening address in
may participate in public sector transfor- Parliament, President Mbeki committed
h u m a n d e v e l o p m e n t r e p o r t 2000
41 by the Portfolio Committee on Public declared a loss of R426 million for 1998/
Service and Administration in 1998 1999 after making a R278 million profit in
42 In terms of the Special Investigating Units 1997/1998. It subsequently announced that
and Special Tribunals Act, 1996. companies making a loss, such as Autonet
43 formerly known as the Office for Serious and Fast Forward, would be privatised
Economic Offences (Sunday Times, 18 July 1999)
44 Sangweni & Balia [1999] 49 Business Day, 5 March 1999.
45 This innovation was the result of the 1996 50 In his speech at the opening of Parliament
Constitution. on June 1999
46 Department for Public Service and Admin- 51 In his inaugural address at the opening of
istration [1997a], 42 the new Parliament on 25 June 1999.
128 47 Department of Public Enterprises [1995] 52 Rodrik[1996]; Evans [1996]; World Bank
48 Transnet (which controls South African [1997]
Airways, Spoornet, Metrorail, Portnet, 53 Mbeki [1999], 3
transforming the public sector
h u m a n d e v e l o p m e n t r e p o r t 2000
5
129
Transforming processes for
h u m a n d e v e l o p m e n t r e p o r t 2000
“
D eepening democ-
racy in our society
is not only about vari-
ous governmental and
non-governmental insti-
130
tutions. Effective democ-
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Introduction
I
n an era of globalisation, the subjec- foundly unequal gender relations and
tion of humanity to narrow market- gender-based violence) and in the
driven considerations constitutes one private sector sphere (the market).
of the biggest threats to the realisation The challenge is to sustain the mo-
of full human potential. Measurement mentum in political society and to 131
of progress is now being subjected to extend it to the household sphere and
economic categories and descriptions market sector. This will, in many ways,
Employment
political society. These are, as
shown in the preceding
chapters, formal governing Foreign Economic
institutions, state structures savings growth
and ‘action spaces’ between
the state and civil society. Domestic
Less transformation has savings Source: UNDP, Human
Physical
occurred at the household capital Development Report, 1996: 68.
level (manifested in pro-
h u m a n d e v e l o p m e n t r e p o r t 2000
examination of participation opportuni-
To use democratised governing ties that privilege organised civil society
sectors also acquires importance.
institutions for the broader
A central concern is how to ensure
purpose of social transforma- that the very processes, sites and modes
tion requires a critical under- of engagement are transformed as part
standing of the processes that shape of the structural changes underway. A
key site and instrument for democratisa-
these institutions.
132 tion, both in terms of process and
outcome, is education. As a critical
element in human development, educa-
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Transforming South Africa’s social
and economic relations also requires A wider and deeper democrati-
forms of institutional engagement,
sation may be achieved by
instruments and processes that can
deliver over the long-term. To further decentralising power to civil
this goal, the Reconstruction and Devel- society.
opment Programme (RDP) called for a
fundamental change to the way in
which policies are made and imple- 133
examined as a particular mode of en-
mented. New modes of institutional
gagement in the process of both democ-
engagement are designed to ensure that
h u m a n d e v e l o p m e n t r e p o r t 2000
resources – as though people are mation of South African society, there-
merely resources for economies to fore, requires that the race, class and
harness and use. Education should be gender contradictions be tackled simul-
viewed as a human and social process taneously and not sequentially, despite
to be promoted for human develop- the fact that the racial contradiction was
ment. Access to education, therefore, is always the dominant one. Focusing
an important means towards human principally on one aspect – no matter
development, rather than simply a tool what progress can be made – is likely to
to produce human resources for the lead to the exacerbation of the others,
134
labour market. thereby undermining the entire transfor-
In the South African context – with
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
continued repression and which led to formation. Without significant structural
mass student resistance in 1976. In the transformation of schooling, there can
1980s, under the broad umbrella of the
be no transformation of education in
UDF and the student movement, the
schools once again became a site of South Africa and limited change at
resistance… In retrospect, while the societal level. Based on what is perhaps
education campaigns of the 1950s and the most comprehensive survey ever
1980s did not result in significant undertaken on South African schooling,
changes to the education system, they the School Register of Needs Survey, a
did create a platform from which
fuller picture of the state of schooling in 135
education needs could be addressed.10
South Africa emerges.12 This is reflected
Education has thus become both a in the box on the following page, which
h u m a n d e v e l o p m e n t r e p o r t 2000
majority of the people of the country. It
Apartheid backlogs in schooling affects democratic participation, and
No water is available in 24 percent consequently hinders human develop-
of the schools in the country, and ment. The most positive development
less than half of schools (43%) in this regard is the importance the
have an electrical power supply. new Minister of Education, Kader
The lack of power supply is most Asmal, places on this particular issue.18
prominent in the Northern Province Indeed, key priorities in Tirisano19
(79%), the Eastern Cape (77%) and (Ministry of Education’s Ten Point Plan)
136 KwaZulu-Natal (61%). will help to guide resources to where
A maximum of 37 percent of schools have telephones, they are most needed.
transforming processes for human development
except in the Northern Cape (77%), Western Cape (88%) For Adult Basic Education and
and Gauteng (85%). Most striking from this survey is the Training (ABET) to have meaningful
identification of toilet facilities as one of the most neglected
results, it needs to be part of an inte-
areas of provision. Provinces with the most severe shortage
grated implementation plan for all
of toilets were KwaZulu-Natal (a shortage of 66,921 toilets),
spheres of activity, especially the
Northern Province (a shortage of 51,324 toilets) and the
Eastern Cape (a shortage of 46,785 toilets). Where toilets workplace and household. The diffi-
were provided, 47 percent were pit latrines and 34 percent culty is that two separate government
had flush systems. At 13 percent of schools, no toilets of any departments, education and labour,
kind were provided for learners. have historically performed these two
The provision of media equipment, media collections, functions independently of each other.
learning equipment and materials was almost non-existent: Despite efforts at co-ordination, their
82 percent of schools had no media equipment at all. There joint efforts have proved far from
is also an extremely poor provision of media centres (includ- adequate. The challenge, therefore, is
ing libraries) in most of the schools. For instance, only 2 the extent to which the private sector
percent of primary schools in the Northern Province, Free can be mobilised to be truly part of the
State and Eastern Cape had media centres. In addition, education and training effort. This will
between 44 percent and 47 percent of schools in KwaZulu- require strong state leadership. The
Natal, Free State, Eastern Cape, Northern Province and Skills Development Act (1998) is a
Western Cape were without sports facilities further major step towards enhancing
With regard to classroom shortages, based on a learner- training and skills development, par-
classroom ratio of 40:1, it was estimated that in 1996, ticularly given the fact that South Africa
57,499 classrooms were needed nationally. Classroom spends far less on training than coun-
shortages are extremely high in the Eastern Cape (15,538), tries at similar levels of development.20
KwaZulu-Natal (14,534) and the Northern Province
(13,670).
Higher education
The gender inequalities within the education sector are
Educational institutions and policy
striking and reflect the inequalities in the wider South African
society. While 64 percent of all teachers are women, male makers in South Africa need to recog-
teachers hold 58 percent of principal posts, 69 percent of nise the significant relationship between
deputy principal posts and 50 percent of heads of department research and development and technol-
posts. Until very recently, women teachers did not qualify for ogy for industrial production and
the government’s ‘home owner’ scheme, and gender-based communication. Because of the link
differentiation in salaries was only eliminated in 1992.13 between human development and
Only 33 percent of women/girls participate in school sports technological advances, education and
as opposed to 77 percent of men/boys.14 research that is geared to a globalising
Girls are also susceptible to other pressures and realities. economy must begin to focus on the
For instance, South Africa has a teenage pregnancy rate of 33 manner in which trade patterns change.
percent, affecting the education of girls quite severely. Girls These are the linkages that provide
are usually expelled as a result, but boys who impregnate countries with an alternative form of
girls are allowed to continue with their education. comparative advantage.
h u m a n d e v e l o p m e n t r e p o r t 2000
In addition, the extent to which all People’s education is education for the
South Africans are a part of the educa- ‘people’… people who aspire to non-
tional process is the extent to which this racialism and democracy, and who are
predominantly black and working class.
comparative advantage will be meaning- Accordingly, this education is non-
ful. The participation of African students racial and democratic, and primarily
in higher education more than doubled informed by the aspirations of the
between 1986 and 1992, but still repre- nationally oppressed blacks and the
sented only one-sixth of that of whites. exploited working class.25
While in 1993, women’s enrolment at
137
university was 49 percent; in the
Transformation of education policy as an
technikon sector it was only 30 percent.
h u m a n d e v e l o p m e n t r e p o r t 2000
Education as a Basic Human
Implementing Educational
Right Processes for Human
Everyone has the right – Development
a. to a basic education, including Significant as they are, policy frame-
adult basic education; and works do not automatically translate
b. to further education, which the into structural changes in the system.
state, through reasonable meas- Instead, their implementation becomes
138 ures, must make progressively available and accessible
an intense site of struggle. Structural
Everyone has the right to receive education in the official transformation also needs to be as-
transforming processes for human development
language or languages of their choice in public educational sessed to determine the extent to which
institutions where that education is reasonably practicable. In
policy shifts have been translated into
order to ensure the effective access to, and implementation
opportunities for the majority. In addi-
of, this right, the state must consider all reasonable educa-
tional alternatives, including single-medium institutions, tion, the implementation process must
taking into account – focus on the extent to which educa-
a. equity tional changes in South Africa have
dealt with the race, class and gender
b. practicability; and
contradictions – not in isolation but in
c. the need to redress the results of past racially discrimina- relationship to each other. In other
tory laws and practices.26
words, one needs to examine the extent
to which government has intervened in
the cycle of causality of poverty and
development features prominently.
inequality to improve the supply and
Particularly important is the fact that the
demand for human capital and to build
White Paper combines, both conceptu-
social cohesion.
ally and programmatically, human
resource development and the develop-
ment of multi-skilled citizens able to Finance and redress as key processes
participate in the processes of democ- Through its RDP Presidential Lead
racy. Projects, government set aside an
amount of R1,2 bn to build classrooms
The main theme of the RDP’s human
resource development programme is in 1994. By the end of the term of the
the empowerment of people, through first democratic government, almost
education and training, including 10,000 classrooms had either been built
specific forms of capacity-building or repaired and more than 80 percent of
within organisations and communities, the allocated money spent.29 This
to participate effectively in all the
processes of democratic society, eco-
amounts to classroom space for about
nomic activity, cultural expression and 350,000 students, taking an average 1:35
community life.28 classroom size. Most, if not all, of these
In line with the RDP, education is not classrooms have been built in black
seen simply as educating for economic schools, particularly in the rural areas.
needs and the labour market, but also This accounts for about one-fifth of
in terms of human, social, intellectual estimated classroom shortages in 1997.
and cultural development. However, Despite these achievements, it should
translating this into practical reality, be noted that school enrolment in-
within the context of global pressures creased by 1,5 million between 1994
on South Africa as a developing coun- and 1999.30 This is a significant devel-
try, poses some serious dilemmas and opment, but puts further strain on the
tensions. system.
h u m a n d e v e l o p m e n t r e p o r t 2000
At the same time, redeployment and
anticipated retrenchments have led to a Between 1994 and 1999,
drop in enrolments in teacher educa-
about R1,2 bn was spent to
tion colleges and faculties of education
at universities. If demand should again support poor but academically
rise, this could pose a serious threat to deserving students with loans
teacher education in the future. There and bursaries in higher education...
is a danger of severely running down
about 80,000 black students would not
the capacity of many higher education 139
institutions to provide teacher training. otherwise have been able to study in higher
h u m a n d e v e l o p m e n t r e p o r t 2000
clear links between government’s The process of centralisation and
political priorities (such as curriculum decentralisation of education as
transformation) and the need for social
instruments of transformation
allocations that simultaneously respond
One of the key structural issues in the
to issues of redress and other problems.
South African education sector is that of
The higher education sector is also
the relationship between the centralisa-
crippled by the amount of student and
tion and decentralisation of education.
institutional debt inherited from apart-
There is general consensus that both are
140 heid. Without a national strategy and
needed to ensure the transformation and
mechanisms to deal with this debt, the
smooth running of the education sys-
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
The weaknesses in mass organisa- In organisation and management,
tions in the education sphere arise from empowerment has an external and
the strategic dilemmas facing these internal dimension. The external dimen-
organisations in the new period. On sion refers to the involvement of clients
the one hand, they must decide how to and customers in the decision-making of
support and be an active part of gov- the organisation.38 In internal manage-
ernment without sacrificing their au- ment processes, therefore, the term
tonomy or compromising the interests ‘empowerment’ may be used to refer to
of their constituencies. Conversely, how the delegation of power in order to 141
do they advance the interests of their create an enabling environment. In this
sense, ‘empowerment’ is “a process of
h u m a n d e v e l o p m e n t r e p o r t 2000
less than white earners. The unemploy-
An Economic Bill of Rights to ment rate in South Africa is extremely
Promote Economic Growth high compared to that of other medium
and Human Development income countries. Wage disparities are
also high by international standards.
• a right to a basic income and This reflects the apartheid legacy of
access to a minimal level of white workers who are relatively better
economic resources educated compared to black workers.
• a right to participate in the produc- These inequalities mean that Africans
142
tive and reproductive work of society are disadvantaged in terms of income
generating resources. They are not
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Worker participation or co-option changes or restructuring. ESOPs are
Empowerment programmes constitute seen as an alternative way of paying
government’s main pillars to change workers, as an attempt to discourage
stock ownership plans, expand oppor- workers from demanding higher wages.
tunities for broader South African Further, workers participating in such
participation and ensure that SMMEs schemes pose no threat to ownership as
have equitable opportunities. In addi- the number of shares issued depends
tion to participation in union-driven entirely on the business concerned.
empowerment projects, another type of Another criticism of ESOPs is that such 143
economic opportunity being explored schemes normally favour those who are
already better of in terms of wages,
h u m a n d e v e l o p m e n t r e p o r t 2000
previously disadvantaged areas. Conse-
Economic empowerment must quently, companies in which unions
have invested through empowerment
lead to sustainable livelihoods
have made deals of over R1.1bn.50
and access to income earning These deals have been criticised on
opportunities. various grounds, predominantly on
grounds of conflict of interest. Critics
have questioned whether the unions are
empowerment is being equated with not ‘in bed’ with the capitalists and have
144
the development of SMMEs. More asked whether, as investors, they will be
people are forming groups to partici- able to represent the interests of the
transforming processes for human development
pate in initiatives that include privatisa- workers. Will they be able to advocate
tion, corporate restructuring and empowerment and affirmative action
unbundling. All of these issues, how- from inside corporate structures? Or will
ever, need to be examined against the they pursue profits at the expense of
need to ensure that economic empow- broader issues of worker rights? It is still
erment is more than having a stake in too early to assess this. COSATU-aligned
business. It is also about ensuring that trade unions such as the National Union
those people who are outside the of Mine Workers (NUM) and the South
formal economy are integrated into the African Clothing and Textile Workers
system in a meaningful way. Economic Union (SACTWU) were amongst the first
empowerment must lead to sustainable to participate in empowerment pro-
livelihoods and access to income earn- grammes.
ing opportunities. The viability of these deals is also
being questioned because of the man-
Current views on empowerment ner in which they were introduced.
Equity ownership was made available to Most black empowerment deals were
some groups of blacks and, in this way, said to be risk-free, enabling these
large deals have been completed, companies to exercise less discretion
involving both listed and unlisted regarding the investments they were
companies. For its part, government making. The deals were made through
determined that these deals should be the special purpose vehicle (SPV) fund-
broad-based and set criteria to make ing mechanism. Financiers are now
sure this happened, particularly in the taking a second look at this type of
area of procurement. The criteria at- funding strategy and only a few deals
tracted a larger number of participants will pass the new conditions to be
to the tender process, especially for implemented. Already, some empower-
government business. It required that ment groups are failing to complete
entities tendering for government busi- deals due to stricter requirements. For
ness demonstrate that they are broadly example, Kopano ke Matla recently
representative and inclusive. Most of the failed to raise cash to purchase a 100
tendering took place in the IT and percent stake (R93 million) in Aventura,
telecommunication industries, where and NuIntegrated Communications
government is a big spender. Print, could not raise 40 percent (or R8 mil-
publishing and broadcasting were also lion) to purchase equity in Saatchi and
areas for economic participation.49 Saatchi. Business Map notes that an
Unions were successful in their average of six empowerment deals per
tenders for business because they month were completed in 1999 against a
brought in added value as black-owned 1998 average of twelve for the same
consortiums and represent people from period.
h u m a n d e v e l o p m e n t r e p o r t 2000
Economic empowerment deals raise elaborate procedures and unclear objec-
certain tensions and contradictions for tives.
organised labour’s involvement in the Privatisation is seen as part of a
market. However, such tensions must broader strategy of structural reform and
be resolved if the economy is to be is expected to provide opportunities for
deracialised and democratised to pro- economic empowerment. Government
mote economic growth and human argues that privatisation is necessary in
development. Fine51 makes the follow- order to leverage more capital, infuse
ing suggestions: new technology and develop new 145
• Black empowerment should be markets. The dilemma that privatisation
presents for government is that it inevi-
h u m a n d e v e l o p m e n t r e p o r t 2000
the parastatal sector are to broaden
Most potential investors are coverage, most potential investors are
less interested in broadening service
less interested in broadening
coverage than they are in buying into
service coverage than they are parastatals in order to remain in lucra-
in buying into parastatals in tive markets and realise high profits.
Labour argues that the state ought not to
order to remain in lucrative markets
stand back and reduce its involvement
and realise high profits. in favour of the private sector. Rather
146
there should be strategic nationalisation
of some industries and the introduction
transforming processes for human development
the same period. The statement goes of strong regulatory bodies together
further: with the development of creative forms
Many local governments have begun to of worker and community control and
explore alternative means of delivering ownership.56
services. More and more … have come
to realize that they can and should, The small and medium business sector
work in partnership with the private
The Department of Trade and Industry
sector with a view to getting private
investment and delivery of a service. is responsible for promoting small
Perhaps even in the management of a business in the country. The Department
service utility that the public sector has established a policy framework, the
owns, private financing of public White Paper on a National Strategy for
infrastructure investment, or … other the Development and Promotion of
combinations.55
Small Business in South Africa. The key
The public-private partnership ap- objectives of the national small business
proach could be seen as one govern- strategy are to:
ment strategy to democratise the • Create an enabling environment for
economy. The strategy is designed to small enterprises;
ensure that the role of government • Facilitate greater equalisation of
remains one of policy making, systems income, wealth and earning opportu-
development, monitoring and evalua- nities;
tion while the private sector is expected • Address the legacy of apartheid-
to focus on delivery. This type of role based disempowerment of black
for government is strongly contested, business;
particularly in the context of massive • Support the advancement of women
inequalities and the economic logic in all business sectors;
within which the private sector oper- • Create long-term jobs;
ates. The rise in service charges and the • Stimulate sector-focused economic
inability of low and unwaged workers growth;
to pay for basic services has a negative • Strengthen cohesion between small
impact on human development. enterprises;
Government is, therefore, faced with • Level the playing fields between
the challenge of having to democratise bigger and small business as well as
a highly centralised and monopolised between rural and urban business;
parastatal sector. The centralised nature and
of this sector is said to make it behave • Prepare small business to comply
in a manner that is typical to monopo- with the challenges of an internation-
lies – that is supplying to a limited ally competitive economy.
market at high prices. While govern- Two agencies have been established
ment’s objectives in wanting to privatise to provide financial and expert support
h u m a n d e v e l o p m e n t r e p o r t 2000
to SMMEs: Khula and Ntsika. It is economy, which had stagnated due to
estimated that there are more than the accumulated weight of apartheid
800,000 small, medium and micro economics – exhibited mainly in declin-
enterprises in South Africa that provide ing net investment, high interest rates,
jobs for approximately 3,5 million skill shortages and a general loss of
people57 . Building the capabilities and business confidence.
assets of this sector is therefore critical In short, South Africa was, and still
to the process of deracialising and remains, in the midst of a ‘double
democratising the economy. Such an transition’ – a simultaneous movement 147
approach must be based on a twin towards political democracy and eco-
strategy of moving from human devel- nomic restructuring. Under conditions
h u m a n d e v e l o p m e n t r e p o r t 2000
mentation of policies decided elsewhere The establishment of NEDLAC
in the system. The central dilemma for
NEDLAC arose as a result of worker
COSATU, then, is whether the “labour
struggles driven by the major progres-
movement is willing to become an
sive union federations such as COSATU
active party to a neo-liberal economic
and the National Council of Trade
strategy in exchange for concessions for
Unions (NACTU) in the late 1980s.
a section of the working class?” And, if
These worker struggles were the result
the answer is ‘yes’, will this entail an
of the 1988 attempt by the Nationalist
abdication of the labour movement’s
148 government, with the support of em-
role in breaking the insider/outsider
ployers, to amend the Labour Relations
divide in society?63
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
of Parliament in September 1994 (Act
35 of 1994) and its launch on 18 Febru- NEDLAC is a forum through
ary 1995. NEDLAC’s new statutory
which the representatives of the
status made it more powerful and
stable than the NEF and NMC, whose most powerful employer and
roles it incorporated.67 worker organisations and the
Democratisation must reach beyond
democratic government interact to
the narrow governmental domain. The seek agreement on important policies.
National Economic, Development and 149
Labour Council is a key step along the
h u m a n d e v e l o p m e n t r e p o r t 2000
concerns and make the economy more
That NEDLAC was granted governable.80 In the final result, regard-
less of some ambivalence about
real negotiating power was
NEDLAC, the institution was granted
due to the strength and politi- significant powers (see box).
cal importance given to un-
ions by the new government. NEDLAC processes – linking economic
and social objectives
150 NEDLAC is a representative body where
parties seek agreement primarily
There were other reasons for busi- through negotiation and discussion
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Executive Council (the highest decision-
making structure). At an annual Summit, NEDLAC powers, purpose and
there is feedback and input on progress structure
made by NEDLAC. The NEDLAC Act requires NEDLAC
Each constituency decides on its to:
own representatives and how they are
• Strive to promote the goals of
allocated to the Chambers and other
economic growth, participation in
NEDLAC structures. In the labour
economic decision-making, and
constituency, the six labour seats in social equity; 151
each of the Chambers have been di-
• Seek to reach consensus and conclude agreements
h u m a n d e v e l o p m e n t r e p o r t 2000
stituencies of the need to work towards limited success against poverty. Its presen-
a longer-term vision, and consider the tation to the subsequent NEDLAC Summit
need, where necessary for shorter-term called for a “return to the RDP”.91
trade-offs to achieve this vision”. This Such strong, opposing perspectives
framework must “assist in identifying and approaches of its constituencies are
specific issues for negotiating in the a major obstacle to the facilitation of a
chambers” and provide “common common vision at NEDLAC. Indeed, its
assumptions and a common terminol- initial attempt to do so may have been
ogy”.88 Further, the document raised a greatly over-optimistic.
152
number of possible areas for such a
framework: wages and incomes; invest- Impact on details
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Another weakness is that flexibility back meeting.109 This, however, reveals
may result in a vacuum in which the more about the weaknesses in internal
role of strong personalities is enhanced. democracy and the communication
This may be exacerbated by weak- system within the labour constituency
nesses in constituency capacity and than about NEDLAC itself. Similar weak-
loose mandating procedures. This nesses probably exist in all constituen-
applies equally to all constituencies cies, including between Ministers and
represented at NEDLAC. bureaucrats and between business
representatives and employers. 153
2. Capacity of constituencies
Weaknesses in mandating and com-
All NEDLAC constituencies lack capac- munication clearly impact on the
h u m a n d e v e l o p m e n t r e p o r t 2000
Case study (1): Negotiations on the Basic Conditions of Employment Act
The introduction of a new BCEA was central to the five- been asked to vote on the issue. Further, bypassing
year plan of the Department of Labour. The BCEA NEDLAC appeared to undermine the credibility of the
process was preceded by the LRA negotiations. In that institution. After all, some would ask, if it cannot reach an
process, also negotiated through NEDLAC, constituen- agreement, “what do we have NEDLAC for?” The con-
cies reached agreement on the Act ‘line by line’ and servative media immediately claimed that “COSATU’s
completed their task within ten weeks. Thus, govern- withdrawal” from NEDLAC may “signal the end of
154 ment was relatively optimistic about getting an NEDLAC”, as the institution appeared unable to deliver
agreement on the BCEA.92 “satisfactory outcomes”.95
By mid-1997, after a year and eleven tripartite Under strong pressure to avoid a vote in Parliament,
transforming processes for human development
meetings, the negotiations on the BCEA had reached a the Minister of Labour threatened to withdraw the draft Bill
deadlock. At issue was labour’s demand for lower and implement an interim piece of legislation that would
hours of work and paid maternity leave, together with simply cover all workers under the old Act. Further,
unhappiness that the new Act was trying to undermine Cabinet announced that a Presidential Job Summit
standards, especially regarding the clauses dealing would be held in October 1997. The timing of this
with ‘variation’ of minimum standards. announcement (based on a June 1996 proposal of the
Labour threatened a national strike to break the Labour Market Commission) was tactical. It created an
deadlock. In the past – as during the 1995 LRA opening for employers to ask that the deadlocked BCEA
negotiations – such a strategy did not prevent eventual negotiations continue after the Job Summit, when a
agreement. But the new LRA required that, before better understanding of job creation could be achieved.96
embarking on ‘socio-economic protests’, unions had Rather than “give in to face-to-face confrontation with
to follow a clear process through NEDLAC – notifying business and government”, COSATU prepared to take the
NEDLAC93 and requiring that it attempt to resolve the matter to a vote in Parliament and, if the democratic
dispute before protest went ahead. Labour’s oversight Parliament voted against them, to “lose with dignity”.97
of the new requirement allowed organised business to By now, all serious hope of continuing negotiations was
seek a Supreme Court interdict, successfully stopping dead, with COSATU describing the dispute as an “ideo-
the labour protest on the grounds that it had not logical war”.98
complied with the new LRA. The task then became one of finding a suitable
The negotiations turned from difficult to poisonous. compromise to ensure that a NEDLAC agreement, and
Labour ‘postponed’ its protest action and followed the not a Parliamentary vote, was arrived at. To this end,
NEDLAC S77 process. The impact of the now government agreed to some concessions for labour,99
procedurally-correct work stoppage was uneven while refusing many of labour’s core demands.
though considerable; between 25 percent – 70 In reviewing the process, the Minister of Labour
percent of the workforce across the country responded. stated that, “we assumed that there was increased
This use of mass action by the trade unions was later maturity among NEDLAC social partners after the LRA
to become a subject of debate: after all, does going to negotiations. Therefore we felt that the Basic Conditions
the streets to protest not undermine the integrity of the of Employment could also find agreement. But instead
negotiating forum? we found deadlocks all over the place.” The Minister also
Both sides now engaged in hard-line positions said that, “government is determined not to repeat this
and there was little movement. COSATU claimed that, experiment until the relationship between the three
“business have no desire to see a new Statute” and partners has matured sufficiently.”100
“that no amount of discussion in this body [NEDLAC] If NEDLAC was so thoroughly undermined, though,
would reach an agreement”. It threatened to break off where could the Presidential Job Summit be held? The
negotiations, taking the matter straight to Parlia- answer, ironically, was NEDLAC. This apparent about-
ment,94 believing that Parliament, with an ANC face may reflect the view that conflict over policies would
majority (many of whom were former COSATU have taken place anyway and that, without NEDLAC, they
leaders) would vote in its favour. would have been harder to resolve. It also reflects that
The implications of this approach were far- the BCEA problems may have had more to do with the
reaching. This was the first time that NEDLAC had complexities of the issues than with the maturity of
failed to reach agreement and that Parliament had NEDLAC constituencies.
h u m a n d e v e l o p m e n t r e p o r t 2000
Case Study (2): Job creation for human development
Table 5.1 demonstrates that companies saw the most the desire to create a more equal society. Even if
important variables influencing investment behaviour government and business preferred such an
and consequently job creation as interest rates, approach, it would face fierce resistance from
economic growth and the overall stability of the unions, as it would undermine the conditions of
economy. Average wage levels and maintaining good the already working poor.
labour relations were seen as the least important of Third, if asset ownership is redistributed (as
the variables. indicated in the ESOPs), a broad segment of
It is unlikely that the large corporations, under society can derive the benefits of redistribution from
current economic conditions, will substantially remuneration towards profit share, which would
increase employment in the short to medium term. In have a lesser impact on inequalities. Therefore,
fact, further job losses in these large firms can asset redistribution should become a core element
probably be expected in the next several years. of a strategy to create jobs.
Further, restrictive economic policies (including high Fourth, there may be possibilities to develop a
interest rates) undermine economic growth and job job creation strategy through small, medium and
creation. micro-enterprises (SMMEs). In the event that SMMEs
There were several broad options facing the are proved to be net job creators101 , this route may
NEDLAC constituencies. be vital. Major problems of SMMEs include access to
First, if the private sector is unlikely to create jobs, cheap credit and skills. However, in policy debate,
jobs can be created within the public sector and labour regulations are also raised as a problem.102
through fiscal policies. Such an approach could use a Other aspects include linking SMMEs to an asset
combination of different policies, including public distributive strategy, including land.103
works programmes (which could also be linked to Finally, research104 indicated that labour
infrastructure delivery); maintaining a sustainable shedding trends in large South African firms seem
level of employment within the public service, and to be a reaction to the need to become competitive
pursuing redistributive fiscal policies to produce and in the international marketplace. There is, therefore,
deliver public goods and services. The critical element a need to tackle the terms under which South Africa
of such an approach would be to link such pro- enters the global economy. Addressing such a
grammes to an overall goal of economic growth and broad challenge is one of the potential strengths of
human development. a NEDLAC structure. This remains an area of great
Second, if private firms are to create more jobs, potential, and, in view of massive job losses, an
the profit share is important. But this may contradict urgent one.
h u m a n d e v e l o p m e n t r e p o r t 2000
on matters pertaining to the apartheid
NEDLAC’s new processes are legacy.
However, several problems arise
relatively flexible as rules and
from labour and government’s use of
protocols are still evolving. the Alliance.
First, “the Alliance is generally not
working”.114 Central among many
this “non-negotiable” macroeconomic problems is the fact that broad agree-
156 strategy is an “illusion of central deter- ments reached at Alliance level need to
mination”.112 Macroeconomic strategies be implemented by government bureau-
transforming processes for human development
such as GEAR only “influence” wages, crats and can be interpreted in many
investment and prices; they do not ways, often in ways that some alliance
“determine” them. Therefore “even the partners do not support.
best laid plans of our macroeconomic Second, the use of the Alliance does
managers can be sand-bagged by not stop at ‘apartheid legacy’ issues. The
recalcitrant public sector workers or Alliance is used to intervene and make
angry welfare recipients. So macroeco- deals on matters on the NEDLAC
nomic policy will enter the public agenda, resulting in dual processes.
arena. And holding the line will depend The Alliance must, therefore, be
not only on determination, but on carefully used. If it undermines NEDLAC
popular support.”113 and the Alliance agreements fail to ‘hold
water’, NEDLAC may well lose its power
5. No strategic vision for common action
as a site and instrument for transforma-
NEDLAC, despite its efforts, has not tion. The result could be a reversal of the
succeeded in developing a strategic process of democratising and transform-
vision for common action. This is ing key aspects of South African society.
explained by the very divergent class
7. Relationship between Parliament and NEDLAC
perspectives of the different constituen-
cies and partly, perhaps, by the relative There has been criticism from some that
newness of the process of social dia- NEDLAC undermines the sovereignty of
logue at national tripartite level. Parliament. However, the existence of
Clearly, the goal of achieving a NEDLAC does not mean that Parliament
common vision does not appear possi- is unable to act; simply that extra-
ble because of differences in perspec- parliamentary processes serve to decen-
tive. However, a goal of developing a tralise decision-making to civil society,
common strategy, or perhaps even only thereby deepening democracy. It is still
a common policy agenda, may be more the duty of government to govern,
realistic and realisable. accepting or rejecting any recommenda-
tion from NEDLAC. Attacks on the princi-
6. New modes and former alliances
ple of extra-parliamentary democracy,
The Tripartite Alliance, if it works well, therefore, reflect a resistance to the
can play an important transformational decentralisation of power to constituen-
role. As a structure comprising the cies such as labour and the community.
central progressive forces, it can de- Further, NEDLAC and Parliament could
velop strategy and influence important mutually reinforce each other.115
interventions. With this in mind, Alli-
ance partners have used this structure Representation of community interests
to bypass the ‘old guard’ (essentially The participation of the community
white business and opposition parties) constituency is a sign that NEDLAC goes
h u m a n d e v e l o p m e n t r e p o r t 2000
beyond any form of ‘elite pacting’.
However, this constituency participates “Even the best laid plans of our
only in the Development Chamber, one
macroeconomic managers can
of the least effective chambers. Central
to the problems of this Chamber is the be sand-bagged by recalcitrant
difficult question of the composition of public sector workers or angry
the ‘community’. The constituency is
welfare recipients.”
also embroiled in an internal dispute
over its composition, especially in 157
regard to whether civics should be
allocated a greater share.116
h u m a n d e v e l o p m e n t r e p o r t 2000
The imperatives that drive women’s A critical question in South Africa is
involvement in the informal sector arise how to ensure that those households
from the issues they have to deal with in without any source of income from
the household sphere and their continued waged work or forms of state social
marginalisation from mainstream activity. assistance are able to survive. There is
no doubt that South Africa is sitting on a
Household119 sphere as a site and time bomb of poverty and inequality.
instrument for transformation While survival strategies in poor com-
Although household activities contribute munities depend on state nutrition and
158
to human development, they are unpaid school feeding schemes, these do not
and are still invisible in national ac- create opportunities for long-term,
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
economic and social capacity of house- relations. However, it “means admitting
holds headed by particularly black, rural new contenders for a share in a scarce
women, government can intervene to and highly valuable resource which
transform the process of women’s eco- determines economic well being and
nomic and social marginalisation. shapes power relations in the country-
The October Household Survey side; and it means extending the conflict
estimated that there were about 3,6 over land that has existed largely be-
million black rural households and that tween men, to men and women, thus
this figure might increase to 4,2 million bringing it into the family’s inner court- 159
by 2006. The land reform research yard.”125 Drawing the relationship be-
programme found that 67,7 percent of tween land and social, economic and
h u m a n d e v e l o p m e n t r e p o r t 2000
Gearing social security to address structural receive a low-level Basic
poverty Income Grant per person
per month. The sugges-
The provision of cash benefits to South Africa’s elderly tion envisages a process
population has been internationally acclaimed as a of claiming back the
success story in alleviating poverty. Despite their money from higher
relatively low level, state old age pensions have income groups through
tangible developmental impacts on people’s lives. tax, or alternatively using a
160 Having a reliable source of regular income provides simple means test to exclude
essential security, especially in poor rural households. the wealthy. Final estimated costs amount to about 1.5-
It is widely acknowledged that, while the needs of poor 3 percent of gross domestic product (GDP), depending
transforming processes for human development
people differ, by far the majority budget carefully and on the level of benefit and the system decided upon. The
spend their money for the good and development of total amount spent could be fixed as a percentage of
the whole family. GDP, which would ensure that the grants grow with the
However, over 13 million people in South Africa economy, but not faster than the economy can afford.
living below the poverty line have no access to social This suggestion has found support across the board
assistance and are left in harsh poverty with little as it channels money directly to the poor but avoids
means of escape. Even if one assumes that all ‘poverty traps’ – often inherent in other social security
intended beneficiaries of the current social security schemes – as well as expensive structures, which only
system are reached, 30 percent of the ‘ultra-poor’ and indirectly benefit the poor. The Basic Income Grant
40 percent of the ‘poor’ live in households where could, therefore, prove an integral part of South Africa’s
nobody receives any social assistance. Economic developmental strategy, giving resources and thereby
growth on its own will take decades to alleviate this choices to the people. While it is clear that a Basic
structural poverty. South Africa’s already highly Income Grant will not solve the massive poverty
unequal society cannot afford to leave behind well problem overnight, it could provide a net for destitute
over 50 percent of its people for decades until eco- people and a trigger for self-employment.
nomic growth addresses this structural problem The system would, furthermore, link cash to every
effectively. person, favouring extended household structures and
Research by COSATU identified this glaring gap thereby encouraging social cohesion. With increasing
and initiated a lively debate by suggesting a Basic pressure on households – due to HIV/AIDS-related
Income Grant. Building on the experience of a broadly- changes in family structures – this could be a strategic
based cash transfer system, all South Africans would policy option.122
African women have long outnum- fore, increased most rural women’s
bered men in rural South Africa, mainly insecurity.
as a consequence of labour migration,
by men, to the cities. In recent years, Women’s economic empowerment
more men have moved back to rural The redistributive thrust of land reform
areas as retrenchments in the cities, and is intended to turn around the long
particularly on the mines, have reduced history of racialised land ownership,
employment opportunities. The struggle with the majority of disadvantaged rural
over land between men and women is households either having no access to
thus bound to have intensified. In this productive land or subject to insecure
context, arguments about African ‘tradi- tenure arrangements. The main policy
tion’ and ‘custom’ have been trotted out mechanism offered by government is an
with greater regularity to justify men’s allocation of R16,000 to help rural
(particularly husbands’ and chiefs’) households to acquire land as part of a
stranglehold over land. The shortage of Land Acquisition/Settlement Grant
land in relation to demand has, there- scheme. Some of the communities that
h u m a n d e v e l o p m e n t r e p o r t 2000
have so far benefited from land distri- objectives of the land reform pro-
bution feel that the acquisition of land gramme, especially gender equity and
has unlocked their development poten- redistribution, were being achieved. It
tial and will create a climate conducive found that many of these schemes
to their socio-economic upliftment.130 practised a narrow interpretation of the
But for many, the acquisition of land objective to promote and protect wom-
has also become a poverty trap, with en’s interests – regarding it as simply a
communities and households unable to question of women’s representation in
tap the full potential of the land due to the legal sphere and neglecting oppor- 161
the lack of services and infrastructure tunities for women’s economic empow-
to support agricultural development. erment. Shares were frequently regis-
h u m a n d e v e l o p m e n t r e p o r t 2000
changes, there are strong signs that the
For many, the acquisition of next few years will be shaped more
decisively by struggles mounted from
land has also become a poverty
within civil society. In a very real sense,
trap, with communities and this marks the normalisation of the
households unable to tap the South African transition to democracy.
Centre-stage already are the domi-
full potential of the land due to the
nant forces in civil society: the organisa-
lack of services and infrastructure to support tions of capital and labour. The power
162
agricultural development. of the former can scarcely be exagger-
ated – all the more so when bolstered
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
Notes 34 Social priority ratio is a way of ensuring
that an equitable percentage of social
1 ANC [1994], 121
expenditure is devoted to basic education,
2 UNDP [1996]
health, nutrition, housing etc according to
3 Heintz and Jardine [1998], 5-6
government’s political objectives.
4 Minister of Finance [1998]
35 Centre for Education Policy Development
5 ANC [1994], 1.3.7
[1997]
6 NEDLAC includes government, business,
36 In May 1998, there were 443, 000 teachers
labour and the community sector as key
in South Africa, 28 percent of whom were
constituents in the policy negotiating body.
under-qualified. In the North-West province
7 Sitas & Jarvis [1998], 3
a whopping 53 percent of teachers were
8 Douglas [1997]
under-qualified, followed by KwaZulu-Natal 163
9 UNDP [1996]
with 34 percent and Eastern Cape and the
10 Taylor [1997], 177-178
Free State at 31 percent. Edusource [1998]
h u m a n d e v e l o p m e n t r e p o r t 2000
resisting economic liberalisation may be displaced employment and retrenchment
able to create new institutions through by larger firms.
which they can process their demands. In 102 Ntsika [1998]
turn these institutions may be able to 103 COSATU [1997], 84
create new rules of the game…in which 104 NALEDI
prominent groups renegotiate the terms on 105 Gostner & Joffe [1997], 12
which a country engages with the global 106 NEDLAC [1998b]
economy.” Webster and Adler [1999], 1 107 Gostner & Joffe [1997], 14
65 COSATU [1997], 26 108 Gostner & Joffe [1997], 14
66 COSATU [1997], 35 109 A long lag time between agreements
67 Webster & Gostner [1997], 3 reached and membership awareness is
164 68 Mandela [1995] somewhat expected, however. Knowledge
69 Sitas & Jarvis [1998], 5 of any new programme or institution takes
70 Sitas & Jarvis [1998], 5 time to work its way through a constitu-
transforming processes for human development
h u m a n d e v e l o p m e n t r e p o r t 2000
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Appendices
204
appendices
Chapter 2
Appendix 1
Estimates of HDI with and without HIV for South Africa and the Nine Provinces
South Africa Eastern Free State Gauteng Kwazulu- Mpumalanga Northern Northern North Western
Cape Natal Cape Province West Cape
No HIV No HIV No HIV No HIV No HIV No HIV No HIV No HIV No HIV No HIV
HIV HIV HIV HIV HIV HIV HIV HIV HIV HIV
1996 0.628 0.626 0.596 0.585 0.65 0.631 0.712 0.691 0.602 0.571 0.628 0.612 0.632 0.629 0.531 0.522 0.63 0.619 0.702 0.702
1997 0.628 0.624 0.597 0.582 0.651 0.629 0.713 0.692 0.603 0.571 0.629 0.607 0.634 0.629 0.532 0.52 0.631 0.614 0.703 0.702
1998 0.644 0.619 0.597 0.577 0.652 0.627 0.714 0.693 0.603 0.57 0.629 0.603 0.634 0.628 0.533 0.518 0.631 0.611 0.703 0.702
1999 0.645 0.612 0.598 0.571 0.653 0.62 0.714 0.687 0.604 0.562 0.63 0.595 0.635 0.626 0.534 0.513 0.632 0.605 0.704 0.702
2000 0.646 0.605 0.599 0.563 0.654 0.612 0.715 0.681 0.605 0.554 0.631 0.587 0.636 0.623 0.535 0.506 0.633 0.598 0.705 0.701
2001 0.647 0.597 0.6 0.555 0.655 0.604 0.716 0.674 0.606 0.546 0.632 0.579 0.637 0.619 0.536 0.499 0.634 0.589 0.706 0.699
2002 0.648 0.589 0.601 0.547 0.656 0.595 0.717 0.666 0.607 0.537 0.633 0.57 0.638 0.614 0.537 0.49 0.635 0.581 0.707 0.697
2003 0.648 0.58 0.602 0.538 0.657 0.587 0.718 0.658 0.608 0.529 0.634 0.561 0.639 0.609 0.538 0.482 0.636 0.572 0.708 0.694
2004 0.649 0.572 0.603 0.529 0.658 0.579 0.718 0.651 0.609 0.522 0.635 0.553 0.64 0.603 0.539 0.472 0.637 0.563 0.709 0.691
2005 0.65 0.565 0.603 0.521 0.658 0.571 0.719 0.644 0.609 0.516 0.635 0.545 0.64 0.597 0.54 0.463 0.638 0.555 0.71 0.686
2006 0.651 0.559 0.604 0.513 0.659 0.565 0.72 0.638 0.61 0.511 0.636 0.539 0.641 0.591 0.541 0.455 0.638 0.547 0.711 0.681
2007 0.651 0.554 0.605 0.507 0.66 0.559 0.72 0.632 0.611 0.506 0.637 0.534 0.642 0.584 0.542 0.447 0.639 0.541 0.712 0.676
2008 0.652 0.549 0.606 0.501 0.661 0.555 0.721 0.628 0.612 0.503 0.638 0.529 0.643 0.578 0.542 0.441 0.64 0.535 0.713 0.67
2009 0.653 0.545 0.607 0.497 0.662 0.551 0.722 0.624 0.613 0.5 0.639 0.526 0.644 0.573 0.543 0.435 0.641 0.531 0.713 0.664
2010 0.654 0.542 0.608 0.493 0.662 0.548 0.722 0.621 0.614 0.498 0.64 0.522 0.644 0.567 0.544 0.431 0.642 0.527 0.714 0.659
Appendix 2
Ratio of HDI with HIV to HDI without HIV
1.2
1 1996
0.8 2000
Ratio
0.6
2005
0.4
2010
0.2
0
SA EC FS GP KZN MP NC NP NW WC
Province
h u m a n d e v e l o p m e n t r e p o r t 2000
Chapter 3
Appendix 1
Social and economic characteristics and service delivery load by province (Idasa 1999)
Provinces Population Population Rural Service delivery Per capita Relative HDI 1991
growth rate load income number of
poor people
in province
Eastern Cape High High Rural Relatively high Low High Low 205
Free State Moderate Low Urban Moderate High Moderate
appendices
Gauteng High Low Very urban Relatively high High Low High
KwaZulu Natal High High Rural Relatively high Low Moderate Low
Mpumalanga Low High Rural Moderate Moderate Moderate
Northern Cape Low Low Urban Moderate High Moderate
Northern Province High High Rural Relatively high Very Low High Low
North West Moderate High Rural Low High Low
Western Cape Moderate Low Urban High Low High
Appendix 2
Composition of new provincial administrations in terms of old provinces and homeland administrations (Welsh
1994)
Province Ex-homeland administration Old province
Eastern Cape Transkei (large); Ciskei (large) Cape
Free State Qwa-qwa (small); part of Bophuthatswana Orange Free State
Gauteng KwaNdebele (small) Transvaal
KwaZulu Natal KwaZulu (large) Natal
Mpumalanga Kangwane and small section of Lebowa Transvaal
Northern Cape Cape
Northern Province Venda, Gazankula, Lebowa Transvaal
North West Four blocks of Bophuthatswana Transvaal
Western Cape Cape
h u m a n d e ve l o p m e n t r e p o r t 2000
Technical notes
Technical note 1
206
h u m a n d e v e l o p m e n t r e p o r t 2000
There is a new understanding that the development. During the 1950s, devel-
well-being of society depends not on opment economics was concerned with
the level of income but on the uses to transforming traditional subsistence
which it is put. The experience of economies into modern industrial
several countries shows that a high level economies. A key determinant of the
of human development can be attained growth rate, within this paradigm, is the
at relatively low levels of per capita investment rate, which is in turn gov-
income by means of well structured erned by national savings. Therefore,
social expenditure, as in the case of economic growth required saving and
Botswana, Costa Rica, Malaysia, Sri investment which, in turn, required the 207
Lanka and South Korea. At the other emergence of a capitalist class, concen-
technical notes
end of the spectrum, countries such as trating as large a share of the national
Brazil, Nigeria, Saudi Arabia and Na- income as possible. The idea was that
mibia demonstrate that, even with a rich people would save more than poor
high level of per capita income or a people and that they would provide the
rapidly growing economy, the discrep- engine of growth, the benefits of which
ancy between economic and social would then trickle down to eliminate or
performance can be vast. alleviate human deprivation. This para-
digm had widespread influence during
Alternative Development Concepts and the 1950s and 1960s. In fact, the under-
Theories lying economic growth model, based on
Although the concept of human devel- accumulated savings and investment
opment as defined above may seem self rates as the key determinants of eco-
explanatory today, this was not always nomic growth, continues to be used to
the case. Originally, economists inter- this day by institutions such as the
ested in development saw the problem World Bank. This approach, especially
purely in terms of increasing the in- the focus on the entrepreneurial class
comes of people in developing coun- and trickle-down economics, returned to
tries. Countries were ranked according fashion in the 1980s and formed the
to how rich they were. It was assumed basis of domestic policies for much of
that all that was needed to improve the industrial world during that decade.
human welfare was a rise in gross
domestic product (GDP) per capita. It Redistribution with Growth
took almost half a century for develop- In the late 1960s and 1970s, the realisa-
ment theory to move gradually away tion that the fruits of development had
from this view towards a more compre- been unevenly distributed led to the
hensive view of human development. widespread appeal of neo-Marxist
The following section briefly reviews analyses of development. The first
the major themes that have character- statistical signs were emerging that the
ised the development debate over the rich, far from saving a higher proportion
past fifty years. The section is not of their income, may in fact have began
intended to be a comprehensive ac- to question the trade-off between
count of the evolution of development growth and equity. Some argued that
theory over the past five decades and development should be reinterpreted to
many important contributions are thus take account of trends not only in
omitted; rather, it is intended to provide economic growth but also in respect of
the reader with a broad overview of the poverty, income inequality and employ-
evolution of the development debate. ment. Redistribution and growth became
the leading paradigm. However, most
Economic Growth theorists confined themselves to study-
Early development economists focused ing which types of redistribution would
on economic growth as the main deter- have the least effect on the
minant and defining characteristic of growth-equity trade-off which they
h u m a n d e ve l o p m e n t r e p o r t 2000
regarded as inevitable. Focusing on Human Development
distribution rather than production, they The human development paradigm that
saw human beings as the beneficiaries developed at the beginning of the 1990s
of an external process of development has evolved from these earlier ap-
rather than as the main participants in proaches, while building on them in
and initiators of the process. several ways. Human development
emphasises poverty alleviation and its
Basic Needs continued centrality to the development
In the late 1970s and early 1980s, there dialogue. The challenge of development
208 emerged a growing concern that the at the most fundamental level will
policies of redistribution with growth always revolve around the alleviation of
technical notes
h u m a n d e v e l o p m e n t r e p o r t 2000
in the development process. Human Nations HDR 1992 and the World Bank.
development covers all human needs - Together they defined the problems and
from production processes, to political suggested solutions that would lead to
freedoms, to methods of government. sustainable human development (SHD).
Therefore, human development is The HDR 1992 has the following to say
concerned with the creation and distri- about sustainable development and
bution of wealth, with all economic growth, “...sustainable devel-
socio-economic sectors, with political opment implies a new concept of eco-
life, with basic needs and non-basic nomic growth - one that provides fair-
needs and with human choices in ness and opportunity for all the world’s 209
developing as well as developed coun- people, not just the privileged few,
technical notes
tries. “Human development as a con- without further destroying the world’s
cept is broad and comprehensive. But it finite natural resources and without
is guided by a simple idea – people compromising the world’s carrying
always come first”. capacity”. Now, along with healthier,
well-educated citizens participating in a
Sustainable Human Development decentralised government, came new
The evolution of the Human Develop- minimum requirements for SHD which
ment Report paradigm came at a time included the elimination of poverty, a
when global environment concerns reduction in the population growth rate,
were also experiencing a revival. As the and an improved understanding of the
Cold War came to a sudden end, and diversity of ecosystems and the environ-
the former Soviet Union unravelled, a mental impact of development activities.
new atmosphere of trust and SHD puts the human development
co-operation emerged that would allow paradigm within the context of our finite
world leaders to focus on questions of environment and ensures future
common concern. Foremost on the sustainability of the ecosystem.
development agenda was environmental
protection, the need for which con- Measurement of Human Development
fronts both developing and developed
countries. It was clear that, whatever The Human Development Index
the earth’s carrying capacity, we were, Having adopted such a broad concept
and still are, severely undermining of development, the problem that arises
sustainable development, utilising is how to measure what might at first
non-renewable resources at an increas- appear an indeterminate notion. It is
ing rate and failing to develop renew- clear that a precise measurement of HD
able resources effectively. It was also is impossible. Common sense dictates
clear that environmental problems did that it is not possible to capture such a
not respect international boundaries. broad, and in some senses subjective,
Potentially serious problems such as concept within a single digit - into
damage to the ozone layer, the green- which an enormous number of indica-
house effect, acid rain and global defor- tors could be chosen for incorporation.
estation would affect all the peoples of Then comes the question of the respec-
the world, regardless of gender, race or tive weights to be attached to each
nationality. Furthermore, such problems indicator. Some factors that are central
could not be solved by an individual to HD are not easily quantifiable, for
country, no matter how powerful. The example, access to the decision-making
world had entered a new era of process or freedom of the press. In
interdependency. Namibia’s case, it is precisely in the area
In 1992, a UN Conference on Envi- of human freedom that so much
ronment and Development, commonly progress has been made since inde-
known as the Rio Earth Summit, took pendence. Major achievements, such as
up the challenge as did the United the abolition of apartheid, introduction
h u m a n d e ve l o p m e n t r e p o r t 2000
of universal suffrage and freedom of that the more money a person has, the
speech and association, are not re- less benefit he/she would receive from
flected in the HDI, although they repre- an additional dollar. In other words, a
sent tremendous advances in human single dollar is worth more to a pauper
development. than to a millionaire. In order to reflect
Within this context, however, the this, any income above the average
proponents of the human development income level (already adjusted for the
paradigm further postulate that there cost of living) is discounted. It should
are some relevant quantifiable factors be noted, however, that in spite of these
210 that would permit an approximate adjustments to per capita income, being
index by which HD can be measured. a national aggregate, this statistical
technical notes
h u m a n d e v e l o p m e n t r e p o r t 2000
time period, unless static goals are important aspects of development, they
defined for such an exercise. should be measured independently of
The UN received several suggestions the original HDI rather than trying to
to include broader indicators that cov- ask too much of one index. UNDP is,
ered other aspects of progress such as however, committed to the systematic
culture or human freedom. It was improvement of the concept and its
decided that, although these were measurement.
211
technical notes
h u m a n d e ve l o p m e n t r e p o r t 2000
Technical note 2
Estimation of the South African Human Development Index
The technical notes are based on the new methodologies as presented in the
Human Development Report 1999.
212
1. Human Development Index (HDI)
technical notes
h u m a n d e v e l o p m e n t r e p o r t 2000
and 5/17 were attached to primary, secondary, and tertiary enrolments respectively.
In this case the numerator of the weight represents the number of years for the
educational category and the denominator represents the total number of years
from primary to tertiary. Information on enrolment was obtained from the 1996
Census
Combined Gross enrolment index is calculated as follows:
technical notes
D: Adjusted Real GDP per capita (PPP$) Index (APPPI)
This was calculated by using the following UNDP formula:0
Adjusted GDP per Capita Index (APPPI) = [Log(Real GDP per Capita) - Log
(Minimum value)] / [(Log (maximum value)-(minimum value)]
Where:
minimum value is $100 and maximum value is $40,000.
Real GDP = GDP in 1995 prices
Real GDP per Capita = Real GDP/Population
GDP = Gross Domestic Product
h u m a n d e ve l o p m e n t r e p o r t 2000
C: Equally Distributed Income Index (EDII)
This was calculated as follows:
Equally Distributed Income Index =1 [(Female population share/adjusted income
for women) + (male population share/adjusted income for males)]
Where:
Adjusted Income for Women = [Log (GDP per capita for women) - Log
(minimum GDP per capita)]/[Log (GDP per capita maximum) - Log
214 (GDP per capita minimum)
Adjusted Income for men = [Log (GDP per capita for men) - Log (mini-
technical notes
mum GDP per capita )]/[Log (GDP per capita maximum) - Log (GDP
per capita minimum)
GDP per capita for women = female share of the wage bill* Total GDP/
Number of females
GDP per capita for men = [Total GDP - (female share of the wage bill*
Total GDP)]/Number of men
Female share of the wage bill = [(Rf* Ef)/{(Rƒ*Ef)+ Em}]
Where:
Rf = Ratio of female income to male income
Ef = Female share of the economically active population
Em = Male share of the economically active population
h u m a n d e v e l o p m e n t r e p o r t 2000
Where:
Af = Females’ percentage share of administrative and managerial
positions
Am = Males’ percentage share of administrative and managerial posi-
tions
technical notes
Tf = Females’ percentage share of professional and technical positions
Tm = Males’ percentage share of professional and technical positions
D: Combined Index for administrative and managerial, and professional and technical positions (CIAPP)
This was calculated as the average of B and C above.
CIAPP = (IPTP + IAMP)/2
h u m a n d e ve l o p m e n t r e p o r t 2000
Sources of Information
1. Life expectancy at birth for South Africa and the 9 provinces and by gender
were obtained from the Department of Health, Pretoria.
2. Information on educational levels of the population was obtained from Cen-
sus in Brief, Report No.1:03-01-11 (1996), published by Statistics SA for South
Africa and the 9 provinces and by gender.
3. Enrolment figures were obtained from Information Systems Directorate, De-
216 partment of Education, Pretoria (Contact: Christo Lombard @ 012-312-5242).
These included gender and provincial breakdowns. Tertiary enrolment was
technical notes
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Statistics South Africa [1996] http://www.statssa.gov.za/stats_in_brief_2000/housing.htm
Statistics South Africa [1997] Rural Survey
Statistics South Africa [1998] The People of South Africa: Population Census 1996, Report 217
No. 03-01-11
technical notes
Statistics South Africa [1999] The People of South Africa: Population Census1996, Report No.
03-01-11
UNDP [1997] Human Development Report 1997, Oxford University Press, Oxford
UNDP [1998] Poverty and Inequality in South Africa, UNDP, Pretoria
UNDP [1999] Human Development Report 1999 Oxford University Press, Oxford
UNDP [2000] Human Development Report 2000 Oxford University Press, Oxford
Whiteford, Andrew & van Seventer, Dirk Ernst [1999] Winners and Losers, South Africa’s
Changing Income Distribution, WEFA, Southern Africa, Pretoria, South Africa
World Bank [1996] World Development Report 1996, Washington
Notes
1 This is the average annual growth rate of population over the past several 25 years
h u m a n d e ve l o p m e n t r e p o r t 2000
Acronyms
218 ABET Adult Basic Education and GDP Gross Domestic Product
Training GEAR Growth Employment and
acronyms
h u m a n d e v e l o p m e n t r e p o r t 2000
MERG Macro-Economic Research RDP Reconstruction and
Group Development Programme
MINMEC Ministers and MEC’s ROT Rehabilitate Operate
meetings Transfer
MP Member of Parliament SABC South African Broadcasting
MTEF Medium term expenditure Corporation
framework SACP South African Communist
NACOSA National Aids Co-ordinating Party
Committee of South Africa SACTWU South African Clothing and 219
NACTU National Council of Trade Textile Workers Union
Unions SADC South African Development
acronyms
NALEDI National Labour and Community
Economic Development SAF South Africa Foundation
Institute SALDRU South African Labour and
NCOP National Council of Development Research Unit
Provinces SALGA South African Local
NDA National Development Government Association
Agency SAMDI South African Management
NEDLAC National Economic
and Development Institute
Development and Labour
SANCO South African National Civic
Council
Organisation
NEF National Economic Forum
SDI Spatial Development
NEF National Empowerment
Initiative
Fund
SEP Strategic equity partnership
NFA National Framework
SHD Sustainable human
Agreement
development
NGO Non-governmental
SITA State Information
organisation
NHDR National Human Technology Agency
Development Report SLL Supplemental Living Level
NLC National Land Committee SMG State Maintenance Grant
NMC National Manpower SMME Small, medium and micro
Commission enterprises
NP National Party SOE State-owned enterprise
NUM National Union of Mine SPV Special purpose vehicle
Workers STD Sexually transmitted diseases
OAU Organisation of African TU Transformation unit
Unity UDF United Democratic Front
ODA Official development VAT Value-Added Taxation
assistance VSP Voluntary severance package
OSEO Office for Serious Economic WPAAPS White Paper on Affirmative
Offences (now IDSEO) Action in the Public Service
OSW Office on the Status of WPHRM White Paper on Human
Women Resources Management in
PRC Presidential Review the Public Service
Commission WPPSTE White Paper on Public
PSC Public Service Commission Service Training and
PSCBC Public Service Co-ordinating Education
Bargaining Council WPTPS White Paper on the
PSTF Public Sector Transformation of the Public
Transformation Forum Service
h u m a n d e ve l o p m e n t r e p o r t 2000
Glossary of key terms
h u m a n d e v e l o p m e n t r e p o r t 2000
HIV/AIDS and migration Human Development
The migrant labour system in South The process of widening people’s
Africa led to oscillatory (frequent move- choices and the levels of well-being
ment to and from an area) migration. they achieve are at the core of the
Adult men migrated to urban areas and notion of human development. Such
were prohibited by law from living with choices are neither finite nor static. But,
their families in the flats or compounds, regardless of the level of development,
leading to a ‘culture’ of urban and rural the three essential choices for people
wives and prostitution. This has been are to lead a long and healthy life, to
regarded as a major factor in the spread acquire knowledge and to have access 221
of HIV/AIDS and other sexually trans- to the resources needed for a decent
acronyms
glossary
mitted diseases in South Africa. standard of living. Human development
does not end there, however. Other
HIV/AIDS impact choices, highly valued by many people,
The social, economic, political and range from political, economic and
other consequences arising from the social freedom to opportunities for
spread of the virus. One of the salient being creative and productive and
features of this is the impact the disease enjoying self-respect and guaranteed
will have on the national economy in human rights. Income clearly is only
South Africa. Among the economic one option that people would like to
consequences of the spread of the have, though an important one. But it is
disease are the following factors: a sick not the sum total of their lives. Income
and depleted workforce; increased is a means to human development.
health care delivery costs as a result of
large numbers of AIDS patients, and Human Development Index (HDI)
expensive child care services to take The human development index meas-
care of large numbers of orphans. ures the average achievements in a
HIV/AIDS infections, distribution of country in three basic dimensions of
human development-longevity, knowl-
national surveys (e.g: by the CSS on edge and a decent standard of living. A
women attending antenatal clinics) composite index, the HDI thus contains
demonstrate a gradient of HIV infection three variables: life expectancy, educa-
across the country: from high levels in tional attainment (adult literacy and
the North Eastern Provinces, to lower combined primary, secondary and
levels in the south-western parts of the tertiary enrolment) and real GDP per
country. The trend seems to follow capita (in PPP$).
patterns of areas predominantly inhab-
ited by poor communities. While the Human Poverty Index
HIV/AIDS epidemic is more advanced The human poverty index measures
in some provinces such as deprivation in basic human develop-
Mpumalanga, Gauteng and KwaZulu- ment in the same dimensions as the
Natal, it is well established and growing HDI. The variables used are the per-
in intensity in all provinces, and the centage of people expected to die
rate of infections does not seem to be before age 40, the percentage of adults
abating. who are illiterate, and overall economic
provisioning in terms of the percentage
Household of people without access to health
A household refers to a unit of people services and safe water and the percent-
living, working and sharing resources in age of underweight children under five.
a sustained manner and especially living
within a designated geographic boundary Human rights
(for example, a nuclear family of hus- This generally refers to those rights that
band, wife and children living together in have been recognised as basic and
an urban slum or shack). inherent in a human being, such as the
h u m a n d e ve l o p m e n t r e p o r t 2000
right to dignity. Human rights have throughout South Africa from March to
been accepted universally by the June 1998 to gain a picture of the
United Nations and form an important poverty situation from the point of view
part of the constitutions of most states. of poor people themselves. The hear-
ings were organised in a way that
Masakhane (Zulu) allowed people living in poverty the
Let us build together. opportunity to speak about their cir-
Poverty cumstances and make direct input into
Poverty refers to the denial of choices the policy making process.
222 and opportunities for a tolerable life, Poverty, incidence of
and often encompasses a lack of basics The incidence of poverty, expressed as
glossary
acronyms
h u m a n d e v e l o p m e n t r e p o r t 2000
survey then establishes the Poverty, severity of
proportion of people living in house- The severity of poverty can be meas-
holds with consumption (or some- ured as a weighted average of the
times income) below this line. The squared distance below the poverty
basic diet may consist of the staple line, expressed as a proportion of that
foods needed to meet basic nutri- line. The weights are given by each
tional requirements, the typical adult individual gap. Again, the average is
diet in the lowest consumption formed over the entire population.
quintile or the investigator’s notion of Since the weights increase with poverty,
a minimal but decent diet. The choice this measure is sensitive to inequality 223
of both the food and the non-food among the poor.
acronyms
glossary
components included is necessarily
Poverty, transient and chronic
arbitrary.
Transient poverty refers to short-term,
• Food energy method. This method temporary or seasonal poverty, and
focuses on the consumption expendi- chronic poverty to long-term or struc-
ture at which a person’s typical food tural poverty.
energy intake is just sufficient to meet
a predetermined food energy require- Poverty, Ultra-poverty
ment. Dietary energy intake, as the Ultra-poverty is said to occur when a
dependent variable, is regressed household cannot meet 80% of the
against household consumption per FAO-WHO minimum calorie require-
ments, even when using 80% of its
adult equivalent. The poverty line is
income to buy food.
then set at the level of total consump-
tion per person at which the statistical Rural communities
expectation of dietary energy intake Refers to non-urbanised, peri-urban
exactly meets average dietary energy areas. These are often poor places in
requirements. The problem with this which the lifestyle of the community
method is the caviar caveat: groups depends mainly on agriculture and
that choose a costly bundle of foods livestock farming. Poverty and unem-
are rewarded with a higher poverty ployment levels are often very high in
line than that for more frugal eaters. such places, and infrastructure develop-
All three approaches are sensitive to the ment and services provision poor.
price level used to determine the cost
Social cohesion
of the bundle. And all three concentrate
The extent to which a group of people
mainly on calories or dietary energy,
share certain fundamental values
because protein deficiency due to
around which they mobilise each other
inadequate economic resources is
and strengthen the group.
perceived to be rare in most societies.
In industrial countries, too, national Tirisano (Tswana)
poverty lines are used to measure Working together.
relative poverty. The European Com-
mission has suggested a poverty line for White
these countries of half the median Refers generally to people of European
adjusted disposable personal income. descent or origin and excludes people
of Indian descent or mixed race, classi-
Poverty-related disease fied as Coloured.
An illness associated with or directly
linked to a lack of basic needs such as Youth
food, shelter, housing, etc. Common The term normally refers to people
poverty-related illnesses include TB, aged between 15-35, but the limit
cholera and scabies. constantly changes.
h u m a n d e ve l o p m e n t r e p o r t 2000