Theme issue on poverty and inequality in South Africa

In today's post-financial-crisis world it is easy to become paralysed by inertia when considering issues of poverty and inequality. It is also tempting to view 2007/08 as year zero driving the three interlinked phenomena of poverty, unemployment and inequality globally and particularly in South Africa. The country has a long history of inequality and injustice. The policies of the pre-1994 government marginalised the majority of South Africans, excluding millions of people from the political, social and economic base of our society and denying them long-term accumulation of land, assets and sustainable livelihoods. The result is that, together with Namibia and Botswana, South Africa ranks as one of the most unequal societies in the world in terms of income inequality.

This theme issue of Development Southern Africa brings together current thinking about some critical policy issues in an attempt to advance knowledge in the field and challenge orthodox approaches. It provides some fresh ideas about how we can break down poverty and work towards economic inclusion for the close on half of the population who find themselves outside the circle of secure economic livelihoods.

Several current debates are germane to this issue. One is about what definition and measurement of poverty the country should adopt. Statistics South Africa is currently piloting three poverty lines for the National Treasury and we are eagerly awaiting the outcome. How to create decent employment for the 6.6 million unemployed people of working age, including discouraged work-seekers, is another, and one that is central to the design of the New Growth Path. Identifying sectors that can absorb workers with their current skills sets is vital to this. At the same time, we need to identify areas for future growth based on our competitive and comparative advantages and, from this analysis, develop education and skills training that will prepare people to move into those sectors and drive productive economic growth.

The critical issue of the 3.2 million unemployed young people between the ages of 15 and 34 is also a matter that requires urgent, comprehensive and innovative thinking. The longer people are outside the labour market, the more difficult it is for them to be brought into it, as they lose their skills and fail to keep pace with technological advances. Youth unemployment has deeper implications than just that, though – their exclusion from the labour market makes it hard for them to move from youth into adulthood and assume their roles as responsible and empowered adults and parents. They find themselves in a Never Never Land where they fail to grow up, and this undermines social cohesion and social reproduction.

In 2015 South Africa will report to the General Assembly of the United Nations on its success in meeting the Millennium Development Goals. The first of these goals is to eradicate extreme poverty and hunger. Given South Africa's middle income status, it will be extremely disappointing if we cannot achieve this.

Over the past 17 years the government has committed significant resources to poverty interventions. One of the most successful of these is the monthly transfer of income to more than 15 million people, amounting to 27% of the population, mainly in the form of child support and old age grants. A recent report by the OECD (Leibbrandt et al., 2010) found that social grants do mitigate some of the worst destitution in South Africa by injecting cash into households that qualify under the means test. It also found, however, that, because incomes are generally low and the grant gets diluted by being shared with other household members, the grant system cannot significantly reduce income inequality in South Africa.

To counter this discouraging finding, there is evidence of exciting and innovative thinking in the field of poverty and inequality research. A new book by Wilkinson and Pickett (2010) challenges our understanding of inequality and our belief, as the non-poor, that reducing inequality is of no consequence to us. The authors explain the interconnectedness of well-being for society as a whole and the particular relevance of this for South Africa, where inequality threatens our social fabric and yet the widening gap between rich and poor goes unchallenged.

Also interesting is Bannerjee and Duflo's (2011) new book, reviewed in this issue, which inverts previous ways of thinking about poverty and the poor and argues that solutions need to be based on the realities that affect people who are poor and the choices they make. The authors argue that unless we put poor people at the centre of our deliberations, policies aimed at improving their lot will fail.

Contributions to this theme issue include papers delivered at a conference in Boksburg, Johannesburg, in September 2010 entitled ‘Overcoming Structural Poverty and Inequality in South Africa: Towards Inclusive Growth and Development’. We also feature two debate articles intended to stimulate responses: the first is on the vexed question of how to define and measure poverty, and the second argues that the notion of an apartheid legacy is not useful in explaining why rural poverty remains entrenched. We hope this issue will encourage challenges to the orthodox thinking that hinders real transformation and development in South Africa today and in the future.