The persistence of poverty in post-apartheid South Africa : assets, livelihoods and differentiation in KwaZulu-Natal, 1993-2004.

Abstract

The situation in South Africa presents unique challenges to achieving sustained poverty reduction. Although it is an upper-middle-income country with a per capita income similar to that of Botswana, Brazil or Malaysia, a significant proportion of South African households have remained poor despite a plethora of government policies that target the less resourced. While estimates vary, over 22.9 million South Africans are categorised as being poor, with almost 2.5 million people suffering from malnutrition. Most analysts now agree that while poverty increased during the 1990s, some progress has been made in reducing both the incidence and depth of poverty after 2000. This thesis argues that the economic and social dynamics set in motion by apartheid that produced this situation, may also have generated a low-level equilibrium trap from which some the poor in South Africa will find it difficult to escape. The thesis suggests that the explanation for this 'poverty trap' lies in what Sen has termed the exchange entitlement mapping that poor households face when attempting to use their assets/endowments. In other words, the processes that underpin the accumulation of assets, the opportunities to use these assets, and the returns obtained are structurally prejudiced against the poor. The implication is that the current experience of poverty leads to its reproduction and to a structurally persistent poverty. The central research question of this thesis is then: "Did the extent, distribution and experience of poverty of the apartheid era persist in the immediate post-apartheid South Africa despite the efforts of government to foster pro-poor reforms?" The central policy concern is that if asset accumulation failure underpins persistent poverty, policies for those who are structurally poor should be differentiated from that which is directed at those who are transitorily poor. As an example, the policies of the South African government concerning the redistribution of agrarian assets (principally land and finance) may not be sufficient to assist the poor in rural areas, and may only increase intra-rural inequality. The thesis draws on two principal data sources: the South African Participatory Poverty Assessment completed in 1997, and the KwaZulu-Natal Income Dynamics Study (KIDS) which contains panel data collected from the same households in 1993, 1998 and 2004. Using these data, the thesis identifies a typology of structural poverty classes. At the bottom of this typology are those trapped in poverty with an asset base that is inadequate to meet their immediate needs as well as their ability to accumulate further assets over time. Other are stochastically poor or non-poor, moving in and out of poverty according to their good or bad fortune. Finally some have never been poor and have the asset base to ensure that they remain in this position or indeed improve over time. The livelihood strategies of households are used to differentiate households according to their participation in labour markets, farm and non-farm own production and access to social grants. The livelihood clusters that result are then matched to the poverty classes in order show differentiation among the households surveyed in KIDS. This allows for more nuanced policy recommendations that can be tailored to the needs of households experiencing different forms of poverty. This thesis is 87 000 words in length excluding appendices.