This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
Poverty and Development
An interview with Francis Wilson
Francis Wilson is a Professor in the School of Economics at the University of Cape Town, and Director of the Southern Africa Labour and Development Research Unit (SALDRU) at that university. He was, from the early 1980's, Director of the Second Carnegie Enquiry into Poverty and Development in Southern Africa, and with Dr Mamphela Ramphele, co-author of the major report that emerged from that Inquiry, entitled "Uprooting Poverty: The South African Challenge." His previous books. Labour in the South African Gold Mines 1911-1969; (1972) Migrant Labour in South Africa (1972); and his publications include, amongst many others, chapters to both The Oxford History of South Africa and the Cambridge History of Africa.
Prof Wilson has kept together, over a very long time, the historic publication South African Outlook; and is on the Board of Governors of Fort Hare University, now undergoing a thorough transformation from its apartheid era.
MONITOR: May I begin with questions about the localisation, and the extent, of poverty in South Africa. Who is poor in South Africa?
FRANCIS WILSON: We must start with the Carnegie Enquiry research. While it is 10 years old, it is still the best data that we have.
Who is poor? Of course there are whites who are poor and blacks who are rich. But there are broad guidelines as to where, statistically, poverty is deepest rooted. And this rooting has at least four components: a racial component; a geographical component; an age component and a gender component.
The racial component first. Poverty is primarily endured amongst black South Africans. The geographical component: Poverty is worse in the rural areas, which includes the reserves, the homelands, the Black national states and of course on the Platteland. We tend to ignore the Platteland, but it is 80% of South Africa's land area, and has 20% of our people living on it, on farms and in small dorps, where poverty is very acute.
The age component? Very often it is young people who are unemployed.
The gender component? Who is really struggling because of inadequate energy? It is the women - they are the ones who have to walk 10 miles to cut firewood and who have to walk back with it on their heads.
So, poverty in South Africa is most probably found within a Black household headed by a women living in a rural area.
But that does not mean that we do not have masses of poverty in urban areas. There it can manifest itself in different ways. Take housing. In rural areas, poor people have reasonable houses - huts that are ecologically sound, that are warm in winter, cool in summer, and with a bit of space around them. The urban environment can be very much less pleasant, with appalling shanties that cook like ovens in summer and freeze in winter. Vastly overcrowded. Awful sewerage problems.
Poverty is not just about income - it has the aspects of housing, clean drinking water, high infant mortality rates, etc, all around it.
Let's look at infant mortality. The Carnegie Enquiry research gave us reasonable figures for the early 1980's. Infant mortality figures varied so much. Whites, on average over the country, had a figure of 12 infants in every 1000 born dying before their first birthday. The nationwide Black average was somewhere between 94 and 120. But in Soweto it was as low as 35, in Tzaneen where there was a good clinic it was about 70, in rural Transkei 140.
And look at water. Andrew Stone from Rhodes showed how, in the Eastern Cape, whites per capita water consumption was about 300 litres per day - for Blacks in Cookhouse 191, and in the rural Ciskei 91 litres per person per day.
While these figures are rough they give us some idea of poverty and its geography.
And the extent of poverty?
In the Carnegie Enquiry we relied on Charles Simkins data, and he had, in the early 1980's about 50% of all South African households being under the Poverty Datum Line (I see his latest figures are 41 - 42% of households).
Now that was for the population as a whole - for Black households it was above 60%. For African households in the reserves, it was 81% - four households out of every five being under the poverty datum line. And this poverty datum line allows for a very unexciting diet and such things, and allows for nothing for going to a soccer match or anything that some may call luxuries, but others would see as necessary components of a reasonable human existence.
Are there poor whites?
This is one of the areas now needing research.
The colour bars obviously protected many whites from competition in the job market from more capable blacks. These bars have fallen now, and in a stagnent economy. It is quite possible that poverty amongst whites has increased. Simkins's latest figures suggest this.
Poverty amongst the Coloured community?
We found considerable very acute poverty within this community in the Carnegie Enquiry, particularly in the Platteland where, of course, many coloureds still live.
Of course the coloured community has a better social welfare, social grant, support system than the African community. Both in terms of amounts of money, and in efficient delivery, they are better catered for.
A major problem area is of course housing.
The government's policy for the Coloured community was to devote a considerable percentage of houses being built to rehouse people moved in terms of the Group Areas Act, and then to destroy their precious, perfectly good, housing. Within the African community the government just built no houses - they were not supposed to be in the cities.
Put these policies together with mass urbanisation and one begins to understand today's incredible housing backlogs.
Poverty is everywhere in South Africa - staring all of us in the face, but nowhere else is it as developed as in the African community.
Now I'd now like to talk about problems in such fields as the family, education, health and other social issues.
Could we start with the family? What is the state of the South African family?
The African social structure has been incredibly strong in sustaining a battering that few other societies have had to sustain. I'm talking particularly about the impact of the migratory labour system. No other society on earth has industrialised for 100 years and has always had a migrant labour system at its core.
To refresh our memories here, let's look at the mining industry over the last 100 years.
For the 100 years of the gold mines, the vast majority of the industry's workers were labour units - they were housed in hostels without their families. Policy may have changed now, but there is, after 100 years, almost no family housing available.
So what we are talking about is adaptions by African society to an intolerable situation, subject to a massive range of stresses and strains in African social structure.
There are all sorts of permutations of such divided families: father at the mines, mother and children in the rural backwaters - here, all too often father takes a town wife also; or maybe mother goes to the mine to live with her husband, then the children are left in the rural areas. And so on. Very, very unsatisfactory arrangements, all of them.
All of this has caused a considerable loosening of the bond between husband and wife. One of the things we found at the Carnegie Enquiry was a large number of younger African women who were saying: "Look, I just don't want to get married. I am prepared to have children but I'm not prepared to cope with a man as well."
And then our massive levels of violence. The overtly political violence is in a sense only one manifestation of a much deeper violence in our society that is not traditional. I want to stress that - early travellers throughout the Eastern Cape wrote of very well ordered societies. The pathology of violence is a signal of the destruction of social structures.
So many of these problems seem to me to be rooted in poverty, and the overcrowding, unemployment and frustration that accompanies poverty.
Poverty is one of those simplistic words, like capitalism and socialism. You have to define it. How can one run a decent family life if there is no money and one is living twenty to a four-roomed house? How does one maintain married life if there is no privacy? We have crises not only in housing, but in private space generally.
Then, planners like David Dewar remind us that the townships developed in the 1960's/1970's were developed without any thinking about public space. Let's go back to old European towns. There workers could move from workplace to home to pub with ease over a small distance. One certainly lacks that ambience in our townships. Public space, public interaction, is appalling in townships.
One of the many angers is the number of kids killed by passing motorcars. Some of the problem is reckless driving, sure, but some of it is also that kids have nowhere else to play.
These are simple but crucial points - we have to get them right.
Education. There are such problems here. Quality. Access to education. Lack of schools.
If we look broadly at our society, one can get hell of depressed.
Issues like energy, drinking water, violence, the political scene, unemployment - they are so extensive as problems.
What we need to tackle head on, first of all, is the question of whether we want to go forward in some kind of hope, or in despair.
If we look in the wider context and say, "for 300 years this country has been moving in the wrong direction. For Black South Africans, it has been a country under occupation. The conquerors have been running the show and have not been conceding even the humanity of the majority." As an example, look at the migrant labour system. Any society that can sustain such a system for so long is diseased. There is no other word for it.
But let's look at the other side. Some time in 1989 Mandela, in prison, took the initiative to write to De Klerk. De Klerk then responds with that great speech of his on 2 February 1990. Then we began to see the possibility of this country turning around. From that minute on racism in South Africa, the structures of South Africa with blacks on the bottom and whites on the top - that is now dead, finished for all time.
We can now sense that we are beginning to move in the right direction. And an enormous amount of energy is being released at the same time. Raw energy, from the AWB to the far left. There is a rugged energy in South Africa that outsiders find very attractive.
If you like, the real struggle in South Africa now is between the optimist and the pessimist. Between those who are trying to engulf our country in violence, and those who, while admitting the enormity of our problems, are trying to see what can be done to work them through. I'm on the side of the optimists!
What we need now is people who are willing to get into the problems of our society, and who are willing to use their creativity and imagination and who are willing to adapt an idea from, say, a literary program that has worked in Peru, and try to make it work here.
Now this is the attitude we have to take to the enormous problems of black education.
If we say "my God, look at this situation, it's appalling - what are we going to do?", we'll probably end up doing nothing.
But if we unpack it and say, "let's fmd the schools that are working, let's fmd where there are good teachers and why - how do we build on this?"
How do we begin to get to grips with re-thinking imaginative syllabusses for Maths and English? Black education set out to destroy a science culture in Blacks. So we have to go back to basics, and learn the lessons of India, America, Japan.
We can do it! Just look at the Project Literacy Campaign. One lady decided to try to do something about illiteracy. Now her project is having a major impact - it is providing a model for what can be done as it radiates out from Pretoria.
Imaginative action, the strengthening of existing successful institutions, and the building of new ones - these can be models for action.
If we look at South Africa now - and we must look at South Africa now, unless we face the shadow side of our society we will never be able to begin to move - once we have gone through the examination of our shadow side, then we must work hard, pray hard and release creatively our energy - then we'll make it. Like the USA in the 1930's. After the great crash and its sense of shock, a massive energy was released. They got out of their hole. We can succeed also.
Now if we could just have a look at unemployment. Who has a job and who hasn't got a job?
The issue of employment is the central problem facing our society. There is a whole network of problems but the question of work is critical. We don't know the exact figures, but it would appear that somewhere between 25% and 40% of those who are economically active and who would like to have jobs can't have them. The jobs don't exist. The figure for Port Elizabeth is reputed to be in the order of 50%. You don't have to be too accurate about it. Let's say that one-third of black South Africans who want jobs can't get them.
The profile of the unemployed changes but what emerged out of the Carnegie Enquiry is that in the first instance it will be women in the rural area. We will also have young school leavers who want to have jobs. There will also be a very interesting category which we hadn't thought about until we went to Calitzdorp where we found that in the coloured community the really vulnerable people were those households headed by a man somewhere between 55 and 65. These are people who work on farms but when they get to their mid fifties they are considered too old to work and are fired. But they are too young to get pensions. So there is that trough.
We found exactly that same trough among a completely different group of people in KwaZulu, by Libby Ardington. The contribution by males to their household started in their teens and went up and up until they got to 55 or so and then it fell right down to the bottom and rose again at the age of 65 to higher than what it was at 55. In other words, the pensions, low as they are, mean that the households are getting more from their men when they are on pension than when the men were at work because the men had to survive in town as well as send money home.
But because there is this trough between 55 and 65 there is an area of vulnerability.
So we are looking in the first instance at those three major categories: youngsters who have not been to schools - 26 to 35 kind of period. Secondly we are looking at women, African women particularly, and in the rural area particularly. And thirdly there is a trough of men, and it will apply to women as well who are considered by the economy as too old to work but too young to get their pensions.
But, of course, unemployment runs right through society and there is nothing more harrowing than reading or listening to people explain what it means to be unemployed. By far the worst stories we got on the Carnegie Enquiry were people, men and women, explaining what happened to them as individuals when they became unemployed. The horror of it is not only the question of a loss of income, it is a sense of uselessness and being unable to contribute to family well-being. I think we have undervalued very greatly the importance of work in terms of one's self-esteem, of self-denigration and an assault on one's humanity.
Coming back to the issue of violence, I would see part of what we are witnessing as an expression of frustration at not being able to contribute to society.
The informal sector. It has the advantage of limiting the development of welfarist mentality and teaches self-reliance. But is it providing families with a decent living?
Anything which helps one make some money when you have got none is useful. But we should look at it in terms of adequacy rather than usefulness and it's not adequate. The downside of the informal sector is that it can be very exploitative. You can have appalling working conditions, very low wages and so on. On the other it is one of those areas without regulations, so individual energy can make its way, people can fmd ways of creating some wealth that couldn't be done by the state. One needs to fmd ways of providing people and groups of people with ways of co-operating to use their individual resources and energy to create jobs. There is certainly a need for work in the informal sector. However, the very nature of poverty in South Africa - the extent to which so many people who work very hard earn money below the poverty datum line - shows that our formal sector and our informal sector are inadequate. There are two problems: jobs and the need for people who are working to earn at least a living wage.
Special employment programmes. Politicians seem to be coming out stronger and stronger on the need for such programmes. Are they useful?
Yes. We should be setting aside a portion of our budget, say 10%, for an employment guarantee scheme, simply to say that we are going to fmd jobs for people who have not got jobs. But one can't do it at the market rate. There are all kinds of ways of doing it - special job teams, a special public works department. But it must be quite different from normal work done by the state or by companies, but one can have investment in public works. They can be designed in such a way that they are an investment. America's roads and many of its airports were built at the time of the New Deal and there is a lot of evidence that this really worked. I think it is crazy for us to think either in terms of the state or the private sector. Instead, we should be looking at how these two can reinforce one another in tackling a problem they both believe is important. I accept that we have to avoid bureaucracy, we have to avoid over-government, but we must not shy away from the role that the state can play in helping particularly the poor in terms of employment guarantees - all those kind of things that the Labour Party was trying to do in Britain, the New Deal was created to do in the United States. Those remain fundamental.
Our social problems - the family, education, problems, health problems, pensions, jobs, housing. What is the size of all of these put together and what resources have we got to marshall to try and get to solutions?
We don't have the resources to ensure that everybody gets heart transplant-type health care. But it does not seem to me to be at the moment primarily a question of money. We have got to look at how we can make the institutions we already have more efficient. Just think of how much money we put into education in the last 10 years and how useless it's been.
If throwing money solved the problem we would have no problem in black education.
Yes. More money won't solve the problem unless we increase our capacity to use the money. It is a question of building capacity and finding out why we have not got that capacity. There is something crazy about this society. We need hundreds of thousands of houses and there are hundreds of thousands of unemployed people who are dying to work, but we can't put the two together. And the big companies don't know how to answer the question of organisational capacity.
Nobody knows how you put together the energies of the people so that you release it in such a way that it enables them to do things. But there are models. In India there is the example of a co-operative dairy which has been put together village by village over the last 40 years. Each household owns only one or two buffalo but the co-op is the second largest milk-producing dairy in the world.
I think it's interesting that the word sub-economic is used as a term of abuse. Whereas in fact one is simply saying someone is not paying the full cost for the use of something. It is an acceptable principle on which universities and schools are run. The University of Cape Town is a state funded institution but we have a certain amount of independence and accountability and we have to make ends meet. Universities are quite efficient at producing graduates and research and nobody has come up with a much better scheme.
We need to look with imagination at how to create new structures for different functions that are performed by the state. For example pensions: can we not combine private sector competition with state resources to get better pensions?
Now the question of the redistribution of wealth. The controversial problem concerns the redistribution of assets. Assets in South Africa are massively racially skewed in terms of their ownership. Consequently the income that follows from the control of these assets is also owned in a massively racially skewed way. And until such time as we can break out these assets and spread them more generally through the community we can probably expect our present income differentials to remain in place. Firstly, do you think that argument is correct, and secondly, what do we do to break up assets?
A significant proportion of the income of the rich obviously comes from asset holdings, dividend payments and all the rest of it.
Major assets in this country are actually very widely distributed through the building societies and through pension payments. Now what we can be arguing about is who is going to control these pension funds and who is going to make the decision as to what actually is invested. The colour composition of those holding pension funds is going to change and has changed dramatically in the last 20 years. I don't have any figures but when one just thinks of black mine workers who earned 40c a day twenty years ago and obviously could not make pension payments out of that. Now they have pension funds. It means that an increasing amount of money that will be saved and invested will be owned by blacks. Then comes the question of the control and placement of those funds.
But let's look at one major asset which for historical reasons is very fundamental - the land issue. I don't know exactly how we can run land reform in this country. I certainly think we have got to learn from the Japanese and the Taiwanese and others. But remember we are not talking about redistributing small paddy holdings here, we're talking about the Karoo. and there's not a tremendous amount that can be done with the Karoo - you talk about a square mile per sheep or whatever it is. What we need to look at more immediately is small-scale agriculture - apple farming, wine farming, sugar farming. In Natal there has been a lot of work on small-scale cane growing. There is room for a great deal more work on small-scale horticulture around the big cities. The major constraint on that is not land, it's water.
The question is can we expand small-scale agriculture significantly, given our water resources, so that the land generates much more employment. There is a lot more work we can do in this area. Just look at what the Zimbabweans are doing with flowers and vegetables and goodness knows what which they are sending to London. We need to explore this, not least around Port Elizabeth. Land reform could take place to help people, who must obviously be carefully selected to be good farmers and who are backed up by services such as extension and marketing. A programme for developing small-scale agriculture has potential but we are not tackling it seriously.
One of the things this country has to face is that energy and water, particularly could become really scarce commodities. We have got to be working much harder on conservation.
Constraints on re-distristribution, Captial flight. We've had an enormous amount of capital flight.
If the business community decides to leave and take all their money there is not much one can do about this. But there are plenty of people who really want to make a go of this place, who are trying to make it work. We have to deal with a problem a workman told me about. He said, "The real problem in this country is that the bosses are on strike. Their duty is to invest capital and they are just not investing any capital right now." I think that's fair comment.
It seems to me that if people have made their money in this country the least they can do is start ploughing it back into this country, and I include the Americans and the British in that. We really do need reinvestment. Of course there are constraints on growth. We know that until we get the politics right, until there is some legitimacy of government and some kind of order in our society, we are not going to get a lot more investment. We know that lack of investment is a constraint, that education and training are constraints. We have to look at the whole thing and say, where are the blockages? Lack of money is one blockage, but it's not the only one.
We could hope for a gold boom, we could hope for foreign investment, but both are unlikely. What could get us moving?
Economists need to be very careful about making predictions, especially South African economists. Every prediction ever made about the gold mining industry has proved wrong. However, it doesn't seem that our future lies in gold. It doesn't look as though minerals, or agriculture, have a huge life in them. We've been reducing the number of workers in agriculture for the last 25 to 30 years.
I think we should look at two areas. One is the whole issue of beneficiation - rather than exporting raw gold turn it into jewellery here. I also agree with those who say we should go for an outward strategy, finding export markets wherever we can because we are a manufacturing country.
Do you think we will ever get to the level of manufacturing exports that that Nedcor/Old Mutual scenario suggests might be possible?
It is difficult to make these sort of predictions but we must not assume it is inevitable. We are going to have to work at it. Maybe we should give up the idea that there is going to be one sector leading us. We need to go for multiple growth points, in terms of every manufacturer asking whether he can increase exports by 10%. Or can I go from zero to something? Can I not produce more and look for ways and means of improving what we are already doing? In that way we might actually find ourselves growing surprisingly well. There is a very strong base in this country, not just infrastructure but industrial and managerial capacity. If every manufacturer increased his exports by 10% then such micro decisions could make a macro difference.
I think we need to ask ourselves much more clearly where the bottlenecks are so that we can get real expansion of production, rather than inflation, as the economy expands. The other thing we need to look at is whether the expansion of the economy will lead to an increase in demand for imports. These imports can only be paid for by exports. Therefore, we have got to be increasing our exports, otherwise we will get into a balance of payments crisis and we will be restrained by being unable to import.
The need for housing. As you have said, there are loads of raw materials available, and they are locally manufactured. There is a need to create jobs. There is money, there is land. What is going wrong? Why can't we house our people?
The question is the organisational capacity. We've been trying to run the society with 15% of the population and the other 85% have a lousy education and are hostile to the English and Afrikaans entrepreneur and organisation. We have to fmd ways and means of developing the discipline of organisational production.
We need mathematicians because we need them in a modern industrial society. We must fmd those youngsters who are going to be good at mathematics and give them special training. I must make this clear: I do not believe affirmative action is a matter of putting incompetent people into positions because of their colour. It's a question of trying to create real fairness and develop a potential in people who, for historical reason, have not been able to develop them.
The very first thing to be done is to believe that it can be done. Secondly, we need to rethink our budget. There is going to have to be much tougher public debate so that we move towards what I would call public investment, job creation through public investment. We must try to make sure that everybody in the country can work. I would argue for a politics of full employment. The' goal of our society should be employment for everybody and the state should want to participate in that. Build a consensus between the unions and companies and everyone else, that one is going for full employment and then pick up what we can learn from the Austrians and the Germans, the Swedes, everybody else, as to how we are going to achieve that. My goal for society would be full employment in a free society. That means that the state budget has to be re-examined carefully in terms of how effictively it's been spent. We need a massive public debate, not just between politicians.
Then we need to go for land reform, with a vengeance. Here I'm looking at intensive agriculture to see what we can do to use the land, especially around the big cities, in a way that is going to provide jobs and to create jobs via the export market and through the sale of produce in the cities.
I would then go for education and training, looking not only at producing more university graduates but also at technical training, primary and secondary education, adult literacy and numeracy programmes. Everybody has a thirst for education in this country and we are not providing it. For the last ten years children have been dying on the streets to get a better education. We dare not let that sacrifice be in vain. We have not really restructured our education to get that right.
Then we have to work on imaginative action by non-governmental organisations, fmd ways and means of harnessing people's energies.
If I can use an analogy without pushing the ecological consequences too far: when one builds a dam to generate hydro-electric power you place it so that it drains all the rivulets of water so that together they will generate enormous power which will transform the area. We need that kind of imaginative intervention at the social level. We need to be building social structures which do on the socio-economic terrain what the hydro-electricity dam does in the geographic terrain. In other words, collecting the energy or enabling the energy of individuals and small groups to be harnessed together to generate power to transform the landscape. We have seen it happen in other countries and I believe we can do it here.