Social grants not a solution to addressing SA’s deep-rooted challenges

Any solution to the alleviation of poverty must be focused on income generation, employment and jobs rather than grants. Image: iStock

Any solution to the alleviation of poverty must be focused on income generation, employment and jobs rather than grants. Image: iStock

It’s time to stop using money as a well-being ‘fix’ and start looking at other measures that will put the poor and excluded in a better position to actually improve their lives.

For many South Africans, having political power doesn’t mean having a better life, more altruistic leaders, or less brutal or abusive government. While it is a fact that social grants have had a positive impact on beneficiaries, it is hardly enough to lift them out of generational poverty or improve the upward mobility of the children receiving it.

Grants are like putting a Band-Aid on a deep cut that needs stitches. For half of the South African adult population living below the poverty line – 49.2% according to Stats SA’s ‘Five facts about poverty in South Africa’ – it means power merely changed name and shape. They are part of the 6.8 million unemployed.

For these people – the youth and those who have completely given up looking work and finding a way out of poverty – the aphorism ‘A rising tide lifts all boats’ is a falsehood. A narrative only mentioned by economists and politicians in their policies and speeches about poverty under the current world financial systems.

Now you might want to interject and point out that so many things are going wrong in this country – but remember, the poverty crisis is not unique to South Africa. It is so widespread that four years ago the United Nations, in defining the 17 global Sustainable Development Goals (SDGs), set the target of eradicating extreme poverty from the world by 2030.

Fragility

The UK’s Commission on State Fragility, Growth and Development – a joint endeavour by the London School of Economics and Political Science and the Blavatnik School of Government at the University of Oxford – notes in its 2018 ‘Escaping the Fragility Trap’ report that: “Nearly a third of the way towards that deadline, almost 900 million people are still living on less than two dollars a day and, in too many of the world’s poorest countries, progress is completely stuck.”

While South Africa can’t be categorised as one of the world poor countries, its inequality is alarmingly growing and continues to occupy the number one spot in the world.

Since the country is part of the international community, it means something has to be done in the remaining 11 years before the 2030 deadline.

Earlier I suggested that democracy doesn’t automatically translate into better lives. Similarly, a government of the people does not mean leaders who care about the well-being of the people. Evidence of this is made clear by the violent way government treats its most vulnerable who are locked out of the economy and have no chance of getting in. The state brutality against those who protest countrywide for basic service delivery affirms its unwillingness to (a) listen to poor people and (b) bring them into the economy.

Policies such as the Expanded Public Works Programme are short-term and often never quite address the bigger picture. This links to the social grant point I made earlier – you can give poor people monthly grants and even increase that money, as was the case in one or two state of the nation addresses (Sonas). For beneficiaries, however, the standard of living doesn’t necessarily change nor does their quality of life.

Money vs the means to make money

It’s time to stop using money as a well-being ‘fix’ and start looking at other measures that will put the poor and excluded in a better position to actually improve their lives – such as access to opportunity, food, water, sanitation, healthcare, education; the type of support that will lead to a greater ability to make life choices. Would such a shift not be better?

Well-being determined by earned income rather than social-grant income is infinitely preferable for both the recipients and the economy.

Any solution to the alleviation of poverty must therefore be focused on income generation, employment and jobs rather than grants.

I have previously suggested lessons that South Africa could learn from Japan, but maybe I was being short-sighted. Instead of attempting to copy, alter and apply approaches or paths used by successful countries and assuming they will work, is it possible to develop a South African solution?

Government and President Cyril Ramaphosa, as outlined in his state of the nation address in June 2019, has set seven priorities that the new administration will focus on, five fundamental goals for the next decade, and 10 years in “which government will make progress in tackling poverty, inequality and unemployment”.

After mulling over what can be done about poverty and the wider problems plaguing the county, I would like to suggest the following.

First, for the state to actively promote one main plan by creating and ensuring an environment conducive to collective action.

Defining a shared common goal about what kind of economy government, business and labour want collectively, with the emphasis on collective work, should be a steady process.

While state priorities and goals are imperative, it would be a mistake for government to think it alone can drive them. Business, labour and citizens must buy into what government is selling. Finding the right balance between aspiration and reality is therefore crucial. For example, in order for investment to materialise, the private sector (locally and internationally) needs to have an atmosphere where conditions for doing business are favourable. This means fewer bureaucratic constraints such as onerous labour laws, rent-seeking practices and unrealistic political promises by government that ignore economic realism.

Second, and this is an urgent one, focus on urban infrastructure development.

The Johannesburg and Pretoria CBDs are examples of how fast urbanisation is happening. The two also illustrate the difficulties that arise when buildings are allowed to decay then trying to solve that issue while addressing inner-city housing problems. I suggest a private-public partnership that incentivises a return to the city of the private sector that integrates and offers urban working and living for young professionals who are first-time employees and potential property buyers.

This will only be possible if safety, security and services such as water, electricity, sanitation, transportation, as well as roads into and out of the cities, are assured. If this done, it will be a step towards dealing with urbanisation not just by solving problems but as part of the rebuilding of the economy.

Since economic growth happens in the city, a revived, well-run city that is freed from political interference or contestations can be the much-needed kickstart to replicable programmes in other provinces.

Third, ultimately it is the actions of leaders in all levels of public office that will determine whether state policies and plans for inclusive growth materialise.

It would serve Ramaphosa well to build legitimacy by demonstrating his executive powers in disassociating his administration from the many leaders who are implicated in corrupt – and corrupting – practices. Yes, it would mean overhauling his cabinet. And while that may shock the markets for a moment and affect the rand, the long-term effects will far outweigh the short-term discomfort.

Crucially, it would also mean inculcating within his cabinet a culture of listening to what ordinary South Africans want while balancing this with the reality of what government can feasibly deliver. Protests that are happening nationally show the gap between expectations, reality and unmet promises – and the resultant frustration. Easy and short-term programmes that yield quick and tangible results are more likely to win over unhappy citizens than long-term plans that are just words.

Taken together, the urgent priorities and goals for Ramaphosa and government seem rooted in doing things that, for poor people who are locked out of the economy, will make a significant difference in their immediate lives. To achieve this or even come close requires a government that has policies that are short term and easy to implement in a way that delivers results that are visible to the citizenry.

If done right, these short-term actions can enable government to tackle poverty, deal with unemployment and generally assuage the frustrations of many South Africans. This may also give government the breathing space it needs to carry on with the long-term strategy. After all, it is not built on nothing – it is a gradual process that is made up of short and medium-term strategies.

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