mandela initiative community of practice workshop 8 – 9 ... · into policy-making; thus,...

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Mandela Initiative

Community of Practice workshop

8 – 9 May 2017

A summary report on the gathering of a

poverty and inequality community of practice

A collaborative engagement with the support from

the Department of Science and Technology

and the National Research Foundation

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Contents Background and context ......................................................................................................................... 3

The importance and relevance of Communities of Practice .................................................................. 4

Collaboration experiences of the Mandela Initiative as a CoP ............................................................... 5

Findings of the DST-NRF Research Chairs' research projects for the MI ................................................ 8

Labour markets: Strike activity ........................................................................................................... 9

Labour markets: Labour law violations ............................................................................................. 11

Rural job creation: Overall (preliminary) findings ............................................................................ 14

Forestry, timber, pulp and papers ................................................................................................ 16

Citrus farming ................................................................................................................................ 19

Fisheries ........................................................................................................................................ 21

Urban planning and development: Informalisation, urban poverty and inequality ......................... 21

Health policy: The redistributive potential of the health system in South Africa ............................ 23

Gender and family relations: Families and inequality ...................................................................... 25

Education: Improving education for the poor .................................................................................. 28

Overcoming Inequality in South Africa: Thinking “outside of the box” ............................................ 31

Elements of an economic strategy ........................................................................................................ 35

Emerging cross-cutting themes ............................................................................................................ 43

Addressing poverty and inequality: Key issues for prioritisation ......................................................... 46

Reflections on the event and its methodology ..................................................................................... 47

Appendix: List of workshop participants .............................................................................................. 49

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Background and context

Communities of Practice are defined by the National Research Foundation (NRF) as “research-led

alliances, in which established researchers collaborate to produce solution-oriented research

findings with an intention to translate research outputs into tangible outcomes, and influence policy

development and implementation through communication of the necessary research findings”. A

Community of Practice (CoP) must be strategically aligned to government policies aimed at

addressing key social challenges and problems.

A CoP has emerged from within the Mandela Initiative (MI), which focuses on strategies to

overcome poverty and inequality in South Africa. The MI was originally conceived as a process

towards a third Carnegie inquiry. Supported by various universities together with the NRF, the MI

includes a Think Tank of around 40 eminent South Africans and nine1 Research Chairs of the South

African Research Chairs Initiative (SARChI) of the Department of Science and Technology (DST) and

the NRF. With funding from the NRF’s CoP programme, these DST-NRF Research Chairs, whose work

focuses on poverty and inequality, have led eight research projects as part of the MI’s research

programme. The projects were designed to contribute to key national debates on critically

important aspects of poverty and inequality and focus on the themes of education, health policy,

labour markets, gender and family relations, urban planning and development, land reform, rural job

creation, and inequality broadly.

In May 2017, a CoP workshop brought together the DST-NRF Research Chairs and researchers for

each research topic, as well as policy-makers, practitioners and other researchers. The workshop

shared research outcomes, supported development of collegiality and understanding within and

across themes, and held a quality of space where new ideas could be generated.

This report presents:

• a summary of workshop reflections on the importance and relevance of CoPs, and on learnings

and collaboration experiences from the Mandela Initiative as a CoP;

• (very abridged) findings of the NRF-sponsored research projects led by the DST-NRF Research

Chairs, as presented by them at the workshop;

• a synthesis of cross-cutting themes which emerged during the interactive sessions of workshop;

• and workshop participants’ collective suggestions of key issues to prioritise in strategies to

overcome poverty and inequality in South Africa as an outcome of the workshop deliberations.

1 One of the Research Chairs, Prof Dorit Posel, was the DST-NRF Research Chair in Economic Development at the University of KwaZulu-Natal when the research grant was awarded, but has since moved to the University of the Witwatersrand, where she now holds the Helen Suzman Chair in Political Economy.

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The report also includes a short version of a paper on “Elements of an Economic Strategy”, as

proposed by the (now former) Deputy Director-General and head of the Government Technical

Advisory Centre, National Treasury, Andrew Donaldson.

The importance and relevance of Communities of Practice2

The Mandela Initiative CoP emerged with the coming together of researchers with a common

interest in poverty and inequality to work together, discuss and reinforce one another’s work, and

share findings. Preliminary findings so far have convinced the DST and NRF that this was a winning

formula, and there are now plans to establish at least another 10 thematically-steered CoPs in the

country. These would constitute important pathways for human capital development by bringing

together next generation researchers, emerging researchers and established researchers.

Such CoPs, however, need to move beyond research to establish how research findings translate

into policy-making; thus, effecting change through evidence is as important as the research itself.

This concept resonates with the NRF’s 2020 strategic vision that research must result in societal

benefit and impact, and which requires that research is translated for policy relevance. It is therefore

important that evidence is produced not just for academic publication, but that such work addresses

key issues of relevance to the national development agenda.

A CoP can operate in three spheres: 1. the sphere of control where researchers can determine the

focus of their research; 2. the sphere of influence where the evidence is translated for government;

and 3. the sphere of creating interest in the CoP itself. Working across these spheres for change is

underpinned by the cornerstone of excellence, which is a mandate of the NRF.

The DST has a science engagement strategy which defines such action as “an interaction in the form

of a dialogue and mutual learning between the public and the scientific community to advance both

enhanced public participation in and understanding of complex decision-making on matters related

to science and technology, and the responsiveness of science to its context”. The NRF is an

important partner in this strategy, and CoPs assist in deepening the impact of the strategy.

The DST and NRF need to be acknowledged for their collaboration with the Research Chairs in

driving the value of science, providing guidance and influencing policy; likewise, there is appreciation

of government’s openness to research evidence to guide its policies. Creating enough relevant

2 This section is a summary of contributions to the programme by Dr Dorsamy (Gansen) Pillay, Deputy CEO: Research and Innovation Support and Advancement, NRF; Prof Josè Frantz, Deputy Vice Chancellor Research: University of the Western Cape; and Dr Thomas Auf der Heyde, Deputy Director-General: Research Development and Support, DST.

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research for the country’s development needs is critical, however, to ensure that research remains

valued within the public policy space. At the same time, the lack of political will to follow through on

policies that are informed by empirical evidence can create a dichotomous relationship between

science and society.

As science was viewed at the macro level of a social institution, it is important to be mindful that

many social institutions have of late become sites of extreme political contestation. In this context,

the case for science in society must keep in mind a double-edged sword: the need to maintain the

integrity of research by ensuring that scientific institutions do not become subject to the

antagonisms that arise in institutional environments, while at the same time ensuring that science

remains meaningful in its social context. This dichotomy needs to be managed.

Collaboration experiences of the Mandela Initiative as a CoP

Knowledge and action are inherently collaborative and, while the coming together of the DST-NRF

Research Chairs constituted a CoP on strategies to overcome poverty and inequality in South Africa,

the Research Chairs and their respective researchers themselves often in fact functioned as small

CoPs, which at times interacted and engaged with policy-making processes, and sometimes actively

participated in these. This session aimed to foreground their experiences in this regard, and the

summary below presents shared reflection by themes that emerged.

Ideologies, relationships and access to policy-makers:

• In the land reform arena, it has been hard to access government officials because of the

critical nature of academics’ and civil society’s contributions to debates.

• Debates about land and radical economic transformation have been a contentious political

issue that has led to adversarial relationships and highly fractured CoPs. What is needed is a

united CoP which can collaborate on this complex problem.

• Within the ruling party, strong connections between the idea of land justice and rural and

agricultural development led to a political reluctance to engage with the realities of

urbanisation. The National Planning Commission, as the instigator of a high-level panel to

review land issues, played a key role in shifting national government’s policy position

towards an urbanisation policy.

• The South African Cities Network assisted the urbanisation policy process by, over two years,

engaging with residents in communities, and by gradually shifting officials’ mindsets, buy-in

and approaches to more in-depth and effective methodologies, and eventually

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institutionalising those methodologies. This part of the process was critical to effect policy

change.

• Successful policy influence can also depend on how particular policy-makers perceive

evidence and the research process – more success is likely when policy-makers see the value

of research to inform policy rather than as a threat.

• It is important to acknowledge the limits what a CoP can do when the issue that they engage

with becomes a political football, for example the minimum wage advisory panel’s report,

which was very contentious and was used by different political alliances against others.

• Before a CoP is established across diverse sectors, complexities in relation to power

dynamics, the availability of resources and so forth need to be discussed, in an effort to

enhance collaboration.

Political opportunities, and CoP collaboration:

• When a High-level Panel was convened in 2016 by the speaker of Parliament to review all

legislation since 1994 in relation to social cohesion, poverty and inequality, and land, a

powerful CoP emerged through the participation of people of different walks of life who

have collaborated in putting forward proposed legislation and other solutions to the panel.

• The CityLab model, a collaboration between UCT’s African Centre for Cities and the Cape

Metropole government, has assisted shifting public servants’ mindsets, capabilities and

framing of urbanisation issues. It has also prevented rushed urbanisation policy-making and,

by sharing researchers’ assumptions, understandings and questions, has changed practice in

the private sector.

• Similarly, the involvement of the South African Cities Network, which consists of the

country’s eight metropolitan governments, in urban policy processes has helped to shift

officials’ mindsets.

• One of the contributions of researchers is to change the conceptualisation of problems,

which are often constrained by deeply-embedded paradigms – something which policy-

makers are often not even aware of. For example, in relation to land reform policies, getting

the understanding across that smallholder farmers and commercial farmers are completely

different is a challenge, as is developing a better understanding of the workings of the

informal economy.

• Institutional constraints need to be kept in mind, for example the time that is required to

undertake research, while government officials work within shorter policy-making

timeframes.

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Changes in governance and political leadership:

• While a draft urban development policy was agreed on, and adopted by Cabinet in early

2014, it has been difficult for this to gain traction since then as the national elections in that

year meant changes in government leadership.

• Wits University researchers engaged with the City of Johannesburg’s Corridors of Freedom

project, but since the 2016 local government elections, the political will and support that

were received from the City began to shift. This has required the challenging task of

adapting to a completely different political agenda without compromising integrity.

• A change in governance can cause loss of interest in a particular body or its research, but

research evidence does not disappear completely.

• For example, the appointment of a new Director-General for the Department of Education

had a negative effect on researchers’ efforts to influence policy. In this case, there is a need

to wait it out until the next right moment for policy influence to appear.

Communication:

• The government, or a private communication company used by the government, has taken

over the process of communicating the urban development policy process, while the

communities, universities and civil society organisations who originally worked on the policy

are no longer engaged. This is problematic as the quality of the current communication is

not good. Communication and popularisation are often problematic and are an issue that

should be addressed by a CoP.

• The problem is not the absence of sufficient evidence and ideas for policy change, but rather

the absorption and translation of these into government policy.

• In communicating evidence as a research-led CoP, the question is whether the aim is to

influence policy directly, or rather to just provide policy guidance.

• On the flip side, a key challenge for policy-makers is the level at which the knowledge is

being harvested and knowing what kind of policy guidance to derive from such knowledge.

What would assist this need is to involve policy-makers early on, from the research inception

stage, to enable their buy-in to the process.

• At the same time, it is important to understand that policy-makers do not wait for research

to provide solutions. Thus, the policy-making process is not linear, and government decision-

makers might already have been on a particular policy path for a while by the time relevant

research is released.

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Findings of the DST-NRF Research Chairs' research projects for the MI

The studies within the Mandela Initiative research themes were (in alphabetical order, by Research

Chair surname):

• Prof Haroon Bhorat (DST-NRF Research Chair in Economic Growth, Poverty and Inequality:

Exploring Interactions for South Africa; Development Policy Research Unit, University of Cape

Town): Labour regulation in South Africa – strike activity and minimum wages

• Prof Ben Cousins (DST-NRF Research Chair in Poverty, Land and Agrarian Studies; the Institute

for Poverty, Land and Agrarian Studies, University of the Western Cape): Job creation in

agriculture, forestry and fisheries

• Prof Phillip Harrison3 (DST-NRF Research Chair in Spatial Analysis and City Planning; School of

Architecture and Planning, University of the Witwatersrand) and Prof Edgar Pieterse (DST-NRF

Research Chair in Urban Policy; African Centre for Cities, University of Cape Town):

Informalisation, urban poverty and inequality

• Prof Murray Leibbrandt (Southern Africa Labour Development and Research Unit, University of

Cape Town): Overcoming inequality in South Africa: Thinking “outside” of the box

• Prof Diane McIntyre (DST-NRF Research Chair in Health and Wealth in South Africa; Division of

Health Economics, University of Cape Town): Assessing the redistributive potential of the health

system in South Africa

• Prof Lungisile Ntsebeza (DST-NRF Research Chair in Land Reform and Democracy in South Africa;

African Studies, University of Cape Town): Land and the war on poverty, inequality and food

insecurity

• Prof Dorrit Posel (Helen Suzman Chair in Political Economy,4 School of Economic and Business

Sciences; University of the Witwatersrand): Motherhood, family and well-being in South Africa

• Prof Servaas van der Berg (DST-NRF Research Chair in the Economics of Social Policy; Research

on the Economics of Social Policy, Stellenbosch University): Understanding unequal outcomes in

education

What follows are somewhat condensed versions of summaries written/posters that were presented

at the workshop by the respective Research Chairs, with the exception of Prof Ntsebeza, who was

unable to attend.

3 As Prof Harrison was on sabbatical, he was represented in this CoP event by Dr Margot Rubin 4 Prof Posel was the DST-NRF Research Chair in Economic Development at the University of KwaZulu-Natal when the research grant was awarded, but has since moved to the University of the Witwatersrand.

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LABOUR MARKETS: STRIKE ACTIVITY

Examining the impact of strikes on the South African economy Haroon Bhorat (Development Policy Research Unit, University of Cape Town) - About the study, and its importance:

Between 1998 – 2008, South Africa’s strike intensity was at 2.8% – similar to countries such as

Denmark, Australia and Iceland, which debunks myths that the country has an abnormal level of strike

action (Bhorat, Kanbur & Mayet, 2012). Analyses of strike length and strike depth also show that local

strike action is not much different from similar activity in other emerging economies (ibid). While this

may be the case, there is a lack of comprehensive economic evidence that has estimated the costs of

strikes on the South African economy or the relationship between strikes and the business cycle. This

project aimed to provide an overview of the historical impact of strikes on the country’s economy.

- Main findings to date:

The frequency of strikes has decreased substantially from the beginning of 2000. The Department of

Labour attributes this to the improvement of labour legislation in the early 1990s. Strikes are,

however, more intense when they do occur: In the 1990s, the number of work days lost in strikes was

between 1 and 4; in the 2000s, days lost were as high as 10 days, and even a maximum of 20 days in

the 2010 civil servants’ strikes.

Table 1 shows sectors that are prone to strikes have predominantly been mining and community

services, which include civil servants accounting for an average of a third of striking workers over the

period 1999 – 2014. Years that stand out were 2010 (civil servants’ strikes) and 2014 (mining sector,

in particular the platinum mine strikes).

Table 1: Industrial share of strikes, 1999 – 2014, selected years

1999 2005 2010 2014 Average Share of Striking Workers Agriculture 1 1.9 0 1.7 1.4 Mining 11.6 41.5 1.1 62.9 30.2 Manufacturing 9.5 13.9 2.2 21.6 15.4 Electricity 0.1 0.1 0.3 0.7 0.8 Construction 2.2 1 0 0.7 3.1 Wholesale, retail trade 0.4 11.7 2.8 1.3 4.8 Transport 11.3 13.6 3.1 1 8.1 Financial intermediation 0 0.5 0.5 0.2 0.7 Community Services 63.8 15.8 90 9.8 35.5 Total number of workers 555 435 399 291 1 191 813 118 566 371 007

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Table 2 shows the total value of production foregone as proportion of the gross value added (GVA):

looking at the economy as a whole, this proportion was as low as 0.0082% in 2008 but as high as

0.4973% in 2010. For results by industry, this proportion exceeded 1% twice – mining industry in 2014

(3.0781%) and CPS industry in 2010 (2.1230%). Analysis of real GVA growth with and without strikes

showed that there was positive real GVA growth in the mining industry in three of the 10 years under

study under study. However, had strikes not taken place, this industry would have experienced

positive real GVA growth in four years: instead of a negative growth of -1.41%, the real GVA would

have grown by 1.52% in 2010 had strikes not happened.

Table 2: Total value of production foregone due to strikes as proportion of gross value added by industry (R million, 2010 prices), selected years

2004 2007 2011 2014 Agriculture 0.01 0.00 0.02 0.00 Mining 0.24 0.11 0.74 3.08 Manufacturing 0.01 0.07 0.15 0.07 Electricity 0.00 0.00 0.00 0.03 Construction 0.00 0.01 0.01 0.01 Wholesale, retail trade 0.00 0.00 0.02 0.00 Transport 0.02 0.00 0.01 0.01 Financial intermediation 0.00 0.00 0.00 0.00 Community Services 0.06 0.64 0.15 0.01 Total 0.03 0.15 0.13 0.27

- Significance of the findings:

The findings provide insights into the source of worker protection and how workers respond to

increased or decreased protection. While labour legislation was still in its infancy in the 1990s, workers

increasingly turned to strike action as a bargaining tool. As labour legislation became far more complex

and extensive in its reach, there was a decline in the number of strikes and in the proportion of

unionised members of the work force. That said, when workers do strike today, they do so more

intensely and at greater time-cost to firms. The GVA cost to the economy was calculated as 0.4973%

at its maximum.

- The wider policy implications of the findings:

Static analysis has shown that strikes can hinder growth in South Africa. Descriptive analysis has also

shown that improvements in labour legislation coincide with a decline in strikes. From this it is inferred

that workers are less likely to strike and to turn to unions for protection if they feel protected by labour

legislation. Policy aimed at reducing the negative effect of strikes on the economy should target

worker protection. That said, certain sectors are especially prone to strikes: civil servants and mining.

Civil servants have a different wage-setting process to the private sector and therefore may feel the

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need to resort to striking more quickly. The history of the relationship between labour and the mining

sector in South Africa has been contentious and, in some instances, even bloody.

LABOUR MARKETS: LABOUR LAW VIOLATIONS

Haroon Bhorat (Development Policy Research Unit, University of Cape Town)

- About the study, and its importance:

Non-wage labour law violations (e.g. in relation to paid leave) in South Africa has received far less

attention than minimum wage violations. This study describes the extent of labour law violations using

data from the 2014 Labour Market Dynamics Survey. The methodology used was innovative as it was

adapted from the multi-dimensional poverty literature to create an index of labour law violation in

South Africa. This index offers a macro-vision of violation in South Africa and allows for the use of

regression analysis to investigate the determinants of labour law violation in the country.

- The main research findings to date:

One main finding was to quantify labour law violation in South Africa into an index format. The result

was two multi-dimensional poverty index (MPI)-style indices (one that included wage and non-wage

violations, and one that only included non-wage violations), as well as an index created by using

principle component analysis as a check and balance on the manually-constructed indices. From these

indices we were able to extract the summary statistics in Figure 1. In this figure, H is the proportion of

violated employees; A is the average intensity of violation for the violated; and, MVI is the multi-

dimensional violation index, or H multiplied by A. An important result is that whilst the headcount for

the wage and non-wage index is the highest, the intensity of violation is higher for the non-wage index.

It appears that it is more likely that minimum wages will be violated than non-wage stipulations in

general; however, when firms do violate non-wage entitlements, they do so more intensely.

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Figure 1. Violation Headcount (H); Violation Intensity (A); and the MVI (H*A) for Different Indices of Violations, 2014

Notes: adjusted using sampling weights; own calculations using LMDS 2014; Sample consists of employees of working age in sectors covered by Sectoral Determinations.

Analysing for the determinants of labour law violation indicated that local labour market conditions

are an important factor in the chance of labour law violation. In Figure 2 we plot the district council

unemployment rate against the district council violation level according to the wage and non-wage

index and the non-wage index. Both panels in figure 2 display a strongly positive relationship: A

strongly positive relationship was found between district council unemployment rates and district

council violation levels. As such, labour law violation is more common in areas with higher

unemployment rates. High unemployment likely lowers worker bargaining power, resulting in higher

levels of labour law violation. The indices have an interval of zero to one, increasing in violation.

Regression results reported that a one percentage point increase in the district council unemployment

rate was associated with an increase of 0.22 points on the wage, all else equal.

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Wage & Non-Wage Non-Wage PCA

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Figure 2. Local Unemployment Rate and Violation

Notes: own calculations using LMDS 2014; Sample consists of employees of working age in sectors covered by Sectoral Determinations.

- Significance of the findings

By measuring violation in an innovatively new way in the form of MPI-style indices of labour law

violation, different types of violation (e.g. no paid leave, no sick leave) were grouped into weighted

dimensions (e.g. leave, wages). As a result of this conceptualisation of violation, our understanding of

the relationship between violation and determinants such as firm size, and particularly local labour

market conditions, was tightened. As such, a better understanding that there is a higher probability

of non-wage violation if the minimum wage is violated by employers. These findings represent a

meaningful contribution to the literature on labour law violation, especially to the somewhat

neglected area of non-wage violations.

- The wider policy implications:

More attention should be paid to non-wage violation. Non-wage violations levels are on par with

minimum wage violation and, when they occur, are often more intensely violated than the minimum

wage. This project’s modelling of the determinants of labour law violation offers insights into where

attention should be paid most keenly. Examples are small firms and district councils with high levels

of unemployment.

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RURAL JOB CREATION: OVERALL (PRELIMINARY) FINDINGS

Ben Cousins (Institute for Poverty, Land and Agrarian Studies, University of the Western Cape)


Rural employment is a key policy issue in South Africa, and the NDP 2030 suggests that one million

jobs can be created in agricultural production, processing and related activities. A matrix depicting

“agricultural growth and employment potential” in the NDP shows that citrus, nuts, subtropical and

deciduous fruit and vegetables demonstrate potential for both high growth and labour intensity. The

plan suggests that more jobs can be created by increased investment in water and irrigation

infrastructure, linking small-scale farmers with markets, creating tenure security for farmers in

communal areas, innovative financing and joint ventures.

The objective was to estimate the potential for creating employment in selected agricultural

commodities (citrus, deciduous fruit and smallholder fresh produce), as well as in fisheries and

forestry. The potential impact of rural job creation on broader patterns of poverty and inequality in

South Africa was also explored.

- The overall research findings to date:

Existing structure of the rural economy

The rural economy remains divided and ‘dualist’ in character, with relatively few large farming,

forestry and fishing enterprises and companies dominating most sub-sectors. Some vertical

integration exists in some sub-sectors (e.g. poultry). Exports are important in sub-sectors such as

fruit and wine. Processes of concentration have resulted in a minority of farm producers being

responsible for the bulk of produce and exports. Barriers to entry are high, formed by the costs of

land and capital, as well as demanding standards in formal value chains in relation to the quantity

and quality of products.

However, a large number of small-scale primary producers (farmers, timber growers and fishers)

also exist, often producing for their own use or for informal markets. Larger-scale producers and

companies are mostly white-owned; smaller-scale are mostly black. There are relatively few

successful small-to-medium enterprises (the ‘missing middle’).

Employment patterns

Large-scale producers, input suppliers, processors and retailers are investing heavily in new

technologies to improve labour productivity and remain competitive. The number of workers

employed per hectare or other measures are dropping, and the overall trend is to employ smaller

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numbers of highly skilled and better-paid workers. However, employment of temporary and casual

labour remains important for some operations. Smaller-scale enterprises are more labour intensive,

albeit with lower returns, and often wages are below statutory minimums.

The informal rural economy

The size and nature of the informal rural economy are poorly understood partly due to a dearth of

reliable statistics. Case studies, however, suggest that it may be much more significant than

acknowledged. The potential for its expansion, and for further accumulation and growth, is largely

unexplored. Expanding the number of producers on smallholder irrigation schemes, who could help

supply the growing market for fresh produce, are emphasised in the NDP, but the water availability

for such expansion is unclear. This debate needs to be resolved urgently.

The general character of government policies

Government policies tend to support the large producers and companies that dominate the rural

economy, in practice if not in policy. They also tend to be biased against small-scale, labour-intensive

and black-owned enterprises in the informal sector, and budgets to support and promote such

enterprises are too small. Appropriate policies and support programmes are necessary to realise the

potential for rural job creation.

Community–public–private partnerships

Partnerships between rural communities and the private sector, often with government funding and

support, are regularly proposed to create the ‘missing middle’. These are often suggested in land

reform contexts, with production continuity seen as desirable. Here, a private sector partner

supplies both capital and expertise, and government funds help to capitalise the (conventionally

large-scale) venture. Some successes have been noted in agriculture and forestry, but problematic

cases and failure exist, with few real benefits to community members. The small number of

beneficiaries to date is problematic and suggests limited contribution to job creation. Well-designed

partnerships, however, do have a role in rural job creation.

New markets or market niches

Research indicates that there is limited but definite scope for the expansion of certain forms of

production, such as citrus and deciduous fruit and smallholder fresh produce, as well as for new

forms of processing (e.g. dissolving wood pulp and furniture) and expanded supply to new markets,

both international and national (such as informal markets for snoek). Government support is often

necessary to realise these potentials, as is the need to negotiate appropriate trade agreements.

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Expanding the resource base

Research reveals there is limited but real potential to expand the resource base for certain kinds of

rural enterprises. This includes 100 000 – 160 000 ha of forestry land in communal areas and

elsewhere, new smallholder irrigation schemes (perhaps on 200 000 ha), and the redistribution of

under-utilised grazing land on commercial farms to small-scale livestock producers through land

reform.

Can 1 million new jobs be created in agriculture, as the NDP projects?

Initial estimates of job creation potential from this project are as follows: citrus: 24 000 – 58 000

new jobs; smallholder irrigation in the Eastern Cape: 16 000 new jobs; forestry: 43 500 new jobs plus

some from new industrial products. In fisheries the potential is difficult to estimate.

If all of agriculture is considered, including market-oriented smallholders and land reform

beneficiaries, as well as related off-farm jobs, the NDP’s projection appears to be achievable.

Forestry and perhaps fisheries can make modest additional contributions. What is required,

however, is a capable state, coherent policies, effective implementation, and well-designed

partnerships with private sector actors.

FORESTRY, TIMBER, PULP AND PAPER: SELECTED FINDINGS

Jeanette Clarke (independent researcher)

- Importance of the study:

• Domestic and global markets for sustainably produced timber are rapidly growing and a

supply shortage is forecasted. In South Africa, forestry (together with downstream timber,

pulp and paper industry) is a mature and well-developed sector of the economy.

• The timber industry, especially sawmilling and activities further down the value chain, is one

of the most labour-intensive in the economy.

• The sector contributes 1% to GPD and 6% to manufacturing GDP. Exports amount to 70% of

sector revenue (total value: R2.2 bn); 99% of exported products are value added.

• The industry provides an estimated 236 500 formal sector jobs, many in economically

depressed rural areas.

• Growth in forestry and forestry value chain industries is constrained mainly by water

availability that limits the total extent of timber plantations, thus limiting timber supply to

value chains.

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- Main findings and their significance:

There are a number of key opportunities for growth and employment creation in forestry and

downstream industries but a range of constraints hinder the realisation of these opportunities:

A. Commercial forestry as catalyst for rural revitalisation in communal areas

There is considerable potential for commercial timber production in communal areas, particularly in Eastern Cape & KwaZulu-Natal. Timber plantations can provide jobs, and a source of revenue to capitalise a wide range of community-based businesses.

Opportunities Constraints Potential new jobs

Eastern Cape community-based afforestation

60-100 000 hectares of land suitable for new afforestation

Successful community businesses that provide leadership

Experienced support partners

Well-developed market and marketing agents

Finance for (costly) project development & plantation establishment

Distance to markets, poor transport infrastructure

Weak tenure rights and poor governance

28 000

Small growers in KZN

In excess of 10 000 existing growers

40-60 000 hectares suitable for new afforestation

Support partners with good track record


Finance for recapitalisation and new afforestation

Access to technical and advisory services

Illegality may bar access to markets in future

15 500

DAFF plantation recap & transfer

65 587 hectares of plantations in areas with high forestry potential

Support partners with good track record


Severely degraded resource

Finance for recapitalization

Lack of capacity and commitment to plantation transfer (DAFF)

Already overstaffed. Job opportunities in new processing

B. Further industrialisation of forestry value chains

Forestry, pulp, paper and furniture is identified as a lead sector in the National Industrial Policy Framework because of its growth and employment creation potential, much of it in rural areas, and potential for economic and industrial decentralisation.

Opportunities Constraints Potential Jobs

Biofuels Rapidly expanding market internationally

High volumes waste in plantation and sawmills

Lack of Government commitment to renewable energy

No available estimates

18

Rapid development of bioenergy technology

Dissolving pulp industry

Sappi is the leading producer in the world of dissolving wood pulp (DWP)

Rapid DWP product development globally

Good market - green alternative to non-renewables

Key Action Programme in the IPAP – PPP for industry development

IPAP action plan still to be implemented


Furniture and housing

Labour intensive sectors

Niche and preferential government procurement market opportunities, eg furnishing for schools and low cost housing

Timber from clearing invasive trees

Competition from cheap imports and dominant domestic players

Access to timber

Lack of State support for training and capitalisation


- Wider policy implications of findings:

• Instruments for state investment in community-based commercial forestry ventures are

required to unlock the potential that exists for job creation and rural economic

revitalisation.

• Renewed state commitment to transfer DAFF plantations in communal areas, along with the

necessary recapitalisation and project development finance, are required.

• State-led programmes must assist communal area growers to obtain water use licences and

comply with other legal requirements.

• Tenure and governance reform in communal areas is required to prevent elite capture and

corruption.

• Monitoring and support for implementation of the IPAP Key Action Programme in forestry

and forest-based industries is necessary.

19

CITRUS FARMING: SELECTED FINDINGS

Amelia Genis (independent researcher)


The citrus sub-sector is believed to be one of the largest employers in agriculture and is a sub-sector

with the greatest potential for job creation, given its potential for expansion. For the past decade,

the sub-sector has also increased export volumes from 72 000 boxes in 2007 to 118 000 boxes in

2015. The number of people employed in the sub-sector is estimated at between 85 200 and 125

000 workers.

- Main research findings:

• Citrus farms operate on a large scale and focus on export markets.

• Farmers are optimistic about the future of the sub-sector and its ability to create more jobs.

But this requires the further development of export markets, while changing policies and

legislation cause uncertainty and hamper employment creation and competitiveness.

• As farms are larger and require more intensive management, and because of the high-

quality standards of buyers, workers’ skills profiles have changed towards a higher

proportion of workers in managerial and supervisory positions, and towards the more

technically skilled.

• Farmers consider labour productivity to be key to profitability, and would be willing to pay

higher wages if these could be linked to higher levels of productivity.

• Other key factors affecting employment are the profitability of the business, labour

legislation, the level of the minimum wage and ESTA (Extension of Security of Tenure Act).

• Farmers would mechanise more if a higher national minimum wage ‘forced’ them to. Cut-off

point between human workers and machines depends on the exchange rate.

• A big divide exists between permanent and seasonal workers in terms of status, job security,

training and remuneration.

• Farm workers are not well organised, with only three Limpopo farmers recording unions on

some farms. Unions exert pressure for higher wages, but do not have impact on wage levels.

All farms have workers’ committees, farm committees and/or employment equity (EE)

committees that meet regularly and keep minutes of meetings. Only one farmer in Limpopo

reported a strike during the past five years

• Wages have risen annually since the introduction of a minimum wage for agriculture in

2003. In 2013, when the minimum wage was increased by 50%, some farmers reduced

working hours from 9 hours to 8 hours per day

20

• Farmers employ many different methods to ensure that citrus trees are yielding more, e.g.

monitoring productivity, effective soil preparation and planting productive rootstocks

• All these efforts appear to have improved the efficiency of production and increased the

productivity of labour, as indicated by the measure: ‘hectares per worker’

• Mechanisation is expensive and machines need to be maintained, while labour is still

relatively cheap, and human workers are more flexible than machines.

• production. Even though farm operations are not mechanised and automated to their full

capacity, farmers are aware of the promise and cost of every machine able to undertake key

tasks

- Significance of findings:

• Expansion of citrus production is key to creating more jobs, but there are real constraints,

e.g capital, water, regulation and markets.

• Increased citrus production can generate jobs upstream and downstream of farms.

• Farmers are actively trying to employ fewer workers, expressed in hectares per worker.

- Wider policy implications of findings:

• There is real potential to create more citrus jobs, but not to the extent of "1 ha: 1 job" as

proposed by the NDP and the Citrus Growers Association, and could be constrained by

access to water, finance and markets and the ability to include new black entrants in an

equitable and sustainable manner.

• Government departments require strengthened capacity to negotiate reduction or removal

of technical trade barriers, and to conclude beneficial trade agreements with receiving

countries.

• Smaller-scale citrus enterprises exist alongside the very large enterprises. The former could

be an appropriate model for new farmers, and needs investigation.

• In many cases, citrus production is expanded by replacing relatively labour-intensive sub-

sectors such as wine grapes and potatoes, and this may lead to a zero-sum situation.

• Efforts to create more jobs by expanding export citrus production are capital-, water- and

time-intensive, compared to, say, vegetables, extensive or intensive livestock production.

Choices must be made where funds are limited.

21

FISHERIES: SELECTED FINDINGS

Moenieba Isaacs (Institute for Poverty, Land and Agrarian Studies, University of the Western Cape)


The South African fishing sector experiences tensions between fishing rights allocations, which in the

established industry could risk job losses; fish stocks are under pressure, which is a global

phenomenon; and there is a need to recognise (customary) fishing practices as a human right.

Assessment of social and economic indicators based on the Thomson scale indicate: a dependency

of small-scale fisheries on large-scale fisheries with regard to infrastructure (catching, processing

and marketing); vertical and horizontal consolidation of the large-scale sector is a constraint on the

small-scale sector; and small-scale fisheries are viewed as a ‘safe haven’ for the poor to buy and sell

some fish.

- Main research findings and policy implications:

• Fisheries policies are not pro-poor in character.

• Inconsistencies in policy constrain job creation.

• Small-scale fisheries are recognised, but no rights have been allocated as yet.

• Aquaculture, emphasised in the NDP, is not a magic bullet to create jobs, while much

evidence indicates that small-scale fisheries are more sustainable and provide livelihoods

and jobs to many more people than large-scale fisheries.

URBAN PLANNING AND DEVELOPMENT: INFORMALISATION, URBAN POVERTY AND INEQUALITY

Margot Rubin (School of Architecture and Planning, University of the Witwatersrand) on behalf of

Phillip Harrison, on the study ‘The daily practices of informality: Johannesburg’s “hidden spaces”’.

- About the project:

The project explores the spatial underpinnings of poverty and inequality in South Africa by focusing

on different dimensions of informalisation in townships and inner-city areas in metropolitan cities. It

also focuses on the intersections and relationships between informalisation and the predominantly

formal processes in the economy and of governance. It aims to build an understanding of processes

that are often hidden from the purview of officialdom in a way that would support more responsive

policies. The following discussion focuses on the work that was completed in five “hidden spaces” in

the Johannesburg inner city.

22

- About the importance of the project:

• The project takes seriously the theoretical challenges of Southern Urbanism and Southern

Theory, building theory from empirical and situated knowledge about cities and the co-

production of these spaces from below. This is a relatively new field and is extremely

important in terms of destabilising colonial epistemologies and ensuring intellectual

transformation.

• The project offers new empirical and grounded insights about the daily lives, practices and

experiences of poorer urban dwellers as a whole – understanding where different practices

of informality intersect. Like much of the existing literature it also begins to question the

construction of informality and the practices by the state which maintain such conditions as

well as the range of inter-linkages and definitional blurriness that occur when discussing

formality and informality.

• This work demonstrates some of the “gaps” and unintended consequences of existing policy

and its inability to support very poor people living in situations of intense vulnerability and

precarity. The findings suggest proactive ways in which urban policy can be rethought to

support rather than repress the life strategies of poorer people.

- Main research findings to date:

• Formal spaces are changed, reterritorialised and reinvented due to the changing needs and

demographics of a specific area. When buildings, land, rooms, basements meet the

functional end, they are repurposed by those living and interacting with these spaces to

make them useable.

• The consequence is a changed landscape where houses, buildings and plots are sub-divided

and partitioned either temporarily or permanently, or structures are partially or completely

demolished to make the spaces useable again.

• Activities of overlapping informality by the poor are not political acts but are actions that

seek to find ways of belonging and engaging with spaces. The reasons that poorer people

live entire lives within informal spaces are due to the state’s unwillingness to acknowledge

the importance and contribution of these activities in the co-production of the city.

• The encroachments of the poor “are not at the cost of fellow poor or themselves, but of the

state, the rich and the powerful” (Bayat).

• As a consequence of a negative relationship and history with the state, households and

individuals living and working in situations of informality choose to move between being

visible and invisible to government departments.

23

• State infrastructure, often illegally accessed, is an important dimension of how households

improve their lives.


The research shows the overlapping and interlocking daily practices of informality from finding,

accessing and holding land and shelter to accessing transport and work. Such findings surface the

intense and ongoing activities of the informal sector and its ability to produce and reshape the city

“from below”. Conceptually, it also indicates the highly porous nature of the formal and informal

divide and questions the usefulness of the idea of “informality” and the state’s role in continuing to

label activities as informal.

- Wider policy implications:

Informality is a response to a larger set of structural issues, and insufficiencies and incapacities that

exist within the formal sector. Consequently, households, individuals and communities find ways to

include themselves within the urban fabric, finding and making homes, and jobs. These activities are

largely repressed through legislative and other regimes such as by-laws, urban policies of

formalisation and regularisation, and de jure do not recognise the important efforts, skills and

capacities of these households and their work. As a consequence, when the state makes itself felt in

informal settlements or sites that have been informalised and re-territorialised, these life strategies

and efforts are undermined, repressed, and the poor are excluded. Policy needs to work from what

already exists and supports the activities and tactics of those on the ground, thus considering

incremental approaches of upgrading and support rather than by-law enforcement and repression.

HEALTH POLICY: THE REDISTRIBUTIVE POTENTIAL OF THE HEALTH SYSTEM IN SOUTH AFRICA

Diane McIntyre (Health Economics Unit, University of Cape Town)


The proposed introduction of a National Health Insurance (NHI) system in South Africa is in line with

global efforts to move towards Universal Health Coverage, which means: providing financial

protection from the costs of using health services for all people; enabling them to obtain the health

services that they need; and that services are of sufficient quality to be effective. Although termed a

National Health Insurance, the intention is that it will be tax funded. From a poverty and inequality

perspective, this research is important because the health system can contribute to redistribution,

both in terms of who pays how much for funding health services, and who uses and benefits from

24

health services. The research assesses changes in income redistribution associated with financing

health services over time; and inequality in unmet health-care needs.

- The main research findings to date:

• When exploring changes in health-care financing between 2005/06 and 2010/11, it was found

that:

There has not been a statistically significant change in income redistribution from overall

health-care financing since 2005/06.

However, indirect taxes have become more regressive over time and funding of health

services through the indirect tax component of general tax revenue has contributed

significantly to widening income inequality since 2005/06.

Medical scheme membership has become even more concentrated among richer groups,

which means that scheme contributions are ‘progressive’ (i.e. the burden of financing

medical schemes is borne by the rich).

• With regard to inequalities in health-care financing between and within different groups in

2010/11, it was found that:

Increases or decreases in income distribution inequalities caused by each health-care

payment mechanism within race and gender groups and within urban and rural areas is the

dominant effect compared to changes in distribution between groups or areas.

Consistently, out-of-pocket payments and indirect taxes have a negative redistribution effect

(i.e. increase inequalities) while the direct taxes, medical scheme contributions and overall

health financing have a positive redistribution effect (i.e. reduces inequalities).

However, the positive redistribution effect of overall health financing is not statistically

significant.

• The analysis of inequality in unmet need is yet to be completed; however, previous research

suggests that unmet need is concentrated amongst the poorest.

- Wider policy implications:

• Even though overall health care financing has a small positive redistributive impact at present,

the full redistributive potential of the health system is not yet being realised.

• The key implications for the current NHI debates, are:

Increases in indirect taxes such as VAT should be avoided as a means to fund the NHI;

instead the emphasis should be placed on direct taxes if the NHI is to contribute not only to

promoting equitable access to health care but also to income redistribution.

25

The future role of medical schemes requires careful consideration. Although scheme

contributions have positive redistributive impacts from a financing perspective, only scheme

members (16% of the population) benefit from these resources, contributing to large

inequalities in benefits from using health services.

GENDER AND FAMILY RELATIONS: FAMILIES AND INEQUALITY

Dorrit Posel (School of Economic and Business Sciences, University of the Witwatersrand)


There are many family types in South Africa, with large differences in rates of union formation, and

household living arrangements by gender and race. Marriage rates are far lower among Africans;

rates of non-marital childbirth are higher; and African children are much more likely than other

children to live in households without their father, or with neither parent. In the absence of

marriage or the cohabitation of parents, children typically live with their mother. Consequently,

African women tend to live in larger households which include more children than African men. In

this context, the objective of this project is to better understand the nature and implications of

family formation and functioning in South Africa to show how family dynamics can perpetuate or

reproduce poverty and inequality. Four parts of the project have been undertaken, all of which

analysed national micro-data collected in the National Income Dynamics Study or the 2010 Time Use

Survey.

- The main research findings to date, and their significance:

1. The gender division of labour in the care of children:

• The very large majority of children receive primary physical care (fed, bathed, taken to school,

helped with homework, taken care of when ill, etc.) from women.

• When children live with their mother, the mother is almost always the primary physical

caregiver.

• African children are far less likely than other children to live with their mother, and are therefore

more likely to receive primary care from other women – mostly from their grandmother.

• The responsibility for the financial support of children, at least in terms of schooling expenses, is

not borne disproportionately by men. Among African children, mothers are three times more

likely than fathers to provide financial support for a child’s schooling.

• When children do not live with a parent, then that parent is far more likely to not be part of the

household than to be a non-resident household member (as in the case of a labour migrant). The

26

majority of parents who are non-resident household members see their children and contribute

financially towards their upkeep. Absent parents’ contribution is, however, far lower. Among

African children, absent mothers are significantly more likely than absent fathers to see their

children regularly and to provide financial support.

• Rather than a gender division of labour in the provision of care particularly to African children,

both the primary physical care and the financial support of children are most often provided by

women.


Women’s responsibility for the care of children has significant implications for the economic

wellbeing of women and the children they support – for women continue to earn considerably less

than men, and this is at least partly because women’s child-care responsibilities limit the nature and

extent of their labour force participation.

1. The gender division of labour among the elderly:

• There is clear evidence of a gender division of labour even among adults who have reached

retirement age: elderly women spend far more time on housework, while elderly men spend

more time on production work.

• There is no evidence in the time diaries of elderly women that dedicated child-care activities

(playing with, reading to, or bathing children, helping with homework, etc.) form an important

part of their day. However, elderly women who live with children are significantly more likely

than other women to spend much of their day on housework (cooking, cleaning, washing, etc.).


Grandmothers are the primary physical carers of many African children who do not live with their

mother, yet the amount of time that elderly women devote to dedicated child-care activities is very

small. This suggests that the kind of child-care that elderly women provide may be associated more

with activities related to housework than with specific child-care activities.

2. The time allocations of children:

• Racial variation in the time allocations of children (10 – 17 years) mirrors well-documented

findings of racially differentiated schooling outcomes: African children spend significantly less

time on learning activities than other children, particularly outside school hours.

• African children spend significantly more time than other children on household and production

work and on school-related travel.

27

• However, African children do not spend less time on leisure than other children. The share of

African children who engaged in leisure activities after school and over weekends also far

exceeded the share who spent time on learning or work-related activities.

• Most children who completed the time diaries evaluated their use of day time as comfortable.

However, African children were more likely than other children to view their day as insufficiently

active.


We cannot establish causal inference from the analysis of children’s time allocations. But the overall

findings suggest that time constraints may not be the reason (or the only reason) for the lower time

allocations of African children to learning, particularly outside school hours, and that inputs from

home and school are also important. African children, who live in poorer households and who are less

likely to live with both parents, are also likely to face a less conducive environment for learning outside

school, to attend schools of lower quality, and to receive less input from teachers and caregivers.

3. Measuring inequality:

• Inequality is typically measured by converting total household income into per capita household

income. This may underestimate resources in larger households which include more children,

because per capita measures are not sensitive to economies of scale in household consumption

or to the lower consumption requirements of children.

• The application of equivalence scales significantly lowers measures of inequality: using relatively

conservative equivalence scales, the Gini coefficient would fall by more than three percentage

points. This is because scale adjustments increase the income of larger households and

households with more children by relatively more than other households; and larger households

with more children are also far more likely to low-income households.


Because Africans and women live in significantly larger households with more children than non-

Africans and men, the application of equivalence scales also has implications for measures of race

and gender inequality specifically.

- The wider policy implications:

The findings highlight the importance of measures designed to increase the contributions of fathers

to the care of their children (such as maintenance laws); measures to make it easier for women to

combine child-care responsibilities with labour-force participation (such as the provision of crèches

28

and affordable family accommodation for migrant mothers); and measures that encourage or

facilitate the acquisition of human capital particularly in the home environment.

EDUCATION: IMPROVING EDUCATION FOR THE POOR

Servaas van der Berg (Research on the Economics of Social Policy, Stellenbosch University)


The SARChI chair on the Economics of Social Policy, Servaas van der Berg, and his Resep team (Resep

stands for Research on the Economics of Social Policy) have been researching issues in the economics

of education. This included analysis of a large number of education data sets, including international

education evaluations that South Africa has participated in, such as TIMSS (testing Grade 10 learners

in Mathematics and Science), PIRLS (testing Grade 4 and 5 learners in Reading Literacy) and SACMEQ

(testing grade 6 children in Reading and Mathematics). In addition, the team also looked at how

education outcomes feed into outcomes in the labour market, thereby influencing poverty and

income distribution.

The funding received through the Mandela Initiative supplemented that obtained through the SARChI

NRF chair itself, as well as funding from the Programme to Support Pro-Poor Policy Development

(PSPPD), a collaboration effort between the Presidency and the European Union, and also from the

Zenex Foundation. These joint inputs made possible a large number of outputs, including three

published research reports (available at Resep):

• “Identifying Binding Constraints in Education”

• “A Society Divided – How Unequal Education Quality Limits Social Mobility in South Africa”

• “Laying Firm Foundations – Getting Reading Right”

- Main findings to date:

After synthesising years’ worth of collaborative research effort from contributors across economics,

education and policy-making arenas, the unanimous conclusion is reached that quality

improvements in basic education, particularly learning to read in the foundation phase, are a national

priority.

Earlier work by this team has identified low quality education as the main poverty trap holding back

upward mobility of children from poor families. Despite significant improvements and pro-poor

spending shifts in education in post-apartheid South Africa, too many young children in the country

are still failing to master the basics of learning. PrePIRLS 2011, a nationally representative literacy

29

test of Grade 4 students in predominantly home language, indicates that 58% of these children have

not yet learnt to read for meaning in any language, and that 29% of Grade 4s are reading illiterate.

Not being able to read becomes a binding constraint for children as they progress further into the

schooling system. Students who have failed to learn to read cannot subsequently read to learn. For

all subjects, the curriculum assumes that children have learned how to read by the end of Grade 3.

But, as most children in South Africa do not acquire the most basic reading skills, they never fully

accessing the curriculum despite being promoted to higher grades. For this reason, the reports

recommend that the Department of Basic Education should adopt a unifying goal: “Every child in

South Africa must learn to read for meaning by the end of Grade 3”.

A fundamental concern is that learning in schools is highly unequal with respect to the socio-

economic status of children and their race group. For instance, it was found that there is achievement

gap of almost three years between Grade 3 learners in the wealthiest quintile 5 schools and those in

other schools. The gap widens to 3.5 years by Grade 9, with a projected gap of four years by Grade

12 (Spaull & Kotze, 2015). These learning backlogs essentially preclude many poor children from

meaningful subsequent learning, including achieving a bachelor’s pass in matric – necessary for

university acceptance and an important signal in the labour market (Van der Berg, 2015).

Weak teacher content and pedagogical knowledge, particularly in poorer schools, are possibly the

dominant constraints for system improvement. Only 32% of Grade 6 teachers in South Africa have a

desirable teacher content knowledge level. In Kenya this figure was 90%, 76% in Zimbabwe and 55%

in Swaziland (Hungi et al., 2011, p. 52).


These stark realities present significant consequences for social mobility, success in the labour market,

inequalities and economic growth. Differences in education quality are at the root of South Africa’s

high levels of income inequality. This is explained in Van der Berg’s depiction of the dualistic natures

of both the school system and the labour market and how they are linked together (figure below).

Important new evidence also finds that learners who attend poor quality schools in South Africa

generally earn substantially less than those who attend good quality schools, even when they have

the same education levels (Burger & Teal, 2016).

30

- The wider policy implications

What is clear is that, until we raise the quality of education service delivery to the poor, intervening

as early as possible, South Africa will not circumvent wider income inequalities. In this research, this

policy challenge is approached through the following lens: certain constraints to improvement must

be tackled first as they preclude progress in other areas. It is not possible for governments to tackle

all things well. Prioritisation is necessary. Four binding constraints to improved educational

outcomes that must be addressed are identified:

1. Weak institutional functionality reflected in provincial department weaknesses in fulfilling

critical administrative functions.

2. Undue union influence on administrations’ ability to act in children’s best interests.

3. Wasted learning time.

4. Weak teacher content and pedagogical knowledge, including skills to teach reading.

31

OVERCOMING INEQUALITY IN SOUTH AFRICA: THINKING “OUTSIDE OF THE BOX”

Murray Leibbrandt5 (Southern Africa Labour and Development Research Unit, University of Cape

Town)


It has been generally recognised within the deliberations of this Community of Practice (CoP) that the

key organising concept of our work is has been to make an aggregate contribution to tackling South

Africa’s inequality issues. This project is directed at consolidating international evidence on strategies

to overcome inequality for the CoP, working with the community to fashion our own framework and

to consolidating the detailed work of the CoP within this framework.

- Context:

From three centuries of colonialism and then more than a half a century of apartheid, South Africa

inherited a pernicious inequality legacy from policies that intentionally created extreme inequality in

every dimension of human wellbeing. Hence, inequality – alongside poverty – has always been a policy

priority of the post-apartheid state. Yet, it is not clear that the commitment to dealing with inequality

has translated into specific policy interventions beyond those directed at overcoming poverty. Our

post-apartheid record is clear: We have not made progress in bringing down inequality and we have

not been successful in breaking the structural legacy.

This unsystematic approach to dealing with inequality is somewhat understandable. International

policy literature about the key prongs of an anti-inequality project was sparse until very recently – in

sharp contrast to the well-developed literature on anti-poverty policies that we have leaned on in

post-apartheid policy making. Even today, the international literature has made some theoretical

progress but is still very unsettled on key policies. Our thinking and our post-apartheid policies are

very much in line with the international corpus. No obvious gaps emerge, even with regard to Brazil

and Latin America. Indeed, we seem to be doing many things right, but without the same results.

Against the context of our lack of success in reducing inequality in South Africa, and the lack of clear

guidance from the international literature, we find in the final work of Anthony Atkinson a potentially

useful framework for taking us forward.

- Findings to date: Thinking outside the box – the Atkinson framework

After a lifetime of engaging with policies to address inequality, Anthony Atkinson realised that the

international research and policy community had not really come to grips with addressing inequality.

5 This summary is based on a policy brief co-authored with Vimal Ranchhod, SALDRU, UCT.

32

It seemed to him that the focus of policy thinking was mostly on a standard set of policies that target

earned income, capital income, and disposable income:

• Earned income inequality is targeted by promoting and protecting employment, and the

promotion of minimum wages to improve earnings for those in the labour market.

• Capital income is traditionally managed with savings incentives and taxation on inheritance.

• Disposable income inequality is managed with progressive income taxation, social insurance

and means-tested transfers.

There is a huge literature on each of these prongs and the best policy options within them. They are

each important and, in South Africa, it should be possible to design good and effective versions of

each, and configurations of all three. Indeed, we already have a very good set of policies in place to

deal with earned income and disposable income. Nonetheless, in South Africa and elsewhere the

evidence suggests that this established matrix has not shifted the dial on inequality.

Atkinson labels these standard policies as being “inside the box”. By drawing on his huge experience,

he tabled a less conventional and established set of areas/policies that are not part of the standard

menu but that seem to require serious consideration to tackle contemporary inequality. These

policies are “outside of the box”, and we briefly summarise them in relation to the diagram below.

(BOURGUIGNON & ATKINSON, 2015), (Atkinson 2015)

Labour for technical change: Participation in the globalised world puts a country in an environment

of labour-replacing and skill-intensive technology. Staying linked to the international economy,

33

however, does not mean giving up on promoting employment-intensive growth. For example, public

investment and industrial policy can be used to encourage technical progress which favours labour

rather than capital, and an employment-intensive growth path. Atkinson points out that countries are

making choices, sometimes implicitly and often in favour of capital, even if they argue for neutrality

or that there is nothing that they can do in the globalised world.

Guaranteed public employment: The contemporary world is one with a skills twist that favours skilled

over unskilled labour. This has changed the nature of unemployment in many countries, including

South Africa, and policies directed at frictional unemployment seem old-worldly and misplaced.

Guaranteed public employment for all job-seekers at the minimum wage has to be up for discussion

on the South African policy menu. The state could, and arguably should, act as an employer of last

resort, analogous to being a lender of last resort in financial markets. Such policies are already carried

out in India and the United States.

Strengthening countervailing power: Internationally, behavioural models of employment have

suggested that wages paid at equilibrium are partially determined by social norms as well as by

bargaining power. Social partners who influence norms and strengthen bargaining power can be used

to counteract the one-sided power of large capital holders. This should improve equity for wages and

can be coupled with efforts to dismantle monopolistic pricing regimes. It is about institutions that

mediate economic power. In South Africa, the Competition Commission and NEDLAC would be

institutions operating in this space.

Capital sharing funds: This idea addresses the nature of contemporary unemployment, and in

particularly the burden that is placed on youth, who need to be able to transition successfully out of

basic education into adult citizenship or higher education or the labour market. Thus, the proposal is

for a state-guaranteed minimum endowment payable to youth at age 18 or 21. This could be funded

through methods like sovereign wealth funds, helping to reduce inequality arising from the returns to

capital. This guaranteed income can be seen as a floor income to launch youth into active participation

as citizens – and so is a societal intervention to damp persistent intergenerational inequality. Atkinson

suggests that revenue from inheritance tax is used to (part) fund this income.

Citizens’ income: At the bottom of the diagram, underneath the standard social protection measures,

is the suggestion that contemporary society needs to guarantee a citizen’s income or a participation

income. This is a guaranteed minimum paid out on the condition of some sort of economic

participation, past or present, which includes caring for dependants and being available to work if the

government requires. It is an unconditional transfer to all and resonates closely with South African

discussion around a Basic Income Grant.

34

- Significance of the framework and wider policy application for South Africa

There is much that is of use in this “thinking-outside-the-box” framework:

The labour market: By building some outside-of-the-box thinking into our current policy matrix, two

important examples need to be flagged:

• Piloting employment guarantee schemes acknowledge that, given the disastrous

consequences of youth unemployment, we cannot allow our labour market to fail. We need

to innovate beyond public works programmes. Our policy experience with variants of public

works programmes can be placed alongside our piloting of guaranteed employment

programmes to craft substantive, impactful sets of interventions. One option from

international experience in which there has only been preliminary thinking in South Africa is

a national youth service programme.

• Our formal sector inherited and remains characterised by ossified and uncompetitive value

chains in spite of active competition policy This situation is a key blockage for new entrants,

inclusivity and innovation. It requires promoting an inclusive labour market which includes an

integrated approach to formal–informal sector interactions as the informal sector is part of

the value chain and needs to be conceptualised as such.

A balanced menu of policies: The country is busy putting in place a balanced menu of policies that

seek to cheapen labour to employers through wage subsidies whilst putting a floor on the wages for

workers through a national minimum wage. Our policy review endorses these policies and this

balance. Other prongs of labour market entry, such as internship policies, need to be harmonised within

this approach to ensure clarity and coherence.

Structural issues: Some harder structural issues of inequality in South Africa revolve around access to

land, housing and infrastructure such as public transport. The distribution of these private assets and

access to public goods like transport still perpetuate inequality, severely constrain people’s livelihoods

and, as a result, distort our potential and limit the effectiveness of other policies. Policy discussions

need to acknowledge these normative dimensions and the need to tackle redistribution by focusing,

at a minimum, on interventions to increase access to land, housing and transport of adequate quantity

and quality to collectively break the persistence of inequality.

Complementarity: There is no doubt that a virtuous dynamic to turn the tide on inequality requires a

complementary mix of inside-the-box and outside-the-box interventions. In recognising this, the notion

of ‘binding policy constraints’, such as the well-documented failures of education and some health

policies, needs to be exchanged for the notion of ‘limiting constraints’. This means acting on the urgent

35

imperative to hone and implement social expenditure policies at the same time as we are tackling the

failures of education, health and other social policies.

Tackling inequality is complicated and politically contentious. The art is to table well-motivated

redistributory policies that are designed to empower and break constraints, alongside a commitment

to strengthening the effectiveness of what we already have in place.

Elements of an economic strategy

Andrew Donaldson (former Deputy Director-General and head: Government Technical Advisory

Centre, National Treasury)

Below is an edited version of the paper presented by Andrew Donaldson. The full paper was

published in the GTAC WhatsUp (www.gtac.gov.za) while this edited version was subsequently

published in Mail & Guardian Business, 12 – 18 May 2017, p. 2.

Nine steps to exit low-growth trap and ignite the economy

What would be the principal elements of an economic strategy that would substantially transform

livelihoods and household opportunities in South Africa?

A policy framework that encourages effort from all South Africans and is open to global and

domestic capital, expertise, enterprise and co-operation is more likely to succeed than a closed or

conflict-based strategy. But this requires broad agreement and trust between parties who recognise

their shared interest in a co-operative outcome.

A clear imperative is that the unbalanced infrastructure and market structures of apartheid should

be addressed. This has several large and compelling implications. One is that far greater impetus is

needed in urban development, including housing investment, more densified cities, transport

integration and commercial renewal.

A second imperative is that productivity and wages should be improved, which is partly why

openness and global linkages are important. A third is that job creation must be accelerated,

especially for young work seekers. A fourth is that social services — schooling, healthcare, social

security and welfare services — must be improved.

The context is an economy caught in a “low-growth trap” brought on by worsening commodity

prices and trade conditions after the 2008 recession and a subsequent deterioration in investor

confidence. Political and policy uncertainty, institutional weaknesses and unresolved regulatory

conflicts have contributed to the low-growth environment.

https://www.gtac.gov.za/

36

The circumstances call for a heterodox mix of policy initiatives, to improve investment and growth

and to broaden opportunities and employment. Economic activity has to be boosted without raising

the public debt-to-GDP ratio beyond current projections.

Broadening credit extension

Financial deepening, the diversification of enterprise funding and real growth in private sector credit

extension are enabling conditions for investment and economic growth. Public sector borrowing has

grown rapidly over the past decade, but private sector investment and borrowing have been

sluggish.

A more accommodating financial environment can assist in creating conditions for a more buoyant

recovery. Global financial easing has kept interest rates low since the recession, but this has

facilitated financial recapitalisation and disintermediation rather than easier access to trade or

investment credit.

As interest rates rise over the period ahead, it is important that offsetting measures be adopted to

ensure that credit conditions improve. Stronger growth in public and private sector financing cannot

be expected to arise spontaneously in the presence of regulatory uncertainty or pessimism about

growth prospects.

Concerted efforts are needed to construct a more favourable financial environment. A high-level

accord or understanding between the finance ministry, the South African Reserve Bank and the

heads of the major banks to support stronger growth in development financing and credit extension

would be a useful starting point.

Although development finance institutions have a complementary role to play in this, to mitigate

risk in municipal finance and the housing “gap market”, for example, the private financial sector has

far greater resources and must be the main player.

A competitive exchange rate

Export-oriented manufacturing, tourism and trade in services are important growth drivers, but they

cannot thrive if the exchange rate is highly volatile and overvalued. The present policy stance on the

exchange rate is confused — it appears to assume that because a weak rand cannot be defended in

the presence of adverse sentiment, it is also impossible to counter unwanted rand strength. It is, of

course, impossible to “stabilise” the rand in real terms, but it doesn’t follow that its value should be

left entirely to the vicissitudes of the market.

For a time, there was agreement between the treasury and the Reserve Bank to “lean against the

wind” with foreign exchange purchases when market trends and global currency movements led to

37

an unwarranted strengthening of the rand. This contributed to a substantial rise in official reserves

until about 2010.

But there is no longer a shared understanding of the associated security holdings and sterilisation

costs, and so the required forex market interventions have fallen away.

In the absence of a more active exchange rate policy, industrial development and trade rely too

heavily on protectionist measures. And in the absence of better co-ordinated trade and investment

policies, the current account of the balance of payments remains a drag on growth and a continuing

drain on national wealth.

As with accommodative monetary and financial sector policies, a bias in favour of a weaker rand is a

helpful element in creating an environment for growth, investment and job creation, but it is no

silver bullet. Nonetheless, the present impasse between the treasury and the Reserve Bank on

sterilising forex market interventions needs to be resolved.

Fiscal consolidation

Fiscal consolidation has three broad aspects: expenditure management and revenue strengthening,

debt containment, and restructuring of state assets. Government expenditure must be kept in check

while debt continues to rise as a share of GDP and the scope for raising the overall tax burden is

limited.

These are not circumstances in which substantial medium-term shifts in the structure of expenditure

are possible — moderation and effective spending controls are needed everywhere. But it is helpful

to focus on the dominant long-term expenditure challenges that should be resolved if the fiscal

space is to not remain constrained indefinitely.

Challenges to be addressed include:

• Road Accident Fund claims, which, despite the substantial increase in the Road Accident Fund levy,

continue to accrue an annual deficit of some R30-billion;

• Government personnel expenditure, including the size and structure of the public service;

• Strengthening of infrastructure investment within an affordable and sustainable fiscal envelope

that switches expenditure from remuneration, goods and services to infrastructure; and

• Rationalising overlapping and fragmented government departments.

South Africa’s revenue base has been strengthened considerably since the 1990s, mainly with better

tax administration and the broadening of the tax base. There will be further opportunities for

38

revenue enhancement ahead, although increases in the tax burden should be balanced against the

need to encourage investment and retain wealth and capital domiciled in the country.

User charges and fees are an important supplement to tax revenue — and assist in managing the

consumption of scarce resources.

Appropriate pricing of water services is important for cost recovery purposes and to ensure that

access to water is fair and sustainable.

Carbon pricing and environmental charges are likely to play an increasing role. But the main revenue

policy issues will continue to be the progressiveness of personal income tax and its allowances, the

structure of company tax, and maintaining a broad value-added and indirect tax base.

Against the backdrop of the modernisation of tax administration, consideration now should be given

to improving the horizontal fairness of income tax, for example by phasing in allowances for

dependants that are revenue-neutral.

South Africa’s fiscal consolidation path is aimed at stabilising the debt-to-GDP ratio at about 50%.

Overall public sector debt is considerably higher, and is rising mainly because of Eskom’s borrowing

requirement for its build programme. Eskom and Transnet are at some risk of future financial

difficulties associated with rising debt, particularly if economic growth remains sluggish.

Shift the economic landscape

Cities are the engine rooms of modernisation and technology change. They are the co-ordinating

hubs of trade, markets and enterprise development. Apartheid was in part about retarding and

distorting the patterns of urban development, and so urban investment, consolidation and

neighbourhood improvements are especially important for transformation and inclusive growth.

Improved city planning, accelerated investment in water and electricity networks and transport

systems, enhanced education and training institutions, and better co-ordination between civic and

business leaders are key aspects of the urban development challenge.

The principal cities are well placed to step up investment and infrastructure maintenance, because

they are not overly indebted. However, in some cases financial and revenue management

weaknesses need to be addressed.

Cities need to be able to invest for the long term and improve their maintenance of infrastructure

without creating a greater burden on the national fiscus. This means municipal revenue sources

need to be strengthened and private investment must be mobilised more effectively.

39

Investment in housing

Alongside economic and community investment in cities, a substantial increase in housing

investment is needed. There is an ongoing role for government-sponsored housing schemes and

upgrading of informal settlements, but greater emphasis must be given to private investment in

housing stock as part of urban densification initiatives and to contribute to affordable, improved

residential neighbourhoods.

Investment in housing not only meets the growing need for shelter and living space, but also

generates employment and business opportunities with a comparatively low leakage of spending on

imports. Over time, it will yield secondary benefits in improved education and health outcomes and

informal and small-scale enterprise opportunities.

House ownership is the largest and most enduring vehicle for the accumulation of family wealth.

A new initiative is needed in which the government partners with the banking sector in expanding

investment in new and improved housing stock, supported with a limited fiscal subsidy or guarantee

plan and aligned with municipal densification and transport integration plans.

Modernise network industries

Power, transport, water and communications are network industries in which public regulation and

licensing are necessary, but there are many possible blends of public and private ownership of

infrastructure and services. South Africa has historically relied on state-owned, integrated utilities to

maintain these infrastructure networks and secure the supply of network services.

But this approach leaves little scope for diversification and modernisation associated with

technology change, and relies heavily on public debt raised against the assurance of a regulated

price together with limits on market competition.

The impasse between Eskom and the energy department on independent power producers (IPPs)

has damaging consequences for South Africa’s reputation in the investment and infrastructure

markets. There might well be a need for a new approach to agreeing on the future project pipeline

ahead of the IPP procurement process, but the current set of projects needs to be signed off to

restore investor confidence.

Continued rounds of IPP investments, in renewable energy and the envisaged coal and gas projects,

are not just about meeting medium-term power requirements at agreed prices. They are also about

creating a market in which power can be contracted at competitive prices beyond the initial term of

the IPP projects.

40

One possible route would be for Eskom to retain its system operations, purchasing and transmission

responsibilities and selling or partially disposing of its generating plants.

In this way network control and co-ordination remain in public hands, where they belong as a

“natural monopoly”, but operating plants migrate into a competitive environment in which the

advantages of private ownership and management can be mobilised.

A bias towards employment

Industrial and urban development policies under apartheid were designed to constrain employment

growth and retard opportunities for black economic participation, outside of Bantustan areas and

decentralised enterprise zones. The law and governance arrangements have changed, but the

structure and dynamics of economic growth have not yet reversed these distortions.

Deliberate policy measures and interventions are needed to push the economic growth bias towards

employment and inclusiveness.

Tourism and related services have continued to grow despite difficult market conditions. More

accommodating visa and border control arrangements would be helpful.

Special economic or export-oriented industrial zones need to be given greater impetus, and

associated institutional and regulatory barriers must be addressed.

Some subsectors of manufacturing have considerable employment potential, such as food

processing, clothing and textiles, and furniture manufacturing. Industry partnerships as part of the

Industrial Policy Action Plan need to be supported and implemented aggressively. Bargaining council

agreements need to recognise the need to accommodate and support small and low-productivity

enterprises.

There is further growth potential in the extended public works programme (EPWP), particularly in

cities, larger municipalities, schools and health facilities. Support for work seekers in bridging the gap

between school or college and the work environment is central to improving young people’s

prospects.

Well-managed implementation of labour market reforms and support for low-productivity activities

are central to a successful transition to more inclusive growth.

Implement the minimum wage

The government has indicated an intention to introduce a national minimum wage that has

considerable potential to protect vulnerable workers, but could also lead to higher unemployment

41

and reinforce a “dual” labour market in which informal, noncompliant enterprises become more

common.

The minimum wage should be accompanied by suitable complementary measures to strengthen

social protection and assist low-productivity enterprises.

It has been recommended that the EPWP and similar programmes, such as the Community Work

Programme, should be exempt from the minimum wage. This is morally cynical and institutionally

impractical. If there is a socially agreed-on minimum wage, then the government must lead by

example.

It is mistakenly thought that the minimum wage would be “unaffordable” for EPWP projects — in

fact, current levels of EPWP participation are still well below what they should be, and the costs of

phasing in compliance with a R20 an hour minimum wage by 2019 are modest. This would send a

clear message of the government’s intent to respect the new standard.

The minimum wage task report recommends temporary relief for workers in agriculture and

domestic service, for an adjustment period of two to three years. A better approach, aligned with

the country’s structural employment challenges, would be to extend the employment incentive to

all low-wage employees, subject to compliance with minimum wage and social security

participation.

The circumstances of young, entry-level employees, whether in training or internship positions or in

part-time or relief employment, need to be distinguished from the employment status of older

workers in more stable jobs.

South Africa has an especially severe youth unemployment problem, and it is neither practical nor

affordable to extend labour standards or social security requirements fully to young work seekers.

The present employment incentive operating through the tax system is not enough.

The commitment of business leaders to the “million jobs” initiative needs to be given recognition

and impetus, including appropriate regulatory relief to align the costs, benefits and incentives

associated with youth employment.

Social security and health

Proposals for comprehensive social security and health insurance were set out in the Taylor

committee report nearly 15 years ago. The policy frameworks are still far from adequate as practical

implementation plans and credible financing strategies.

In the absence of progress in social insurance and integrated health coverage, the gap between

publicly funded services and private pensions and health insurance widens.

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But the underlying policy issues and social security design considerations are complex and politically

contested. The relevant government departments and social security funds and entities do not

collaborate effectively. There is little engagement with private sector and civil society stakeholders.

There are several pressing needs and opportunities for reform targeted at the most vulnerable. Key

social security proposals include a basic income transfer for long-term unemployed work seekers,

and a standard retirement pension and basic death and disability cover implemented using the

Unemployment Insurance Fund administrative platform.

What’s to be done?

Achieving social consensus on an economic strategy and its implementation will be enormously

difficult. There is insufficient trust and engagement among stakeholders, and views are highly

polarised.

Yet there is considerable common ground in our substantive imperatives: we need accelerated

growth and investment; housing and urban development are unarguable priorities; employment and

rising wages have to be achieved; and social services must be improved.

It is easy to state the obvious: political leadership and a clear national vision and plan are needed.

But it is also important to emphasise the role of diverse forums of engagement — between

municipal officials and local business and civic leaders, between business organisations and financial

institutions, between organised labour and investors, between social service departments and public

benefit organisations.

These sites of struggle have the potential to become engines of inclusive growth.

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Emerging cross-cutting themes

What follows is a reflection on cross-cutting themes which emerged in the discussions that followed

the above presentations of the DST-NRF Research Chairs’ findings.

1. Policies must be based on sound understandings of existing social and economic realities and of

people’s practices and lived experience in these contexts, as well as the complex inter-

connections between different aspects of these realities.

The key example: the informal economy and livelihood strategies, and informality in general, and

the logics that drive these realities, including informal sector agriculture and rural livelihoods,

community dynamics, and linkages between urban and rural areas.

2. Central to policy formulation must be an understanding of how households and families are

constituted

Such a comprehensive understanding can influence the outcomes of educational, health, labour

market and rural and urban development policies. Agency of people is also a key factor to

understand better, linked to the possibility of mobilising people via social movements. Also

important is the potential role of social grants in enabling a range of desired social and economic

outcomes. However, links between households and schools and health centres can be broken by

exclusion or entry barriers. Micro-enterprises are often based on family labour, and are linked to the

functioning of the labour market.

3. A better understanding of existing realities must involve the construction of new kinds of

typologies, e.g. of public infrastructure, community facilities and settlement types, as well as the

questioning of inappropriate assumptions (e.g. on scale and efficiency in agriculture).

Assumptions that people live in nuclear families with a father, mother and children is a normative

construction at odds with the reality that many families are headed by women. This is a key reality

for poor women who live in rural areas and informal settlements, who bear a number of costs not

adequately covered by child support grants.

Appropriate analyses of complex realities will help to shift thinking on how to allocate scarce state

resources (e.g. on rural development and investment in cities), and can inform spatial planning and

the development of spatial development frameworks.

4. Rethink policy stances regarding poorly understood realities.

This should be done through recognition and support for positive dynamics, but also by developing

appropriate approaches to the regulation of informality (recognising that they do need some

44

regulation given that informality has a ‘dark side’). Public sector officials will need to develop a new

set of sensibilities in relation to informal social and economic realities, as well as different kinds of

management imperatives.

5. The illicit economy (crime, prostitution and other illegal activities) are an important reality that

we do not know enough about.

‘Deal making’ (cutting a deal, sustaining it, reneging on it and remaking it) is central in this economy,

which is connected to the formal economy in complex ways.

6. Social plans or social compacts have potential.

For example, in relation to employment and minimum wages and possible exemptions to minimum

wage levels, perhaps for youth. Can social plans involve agreements on a labour-intensive growth

path? There is a need for agreement on the essential elements of such a compact, as well as an

attitude change to make possible a compact – i.e. a change in the attitudes of various sectors, and

the population at large, towards “buying into” and participating in a social compact, and – as part of

that – an attitude change towards the validity/”worthiness” of certain groupings – like youth, “the

poor” – who will benefit from a social compact.

7. Governance issues are key to reducing poverty and inequality, and accountability in particular

needs to be prioritised.

The judiciary is key to ensuring greater accountability, and the Constitution is enabling of bold

policies to address poverty and inequality. Policy uncertainty has negative impacts. Decentralising

authority and management of health facilities have potential to create both accountability and more

effective delivery. At the local level, community governance is important for facilitating the best use

of infrastructure and public facilities to help secure positive outcomes in health, education and

support for informal economic activity.

8. State capacity and functionality are key.

There is a need to build state capacity for developing specific and differentiated sub-sectoral

policies, e.g. in relation to rural job creation and human settlements. Integrated approaches to

service delivery in education, health, and housing have great potential. Government could use social

grants and housing to offset the negative impacts of minimum wages in the agricultural sector.

Another key question is: how can the attitudes and behaviour of state employees such as teachers

and nurses be influenced; how can accountability be addressed? With teachers, this will involve

addressing undue trade union influence, ensuring role models for teachers, and as well as enhancing

their pedagogical skills.

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9. A coherent national economic strategy is required:

Several considerations are required with regard to macro, fiscal and financial elements, as well as

the transformation of the economic landscape. These include: broadening credit extension and

supporting development financing; resolving the current exchange rate policy to assist better

growth; improving urban infrastructure and city development; accelerating investment in housing;

modernising network industries of public and private-owned service infrastructures; introducing

deliberate policies and interventions towards employment and inclusiveness; implementing the

minimum wage while expanding youth employment; and improving implementation and financing

strategies for social security and health insurance. The success of such a coherent national economic

strategy requires improved trust and engagement among stakeholders; political leadership and a

clear national vision and plan, and an emphasis on the role of diverse forums of engagement.

10. Neglected issues in this CoP:

Housing is a key asset for the poor that can help build other forms of capital. Also, the need for a

more differentiated housing and human settlements policy was stressed, with different options for

different income groupings. Progress towards this had been made in the past but recent policy

thrusts, such as megaprojects, have returned to the older undifferentiated approach.

Early childhood education and youth unemployment are key issues that have been neglected in the

CoP to date. Higher education and skills development, including the functioning of the Technical and

Vocational Education and Training (TVET) system, are important for policies on youth

unemployment.

Trade and industrial policy and the environment are also important issues that have been neglected.

The regulatory framework for the labour market is also key, as are transport, location and mobility.

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Addressing poverty and inequality: Key issues for prioritisation

The workshop culminated in group discussions on the “poverty and inequality landscape” in South

Africa with the aim to identify the three most important areas for prioritisation as they emerged out

of the two days of discussions. What follows is a shortlist of the priority areas that emerged from

this final group discussion. They are ordered according to how often they were mentioned by the

different groups:

1. Improve good governance and state capacity:

• Generate a common understanding of what a capable state should look like

• Assess government’s capacity to deliver with an audit of procurement practices at all three

tiers

• Learn from “best practice” where good governance is present

• Work towards state coherence and good governance coupled with political will,

accountability from administration, and stakeholder collaboration in decision-making and

implementation

2. Building human capabilities (in terms of education, including ECD, and health):

• The quality of schooling needs to improve to meet 21st century economy needs

• Stunting and school nutrition need attention

• Build on ECD best practice to address historic inequality

3. Economic inclusion through coherent economic policies:

• An integrated economic policy, combining taxation with social wage policy, and prioritising

employment above all.

• As households are generally female-headed, create an enabling environment to ensure

their sustainability and strengthen their support to children

4. Youth policies to break the cycle of poverty:

• Devise strategic, feasible, actionable and costed interventions or options to get youth out of

poverty

• A proper understanding of TVET, its quality and whether it meets employers’ needs

5. Building an appropriate conceptual framework for understanding the inter-dependence and

intersection of micro, household-based realities and the larger, macro realities:

• Build on what already exist, such as informality as a predominant factor in the imperative to

create jobs

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6. Building good relationships:

• Careful relationship building between stakeholders, including policy-makers and

researchers, to inform feasible, comprehensible and testable policy responses

Reflections on the event and its methodology

Ben Cousins (DST-NRF Research Chair in Poverty, Land and Agrarian Studies; the Institute for

Poverty, Land and Agrarian Studies, University of the Western Cape)

When first constituted in 2013, our grouping of eight (originally nine) DST-NRF Research Chairs

within the Mandela Initiative held the clear promise of becoming a real, live ‘community of practice’.

We are a group of academics whose work focuses on understanding persistent inequality in post-

apartheid South Africa, and who share a commitment to making useful policy recommendations to

help overcome this structural problem. Despite important differences in focus as well as disciplinary

orientation, we saw the clear potential to learn from each other and ‘connect the dots’, revealing

the pattern in the larger puzzle of continued inequality.

Yet over the past four years we have struggled to realise this potential in practice. Additional funding

from the NRF through its CoP grant has allowed us to engage in new research, in some cases through

hiring new researchers to undertake data gathering and analysis. But finding the time in our busy

schedules to come together to share our findings and insights has not been easy. In my assessment,

the event reported here was our first real attempt to engage with one other as social scientists

sharing detailed research findings with policy implications, and attempting to engage beyond our

specialist expertise in order to construct a wider synthesis.

In my view, the CoP workshop was a success. I would submit as evidence the way that the DST-NRF

Research Chairs hung in there over two long days, engaging with one other and their policy-maker

and practitioner guests in unconventional ways, sometimes in participatory exercises that academics

find strange and unsettling. Our attempts to make connections between our individual projects and

develop an innovative synthesis based on cross-cutting perspectives, whether they break new

ground or not, show that we made a serious effort to get out of our silos and build a wider

‘community’.

Key to this success was the design and facilitation of the workshop. Early on we decided to break

with the usual workshop design of a series of PowerPoint presentations followed by discussion. We

took a different kind of approach, aimed at creating opportunities for participants to engage with

the details of research findings, but also to create a wider conceptual framework for understanding

48

the dynamics of inequality and action to address these. On the advice of one of our Research Chairs,

Edgar Pieterse, and with the help of consultant Sue Soal, we designed a process based on the ‘World

Café’ method.

Working in small groups at separate tables, composed at first of researchers and their invited guests

with specialist knowledge, our research findings were shared and discussed. Then the guests moved

to the next table and engaged with a different Research Chair and research team. This was repeated,

and then the original group was recomposed, to discuss how a particular project’s findings could be

connected to those of other projects and contribute to the broader framework.

Thereafter we worked both in plenary and in different and changing smaller groups, identifying and

exploring the cross-cutting issues and attempting to create an integrative frame. This included using

drawings to summarise and communicate the emerging synthesis. Key to success here was the

expert facilitation of Ingrid Obery, assisted by Philile Mbatha and Rebecca Gough. Another important

lesson from the event is that academics will benefit from the help of facilitators to ensure that

workshop processes create opportunities for all participants to contribute to discussion, debate and

creative synthesis.

We hope that the NRF sees this event as a useful source of lessons on how to constitute other CoPs.

In our view, it is not only ‘who is the room’ that is important, but also how the interactions that take

place within that room are structured and enabled.

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Appendix: List of workshop participants

Name Role / Organisation

Amelia Genis PLAAS, UWC

Phethiwe Matutu DST

Andrea van der Westhuizen Fluidrock

Andrew Charman Sustainable Livelihoods Foundation

Andrew Donaldson National Treasury

Ben Cousins PLAAS, UWC

Benjamin Stanwix DPRU, UCT

Carol Nuga Deliwe

Cassius Lubisi The Presidency

Charmaine Smith Mandela Initiative

Claire Anne Busetti Independent

Di McIntyre UCT

Dori Posel Wits

Dr Tsakani Ngomane DPME

Edgar Pieterse UCT

Fadly Isaacs UCT

Francis Wilson UCT

Gabrielle Wills SUN

Haroon Bhorat UCT

Ingrid Obery Independent (Facilitator)

Jeanette Clarke PLAAS/UWC

Jennifer Van den Bussche Sticky Situation

José Frantz UWC

Justine Burns UCT

Margot Rubin Wits

Marieke Isaacs UWC

Melanie Wate UFI

Morneiba Isaacs PLAAS, UWC

Mpumi Mohohlwane DBE

Ms Haajirah Esau UCT

Murray Leibbrandt UCT

Najwah Allie-Edries Jobs Fund

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Nicola Branson UCT

Nomphmelelo M DBE

Pippa Green UCT

Rebecca Gough

Russell Rensburg Rural Health Advocacy Project

Safia Khan DPRU, UCT

Sagren Moodley DST

Servaas van der Berg SUN

Thandi Mgwebi UWC

Thomas Auf der Hyde DST

National Research Foundation

Andisiwe Jukuda Professional Officer: RCCE

Angeline Khunou Stakeholder Relations and Partnerships Officer: RCCE

Carolina Maphae Administrative Assistant: RCCE

Doorsamy (Gansen) Pilly NRF

Makobetsa Khati Executive Director: RCCE

Margaret Steyn Scribe (for the NRF’s proceedings report)

Thabile Sokupa Director: RCCE

mandela initiative community of practice workshop 8 – 9 ... · into policy-making; thus,...

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