Can the market solve the problems?

Two different sets of recent data project two very different pictures of the economic well-being of the South African society. While both represent a true picture on their own, they also illustrate the huge challenges to avoid the tensions between the haves and the have-nots spilling over into conflict. The data also illustrates that the debate about an ideal economic model for the country is far from over.

South Africa is one of the countries with the highest levels of home ownership in the world, according to one set of data released in early September by Statistics South Africa.

At the same time, lack of adequate housing is said to be one of the main driving forces behind regularly recurring delivery protests.

This apparent contradiction is most probably to be found in another set of data recently released by the Bureau of Market Research (BMR) at the University of South Africa: About 47% of the country's population lives below the so-called breadline; and while the number of households in the middle-income group is growing, the economy is simply not coping in absorbing the numbers of local new job seekers and those coming from neighbouring states.

It is against this background that one should read recent reports from Cape Town, of certain areas in Khayelitsha having become traffic no-go areas.

In the City of Cape Town alone, there is a shortage of between 400 000 and 420 000 housing units and on average, every 10 households have seven other families living with them or in their backyards because of that shortage.

In eThekwini (Durban), the housing shortage last year stood at 190 000 units, while estimates for Tshwane put the shortage in the region of 330 000 units.

The proliferation of informal settlements in and around just about every urban or semi-urban area in the country also testifies to the fact that for a substantial part of the South African population, it is far from paradise on the housing front.

The apparently conflicting pictures presented by different sets of statistics can probably be explained by a difference in the angle from which housing statistics are being looked at and the fact that a high percentage of South Africans who do live in housing units, actually own those units.

Those who live in informal structures are not reflected in the presentation of these statistics.

It is also against this background that one should read contributions to the ongoing economic debate, such as a recent open letter to President Jacob Zuma in the media in which Joseph Edozien of the South African New Economics Network, wrote: "South Africa is using growth, jobs, taxes, debt, and globalisation in a misguided macro-economic adventure certain to fail. South Africa will never grow itself out of poverty under the present financial regime. It is not possible."

While the BMR survey again underlined the fact that, in economic terms, South African society remains one of the most unequal in the world, it should not come as a surprise that there are calls from the ranks of Cosatu, for example, that the food industry should be nationalised.

It also forms the backdrop to the warnings by Moeletsi Mbeki that there lies conflict ahead between the poor and the new ANC elite.

Since the economic, and particularly the financial, system is due for a major overhaul and restructuring in the light of the present recession, there is increased discussion that it may be a good time for developing countries such as South Africa to also revisit the fundamentals on which its economic dispensation is constructed.

• Add New
• Search

Comments (0)

Write comment

Your Contact Details:

Name:

Email: do not notifynotify

Comment:

Title:

Message:

Security

Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 4.0 beta2