Poverty, Inequality and the Nature of Economic Growth in South Africa
"The first key purpose of this paper then is to extend the discussion and debate to the first decade of democracy by utilising and analysing the Income and Expenditure Survey (IES) of 2005. With the IES 2005 we are, for first time, able to provide a comprehensive overview of changes in poverty and inequality for the first full decade of democracy in South Africa. Hence, the primary contribution of this paper will be to provide a profile of poverty and inequality in South Africa over the period 1995-2005. In turn however, and in trying to understand the critical interactions between economic growth, poverty and inequality, the paper will attempt to estimate and determine whether the positive growth rates recorded since 1994 have indeed managed to improve indicators of social welfare within the South African economy. Ultimately then, despite these positive and healthy economic growth rates, we interrogate the extent to which this trajectory of economic growth has been pro-poor in nature. Through the analysis of the relationship between economic growth, poverty and inequality, we attempt to shed light on how economic growth may have contributed (or not) to the quality and sustainability of democracy in South Africa. Section 2 of the paper estimates the shifts in poverty for the first decade of democracy in the country, while Section 3 provides an overview of the changes in inequality over the period. Section 4 evaluates the impact of the positive economic growth over the decade on the expenditures of the poor. In Section 5 the determinants of the increase in the expenditures of the poor since 1995 are evaluated, with a specific focus on the role of the country’s state social security system. Section 6 concludes."