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South Africa: Telling Neglect in Race Institute's Poverty Study
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Business Day (Johannesburg)
OPINION
27 November 2007
Posted to the web 27 November 2007
Joel Netshitenzhe
Johannesburg
THAT the findings of a single statistical report could tell a sharply contrasting story to those of many similar studies is a precise indication of how contestable statistics can be.
Simply put, this means that, while often presented as science, statistics can be manipulated for multifarious purposes. The South African Institute of Race Relations (SAIRR), citing Global Insight Southern Africa (2006), reported that "the number of people living on less than $1 per day (the measure of extreme poverty used by the World Bank) in SA, increased from 1,89-million in 1996 to 4,2-million in 2005.
"As a proportion of the population, this represents an increase from 4,5% to 8,8% of the population living on less that $1."
This report differs dramatically from others by various distinguished academics in the field. It is important to note that, officially, there is no consistent time series data on poverty and inequality trends over time.
Most researchers use a combination of Statistics SA's (Stats SA's) official data and unofficial data sources whose credibility they can guarantee, such as the All Media and Products Survey (Amps) to arrive at a view on poverty levels and trends.
They also adopt different poverty lines, ranging from about R2000 to R4000 a year. While it appears Global Insight uses a combination of data sources, there is no reflection on their sources and methodologies in the report.
The contestability of the use of statistics raises this important question: what then should guide our understanding of the realities of poverty in SA?
Few would argue against what our constitution identifies as indicators of socioeconomic progress. These include access to housing/shelter, education, social assistance, health provision, food and water.
This approach, therefore, exposes the unreliability of using a simplistic tool that is money-metric to measure poverty.
A study by the United Nations Development Programme (UNDP) casts serious doubt on the SAIRR survey.
Using a national poverty line of R354 a month, the UNDP reported that the proportion of people living in poverty fell from 51,1% to 48,5% between 1995 and 2002.
The study, however, showed that the absolute number of people living in poverty increased from 20,2-million to 21,9-million as a result of population growth, instead of governance failures as the SAIRR would have us believe.
Another study by Hoogeveen and Ozler (2004) also confirms the findings of the UNDP. Further, research conducted by Van der Berg, et al showed that there was a proportionate decrease in poverty from 53,1% in 1996 to 43,2% last year.
Between 2000 and 2004, the per capita income of the poorest two population quintiles increased by more than 30%.
This is partly due to the enormously improved reach of our social grant system.
Reaching the bottom 40% of the income distribution, government expenditure on cash transfers in the form of social grants rose from R10bn in 1994 to R55bn in 2005, with the number of beneficiaries rising from 2,6-million to 10,5-million.
With the extension of the child support grant to children under the age of 14, the total number of children accessing the grants is now more than 7-million. The effect of improvements in the labour market on poverty cannot be ignored .
The number of employed people increased from 11,1-million in 2001 to 12,8-million last year.
What does all this say about governance in post-apartheid SA?
The use of $1 per day as a poverty line in the SAIRR report is not without flaws.
While this line is recommended by some international agencies, it often does not factor in the complexities of exchange rate translations. Furthermore, there are extreme intricacies in accounting for the differences in the relative purchasing power of the rand to that of the dollar.
These complexities aside, the claim that the proportion of those below the $1 per day poverty line has increased is invalidated by evidence presented in other works.
For example, the Amps data show that the poorest income group (Living Standards Measure, or LSM, 1) fell from 10,5% to 4,8% of the population between 2001 and last year.
Also, the bottom three income groups (LSM 1-3) shrank from 38,8% to 27,7% of the population in this period. The incomes of people in the poorest groups grew by about 38% between 1993 and 2004.
On a matter as critical as poverty reduction, one would have expected at least a rigorous process of peer review and broader consultation before publication.
That the SAIRR avoided this critical part of research methodology raises the critical question: was there no ulterior motive behind its study?
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Netshitenzhe is the head of policy co-ordination and advisory service in the Presidency.
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