Business Day (Johannesburg)

South Africa: Cost of Not Taking Grants Seriously

column

Johannesburg — AS TOUGHER economic times bite, a key question for the government will not be whether it can afford to take social grants seriously, but whether it -- and we -- can afford not to.

Weekend media coverage of Gauteng proposals for the African National Congress's (ANC's) election manifesto confirmed a depressing aspect of the election campaign -- that debate over ANC economic policy will be conducted in a way least likely to help us deal with our challenges.

Many opinion-shapers share an interest in ensuring that just about anything the ANC says on the economy will be portrayed as a lurch to the left. The media wants juicy headlines, the left in the ANC alliance wants to exaggerate its influence, and some economic commentators seem eager to brand any proposals for change as left-wing in the hope of defeating them. And so obvious political realities, such as the fact that what parties say they will do during a campaign is often not what they do in office, are ignored. Wish lists are depicted as policy shifts and panic is created about the left-wing menace.

Not only does this misrepresent political reality, it prevents a serious discussion on how we should respond to poverty.

Much of the hysteria about the Gauteng proposals is prompted by the fact that they recommend a heavy stress on social grants. This is depicted as a populist experiment that will break the national bank and introduce an oppressive nanny state. A more useful response would look at the role grants have played in our attempts to beat poverty. It would conclude that, for important economic and political reasons, grants must remain at the centre of our national priorities -- even in hard times.

SOCIAL grants have been by far the most effective government response to poverty since 1994. Research shows that they have done far more to change the lives of the poor than any other government programme, for a simple reason: they are the only antipoverty measure that allows poor people to decide their own needs. The biggest obstacle to effective action against poverty since 1994 is the gap between what educated people in government think poor people need and what the poor know they need. Grants allow the poor, rather than the policy community, to decide what they need. Their success in improving living standards shows that poor people know better than policy wonks what they need.

Nor, contrary to elite mythology, do grants create dependence -- they enable grassroots wealth creation. Claims that grants discourage productive labour do not stand scrutiny: research shows they are usually used to kick-start economic activity.

A third important consideration is that, once a grant is introduced, it must be maintained if we are to avoid conflict. Much of our national debate assumes that people rebel when they lack what others have -- evidence around the globe shows rather that people rebel when they lose what they had. If the level of grants is reduced, there is, therefore, a serious risk of conflict because millions of people will be deprived of a benefit on which they have come to rely.

These realities suggest that we ought to increase social grants if we can -- but that these increases must be affordable because, if we have to scrap the grants later, we risk conflict. They suggest also that, if we want to fund grants sustainably, we need to cut the many government programmes that do not help the poor because they make faulty assumptions about what they need -- those who want bigger grants would be on firmer ground if they proposed scaling back on, for example, a housing programme that is causing great dissatisfaction at great cost.

But they suggest, too, that the knee-jerk response that denounces any attempt to extend grants as a ruinous lurch to the left makes a sustainable fight against poverty far harder. The stereotyped verbal war with which this campaign has begun obstructs what we really need -- a reasoned debate on how we can maintain and perhaps extend grants in difficult times.

Friedman is director of the Centre for the Study of Democracy, a University of Johannesburg and Rhodes University initiative.


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