Newsletter 18 – Defining poverty – 24 April 2009

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The number of people living in poverty increased from 17 060 571 or 40.6% of the population in 1996, to 20 551 295 or 42.9% in 2007. This is an increase of 20.5% in the number of people living in relative poverty from 1996 to 1997.

Poverty is the focus of the municipal outreach project. However, defining poverty remains a difficult challenge for the country, especially municipalities. With limited jurisdiction in terms of combating poverty, municipal authorities are faced not only with the challenge of defining and assessing poverty, but are also faced with questions of how to combat poverty.

Three of the most common definitions for poverty must be distinguished in order to get a clearer picture of poverty.
The most commonly used measure of poverty is the dollar-a-day amount. Under this definition, a person living below the poverty line has an income below US $1 a day. The dollar value takes into account the purchasing power parity exchange rate. Purchasing power parity means that the price of a basket of goods in one country is equal to the price of the same basket of goods in another country.
Using the dollar-a-day approach, figures from Global Insight Southern Africa show that poverty in South Africa has decreased from 1 803 394 people or 4% in 1996, to 942 731 people or 2% in 2007.
The second approach is the relative poverty measure, according to which people in poverty are those living in households with incomes less than the poverty income. Poverty income varies according to household size – the larger the household, the larger the income required to keep its members out of poverty. Poverty income levels ranged from R1 023 per month for a household of one member, to R3 752 for a household of eight members or more.
According to this approach, the number of people living in poverty increased from 17 060 571 or 40.6% of the population in 1996, to 20 551 295 or 42.9% in 2007. This is an increase of 20.5% in the number of people living in relative poverty from 1996 to 1997.
The third approach is the proportion of households living below a certain fixed level of income.The proportion of people living below R367 in constant 2007 rands decreased from 1993 to 2007. This is according to the Development Indicators 2008 released by the Presidency. This measure, however, does not take into account the number of members per household. A household of four members with an income below R367 per month is worse off than a household of one member living on less than R367 per month.
All three of these definitions only touch on the surface of defining poverty. The South African Institute of Race Relations does not consider poverty solely in terms of the financial position of a given community or individual. Rather, the Institute identifies the broader manifestations of poverty. These include issues such as access to clean water and sanitation, access to housing, access to employment and education, and developmental infrastructure.
The Major Urban Poverty Challenges Identification (MUPCI) workshops are aimed at defining the problem of poverty and its manifestations. Each municipality experiences poverty in different ways, and these will be explored during the MUPCI workshops which will take place during May at each of the eight target municipalities. Councillors, officials, and development organisations in each of the eight target municipalities are encouraged to attend these workshops.
The municipal outreach project aims to provide extensive research, such as that used in the above analysis, to municipalities covered by the Municipal Outreach Project. This will be done by means of publications, the project website, and workshops. A monthly publication called Fast Facts for Local Government (F3LG) is sent to local councillors, officials, and development organisations in the eight municipalities covered by the project. A weekly newsletter is posted on the project website on Fridays, and e-mailed to project beneficiaries. The annual South Africa Survey, published by the Institute, will be posted to municipalities and extracts posted on the project website.
-Nthamaga Kgafela
by nkgafela — last modified 2009-04-24 12:05