Development in South Africa: Bridging the Gap

To live in one of the most unequal yet highly urbanised societies in the world means that there are high levels of inequality, poverty and other injustices that the majority of the population have to live with  (Burger, Van der Berg, van der Walt, and Yu, 2017). This reality carries with it not only decades of discriminatory policies, but poverty stricken livelihoods that cripple any chance of progress in a society where wealth has a strong racial correlation (Burger, et al, 2017; Leibbrandt, Woolard, and Woolard, 2000). While South Africa is the most advanced and diversified economy in Africa, and the wealthiest in terms of GDP per capita, the country is still haunted by high levels of inequality. According to the 2018 World Bank Report, more than half of South Africa’s population lives below the upper poverty line of R992 per month per person by use of 2018 prices. These are the realities that we are faced with – this is in addition to being the leading country in the world in unequal income distribution with a Gini index of 63.4 as shown in Table 1.1. Although great strides have been made in targeting unemployment and economic growth to ensure that development has taken place, historical inequities still need to be addressed adequately in order to improve the quality of life for the majority of South Africans, and to bridge the gap between these parallel worlds. This chapter will take measure of the nature of inequality as well as advance some routes which could be taken to allay the present challenges.

The world’s 10 most unequal countries

(Source:https://www.worldatlas.com/articles/the-world-s-most-unequal-countries.html)

Not a New Idea

The idea of bridging the gap between two parallel worlds is not one that is unheard of (Zhu, 2017). Asia, being the largest continental economy by GDP (Gross Domestic Product), also implies that it has experienced rapid socioeconomic development in recent years. A great example of this is China – since the late 1970s, the development in the cities has not only attracted immense inflows, but have also been a key driving force for urban growth and development, with the 2010 census stating that 87 percent of China’s “floating” population migrated to cities and towns from villages. Zhu and his colleagues make use of the in situ urbanization, which refers to the process of rural settlements and populations transforming themselves into urban or quasi-urban ones with little geographical relocation of the residents. This phenomenon has two dimensions whose development has played a key role in China’s urban growth between the late 1970s and the late 1990s (Zhu, 2017). Of the two dimensions, one of them focuses on the creation of new industrialised centres, and the other dimension refers to the practical and physical modifications of rural areas through the expansion of township and village enterprises (TVEs) (Zhu, 2017).

The experiences of developed countries propose that in the industrial period and post-industrial period, many individuals and their families move between and/or within cities numerous times due to changes in either employment status or housing needs, which are often caused by various life cycle events such as marriage, child bearing, etc. This is the kind of urban-urban and intra-urban mobility that is often observed in many developed countries (Zhu, 2017).

From the case study mentioned above, we learn that incorporating migration along with in situ urbanisation will not only ensure that people residing in the rural areas benefit from the prosperity of the cities, but will also benefit from the resources and potential development that could occur in their hometowns (Zhu, 2017). Spatial links will need to be visualized and implemented at finer spatial levels, with “a coordinated regional approach” required to “cuts through fragmented boundaries” in order to assist the movement of people between and/or within urban and rural spaces (Zhu, 2017). Additionally, more attention will need to be given to issues of various social security programs and public services, to ensure that migrants will not be disadvantaged by this migration (Zhu, 2017). Gopaul’s (2009) paper based on the South Africa case also indicates that something needs to be done to assist people living in rural areas who live in extreme poverty; else, their standard of living will continue to worsen. He suggests that the solution lies in tourism – “to accomplish rural development, there is a need to nurture a sense of willingness and enthusiasm amongst the poor communities to participate in rural development” (Gopaul, 2009).

The Evolution of Urban Development in South Africa

Rapid development and large scale rural-urban migration in South Africa were inspired by the discovery of diamonds in Kimberly, and that of gold in the Witwatersrand in the 1860s and 1880s respectively (Mabin, 1992; Turok, 2012). These economic activities brought some much-needed opportunities to the rural community, and transformed South Africa from an agricultural state to an industrialized nation (Moomaw and Shatter, 1996; Turok, 2012). An invasion of foreign investment in mining from De Beer, Anglo American and Consolidated Gold Fields was also witnessed in the late 1800s, and further generated rapid growth of support industries and services that were supported by temporary migrant labour that was migrating to the cities (Turok, 2012). As a result, the developing world – including South Africa – has witnessed unprecedented growth in urbanisation rates in the last two decades (Cohen, 2006). Thus far, urbanisation in South Africa has been increasing by roughly 0.5% on a year-to-year basis, with technological innovation and employment in urban areas continuing to increase due to its ability to offer considerable socio-economic opportunities in comparison to rural areas. Behrens and Robert-Nicoud (2014) further argue that cities are not only the locus in which inequality materialises, but they are hosts to instruments that contribute extensively to changes in that inequality.  Thus, it is not surprising that individuals seem to migrate to economic hubs where more opportunities exist (Behrens and Robert‐Nicoud, 2014; Ozler and Hoogeveen, 2005).

Having an urbanised economy or cities as economic powers while rural communities are under-developed is not an exclusive South African phenomenon – it happens all over the world because of several reasons as seen in the case of Asia. Amongst the key reasons is that of economies of scale and rural-urban migration. As such, Fields (1972) referred to the rural-urban migration theory as an economic phenomenon in his paper. The theory hypothesizes that workers compare the projected incomes in the urban sector with agricultural wage rates in the rural areas and migrate if the former exceeds the latter. In addition, the rural-urban migration is often regarded as the adjustment mechanism that workers use to assign themselves between different labour markets, some of which are located in urban areas and some located in rural areas. Thus, rural-urban migration is the equilibrating force that connects rural and urban projected incomes and is regarded as a disequilibrium phenomenon (Fields, 1972).

Consequences of Urbanisation

Over time, we have observed how urbanised South African cities are, and how they continue to advance. The downsides of these advances have had destructive societal, economic and environmental consequences (Turok, 2012). Meanwhile, rural areas continue to remain under-developed with high levels of deprivation with respect to sanitation, access to water and access to energy, high levels of unemployment, inadequate use of natural resources, insufficient access to socio-economic and cultural infrastructure, low skills level and insufficient literacy rate (Behrens and Robert-Nicoud, 2014; Burger, et al, 2017; Gopaul, 2009; Krishman, 2016; Ozler and Hoogeveen, 2005).

Upon the analysis of international studies, Barro (2000) found that people living in rural areas might be using old technological methods, whereas urbanised areas employ more recent and advanced techniques in their daily undertakings. As such, we observe how large municipalities within the cities are deeply accommodative of additional commercial services and more advanced roles concerning finance as well as developmental projects; whereas smaller municipalities, which are mainly located on the peripheries of the cities are only able to accommodate a large portion of lower mandate facilities and industrial work (Behrens and Robert-Nicoud, 2014). In addition, these smaller municipalities are often under-resourced and are surrounded by areas that have high levels of poverty and deprivation.

As it stands, an approximate 66% of South Africans are living in urban areas, with the expectation that eight in ten people will be living in urban areas by the year 2050. This not only means that the demand for infrastructure and housing will increase rapidly, but the cost of living will also increase for the average South African. Though urbanisation is the most convenient instrument currently being used to accelerate the rate of growth in developing countries by means of (i) driving economic growth, (ii) sustaining larger and more productive populations, (iii) sourcing higher means of income, new and diversified engines of growth need to be considered. The results of having cities that are too urbanised may have negative externalities that may affect negatively on rural economies, whose role is to provide economic sustainability and food security (Krishman, 2016). As such, other measures need to be considered if we are to sufficiently and effectively bridge the gap between rural economies and urban economies in order to ensure that growth takes place in a way that is beneficial to everyone.

Although cities are the dominant centres of economic activity and employment, and continue to attract maximum foreign investment; they are not performing to their potential or reaping the benefits of agglomeration due to prevailing shortages of energy and water infrastructure, transport congestion and deficits in education and skills (Turok, 2012). This is in addition to creating poverty traps on the peripheries of the cities, which results in favouritism for road-based transport – private cars and minibus taxis (Turok, 2012). To ensure that rural economies are not left behind in this fast paced economy, we need to consider redeveloping rural areas into sustainable communities that can support themselves economically (Gopaul, 2009; Krishman, 2016).

Poverty and Inequality in Rural Areas

Households that have high levels of poverty and inequality are largely black or coloured communities who tend to reside on the periphery of the cities, thus, a high level of vulnerability is usually observed in some areas that are remote and isolated from the main cities (Burger, et al, 2017). High levels of unemployment are largely concentrated among the poor people in rural areas and continues to remain a core challenge in the South African economy with a 238% growth from 1 703 863 in 1994 to 5 752 632 in 2016 (Dube, das Nair, Nkhonjera, and Tempia; 2018 Quantec, 2018). According to Ozler and Hoogeveen (2005), South Africans are neither separate, nor are we equal in post-Apartheid South Africa. The authors make this statement because the question of whether the economic inequalities of the apartheid era have faded remains, especially with the high levels of poverty and inequality that this country still faces in the rural areas.

Poverty is at an all-time high in South Africa and is highly concentrated within the African race, women, rural areas and the youth (Triegaardt, 2006; Woolard, 2012). Statistics show that Africans account for 95% of the poor population and a large percentage of them reside in former homelands, rural areas and townships households (Woolard, 2012).  It is also important to note that poverty is closely linked with the mortality rate. This stems from the fact that poor people have difficulties in accessing health care facilities seeing as they do not have the basic income for transport services, nutrition and clothing which further perpetuates the high levels of inequality (Woolard, 2012). Consequently, the unsatisfactory living conditions continue to intensify the high poverty levels, which further exclude and marginalise poor people from participating in the economy (Triegaardt, 2006; Woolard, 2012). As such, agriculture presents opportunities of job creation, particularly in rural areas (Dube, et al, 2018). As a labour-intensive and rural industry, agriculture makes a contribution of 10% to total employment. However, a slight decline has been observed between the period of 1994 and 2016 – from 12 percent to 6 percent (Dube, et al, 2018).

How Can Agriculture Help Eliminate Poverty and Deprivation?

In rural areas all over the world, agriculture represents the principal land use and is a major element of the practicality of rural areas. Rural communities can be developed to increase their competitiveness in agriculture. The in situ urbanisation case mentions to how rural areas have to transform themselves into urban or quasi-urban ones with little geographical relocation of the residents; in the case of South Africa, this can be achieved through agriculture. Farming and related undertakings primarily encompass the basic fabric of rural life, contributing meaningfully to the overall state of rural areas by facilitating and creating employment, business prospects, infrastructure and quality of the environment. This can be a driving force for economic growth and can have lasting impacts on the overall community.

In South Africa, agriculture is a twofold production system that comprises of large-scale commercial farmers and small-scale farmers (Dube, et al, 2018). As it stands, agricultural production remains concentrated on field crops given their prominence in determining national food security. However, the growth in South Africa’s agriculture sector –the fruit sector and small-scale farmer participation in particular – is restricted by insufficient infrastructure; mainly ripening facilities, pack-houses and cold storage facilities (Dube, et al, 2018). This limitation causes costly delays, limits entry into the formal sector and hinders expansion into export markets.

Government or private sector needs to intervene by initiating and constructing capabilities in agriculture and agro-processing if these small-scale manufacturers do not have the means to get their products to final consumers (Dube, et al, 2018). What will ensure success in this initiative is linking farmers with large producer-exporting companies that already have access to infrastructure and international markets (Dube, et al, 2018). The government can then incentivise large producer-exporting companies to collaborate with minor producers. In return for large-scale companies lengthening technical services and information on production and standards to small-scale farmers, the large companies can be offered tax breaks, grants for investments in storage and cold chain amenities or support with raising funds. This initiate is one that not only benefits the small-scale farmers, but also the capability to have spill over effects that will benefit the whole economy.

Recommendations

Rural areas undoubtedly have the potential to lead to great economic growth; however, this reality will only be possible if skills uplifted and investment in R&D (research and development) is prioritised. The results of investing in rural economies will have spill over effects and positively impact on urban areas, while creating employment in the peripheries of the country. With a highly urbanised country as South Africa, it is crucial that we look into other alternatives which will not only benefit the country as a whole, but also have an undeniable impact that can bridge the gap between rural and urban areas.

Competitive agriculture in rural communities, particularly when supported by technological platforms can drive economic growth – an example of this is the Khula app.  Khula is a farming app founded by Karidas Tshintsholo with the aim of assisting emerging farmers in finding their feet. To date, 175 farmers are currently using it, and this has ensured that famers who were initially unable to access the formal markets can connect with suppliers. The purpose of the app is not only to assist small-scale farmers, but to assist with alleviating poverty and ensuring that young entrepreneurs have an opportunity to make a decent living.

With such great innovations taking place in the country, the possibilities of the kind of development that can be fostered in rural areas are endless. Indeed South Africa’s developmental woes can only be resolved from within; through South African ingenuity, and modulation of the experiences, technologies and investment of external partners.