What are the distributional implications of halving poverty in South Africa when growth alone is not enough?
The United Nations Millennium Declaration commits to halving extreme poverty between 2000 and 2015. The South African government has set a goal of halving poverty by 2014, although the meaning of this goal has not yet been defined. This article frames government's stated target of halving poverty by 2014 in terms of specific measures of the poverty gap and poverty headcount ratio, using income and expenditure survey microdata. With the poverty line as defined here, approximately half the South African population falls below the poverty line. Despite this, the aggregate poverty gap is surprisingly small at about 3% of gross domestic product. Projections of poverty in 2014 under various growth scenarios indicate that growth alone will be insufficient to halve poverty by then, and that any worsening of distribution will put the target of halving poverty by 2014 far beyond reach. However, projections of the effects of a range of growth and distributional scenarios on poverty, using a new method for simulating pro-poor distributional change, indicate that halving poverty appears feasible with moderate growth rates and fairly mild pro-poor distributional change. The results are indicative as to the scale of distributional changes necessary to halve poverty under various growth scenarios.
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Volume (Year): 44 (2012)
Issue (Month): 20 (July)
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