State Steps Up 'War Against Poverty'

from All Africa

Business Day (Johannesburg)

By Karima Brown and Amy Musgrave
Johannesburg

DEPUTY President Phumzile Mlambo-Ngcuka has admitted for the first time that SA's growing inequality is "politically unsustainable".

Releasing the annual report of the Accelerated and Shared Growth Initiative for SA (Asgi-SA), Mlambo-Ngcuka appointed herself "commander in chief" of the fight against poverty, saying there was a " crisis" in SA.

"We have not developed a strategy to deal with inequality. The rich have become very rich, both black and white. This is politically and economically unsustainable," she said.

Mlambo-Ngcuka said about 7-million people were "missing" from the country's economy and that the government had to target the youth and women if economic growth was to be shared.

Asgi-SA was designed to address key economic growth constraints. These include infrastructure, the skills shortage, second-economy weaknesses, and the inadequate capacity of government structures to support economic development.

While the government was pleased with the progress of Asgi-SA, in particular its infrastructure investment programme, which is valued at R600bn (only government investment), it acknowledged that the interventions in the second economy had to be improved and speeded up this year.

With less than a year left in office, the Mbeki government plans to unveil an anti-poverty strategy in the next few weeks. It will include details of a poverty line. Other second-economy interventions include redesigning the job-creation project, the Expanded Public Works Programme (EPWP), which has been criticised for not creating sustainable jobs.

However, the government remains optimistic that it will reach its target of 1-million employment opportunities ahead of the EPWP's deadlines and it reiterated that despite the slowdown in economic growth it would not adjust its growth and development targets.

Mlambo-Ngcuka said she was concerned about the construction industry's ability to go beyond job opportunities created by the building of stadiums for the 2010 Soccer World Cup.

She appealed for more public-private partnerships, saying that business should help provide "exit opportunities" for youngsters. She punted wage subsidies and income transfers for youth, while emphasising that these had to be linked to productive work.

Any move to introduce a wage subsidy is likely to meet with stiff opposition from the Congress of South African Trade Unions, which argues that the measure is an attempt to create a dual labour market and would be open to abuse.

The African National Congress rejected earlier government proposals to introduce a dual labour market for youth.

Presidential adviser Alan Hirsch said the recent income and expenditure survey from Statistics SA showed that the income of the poorest 10% of the population had increased 80%, while the richest 10% had received 40% more.