the launch of the Charlotte Maxeke Collaboration in the Economics of Social
Protection; University of Pretoria
16 January 2006
Programme director
Distinguished guests
Vice Chancellor of the University of Pretoria
Ladies and gentlemen
It is good to see that all the hard work that has gone into initiating the
Charlotte Maxeke Collaboration in the Economics of Social Protection is
reaching a successful conclusion. We have now created a platform and the
institutional capacity for the real work to begin, and it is a good time to
remind ourselves of the purpose of this Collaboration between the Department of
Economics at the University and the Department of Social Development in
government.
I will therefore begin my address by speaking to the broader context of this
collaboration and the challenges facing our country.
Allow me first, however, to express my appreciation to all of you for
gracing this occasion when we dedicate this collaboration in honour of
Charlotte Manye Maxeke â a remarkable woman and leader. With respect to the
significance of Charlotte Maxeke, I will restrict myself to saying that in her
memory, it is appropriate that this launch is taking place at an institution of
academic and research excellence. We should recall that 100 years ago Charlotte
Maxeke was making her mark as an outstanding student at Wilberforce University
in the United States under the tutelage of the great African American
intellectual - WEB Du Bois.
In her memory, it is also appropriate that this launch is taking place in
the year when we celebrate the 50th anniversary of the 1956 Womenâs March on
Pretoria. This march drew participants from across a broad cross-section of our
society and entrenched the role of women at the forefront of our liberation. I
urge you all to read and familiarise yourselves with the leadership role that
Charlotte Maxeke played in modernising and liberating our society at the turn
of the last century. She was a pioneer and leader in the education, social
welfare, faith and political sectors of our society.
The subject matter of the collaboration in the Economics of Social
Protection is the same as the fundamental challenge facing our country in the
second Decade of Democracy â that of promoting and accelerating sustained
development and shared growth. This is against the backdrop of our goals of
creating jobs, eradicating poverty, creating a better life for all, and
building a non-racial and non-sexist society.
A decade ago, we were confronted with the reality that we had inherited a
society and an economy that were not addressing the challenges of poverty,
social exclusion, inequality, gross violations of human rights, high levels of
unemployment, and stagnating growth. We therefore had no doubt that social
security had to be a cornerstone of the new democratic and developmental state.
Our Bill of Rights thus contains a constitutional imperative that compels the
government to ensure the progressive realisation of the right to access social
security.
In order to give full expression to our commitment to addressing high levels
of poverty and unemployment, we soon realised that we had to go beyond a
traditional conception of social security. Our policies and strategies are
therefore focused on social protection programmes that include income support,
asset and capability measures and social insurance programmes.
The main recipients of our income support measures are the following
categories of poor people - families with children, people with disabilities
and the elderly. By and large the targeted recipients of social grants are not
expected to fully participate in the labour market. An additional
conditionality is an income-based means test. Although up-take rates for
various social grants differ, there has been a rapid although uneven expansion
of coverage. Through our programme of social grants we currently provide income
support to over 10 million poor people in our country.
In collaboration with a number of academics and researchers in our country
we have built up a substantial evidence base that shows that the primary policy
impact of our social grants has been to effectively target poor people and
reduce poverty.
Social grants are financed through general tax revenues and it is projected
that social assistance spending will constitute approximately 3.2% of Gross
Domestic Product in the current financial year. Data on the incidence of
government spending indicates that social assistance, the provision of social
grants, is governmentâs most pro-poor intervention. Not only is our social
assistance programme redistributive, according to a recent study, social grants
reduce poverty by 66.6% when the destitution poverty line is used as
benchmark.
This study by the Economic Policy Research Institute (EPRI) found that
social grants also impact the economic opportunities of poor households. The
provision of social grants translates relatively quickly into enduring positive
impacts on labour market participation, employment success, and realised wages.
In addition, social grants have positive indirect effects on economic growth
through improved education. This particular study on the economic impact of
social grants supplemented other research findings on the positive correlation
between receiving social grants and household nutritional status and school
attendance.
There is a high financial cost attached to the scale at which we provide
social assistance but it has to be seen in terms of the on-going benefits of
poverty reduction and enhanced social inclusion. Because of South Africaâs
legacy of poverty and social exclusion, the trajectory of our work initially
focused exclusively on targeted social assistance. But it is now focused on
establishing a framework of comprehensive social protection. Comprehensive
social protection includes income support, asset and capability measures and
social insurance programmes.
We have recently put in place a new programme of income support targeting
poor unemployed individuals through an Expanded Public Works Programme. This
programme is intended to create work opportunities and enhance the skills of
the participants whilst also providing income support. With respect to asset
and capability measures, we provide a range of free basic services to poor
households at the municipal level of government. Essential social services such
as water and sanitation are reaching a significantly larger proportion of
households than was the case in 1994.
Access to primary health care has also improved and the urban housing
backlog inherited from the apartheid era is systematically being addressed.
Through the land restitution programme, significant land transfers to
households will be implemented. With respect to social insurance, our
programmes cover short-term unemployment, compensation for occupational
injuries and diseases, health care, road accidents and retirement
provision.
Issues of social protection are a vital concern in any society because they
encompass protecting people against all manner of contingencies and risks;
ensuring access to basic needs; and building social cohesion and solidarity.
They are also of importance because they have substantial financial and
economic implications for individuals, community groupings, business
enterprises, and governments.
In our country, because of the dimensions, composition and size of our
system of social protection, issue of the financing and affordability are a
pressing concern. With respect to the long-term sustainability of our system of
social protection, the following key issues will also have to be factored into
our research and capacity building agenda:
1. The increasing incidence of employment in the informal sector.
2. The restriction of large parts of social insurance to only the formal
employment context. This results in some people, who could be accommodated in
social insurance schemes, being dependent on social assistance.
3. The alignment between the contributory and non-contributory components of
social security.
4. The viability of large scale programmes aimed at the labour market
integration of members of households receiving social assistance.
5. The social and economic impact of HIV and AIDS.
6. The impact of public retirement and medical insurance schemes. And,
7. The creation of a national social security agency to address administrative
inefficiencies and leakages from the system.
It is our expectation that the Charlotte Maxeke collaboration in the
Economics of Social Protection will also bring a comparative perspective to
bear in the scientific investigation of and public debates on these and other
subjects. For instance, what roles have social protection schemes played in the
developmental states of East Asia and what lessons can be learnt from these
experiences?
The research and programme development activities undertaken under the
auspices of the collaboration should also speak to South Africaâs own
Accelerated and Shared Growth Initiative. Proceeding from the premise that the
current macroeconomic and social environment affords us the opportunity to
pursue higher and shared growth, the main issues under consideration in the
Initiative include: infrastructure development, sector investment strategies,
education and skills development, Second Economy interventions and improving
the capacity of the state to provide economic services. How can our programme
of comprehensive social protection enhance efforts in these areas?
It should be noted that the Collaboration is in line with governmentâs
objectives of building State capacity and the training courses that will be
offered will enable public servants at all levels of government to respond
effectively to the challenges of social transformation. In the long run work
undertaken in the Collaboration will reduce dependence on social
assistance.
Our objective is to cut poverty and unemployment by half by the end of our
Second Decade of Democracy and the Charlotte Maxeke Collaboration in the
Economics of Social Protection has a vital role to play in this effort. We
appreciate the commitment of the Department of Economics at the University of
Pretoria to this task and call upon researchers in the social sciences in other
academic institutions to also engage this national agenda of social
transformation.
We all bear a profound responsibility to continue the social transformation
and modernisation of our society and the launch of this collaboration augers
well for the future.
I thank you.
Enquiries:
Lakela Kaunda
Tel: (012) 312 7653
Cell: 082 782 2575
Issued by: Department of Social Development
16 January 2006
