Chapter 6

South Africa is still experiencing difficulties, particularly in relation to issues of capacity-building to facilitate more efficient utilization of financial resources for social development, as well as to the Government's commitment to strengthen regional and sub-regional cooperation and partnership for social development.

Unlike other countries on the continent, South Africa, does not have a structural adjustment program. In 1996/97, South Africa used R34.4-billion of its revenues to service debt. In 1997/98 this amount increased by R5.2 billion. Debt service costs average 21,3 % of total estimated expenditure. In real terms, this means that for every rand collected, about 24 cents is spent on interest on Government debt. Clearly, this situation is both untenable and unsustainable. The bigger the country's deficit, the more it has to borrow, the higher the interest bill and the less money there is to invest in social development, poverty relief and other Government programs. It is for this reason that reducing the debt burden is important. The GEAR strategy - South Africa's macro-economic policy is being implemented in a context of fiscal constraints. However, South Africa is able to report that social services have not suffered budget cuts and social development has not been sacrificed to attain macro-economic stability.

Debt relief and social services are the two areas that affect poor women disproportionately. There are many benefits for women that flow from GEAR. The most important is the re-prioritization of the budget, which has resulted in increased expenditure in favour of social development and poverty relief. While there is a debt problem, it is not external debt. If this were the case externally enforced structural adjustment programs would result.

The urgent need to reduce fiscal deficits in an environment of financial uncertainty, low economic growth and already high levels of Government expenditure has limited increases in Government outlays and allocations to departments. Nonetheless, recent budgets show that within this constrained fiscal environment, social services expenditure has been safeguarded and even increased in real terms. Government budgets reflect a substantial re-prioritization of expenditure since 1994, giving expression to the commitments of the RDP. An increasing share of spending is being allocated to social services, justice, prisons and water services with the relative importance of defense, industrial subsidies and administrative functions declining. In addition to increasing expenditure and the re-prioritization of expenditure, growing attention is also being given to the efficiency and quality of service delivery and the elimination of waste.

The relative importance of expenditure on social services in the South African budget is; reflected in the tables attached to the report. Table 26 sets out the functional distribution of consolidated national and provincial expenditure between 1995/96 and 1998/99 as well as forward estimates for the period 1999/00 to 2001 /02. The forward estimate is derived from the Medium Term Expenditure Framework (MTEF), with the figures for 1999/00 to be voted by national and provincial parliaments.

Source: Budget Review 1999, Department of Finance

From Table 27, it is clear that in 1998/99 social expenditure comprised 47,7 % of total national and provincial budgets. The three major categories of social expenditure are education (22,4 %), Health (11,2 %) and Welfare (9,3 %).

TABLE 27: CONSOLIDATED NATIONAL AND PROVINCIAL SPENDING BY FUNCTION 1995/96 TO 2001/02

Source: Budget Review 1999, Department of Finance

These proportions are all high compared to a cross-section of middle-income developing countries. They illustrate Government's strong commitment to social provision. As a proportion of non-interest expenditure, social services comprise nearly 61 % of consolidated expending.

Excluding the contingency reserve, the social services are expected to position over the MTEF period (remaining at 47,7 % of expenditure). The share of the contingency reserve is likely to be allocated to support the social services.

The bulk of social expenditure takes place at the provincial level, as the provinces are responsible for actual delivery while the relevant national departments are mostly responsible for policy formulation and coordination. The provinces fund their expenditure from their equitable share of national revenue and from conditional grants. The equitable share to provinces is determined by a set of indicators reflecting the demand for social services, including demography, poverty and historical backlogs.

Regarding growth of expenditure on the social services, the table suggests that between 1995/96 and 1998/99, total social service expenditure increased by an average 12 % per year, compared to an average inflation rate below 8 % and growth in total expenditure of just over 10 %. Education expenditure increased by an average of 10 % per year, Health by 13,0 % and Welfare by 9,3 %. Housing increased by an average of 25 % per year. After this rapid expansion, expenditure will stabilize over the coming three financial years. Compared to an expected inflation rate of 5,1 % per year, social service expenditure, before allocation of the contingency reserve, is expected to grow at 5,4 % with the Health expenditure growing the fastest at an average 6,8 %.

Further analysis of the budget suggests that 55 % of non-interest Government spending in 1997/98 was on education, health and welfare services. This figure rose to 60 % in 1998/99. A recent study prepared by the Financial and Fiscal Commission for UNDP and UNICEF showed that approximately 46 % of the total education budget are spent on basic education. In real terms, the increase in expenditure on basic education between 1995 and 1996 was 12.8 %.

While only 12 % of total public sector expenditure were devoted to basic health services in 1992/93, the budget for basic health services had increased to 20 % of the total health budget by 1995/96. In addition to the redistribution of health expenditures described, a program is in place to meet the basic needs through the free healthcare policy for pregnant women and children under six and the primary school nutrition programs.

CONSTRAINTS, OBSTACLES AND SOLUTIONS

The following constraints, obstacles and possible solutions for social development were identified:

Table 29: Constraints, Obstacles and Solutions

Overall Assessment of the Implementation Process

The Copenhagen Declaration has served as the framework for a number of advances in social development in South Africa. However, these achievements have yet to be integrated into a national strategy for social development and a national strategy for the eradication of poverty. The advent of its first democratic Government provided South Africa with an unrivalled opportunity to address the Commitments of the World Summit for Social Development. It came with the political imperative, commitment and expectation that the plight of those historically disadvantaged in education, health, welfare and employment must be addressed. This period provided an unprecedented freedom to introduce transformative policies and Iegislation. The national budget was realigned without creating an additional fiscal burden. The opportunity has also been sized to raise the profile and situation of Government within all spheres; the creation of statutory structures to highlight issues; and the careful utilization of the national budget in the interest of women, particularly poor women. The targets for providing universal access to basic education are attainable. The gender gap in primary and secondary education is relatively small and can be closed. More serious work will be done on other forms of gender imbalance, especially in management. Abuse of girls and women in education settings is also targeted for vigorous attention. Since there has been definite progress towards eradicating poverty through decisive national action and international cooperation, we can confidently report on advancing and consolidating work in the eradication of poverty and inequality.

FURTHER INIATIVES

In 1998 the Presidency established the Co-ordination and Implementation Unit (CIU), now called the Policy Co-ordination and Advisory Services (POCAS). The core mandate of POCAS is to monitor the implementation of all Government policies, programs and strategies. Key among its priorities is the development of poverty monitoring mechanisms and the formulation of a country strategy on human resource development.

The South African Government has recognized that it will not be able to deliver on the Commitments of the World Social Summit on its own and that its successes will depend, to a large extent, on the involvement of civil society, NGOs, grassroots communities and the partnerships for social development.

One such partnership is the establishment of the South African Committee for Social Development. This arose from a National Follow-up Conference on the World Summit for Social Development, which was held in May 1998 in Johannesburg. The aim of this committee was to support Government in the implementation of the Summit Commitments. The conference was a catalytic effort for an inter-sectoral approach to the eradication of poverty. It also provided a platform for further discussions. Major demands in social development, together with the Commitments of the World Summit, were identified and culminated in a renewed commitment

Through its various structures, the South African Government has already begun to undertake a range of activities that have a direct impact on social development.

• Analyzing the implications of globalization on social development and formulating policy where necessary.

Globalization has put downward pressure on social development, especially in developing countries. South Africa must be fully informed about the impact of globalization on the areas of social development. It is also imperative that we identify the interventions that are required in order to meet the objectives set out in the ten commitments of the Copenhagen Declaration.

• International resources must be targeted at social development.

Where international resources are available, they must be appropriately targeted in order to be most effective. For example, the needs of the marginal groups and the most vulnerable must be given priority within an integrated approach on regional level be encouraged.

• Integration of the ten commitments into all major agendas.

Integration of the ten commitments can contribute towards fast-tracking the whole process.

• Good governance and democracy must be promoted and established.

• The creation of a Resource Center for Poverty Alleviation Programs.

Governments, NGOs, CBOs and other international agencies can access information on poverty alleviation programs. The Resource Center could enable the review of strategic planning, operational procedures, and resource acquisition plans in order to ensure that they are consistent with sustainable development policy.

• The compliance of all African Governments to the 20/20 proposal.

We should strive to have compliance with the 20/20 initiative.

• Engendering social development.

There is a need to further increase women's participation in politics and to promote their equal representation indecision-making structures through empowerment and Leadership.

• Conflict and political instability

At the regional and sub-regional levels, conflict and political instability in and among some of the sub-Saharan countries has had a crippling effect on developmental programs in general and on unemployment and poverty eradication in particular. These conditions have also had a negative effect on many countries' efforts to establish democratic processes and good governance practices.

The major problem in reforming the public sector is that the civil service is highly politicized and fiercely resistant of change. Governments lack resources and skilled personnel to institute the required reform measures.

The ILO highlighted the "employment crisis" in the sub-region, noting that although economic growth started to pick up in 1995, the labour force in Eastern Africa was growing at 3-3.5 % and at 2.5 % in Southern Africa annually. Unemployment rates were high (between 15-25 %) in the two sub-regions, with open unemployment somewhat higher in Southern Africa.

Therefore, the region faces the following challenges:

• accelerating economic growth rates to 6-8 % annually;

• ensuring that economic growth is made more employment-intensive to reduce levels of unemployment by allocating a greater proportion of investments by both public and private sector to this effect and through the pursuit of productivity enhancing policies;

• intensifying formation and implementation of national unemployment policies to achieve the above ends;

• ensuring that countries formulate and implement fully all ILO core conventions which ensure freedom of associations, avoid discrimination in employment and eliminate forced and child labour; and

• ensuring greater participation on employers' and workers' organizations and other civil society associations, especially in the informal and rural sectors, in socio-economic policy formulation and implementation.

Member countries passed a resolution, which if addressed, will assist in overcoming the difficulties currently being encountered in implementing the summit's commitments.

The oppressive apartheid regime has left South Africa with a legacy of under-development, the magnitude of which South Africans are just starting to appreciate. When the new Government assumed power in 1994, the content of every South African's life was defin3d by the colour of skin and level of income. Five years later, the discrepancy in development between white and black South Africans still poses a major challenge to Government.

Because of the depth of deprivation, 61 % of Africans live under conditions of abject poverty, while only 1% of whites is poor. It is this reality that informs the country's continued call to the African and international continents to work closely with South Africa in the development of a peaceful and economically stable South Africa and Africa.

The universal challenges for social development are encapsulated in the ten commitments of the World Summit for Social Development. The South African challenge is to transform these commitments in term of local needs and possibilities. In our common pursuit for social development, which aims at social justice, solidarity, harmony and equality within and among countries, with full respect for national sovereignty, territorial integrity, national policy objectives and development priorities, religious and cultural diversity and for all human rights and fundamental freedoms, our vision is to restore the dignity of Africa and its people. This include:

• establishment of democratic political systems to ensure the accomplishment of the goal that "the people shall govern";

• ensuring that these systems take into account African specifics so that, while being truly democratic and protecting human rights, they are nevertheless designed in ways which really ensure that political and therefore, peaceful means can be used to address the competing interests of different social groups in each country;

• establishing the institutions and procedures which would enable the continent collectively to deal with questions of democracy, peace and stability;

• achieving sustainable economic development that results in the continuous improvement of the standards of living and the quality of life of the masses of the people;

• qualitatively changing Africa's place in the world economy so that it is free of the yoke of international debt burdens and no longer only a supplier of raw materials and an importer of manufactured goods;

• ensuring the empowerment of the women of Africa;

• successfully confronting the scourge of HIV/AIDS;

• the rediscovery of Africa's creative past to recapture the people's cultures, encourage artistic creativity and restore popular involvement in both accessing and advancing science and technology;

• Strengthening the genuine independence of African countries and continent in their relations with the major powers and enhancing their role in the determination of the global system of governance in all fields, including politics, economy, security, information in intellectual property, the environment and science and technology (Mbeki 1999).

The Government of South Africa, however, recognizes that there are still many imbalances that exist in respect of fundamental human rights as guaranteed in the South African Constitution. Thus this Report to the United Nations can be used as a benchmark against which future developments can be measured.

Contents   |    Chapter 1   |   Chapter 2    |   Chapter 3   |   Chapter 4   |    Chapter 5   |   Chapter 6   |    Chapter 7   |   Appendix