Urban poverty
The informal economy in South Africa: issues, debates and policies. Reflections after an exposure dialogue programme with informal workers in Durban, South Africa
From Ahmedabad to Durban - reflections on informal workers
Authors:
I. Valodia (ed)
Publisher:
School of Development Studies, University of Kwazulu-Natal, Durban, South Africa, 2007
This paper offers reflections after the Durban Cornell-SEWA-WIEGO Exposure Dialogue Programme (EDP). The programme's objective is to continue and develop further dialogue between labour economists, SEWA activists, and WIEGO researchers. The EDP in South Africa was planned to deepen the dialogue by drawing on the experiences of informal workers in another context, where the history of economic development, the economic reforms and, in particular informal employment patterns, differs substantially from that in Ahmedabad, India.
The South African experience is able to enrich the discussion in a number of ways. First, the informal economy in South Africa co-exists with extremely high levels of open unemployment. Second, labour legislation in South Africa is considered to be very progressive and enlightened. Third, by developing country standards, South Africa has a fairly comprehensive social security system which effectively reaches the poor. Fourth, since 1994 the ANC government has attempted rapidly to integrate the economy into the global economy through liberalisation of trade, and more broadly, of the economy.
Key reflection points from contributors include that:
- one of the big policy questions in South Africa appears to on the high unemployment rate - many have been questioning the process of collection of statistics in South Africa
- globalisation is linked with downsizing, cost-cutting, layoffs and outsourcing - the informal sector is important in this context, because it now acts as an "employer of last resort", as long as there is sufficient ease of entry
- income inequality is on the increase within countries - hhowever, the picture on income inequality between countries, and on non-income inequality, the view is much less clear
- the South African record on economic development and policy reduction is one of impressive progress - at the same time, much more remains to be done. A realistic goal is for South Africa to strive to eliminate poverty by today’s standards. From international experience, there are two main pillars of an anti-poverty strategy: improving earning opportunities for the disadvantaged, be they in the formal economy or the informal economy, and secondly, expanding basic social services to those who do not yet have them.
