South Africa

The 2012 development indicators: solving the problem or just describing it?

By Paul Berkowitz 27 August 2013

On Friday 23 August, the department of performance, monitoring and evaluation (DPME) in the Presidency launched the 2012 development indicators. These indicators are an annual release by the department and are essentially an aggregation of all of the most important development indicators available. The trends paint the picture of a country that is improving in many areas, doing a bit better than the broader public consensus in a few others, but unfortunately failing in one or two crucial places. By PAUL BERKOWITZ.

The report on the 2012 development indicators is a substantial one. It’s not just that it contains its fair share of graphs and charts, but that it’s managed to aggregate and collate data from so many different sources. Apart from the usual sources, including StatsSA and the Reserve Bank, there’s a collection of data from different government departments, presented more succinctly and clearly than many of the departments do themselves. This data includes the results of public surveys conducted on behalf of the government, surveys that contain interesting (and disturbing) facts about normal people’s outlooks and future expectations.

The indicators are arranged thematically, under topics like ‘economic growth and transformation’ and ‘household and community assets’. Every theme is prefaced with a comparison to the year 1994, which is the logical and almost universal choice for comparing political and economic statistics. It shouldn’t be the only point of comparison but it is easy shorthand for the public sector. It’s partly ceremonial: next year will be the twentieth anniversary of the democratic state.

Compared to 1994 is also a flattering light in which to examine the current state of affairs. The South African economy was in poor shape in the early 1990s, with high levels of public debt and low growth. The 20-year view does put into perspective the size of the task at hand in 1994 and how much has been achieved by government since then. Whether more could have been achieved is a subject of debate.

Other controversial issues with the structure and motives of the report have been repeated previously: the information is produced by government to measure the work of government. Readers may over- or under-correct for the perceived bias of the report or the unexamined bias in their heads. In the department’s defence, it is largely honest, even brutally so, when it assesses the failures of government.

In the case of economic growth and transformation the report put a slightly positive shine on the recent trends of low economic growth and pedestrian levels of investment. In most areas the government’s macroeconomic policies have been an improvement on the policies of its predecessors. Government debt was slashed and deficits squeezed for the first decade post-1994, paving the way for higher growth and an increase in social spending. The global financial crisis did push spending (and deficits) higher, but government debt remains well below 35% of GDP.

The broadly positive macroeconomic outlook hasn’t led to higher growth or a reduction in unemployment. Unfortunately, the report doesn’t measure microeconomic reforms directly.

In terms of a number of ‘international competitiveness’ rankings, South Africa has fallen down the charts over the last decade. However, the number of countries being ranked has also increased over that period – a fact which is often glossed over when these rankings are reviewed year-to-year. When this is taken into account the downward trend is still evident, although it’s much smaller, and there is even an improvement in South Africa’s relative ranking in the last two or three years.

For example, South Africa fell from 45th place in the World Economic Forum’s Competitive Rankings in 2005/06 to 54th place in 2010/11, a fall of nine places. During that period, the number of countries surveyed had increased from 117 to 139, an increase of 22 countries. Did the country go backwards during this time?

The employment story is fairly well-known: the economic has created millions of jobs since 1994 but the pool of work-seekers has grown even faster. The unemployment rate had edged lower before the 2008 slowdown but hundreds of thousands of jobs were shed in 2008 and 2009. There has been a recovery over the last four years but there are still fewer jobs in the economy now than in 2008.

The government has created millions of work opportunities through its expanded public works and community work programmes. Unfortunately a work opportunity is not a job. It is ‘paid work created for an individual for any period of time’ according to the official definition. The work done may be of benefit to a community but it is not assured beyond the life of the programme.

The measures of poverty and inequality are interesting and contentious. The living standards measure (LSM) data show that more households have attained higher LSMs over the last decade. LSMs measure consumption patterns, not necessarily income or wealth patterns. More households with fridges and microwaves could be due to lower interest rates and easier terms of credit. The research has created an ‘imputed income’ for each LSM level but indirect calculations of household income are notoriously difficult.

Calculations of Gini coefficients have been made for the country and each of the provinces. Apart from the challenges of interpreting Gini coefficients (to say nothing of the ideological debates over inequality and its role in development) the results are interesting. The national Gini coefficient for income has fallen slightly, from 0.70 in 2000 to 0.69 in 2010. The most unequal provinces in 2010 were apparently the North-West (0.73) and the Eastern Cape (0.70) while the most equal provinces were the Western Cape (0.62) and Gauteng (0.64).

In terms of absolute measures of poverty, Gauteng and the Western Cape once again scored best, having the smallest proportions of their populations living below a certain level of income. Some 26% of the population does not earn enough to have food security, but only 9% of the people in the Western Cape and 10% of people in Gauteng are this poor (Limpopo 49%).

The number of people receiving social grants has risen from 6.5 million in 2003/04 to 15.5 million in 2011/12, more than doubling. Spending on social grants has risen from 2.9% of GDP to 3.4% of GDP, and this figure has been stable for the last few years. It might even decline slightly over the medium term: the growth in grant recipients has slowed and the grants themselves are increasing by less than inflation.

The change in household community assets is a mixed bag. The government has had a major success with the roll-out of basic services, particularly water and sanitation services. Only 60% of households had access to water in 1994, and 50% had access to sanitation. These proportions rose to 98% and 83% of all households in 2012. The government is still likely to miss its target of universal sanitation access by 2014.

These measures do not take into account the overall quality of the services provided or the state of basic service infrastructure. While there have been clear improvements in service delivery, the official statistics do not convey the nuances of municipal performance.

The health statistics could be healthier. Overall life expectancy has improved over the last ten years with the increased roll-out of ARVs. Life expectancy has risen to 59 years although there is a debate over how low it was in 2001. StatsSA numbers say that it was 53 years while the Actuarial Society of South Africa (ASSA) says it was 57 years.

There’ve been other clear decreases in the infant mortality rate and the child mortality rate, and child malnutrition has been slashed over the last decade. However, the maternal mortality rate has shot up from 81 maternal deaths per 100,000 births in 1997 to 300 deaths per 100,000 births in 2010. This may be related to problems in the public health sector.

In education there has been strong growth in the proportion of children attending early childhood development facilities, particularly in the last three years. The learner:educator ratio in public schools has fallen from 34 in 2004 to 30 in 2012 but it still remains above international standards.

The percentage of learners passing their senior certificate has risen steadily over the last decade but so have the concerned voices questioning the choice of matric subjects and the quality of the syllabus. The number of learners passing matric mathematics has fallen from 136,000 in 2008 to 122,000 in 2012; the number of maths literacy passes has risen in the same time from 210,000 to 255,000.

The last two annual national assessments (ANAs) show that students are performing badly in maths and languages, and that their performances steadily decline as they progress to older grades.

As a country, our social cohesion needs work. In 2004 and 2005, 85% of people polled were ‘confident in a happy future for all races’. This figure had fallen to 58% by 2012, the lowest in over a decade. Only 39% of all respondents felt in 2012 that race relations were improving – another low. Only 38% of people feel that the country is going in the right direction, the most pessimistic reading in the last 20 years.

Interestingly, 88% of us are proud to be South African, and this figure has been consistently high over the last decade, dipping to a low of 65% in 2008. Most of us self-identify as ‘South African’ i.e. more than identify as ‘African’, through their race or through their home language. We’re all proud of who we are. We are just increasingly negative about our ability to get along with each other.

The figures on safety and security confirm that the incidence of violent crime is slowly declining, but questions remain about the underreporting of certain contact crimes, particularly crimes of sexual violence. Conviction rates for crimes are quite high, the problem is in the detection rates. These are lower, but they are improving.

Much work needs to be done in terms of good governance. The proportion of government audits which are qualified remains too high, particularly at municipal government level where just under 50% of all municipalities are still receiving a qualified audit.

The perception of South Africa as a corrupt country persists. The country fell in the Transparency International Corruption Perception Index from 32nd place in 1998 to 69th place in 2012. The number of countries did increase during this time from 85 to 176, so the familiar problems with the ordinal rankings persist. However, there is also a cardinal ranking in this index, and here South Africa declined unambiguously from 5.2 to 4.3. Most of the decline has occurred in the last three years.

Public opinion on the delivery of basic services has also declined. In 2004, 79% of those polled said they were happy with basic service delivery. In 2012 only 53% of respondents said they were happy with basic service delivery. The number of protests said to be related to service delivery has increased sharply over the last five years.

The department has done a thorough job of collecting all of this information. Whether there is a clear link between the outputs of the last twenty years and the performance of government is not clear. What power the state has to influence the outcomes of the next twenty years is also not cut-and-dried.

As an exercise in self-reflection, this is a competent job, although the thematic reviews bordered on editorialising in places. If the intention of the report is to influence policy, it could be problematic. The broad, bird’s-eye view of the report could lead to an eliding of some of the bigger problems with microeconomic policy. Some of the targeted outcomes might be beyond the scope of government’s plans.

There’s also the challenge of having to dispense advice to other governmental departments and hope that they’ll accept it, particularly when its recommendations are framed in the language of the NDP. The DPME has done very well with its powers of description. We’ll soon see if it has similar powers of prescription. DM

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Photo: A general view of the Durban Harbour with the city skyline in the background October 10, 2012. Harbour workers plan to down tools on Monday in support of the truck drivers strike, according to local media. REUTERS/Rogan Ward