Pretoria, April 10, 2018 – According to a recently released World Report, the number of poor people in South Africa has increased by reducing inequality by creating skilled jobs for the poor, increasing competition and policy certainty, and attracting skilled immigration. By combining a range of policy interventions to boost growth, this could be reduced by more than half by 2030. Bank report.
Forecasting the South African economy to 2030th The South African Economic Update: Focus on Employment and Inequality edition assesses the potential impact of a combination of different policy interventions on employment, poverty and inequality. The report presents a scenario in which the number of people living in poverty falls by more than half, from 10.5 million in 2017 to 4.1 million by 2030, and the Gini index of inequality declines from 63 in 2017 to 56 in 2030. It shows. As a result of these interventions, the economy could grow at an annual rate of 2.2% and 800,000 jobs could be created.
“This report shows that reducing South Africa's high levels of inequality requires the education and space needed to provide the poor with the skills they need to meaningfully participate in a capital- and skills-intensive economy like South Africa's. We see that we need better integration,” said Paul Numba Umu. Bank country director. “This will need to be complemented by policy interventions that foster further growth and provide fiscal space to fund these reforms.”
This economic update reviews the development and nature of South Africa's inequality, which is among the highest in the world, and which will be exacerbated by the development of a labor market that demands skills that the country's poor currently lack. It claims to be accelerating. This is based on the forthcoming World Bank Systematic Country Diagnosis and the recently released Poverty and Inequality Assessment.
Without policy interventions modeled in the Economic Update, South Africa, on its current trajectory, will not achieve the development goals outlined in the country's National Development Plan of creating sufficient jobs, eradicating poverty and reducing inequality. I wouldn't be able to do that. Under a base case of average annual growth of 1.4% in gross domestic product (GDP), the number of people living in poverty would decline from 10.5 million in 2017 to 8.3 million in 2030. Additionally, 215,000 decent jobs will be created each year, mostly in the skilled and semi-skilled workforce, and the poverty rate will fall from 18.6% in 2017 to 12.7% in 2030. The Gini coefficient is expected to decline from 62.8 in 2017 to 59.5 in 2030, and the unemployment rate is expected to reach 26.7%, up slightly from 27.2 in 2017. In 2030.
“Despite the low growth environment that South Africa currently faces, continued educational improvements are gradually paying off as the poor acquire skills and the share of incomes going to skilled workers increases.” said Sebastian Dessus, World Bank project leader. “As a result, he predicts that income inequality in 2030 will be smaller than in 1996.”
The report argues that educational improvements can be made more effective by strengthening teacher capacity, accountability and financial support for poor university students. This will increase the number of poor students obtaining advanced degrees from 2.2% in the baseline scenario to 4.6% in 2030.
Furthermore, in terms of strengthening spatial integration, investing an additional 1% of GDP each year in mass transport systems and social housing would reduce prices and accelerate GDP growth through increased labor supply. This will lift an additional 500,000 people out of poverty. The Gini index of inequality is expected to decline by a further 0.7 points, with vulnerable households and the temporarily poor being the main beneficiaries.
The report also argues that a low-growth environment reduces the effectiveness of such interventions and puts a strain on public finances. Domestic factors such as policy uncertainty, declining business and consumer confidence, and supply constraints have been cited as restraining South Africa's growth since 2015.
The report suggests that reducing policy uncertainty could increase investment in mining by 25% and increase GDP levels by an additional 3% in 2030. It also suggests that increased competition could increase GDP levels by 5% in 2030, which alone could create 400,000 jobs. Finally, the report notes that accelerated migration to skilled labor could ease skills constraints in the short term and create more semi-skilled and unskilled jobs. is revealed. The study estimates that each additional skilled immigrant conservatively creates 0.5 semi-skilled or unskilled jobs, and that an additional 150,000 skilled immigrants could boost GDP levels by an additional 2% in 2030. It suggests that.
