The penalty of rural birth

2011-11-19 11:11

While I warmly welcome the effort to highlight the economic empowerment of ordinary black people in City Press’s black wealth series a few weeks ago, the omission of us rural folks from the analyses did not sit well with me.

A significant number of black South Africans are linked in one way or another to rural South Africa, so to analyse black economic activity without paying attention to nuances brought about by the rural element was erroneous.

Economist Branko Milanovic, author of The Haves and the Have-Nots, is quoted as saying: “One’s income?.?.?.?crucially depends on?.?.?.? place of birth. All people born in rich countries thus receive a location premium?.?.?.?All those born in poor countries get a location penalty. It turns out that place of birth explains more than 60% of variability in global incomes.”

For black youth in South Africa, this could be used to explain the birth penalty or premium for those born in rural Zebediela or urban Soweto.

There has indeed been significant transformation of the economy after 1994, but most of those advances have been exaggerated.

Firstly, to my knowledge, the statistics about property “ownership’’ by population groups, especially the highlighted “two dwellings or more”, includes mostly second dwellings that migrant workers have in rural areas. Listing these dwellings as a sign of economic progression is a political platitude because rural homeowners do not have title deeds nor are there markets for their properties.

Hence banks do not fund building or buying of houses in rural areas. In financial terms, the houses are worthless.

The average value of houses “owned” by different race groups were highlighted as heavily skewed to whites, but a bigger question for me is how much equity do blacks have in their residences.

It’s a known fact that home loans advanced after 2003 are mostly in the red because of receding property prices since the 2008 economic meltdown.

Unlike most townships surrounding the cities, rural folks have not seen much improvement to living spaces beyond the dry water tap 500m away from the house or basic electricity access.

Rampant corruption, skewed infrastructure funding models and cadre deployment have put the brakes on development.

However, another significant contributor to the hapless state of rural areas is the continued ignorance of these places by the mainstream media, as political parties and governments tend to focus on areas in the media glare.

I hope editors realise that when urban citizens have mostly migrated to consuming media digitally and freely, it is the rural areas that will remain as a market for print media.

The apartheid-style spatial development of our cities, which government continues to fuel by building RDP houses in remote townships, and the crumbling state of city infrastructure must awaken all of us to the dire need to build viable rural economies so that those who prefer these quiet and open spaces are not forced to move to appalling informal settlements in the false hope of keeping the wolf at bay.

Of all the economic transformation ideas put forward by the ANC Youth League, one that resonates with me, but which has largely been ignored, is the assertion that “cities are built and not just adopted from one government to another’’.

The small cities of Mafikeng, Polokwane and Mbombela need government attention to ensure that they can provide economic opportunities to rural folks.

The same could be said about building universities and other socioeconomic institutions. Transport and other infrastructure, as well as entrepreneurial activities, would follow the new markets that government must deliberately create.

It is also clear from the recent global economic meltdown that steering ours into a service-based economy, given the problems we have with the education system, will not solve the joblessness problem.

Rural jobs for the unskilled must come from economic or social infrastructure development, agriculture and mining.

Serious effort is required to make agriculture appealing to the youth as well as to unlock the potential of minerals beneficiation through increased power generation investments (the Eskom build programme is not nearly enough).

Credit must go to the ICT and banking industries for their progressive success in bringing the rural areas into the mainstream economy, although my sense is that tailor-made consumer education is required to avoid the current situation wherein rural youth use technology mostly for entertainment and social networks, instead of educational and entrepreneurial activities.

The challenge for the black middle class is to strike a balance between consumption expenditure (including the average 20% of income we spend on “extended” family) and investment for the future, so that generations to come will stand on our shoulders and reach for greater heights.

Not yet Uhuru!

» Mokaila is a professional engineer in the mining and minerals processing industry. Follow Mokaila on Twitter: @LetonaTefo

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