The removal of the last vestiges of colonialism, the dismantling of apartheid and liberalizing economic policies have offered new opportunities for governments and the poor alike. Globalization has, however, brought new pressures to bear, demanding increased competitiveness in the face of declining profits that has often resulted in substantial job-losses, while at the same time reducing the opportunities that governments have had to influence the nature of economic change. The rapid growth of the HIV/AIDS pandemic compounds this situation, and it seems likely that numbers of poor have increased and the severity of poverty has increased. If this trend is to be reversed, it is essential that research on poverty dynamics be prioritized and focused on a number of questions pertinent to policy analysis. Hence the themes broadly:
Poverty and Inequality Node
A. Firstly, understanding the causes of structural poverty as opposed to transitory poverty or increased vulnerability to becoming poor. Structural poverty can be defined as a situation in which the poor are unable to accumulate the resources required to move out of poverty. Thus, because they lack productive assets, or because the commodities that they produce do not translate into a livelihood that has surplus that can be saved, poor households or individuals remain trapped in a situation of poverty. Other factors that might result in structural poverty include destructive coping strategies an unproductive asset accumulation. An example of the former is distress sales of livestock in times of need, while the storage of large stocks of maize might be an example of the latter. In this context, understanding the micro-economic consequences of macro-economic policies is necessary if we are to anticipate the impact of policies such as those often used to achieve the macro-ec! onomic stability believed to be essential for economic growth. Examples include inflation rate targeting and the related management of interest rates, trade liberalization and the removal of tariffs and quotas and finally, the management of state pending and borrowing. The reaction of firms, households and individuals to these policies can be central to the reduction of poverty or its persistence, but the relationship between such micro-economic adaptation to macro-economic policies is poorly understood. Similarly, it is necessary to understand missing or thin markets in poor areas, as well as markets that are intrinsically unfriendly to the situations of the poor as they create the conditions for persistent poverty as described above. Thin markets are caused by lack of buyers or sellers, while the lumpiness of some markets, notably financial and information markets, often meant that the poor are unable to access important resources simply because they are poor. The lack of! insurance for poor producers is an example of an important missing ma rket.
B. Transitory poverty is related to the impact of shocks in individuals, households and communities. For Southern Africa, particular attention has to be paid to the impact, both in terms of poverty and inequality, of HIV/AIDS. Other concerns include the impact of floods such as the recent events in Mozambique and that of other illnesses such as cholera and malaria.
C. Access to social networks or social capital can potentially overcome some of the deficiencies of markets. However, the ways in which these networks function and change over time is another area that is inadequately understood. In particular, the reasons for and impact of exclusion from these networks, is an important issue.
D. In the Southern Africa context in particular where both one-way and two-way (oscillating) migration has been a fact of life for the past century of industrialization, the interaction between poverty and inequality on the one hand and migration on the other needs to be better understood. This will require particular collaboration between the UCT and Wits Nodes.
E. Finally, the inter-generational transfer of poverty has received very little attention in the Southern African context. This refers to how household life-cycle change impacts upon the future trajectory of family members on the longer run. Once again, the impact of HIV/AIDS has to be an important element of this research topic, while transitions through different stages or states in the life-cycle must also be examined. In particular, the transition from adolescence to adulthood is important as this is the period during which children acquire the life skills with which to become sexually active adults, become parents, and enter the labor markets.
The Poverty and inequality node is housed by Southern Africa Labour and Development Research Unit : - SALDRU