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United Nations Development Programme (UNDP) Human Sciences Research Council (HSRC) Development Bank of Southern Africa (DBSA)


Overcoming underdevelopment in South Africa's second economy
- Synethesis report of the 2005 Development Report -


Michael Aliber

Human Sciences Research Council (HSRC), United Nations Development Programme (UNDP), Development Bank of Southern Africa (DBSA)

1 July 2005

SARPN acknowledges the HSRC website as the source of this document - www.hsrc.ac.za
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President Thabo Mbeki refocused the debate around the stubborn persistence of poverty and underdevelopment in South Africa in 2003, when he reintroduced the concept of the two economies into the policy discussion. Since then, policy-makers and practitioners in the development community have debated the existence of two economies: is the concept an apt description of the South African reality, or is it merely a metaphor, and if so, what is its value? Opponents argue that the two-economy conceptualisation runs the risk of distorting perceptions of the real problem, making solutions harder to find. Nevertheless, the introduction of the two-economy discourse has been remarkable for the extent to which it has drawn attention to the question of the persistence of underdevelopment in South African society. And despite concerns that the metaphor may lend itself to simplistic prescriptions along the lines of “how to bridge the gap between the two economies”, it has in fact stimulated us to think more deeply about why poverty has turned out to be so difficult to defeat, and what an effective anti-poverty programme might look like.

The point of departure for this Report is a simple question. Why, if the origins of economic dualism are rooted in the system of cheap, forced, migrant labour introduced with the beginnings of the mining industry and reinforced during apartheid, does dualism persist under democracy when all the relevant laws and many of the practices of the past have been abolished?

In addressing this question, this Report has sought to provide a variety of perspectives on the question of underdevelopment’s persistence. Briefly stated, it has considered the historical origins of underdevelopment in South Africa; the persistence of underdevelopment and poverty in the context of current policy; the current dimensions and trends of underdevelopment and poverty; and specific sectoral attempts to address underdevelopment. This concluding chapter offers a synthesis of these main themes, and ventures a few implications for government policy.



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