SECTION I 7.21.1.14 Policy
3.15 CHALLENGES FACING DURBAN
major structure that held the potential to help un-block development in the DMA was the Durban Functional Region Development Forum (DFR-DF).
rates in per capita income of over 7% (assuming a flat population growth, which is driven by the AIDS phenomenon in Durban) (Durban At The Crossroads 2000:7).
3.15.2 The Growth Challenge
Durban needs a quantum leap in its current growth rates. Output has grown by 1.8 % over the decade far below the required growth of about 7.5%.
3.15.3 The Jobs Challenge
Unemployment is currently at about 30-40%. More precise figures are difficult to come by, due to the multiple sources of data and different definitions-in use of employment and unemployment. Jobs in the formal sector have grown 0.7% over the past decade. To achieve this vision will require job growth of 3.1 % per year to 2020.
This challenge is set in a current context of formal sector job losses of about 10,000 per annum in the manufacturing sub sector of the formal economy over the past four years (a trend which seems to be continuing the year 2000) (Durban At The Crossroads 2000:6).
3.15.4 Sustainable Jobs Challenge
The city needs to double the number of people employed in secure sectors, defined as those sectors with relatively high incomes and sustainable jobs for longer periods oftime.
Only 1 of 3 economically active people are in declining industries. To meet the vision 2 in 3 economically active people need to be employed in a healthy growing formal sector of the Durban economy (Durban At The Crossroads 2000:7).
3.15.5 The Skills Challenge
Durban needs to invest in upgrading skills of the population. Durban has an exaggerated skills deficiency, relative to both Johannesburg and Cape Town. It has a relatively higher proportion than either other city in the category of 'below standard 5 education" and a lower proportion of people with matric/tertiary qualifications.
Overall, 66% of the population is classified as 'skilled". Further compounding this problem in Durban is the acute "brain drain problem-graduates tend to leave Durban
and move both to other parts of South Africa and to countries abroad. Therefore, investing in upgrading the skills-base in Durban includes both the elimination of illiteracy and a reversal in the trend of skills 'leaking' out of the city (Durban At The Crossroads 2000:7).
3.15.6 The Distribution Challenge
In order to meet its vision, Durban needs to eliminate its poverty. Currently Durban has a Gini coefficient of 0.54. The Gini coefficient is a measure of the percentage of income associated with a proportion of households. A Gini coefficient of 1 represent a situation where 1 % of household earn all the income, where as a Gini of 0 describes a situation where there is an equal distribution of income amongst all households.
Durban's Gini of 0.54 compares favourably with South Africa's as a whole (which is about 0.63), but South Africa's Gini is higher than any other country in the world, with the exception of Brazil. In other words, while Durban's distribution of income is better than that for South Africa, it is still very unequal relative to what is possible in the world. In this regard, 7%of household earn no income at all, and 45% of households earn less than R1500 per month. In order to achieve the vision, Durban will need to create a situation where all citizens are living above the poverty line within the next two decades (Durban At The Crossroads 2000:7).
3.15.7 The Empowerment Challenge
Within the city, the African population fares worse than other groups. It has a higher concentration of both unemployed people and poor people, and has relatively much fewer degrees, matric qualifications and averages income: (Durban At The Crossroads 2000:8).
3.15.8 The Service Delivery Challenge
Services charges in Durban are relatively high compared to other cities in South Africa, suggesting that there is limited potential to increase the price of services (while Durban is well positioned financially to deliver the required services, it has the
138
•
•
•
•
•
•
•
•
•
•
highest servIce charges in the country according to the Department of Finance:
Intergovernmental Review).
Durban therefore, requires economic growth rather than increased service charges to sustainably deliver more growth rather than increases charges to sustainably deliver more services. The quality of services delivered in Durban is believed to be of the highest standard than the services delivered in the rest of South Africa. In addition, the funding burden is distributed more evenly, given a greater concentration. The central role for economic growth, as an engine that will drive services upgrading and improved delivery, is clear. The alternative is either limited growth in service delivery- or increasing fiscal imbalances.
The need for service substantial 1 in 4 residences still have unmet basic needs. An analysis from the Water Department suggested that a growth rate of over 6% is required to be able to deliver the required infrastructure and services to meet the quality of life goal that have been set (Durban At The Crossroads 2000: 8).
Durban is facing significant challenges. In the next decade it will need to (Durban At The Crossroads 2000: 9):
Increase per capita incomes to R33 000 per annum;
Create 650 000 jobs in the most sustainable areas of the economy;
Increase its growth rate to over 7% per annum;
Improve the standard of living of the poorest 50% of its population;
Empower the African population to own an increasing share of assets;
Improve income distribution;
Deliver improved services to all in Durban;
Increase the contribution of GDP of small and micro businesses;
Train the best formal educated population in the country;
Ensuring across the board literacy, numeracy and entrepreneurial skills, and to align skills to sectoral and growth needs.
Table 3.1 Shares for both African and Whites Population
Share of Mean for Durban Share of African Share of White population in Durban population in Durban
Poor pOPlllation 44% 67%) .J..I ')01 /0
Unemployed 31% 46% 6%
Pop dation
Uni ersitj Degrees 3% 1% In%
Matriculation 24% 17% 40%
Qualification
Average Income R 10.542 R4.57[) R32.389
Source: (Durban At The Crossroad 2000:8)
Clearly, the legacy of apartheid can be read from this data comparing average income as determined from the poverty survey in Durban the number is much lower, but there is a tendency within surveys of this nature to understate income. Comparison within the survey is meaningful since the same bias applies to all- the white population earns on average R32.000 per annum, and the African population has an average income of about R4.500 (about 117 of the white level). The average white income for the white population is currently at the level, which the vision suggests for Durban as a whole. (Durban At The Crossroad 2000:8).