In search for a new social welfare system : is the basic income grant the appropriate policy framework for developing societies?

Abstract

This paper critically discusses the Basic Income Grant debate in South Africa. It briefly looks at the theoretical framework on poverty as a background. Then it goes on to three major theories that help build a coherent argument. Although it acknowledges the limitations of the Expanded Public Works Programme, nevertheless it uses it as one of the reasons for substantiating the perspective which articulates that Basic Income Grant is not an appropriate social welfare policy framework for a developing country like South Africa. The rationale is that social grants cannot be used as the sole tool for alleviating poverty especially because of the chronic nature of unemployment (which is understood in this paper as causing high rate of poverty). The assumption is that promotion of a universal grant would endorse dependency from the social grant recipients. It argues that the structural nature of unemployment is what has to be dealt with but not exactly through provision of Basic Income Grant but by getting people to work, giving them jobs so they can earn a living and live an independent and decent life. One of the few recommendations brought up (taken from Bhorat. 2002) is the expansion of the State Old Age Pension instead of starting a totally new scheme of the social grant. State Old Age Pension would almost have the same effect in poverty as the proposed Basic income grant.