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A caring SA government would invest in CPI data to gauge poverty

Pali Lehohla is the former Statistician-General of South Africa and a former head of Statistics South Africa. Photo: Thobile Mathonsi

Pali Lehohla is the former Statistician-General of South Africa and a former head of Statistics South Africa. Photo: Thobile Mathonsi

Published Feb 27, 2022

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To address gnawing poverty South Africa deserves better: a granular and not a grainy Consumer Price Index CPI).

The father of modern linguistics, Noam Chomsky, provides an incisive process on how public value is destroyed, “Defund, make sure things don’t work, get people angry – privatise”.

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The late Yasser Arafat, who was the chairman of the Palestine Liberation Organisation (PLO), would have none of this. He inspired how Palestine would wage its struggle. Key to this was a focused attention on knowing Palestine. To this end, in 1993 he established a small team of people to address this task.

The task was accomplished and the Palestine Statistics Office was established in 1993 with a skeleton staff of five to answer the profound question of “how do I know Palestine”. It was one of a handful of institutions that preceded the formation of the Palestinian National Authority.

I was invited to Palestine twice during my tenure as a Statistician-General of South Africa. During each visit I was held in awe on how a country beholden by Israeli brutality held its own and managed to build a modern statistical institution under those circumstances. Needless to mention that by the time I got to the airport in Tel Aviv, I felt the presence of the apartheid ghost. The full-scale impact of this was unavoidable to feel and comprehend when I got at the border into Palestine.

Here was a machine gun-mounted Nyala with an insolent apartheid look and with young Israeli soldiers armed to the teeth and trigger ready, who marched along a 2.7m fence with razor wire at the top. That left me no doubt that the ghostly spirit of apartheid, which I had felt at the airport was alive and well as I entered Palestine.

In both cases of my visit, my written interventions were about the similarities of history of existence under apartheid, which Palestine to this day suffers. But I could proudly argue that South Africa overcame this and in the same spirit, and endeavour, so too will Palestine also overcome the yoke of settler occupation from Israel.

The adoption of the subject matter in official statistics was attended primarily on understanding the challenges Palestinians faced on a daily basis. To this end poverty became a key subject of investigation. This followed hot on the heels of the running of a national population census to understand the people of Palestine and their geographic distribution.

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Central to their programme of work, was constructing measures for cost of living given the challenges of poverty and unemployment that Palestine was and is faced with to this day. To this end, national statisticians conduct a household-based survey of income and expenditure among the population.

From this is derived the Consumer Price Index (CPI) and income and expenditure patterns by strata of the population. This index measures price level changes and plays a critical role in measuring cost of living or inflation and setting of rates of interest – the repo rate in the case of the governor of the Reserve Bank.

The CPI is used as a deflator of nominal gross domestic product and converts it to real gross domestic product. The quality of this measure is the most important in any self-respecting nation. Sadly, Statistics South Africa, the eyes and ears of the nation has been defunded as Chomsky would argue.

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They have been forced to undertake a dangerous gymnastic of determining the inputs into the calculation of the CPI. This is now based on the volume and strata of products as purchased from the business operations. The volumes of expenditure by product can be collected at low cost from outlets of course. But this expenditure report will never tell you who are the poor, who are the rich, and what they are consuming and in what quantity who are buying the goods.

So the CPI based on this method is incapable of policy advice and interventions for the poor. This is especially so in matters of food at this time of vulnerability. South Africa is entitled to much better. A granular and not a grainy CPI is what South Africa deserves!

If you have to measure whether or not a government cares about the poor, just look at how they treat not necessarily the Statistics Office, but importantly the CPI. This is a measure so central to understanding poverty. The verdict currently in South Africa is that the government cares less about the poor.

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I fought this battle for an Income and Expenditure Survey to be conducted in 2016, a year before my departure from office, I lost it, my successor has too. Now over a decade, the income and expenditure survey, which has to be run every five years, has not been undertaken in South Africa. Palestinian Central Bureau of Statistics must be looking at its counterpart Stats SA with a great measure of disappointment.

Pali Lehohla is the former Statistician-General of South Africa and a former head of Statistics South Africa. Meet him @Palilj01 and @ www.pie.org.za.

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