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Bibliothèque Economics of South African Townships : Special Focus on Diepsloot

Economics of South African Townships : Special Focus on Diepsloot

Economics of South African Townships : Special Focus on Diepsloot

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Date of publication
Août 2014
Resource Language
ISBN / Resource ID

Countries everywhere are divided into
two distinct spatial realms: one urban, one rural. Classic
models of development predict faster growth in the urban
sector, causing rapid migration from rural areas to cities,
lifting average incomes in both places. The process
continues until the marginal productivity of labor is
equalized across the two realms. The pattern of rising
urbanization accompanying economic growth has become one of
the most visible and self-evident empirical facts of
development across the world, with almost 200,000 people
making the rural-to-urban trek every day, according to the
United Nations. Cities across the world are powering growth,
development, and modernization. The study then takes a close
look at Diepsloot, a large township in the Johannesburg
Metropolitan Area, to bring out more vividly the economic
realities and choices of township residents. Although
atypical in many ways, by the virtue of being newer, poorer,
and more informal, with a bigger concentration of migrants
(many of them foreign nationals), than the historically
established townships, Diepsloot also retains many of the
economic characteristics of South African townships: Issues
of joblessness, uneven access to basic public services, and
overwhelming levels of crime and violence are almost as
pervasive in Diepsloot as they are in other T&IS. At the
same time, an emergent informal sector more visibly pervades
the township than seen in the average township, which makes
it a particularly useful place to study in order to develop
an understanding of the kinds of economic activities that
are feasible in townships. It focuses particularly on the
nature of business activity in the township, the key
investment-climate constraints faced by its firms, income
and expenditure patterns across households, and some
aggregative social and human indicators. In a first attempt
of its kind for a township, the report also develops a
Social Accounting Matrix (SAM) of Diepsloot for a
comprehensive and consistent picture of the place, including
the circular flow of income within the township, the nature
of its interaction with the rest of the South African
economy, and a simple multiplier analysis of its economy.

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