Just as the worst of the Covid-19 pandemic seems to have abated, the start of 2022...

   

 

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Just as the worst of the Covid-19 pandemic seems to have abated, the start of 2022 saw a significant amount of global uncertainty arise, as the war between Russia and Ukraine has unfolded. The impact of the unrest has been felt in various areas, however, arguably the biggest concern has been its contribution to a global cost-of-living crisis, which is rapidly constraining household budgets across the globe. As both countries are considered important suppliers of agricultural and fuel related products, subsequent supply shocks have inferred rising price levels, greater risks of stagflation and household incomes that have been unable to keep pace. This has had important implications for poverty and hunger levels, especially as the impact of rising living costs have shown to be highly regressive. In other words, they seem to affect the poorest households the most, with the crisis effects on food insecurity, malnutrition, and hunger particularly alarming, even more so, in developing countries, considering that more than 50% of the income of the poorest households is spent on food. For South Africa, this situation has been no different. Annual comparisons on price levels have placed consumers in a much worse position than the same time round last year, as they have had to deal with rising local fuel and food prices, higher public transportation costs, as well as higher costs for electricity. As a result, most recent inflation estimates (7.4% year-to-year basis) have broken through the SARB's target range of 3-6%. This all has inferred significant pressure on the country's consumers, especially considering that a large contingent of the population have been classified as poor (UBLPL rate=50.64%; LBPL = 37.56%; FPL rate=27.03%). Considering the discussion above, you are required to write a short essay on the potential effects of the cost-of-living crisis for South African consumers with a particular focus on the implications for the country's poverty landscape. In doing so, you need to provide an overview of some of the global and local drivers that have contributed to the crisis and explain what it entails for South African households. In addition to this, given the current poverty levels in the country, discuss the potential impact of the rising prices on this cohort specifically. By making use of StatsSA's latest poverty line indicators report .pdf), differentiate what this will infer for (L the different classifications (food poverty lines, upper bound and lower bound) of the poor. Finally, once you have analyzed the situation, provide government with three specific and clear policy recommendations as to how they should go about in managing the process and alleviate the rising pressure on South African households. When writing up your essay keep the following questions in mind: What is the cost-of-living crisis and what have been the underling factors that have driven the phenomenon around the globe? What products and goods has the crisis affected most considering both the demand and supply side of markets? What will be the main effects of the impact on South Africa, especially considering households and consumer spending in the country? . Considering the different poverty lines used in the classification of the poor (see StatsSA poverty lines report 2021), how do you think the crisis will affect poorer households (your discussion should include amongst others, a differentiation between the food, lower bound and upper bound poverty cohorts, which group will be affected most)? . Finally, considering the potential effects of the crisis, provide a few recommendations on how the South African government can best manage the situation. What policy responses can they introduce to alleviate the pressure on South Africans, especially the poor? Proposed/Suggested structure 1.1 ▪ Cover page (Including the essay title, group member names, student numbers, module code) ▪ Essay style (Remember, essay style writing generally incorporates an introduction, body- which is the assignment questions posed above-, then a conclusion) ▪ Reference list 1.2 Essay instructions Length: Essays to be between 1500-2000 words including cover page and reference list. Since this is a group assignment, please ensure that the essay flows logically, connecting dots in a clear manner. This means that you will have to first map/outline your essay structure in terms of what sections/paragraphs will address what to ensure the logical flow of the discussion. 1.4 Technicality of the document Font size and type: Times new roman/Arial, 11 or 12 pt. All paragraphs should be justified. Line and paragraph spacing: 1.5-line spacing between, 6pt before and 12pt after. 3/3 Referencing: NWU Harvard method to be strictly used for all referencing purposes. Ensur include all references in your text and that the bibliography at the end of the essay reflect that were included in the discussion. A minimum of 10 different sources should be used journal articles, online newspaper articles, books, working papers etc). Ensure that all in-text references are correctly formatted together with the reference list at the end. See NWU referencing guide for help. Just as the worst of the Covid-19 pandemic seems to have abated, the start of 2022 saw a significant amount of global uncertainty arise, as the war between Russia and Ukraine has unfolded. The impact of the unrest has been felt in various areas, however, arguably the biggest concern has been its contribution to a global cost-of-living crisis, which is rapidly constraining household budgets across the globe. As both countries are considered important suppliers of agricultural and fuel related products, subsequent supply shocks have inferred rising price levels, greater risks of stagflation and household incomes that have been unable to keep pace. This has had important implications for poverty and hunger levels, especially as the impact of rising living costs have shown to be highly regressive. In other words, they seem to affect the poorest households the most, with the crisis effects on food insecurity, malnutrition, and hunger particularly alarming, even more so, in developing countries, considering that more than 50% of the income of the poorest households is spent on food. For South Africa, this situation has been no different. Annual comparisons on price levels have placed consumers in a much worse position than the same time round last year, as they have had to deal with rising local fuel and food prices, higher public transportation costs, as well as higher costs for electricity. As a result, most recent inflation estimates (7.4% year-to-year basis) have broken through the SARB's target range of 3-6%. This all has inferred significant pressure on the country's consumers, especially considering that a large contingent of the population have been classified as poor (UBLPL rate=50.64%; LBPL = 37.56%; FPL rate=27.03%). Considering the discussion above, you are required to write a short essay on the potential effects of the cost-of-living crisis for South African consumers with a particular focus on the implications for the country's poverty landscape. In doing so, you need to provide an overview of some of the global and local drivers that have contributed to the crisis and explain what it entails for South African households. In addition to this, given the current poverty levels in the country, discuss the potential impact of the rising prices on this cohort specifically. By making use of StatsSA's latest poverty line indicators report .pdf), differentiate what this will infer for (L the different classifications (food poverty lines, upper bound and lower bound) of the poor. Finally, once you have analyzed the situation, provide government with three specific and clear policy recommendations as to how they should go about in managing the process and alleviate the rising pressure on South African households. When writing up your essay keep the following questions in mind: What is the cost-of-living crisis and what have been the underling factors that have driven the phenomenon around the globe? What products and goods has the crisis affected most considering both the demand and supply side of markets? What will be the main effects of the impact on South Africa, especially considering households and consumer spending in the country? . Considering the different poverty lines used in the classification of the poor (see StatsSA poverty lines report 2021), how do you think the crisis will affect poorer households (your discussion should include amongst others, a differentiation between the food, lower bound and upper bound poverty cohorts, which group will be affected most)? . Finally, considering the potential effects of the crisis, provide a few recommendations on how the South African government can best manage the situation. What policy responses can they introduce to alleviate the pressure on South Africans, especially the poor? Proposed/Suggested structure 1.1 ▪ Cover page (Including the essay title, group member names, student numbers, module code) ▪ Essay style (Remember, essay style writing generally incorporates an introduction, body- which is the assignment questions posed above-, then a conclusion) ▪ Reference list 1.2 Essay instructions Length: Essays to be between 1500-2000 words including cover page and reference list. Since this is a group assignment, please ensure that the essay flows logically, connecting dots in a clear manner. This means that you will have to first map/outline your essay structure in terms of what sections/paragraphs will address what to ensure the logical flow of the discussion. 1.4 Technicality of the document Font size and type: Times new roman/Arial, 11 or 12 pt. All paragraphs should be justified. Line and paragraph spacing: 1.5-line spacing between, 6pt before and 12pt after. 3/3 Referencing: NWU Harvard method to be strictly used for all referencing purposes. Ensur include all references in your text and that the bibliography at the end of the essay reflect that were included in the discussion. A minimum of 10 different sources should be used journal articles, online newspaper articles, books, working papers etc). Ensure that all in-text references are correctly formatted together with the reference list at the end. See NWU referencing guide for help.

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