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Economic policy in the post‐colony: South Africa between Keynesian remedies and Neoliberal pain

2004; Taylor & Francis; Volume: 9; Issue: 1 Linguagem: Inglês

10.1080/1356346042000190385

1469-9923

Thomas A. Koelble,

Economic Theory and Policy

Click to increase image sizeClick to decrease image size Notes Sampie Terreblanche, A History of Inequality in South Africa 1652–2002 (University of Natal, 2002); and Sahra Ryklief, ‘Does the emperor really have no clothes? Thabo Mbeki and ideology’, in: Sean Jacobs & Richard Calland (eds), Thabo Mbeki's World: The Politics and Ideology of the South African President (University of Natal Press, 2002), pp. 105–20. Patrick Bond, Against Global Apartheid: South Africa Meets the World Bank, IMF and International Finance (University of Cape Town Press, 2001), pp. iv–ix. B. Freund & V. Padayachee, ‘Post‐apartheid South Africa: The Key Patterns Emerge’, Economic and Political Weekly, 16 May 1998, pp. 5–14. John S. Saul, ‘Cry for the beloved country: the post‐apartheid denouement’, in: Jacobs & Calland, Thabo Mbeki's World, pp. 27–52. Ashgar Adelzadeh, ‘From the RDP to GEAR: The Gradual Embracing of Neo‐liberalism in Economic Policy’, Transformation, Vol. 31 (1991), whole issue. Paul Williams & Ian Taylor, ‘Neoliberalism and the Political Economy of the New South Africa’, New Political Economy, Vol. 5, No. 1 (2000), pp. 21–40. Hein Marais, South Africa: Limits to Change—The Political Economy of Transition (University of Cape Town Press, 2001). The Gini index is used by the United Nations to ascertain inequality levels in all countries and there is a race between South Africa and Brazil for the dubious distinction of being the most unequal society in terms of poverty and wealth spread. Glenn Adler & Eddie Webster, ‘Introduction’, in: Glenn Adler & Eddie Webster (eds), Trade Unions and Democratization in South Africa 1985–1997 (University of Witwatersrand Press, 2000), pp. 1–19. Center for Enterprise and Development Roundtable, ‘Why is South Africa Failing to Get the Growth and Job Rates it Needs?’, Occasional Paper No. 6 (2001). Bond, Against Global Apartheid, pp. 96–7. Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Cornell University Press, 1986). Bernard Magubane, ‘Pluralism and conflict situations in Africa: a new look’, in: Bernard Magubane, African Sociology—Towards a Critical Perspective: The Collected Essays of Bernard Makhosezwe Magubane (Africa World Press, 2000), pp. 52–3. Benjamin Lee & Edward LiPuma, Derivatives and the Globalization of Risk (Duke University Press, forthcoming). See also Benjamin Lee & Edward LiPuma, ‘Cultures of Circulation: The Imaginations of Modernity’, Public Culture, Vol. 14, No. 1 (2002), pp. 191–214. Manuel Castells, The Information Age: Economy, Society, and Culture (Blackwell, 1997). Anthony Giddens, The Third Way: The Renewal of Social Democracy (Polity, 1998). See also Tony Blair & Gerhard Schroeder, Europe: The Third Way—die Neue Mitte (Labour Party and SPD, 1999). See Nicoli Nattrass, ‘Gambling on investment: competing economic strategies in South Africa’, in: Gitanjali Maharaj (ed.), Between Unity and Diversity: Essays on Nation‐building in Post‐apartheid South Africa (Institute for Democracy in South Africa (IDASA), 1999), pp. 75–95. See Marais, South Africa, p. 32. It is an interesting footnote that some of the ANC's leadership cadre has now begun substituting the word ‘Reconstruction’ for the word ‘Redistribution’ when they speak of GEAR. See, for instance, Zola Skweyiya, ‘Pushing back poverty’, Sunday Times, Suppl., 15 December 2002, p. 3. While this may be a misprint, the change would not be accidental. See, for instance, Hein Marais, ‘The logic of expediency’, in: Jacobs & Calland (eds.), Thabo Mbeki's World, pp. 83–100. See Nattrass on the intellectual origins and assumptions of GEAR in ‘Gambling on investment’, pp. 83–8. Nattrass explicitly links the SAF document Growth for All with the GEAR policy. Nattrass is not the only commentator to do so. Terreblanche, Marais and a host of other writers on the RDP/GEAR saga have done so. Trevor Manuel, Minister of Finance, Budget Speech 2002, Parliament, 20 February 2002. The speech is available on http://www.gov.za. Terreblanche claims that since 1996 over one million jobs have been lost in the SA economy. Terreblanche, A History of Inequality, p. 31. South African Development Monitor, Vol. 2, No. 1 (1996), p. 1. Some neoliberal critics argue that the labour regulations brought in under the Basic Conditions of Employment Act (1997) and the Industrial Relations Act (1995) are not based on liberal, free‐market principles as they introduce ‘rigidities’ into the labour market. It should be pointed out that, given the unregulated and highly exploitative nature of the labour system under apartheid and colonialism, it is not surprising that the ANC has sought to introduce a modicum of labour regulation to protect the workforce from unfair dismissal and has provided institutions of recourse that did not exist prior to 1994. It must also be pointed out that these regulations are in no way, shape or form any more onerous on the employer than in any OECD environment. They merely ensure that South African labour practices are brought in line with those of any other free market economy. R. Cassim & D. Onyango, ‘South Africa’s Trade Reform and the World Trade Organisation: Background and Progress', Trade and Industry Monitor, Vol. 19 (2–9 September 2001), pp. 12–23. See the discussion by P.G. Eidelberg, ‘Tripartite alliance on the eve of a new millennium’, in: Adler & Webster, Trade Unions and Democratization in South Africa 1985–1997, pp. 129–58. See Patrick Bond, Unsustainable South Africa: Environment, Development and Social Protest (University of Natal Press, 2002), pp. 185–254. Trevor Ngwane in Ben Cashdan's documentary film Two Trevors Go to Washington. It is common to hear the charge from activists such as Ngwane that the ANC's ‘Black Empowerment’ policies are a ‘gravy train’ designed for a few cronies of the governing elite and a drop in the bucket when compared to the dire needs of the majority of citizens. Gourevitch, Politics in Hard Times, pp. 35–70. John Comaroff, ‘Reflections on the colonial state, in South Africa and elsewhere’, in: Abebe Zegeye (ed.), Social Identities in the New South Africa (Kwela Books, 2001), pp. 37–80. For a structural analysis of the demise of apartheid, see Robert Price, The Apartheid State in Crisis: Political Transformation in South Africa 1975–1990 (Oxford University Press, 1991). See Stephen Gelb (ed.), South Africa's Economic Crisis (David Philip, 1991). See Terreblanche, A History of Inequality, pp. 78–84. Clem Sunter, The New Century: Quest for the High Road (Human and Rouseau, 1992). Sunter was Chair of Anglo‐American and advocated the abandonment of apartheid and isolationism from the mid 1980s onwards. The literature on the influence of the large corporations on policy making is indeed enormous. The latest statement on the influence of the AAC on apartheid can be found in Terreblanche, A History of Inequality, pp. 112–24. See also Robert Price, The Apartheid State in Crisis (University of California Press, 1991); Heribert Adam & Kogila Moodley, The Opening of the Apartheid Mind (University of California Press, 1993); Marais, South Africa; and Dan O'Meara, Forty Lost Years: The Apartheid State and the Politics of the National Party, 1948–1994 (Ohio State University Press, 1996), pp. 353–66. All of these texts contain larger reading lists on the influence of the corporate sector as well as the leading role that the AAC took in initiating talks between the ANC and the National Party government. In his analysis of the relationship between economic policy, democratisation and the influence of the corporate sector on both liberalisation in South Africa and economic strategy, Sampie Terreblanche likens ‘free marketeering’ and ‘globalisation’ to the ‘Anglo‐Americanisation’ of South African society. See Terreblanche, A History of Inequality, p. 74. Both SAF and CDE have extensive websites—www.safoundation.org.za and www.cde.org.za—in which they display not only their membership lists but also lists of publications and studies commissioned on their behalf. ‘Financial Mail survey: giants—waves of change’, Financial Mail, 29 November 2002. Thebe Mabanga, ‘Anglo makes its mark’, Mail and Guardian, 11–16 April 2003. Nattrass, ‘Gambling on investment’, pp. 76–7. Ann Bernstein, ‘Why is South Africa failing to get the growth and jobs that it needs?’, CDE Roundtable, Occasional Paper No. 6 (2001). See Nattrass, ‘Gambling on investment’, pp. 88–9. For an analysis of the first term of the ANC government and its successes and failures from the point of view of the corporate sector, see Ann Bernstein, Policymaking in a New Democracy: South Africa's Challenges for the 21st Century (Centre for Development and Enterprise, 1999). The conclusion of the report is that South Africa must commit itself to a growth strategy and that can only be achieved through privatisation, a commitment to globalisation, free trade and the reduction of government deficits. While painful, the author predicts that the pain of not travelling on the neoliberal path will be far greater and will lead to social and economic disaster. Terreblanche, A History of Inequality, pp. 96–108. For a detailed discussion of why and how the South African constitution reflects consociational principles, see Thomas A. Koelble, ‘The new South African constitution: a case of consensus democracy?’, in: Markus Crepaz, Thomas Koelble & David Wilsford (eds), Democracy and Institutions: The Lifework of Arend Lijphart (University of Michigan Press, 2000), pp. 129–54. Terreblanche goes so far as to argue that AAC and other extractive mining houses have left the country, in terms of shifting their assets to the UK or the USA, in order to avoid being held accountable for the legacies of apartheid. Terreblanche, A History of Inequality, p. 123. The PAC gained 0.71 per cent of the national vote and holds three seats in Parliament. Its most well‐known spokesperson, the feisty Patricia de Lille, has just left the party to form her own political movement. The NNP took the opportunity to defect from its provincial coalition in the Western Cape with the Democratic Party, then dubbed the Democratic Alliance, to join the ANC in 2002, indicating the kind of internal confusion and ideological turmoil the party has experienced ever since it tried to distance itself from its past as the apartheid party. There are numerous newspaper articles pointing to a concerted campaign within the ANC to isolate and silence internal leftist critics. See, for instance, Jaspreet Kindra, ‘Church of the narrowing mind’, Mail and Guardian, 6–12 December 2002. See Bond, Global Apartheid, pp. 185–254. See Jaspreet Kindra, ‘Battle for the soul of the party’, Mail and Guardian, 13–19 December 2002. Jaspreet Kindra, ‘Left out in the cold’, Mail and Guardian, 20 December 2002–2 January 2003. Jaspreet Kindra & Drew Forest, ‘Alliance battle not over’, Mail and Guardian, 3–9 January 2003 where the reports suggest that, while Mbeki's control over the ANC has been tightened, his control does not extent far into the ranks of COSATU. The South Africa Foundation weighed into the debate about the income grant through an entirely negative assessment of its supposed impact in a paper by Servaas van der Berg, ‘The Basic Income Grant: Comments on the Report of the Committee of Inquiry into a Comprehensive Social Security System’, SAF Viewpoint (July 2002), whole issue. See, for instance, William M. Gumede, ‘Down to business, but nothing to show’, in: Jacobs & Calland, Thabo Mbeki's World, pp. 201–19. The BEE policies have, so far, yielded few successes. While the percentage of black‐owned shares on the Johannesburg Stock Exchange went up to some 8% from 1994 to 1997, it slumped down again to about 2% by 2000 as a result of the economic down‐turn and some very sloppy financial empire building. See the comments by Thebe Mabanga, ‘There’s no short cut', Mail and Guardian, 26 April 2002. Heribert Adam, Frederik van Zyl Slabbert & Kogila Moodley, Comrades in Business: Post‐Liberation Politics in South Africa (Tafelberg, 1997). There has been a general debate whether COSATU should try to form its own political party. For the time being, COSATU leaders have sworn their allegiance to the ANC alliance, but there are certainly several key figures in the union movement who advocate a far more confrontational approach to GEAR and to the overall social policies of the ANC‐led government. For a comparison with West European social democratic and socialist parties, see Thomas Koelble, ‘Recasting Social Democracy in Europe’, Politics and Society, Vol. 20, No. 1 (1992), pp. 51–70. Adelzadeh, ‘From the RDP to GEAR’, p. 67. These policies echoed the nationalist, anti‐colonial struggle slogans all over Africa in the 1950s, but were mixed up with liberal political doctrine in the Freedom Charter. On the mix of influences, see C. R. D. Halisi, Black Political Thought in the Making of South African Democracy (Indiana University Press, 1999). Saul, ‘Cry for the beloved country’, p. 43. O'Meara, Forty Lost Years, p. 272. Saul, ‘Cry for the beloved country’, p. 38. Ibid., pp. 37–9. Ibid., p. 49. Steven Lukes, Power: A Radical View (Macmillan, 1975). Susan Parnell, Edgar Pieterse, Mark Swilling & Dominique Wooldridge (eds), Democratizing Local Government: The South African Experiment (University of Cape Town Press, 2002). See Gillian Hart, Disabling Globalization: Places of Power in Post‐Apartheid South Africa (University of Natal Press, 2002). One important aspect of ‘path dependency’ is the taxation regime that prevails in South Africa. The country exhibits one of the narrowest taxation bases globally and is highly dependent upon a small number of companies and individuals for its income. See Evan S. Liberman, ‘National Political Community and the Politics of Income Taxation in Brazil and South Africa in the Twentieth Century’, Politics and Society, Vol. 29, No. 4 (2001), pp. 515–55. Thomas Koelble, The Global Economy and Democracy in South Africa (Rutgers University Press, 1998), pp. 117–29. See Steven Robins, ‘Race, cultural identity and AIDS’, Sunday Independent, 7 July 2002. Bernard Magubane, ‘The Political Economy of the Black World – origins of the present crisis’, in: African Sociology, pp. 405–22. Margaret Legum, It Does Not Have to be Like This! A New Economy for South Africa and the World. (Ampersand Press, 2002). See also Peter Gowan, The Global Gamble: Washington's Faustian Bid for World Dominance (Verso, 1999). Manuel Castells, ‘Information technology and global capitalism’, in: Will Hutton & Anthony Giddens (eds), Global Capitalism (The New Press, 2000), pp. 52–74. Lee & LiPuma, Derivatives and the Globalization of Risk, p. 12. Thomas Koelble & Edward LiPuma, ‘Building a new nation: solidarity, democracy and nationhood in the age of circulatory capitalism—some perspectives from South Africa’, mimeo. See Terreblanche, A History of Inequality, pp. 112–15. Koelble, The Global Economy and Democracy in South Africa, p. 114. ‘All eyes on the Reserve Bank’, Mail and Guardian, 12 April 2002, which reports on the Myburgh Commission investigation into the slide of the rand in 2002. ‘Qunta calls for charges’, Mail and Guardian, 2 August 2002, in which the majority of commission members found that, while the Deutsche Bank had affected the value of the rand through its dealings and had subsequently profited from the devaluation of the currency in terms of buying shares in Nampak and SASOL, the bank had not done anything out of the ordinary or illegal. Christima Qunta was the dissenting member of the commission calling for criminal charges against the Deutsche Bank. Justice Penuell Maduna is quoted as saying that he wanted to put an end to this process, although the government would have been amiss had it not called on a commission of inquiry into the serious allegations against the banks. Alec Erwin, Minister of Trade and Industry, is often quoted as arguing that the weak rand is good for the South African export‐oriented economy. See, for instance, ‘SA has buffer to international downturn’, Mail and Guardian, 21 February 2003. The deleterious side‐effects of currency depreciation are also noted in numerous texts such as John Gray, False Dawn: The Delusions of Global Capitalism (Granta, 1998), or Jeff Faux & Larry Mishel, ‘Inequality and the global economy’, in: Hutton & Giddens, Global Capitalism, pp. 93–111. Lee & LiPuma, Derivatives and the Globalization of Risk, pp. 42–8. See Gowan, The Global Gamble, pp. 33–7. John Eatwell & Lance Taylor, Global Finance at Risk: The Case for International Regulation (The New Press, 2000), pp. 140–79; Joseph Stiglitz, Globalization and its Discontents (Norton, 2002); and George Soros, Soros on Globalization (Public Affairs, 2002). Patrick Bond refers to the process as the ‘steep forgetting curve’ in his Elite Transformation: From Apartheid to Neo‐liberalism in South Africa (University of Natal Press, 1999), p. 16. Koelble & LiPuma. ‘Building a New Nation’. Ibid. Thabo Mbeki, Address to the Commonwealth Club, World Affairs Council and US/SA Business Council Conference, San Francisco, USA, 24 May 2000. Bond, Global Apartheid, p. xi. Jos de Beus & Thomas Koelble, ‘The Third Way Diffusion of Social Democracy: Western Europe and South Africa Compared’, Politikon, Vol. 28, No. 2 (2001), pp. 181–94. Timothy Powers, ‘Blairism Brazilian Style? Cardoso and the “Third Way” in Brazil’, Political Science Quarterly, Vol. 116, No. 4 (2001), pp. 611–36. See also Gumede, ‘Down to business, but nothing to show’. Giddens, The Third Way, pp. 27–68. See, for instance, speeches such as that by Prof. Kader Asmal, Minister of Education, at the official opening of Thuthuzekeni Primary School, Krugersdorp, 20 September 2002, available on http://www.gov.za. Anthony Giddens, The Third Way and its Critics (Polity, 2000), p. 23. Giddens, The Third Way, pp. 50–4. Blair & Schroeder, Europe: The Third Way—Die Neue Mitte. Gumede, ‘Down to Business’, pp. 216–19. de Beus & Koelble, ‘The Third Way Diffusion of Social Democracy’, p. 190. The irony here is, of course, that these minimal welfare policies are also partially legacies of the apartheid system which introduced the pension system. Gosta Esping‐Andersen, The Three Worlds of Welfare Capitalism (Princeton University Press, 1990). Krista Johnson, ‘State and civil society in contemporary South Africa’, in: Jacobs & Calland, Thabo Mbeki's World, p. 238. Patrick Bond, ‘Thabo Mbeki and NEPAD: breaking or shining the chains of global apartheid?’, in: ibid., p. 53. The appointment of several South African leaders such as Ramphele Mamphele to the World Bank and Trevor Manuel to the IMF indicates the attempt by the ANC to effect international changes in the way financial institutions operate. Castells, ‘Information technology and global capitalism’, p. 72. Additional informationNotes on contributorsThomas A. Koelble Thomas A. Koelble, Graduate School of Business, University of Cape Town, Private Bag, Rondebosch 7700, Cape Town, South Africa. Thomas A. Koelble, Graduate School of Business, University of Cape Town, Private Bag, Rondebosch 7700, Cape Town, South Africa.