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The Making of a Myth: South Africa’s Neo-Liberal Journey 2006-03-15
Dr. Dale T. McKinley

* Dale T. McKinley is an independent writer, lecturer, researcher and social movement activist.

Despite the more general social, political and economic advances that have been made in South Africa since the democratic triumph over apartheid in 1994, there is simply no denying the fact that the fruits of such advances are only being enjoyed fully by a small minority. The gap between the few ‘haves’ (represented by established, mostly white, corporate elites as well as a bureaucratic state elite and fast expanding black bourgeoisie) and the many ‘have nots’ (represented by an overwhelmingly black majority of workers and poor) is widening rapidly. This is the reality, and no amount of political or analytical spin doctoring by government and/or its intellectual acolytes, can hide it.


Genesis of the myth


To locate and understand this reality, means locating and understanding its foundation. Even though the ANC government came to power in 1994 on the back of promises (contained in the RDP) to utilise its newfound political power to prioritise the redistribution of natural and human wealth/resources as the means to achieve equitable and sustained economic growth, the first two years of South Africa’s new democracy witnessed the ANC’s gradual, even if at times contested, political and ideological acceptance of the broad framework of a globally dominant, neo-liberal political and economic orthodoxy. Realising that such a drastic ideological shift would be hard to sell to its constituency of workers/poor, the ANC cleverly sought to equate its acceptance of liberal bourgeois democracy as the will of ‘the people’. In this way, neo-liberalism could be twinned to liberal bourgeois democracy such that the former appeared as a necessary and natural economic order emanating from an equally necessary and natural political product. Under such a scenario, democracy and development could then become synonymous with the ‘growth’ of a capitalist, neo-liberal ‘free market’. Thus was born, post-apartheid South Africa’s version of the neo-liberal growth myth.

            Crucially, this rightward ideological shift of the ANC was paralleled by the systematic dismemberment, or incorporation into the organisational framework of the ANC itself, of almost all independent and allied community organisations (whether ‘civics’, women’s organisations and/or youth groupings etc.) in South Africa. By the mid-1990s the vast majority of those community organisations that had been so central to the radicalisation of the anti-apartheid struggle and that had sustained the hope of millions for an anti-capitalist transformation of South African society, had been swallowed by the ANC and, to a lesser extent by its Alliance partners.  

            The ‘deal’ was then institutionally codified by the ANC government with the formal unveiling of the overtly neo-liberal GEAR macroeconomic strategy in mid-1996. GEAR committed the ANC state (amongst other things) to: slash government spending (as a means to reduce the budget deficit); keep inflation in single digits (through high real interest rates); provide tax holidays and other incentives for corporate capital; phase out exchange controls; create a more ‘flexible’ labour market; encourage ‘wage restraint’; and, speed up the privatisation of state assets. In short, to use the power of the state (and the political/moral legitimacy of the ANC as a former liberation movement) to pursue the now compatible class interests of an old and new capitalist elite.


Propagating the myth


In order to propagate the myth that such narrow class pursuits would ultimately benefit everyone (especially the workers/poor), GEAR proffered that a combination of economic affirmative action (through land distribution to a new class of black commercial farmers and state assistance to emerging black industrial/manufacturing entrepreneurs) and new black economic empowerment initiatives through ‘partnerships’ with corporate capital, would best ‘deliver’ the desired outcomes of economic redistribution, social equity, job creation and, of course, ‘economic growth’.

The promise was (and still remains) that a more caring neo-liberal capitalism will, at least eventually, provide a “better life for all”. The various ‘sales pitches’ made by the ANC government and its corporate allies over the years – including the recently unveiled progeny of GEAR, the ‘Accelerated and Shared Growth Initiative for South Africa (ASGISA) - have, despite constant rhetoric to the contrary, all revolved around the notion that the pursuit of ‘growth’ (within the accepted and institutionalised parameters of a capitalist neo-liberalism) will provide both the ways and the means to address socio-economic inequality and injustice. South Africans have been told that they must just be patient and allow the government to govern and the market to allocate.

            When reality has not provided a neat ‘fit’ with such propaganda (i.e. constantly), both the ANC government and corporate capital have been quick to manipulate statistical information, blame failure on a variety of other ‘forces’ or events before their control and attack and attempt to delegitimise those who would dare not believe.


Exposing the myth


Fortunately, the heretics have reality on their side. Every major piece of research conducted over the last several years, both by the state and independently, exposes the neo-liberal growth myth for what it is.

            A 2003 survey conducted by the Community Agency for Social Enquiry (which included over 6000 people in 60 poor communities) found the following:

·            55% of unemployed and 32% of employed said they were unable to afford food

·            54% of jobless and 43% of employed could not afford basic services

·            46% could not afford rent or bond payments

·            68% earn less than R500 per month whether working, self-employed or unemployed

·            86% are looking for work

·            1 in 8 among self-employed said they earned enough to live on

Research conducted by the Development Bank of South Africa in 2005 revealed that the number of South Africans in poverty (with the national poverty line for 2002 being benchmarked at a miserable R354 per adult per annum) in all population groups increased dramatically, from 17 million in 1996 to 21 million in 2003. During the same period, average household income rose by 7,6%. Put together, these figures confirm that there is an increasingly unequal income distribution in a country which is already ranked amongst the most unequal societies in the world. Indeed, the state’s own figures for 2002 show that the poorest half of all South Africans earn just 9,7% of national income (down from 11,4% in 1995), while the richest 20% take 65% of all income.

            According to the Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa in 2002, 55% of South Africans live in poverty and 60% of the poor receive no social security transfers and/or grants. Making matters even worse, the Report of the South African Cities Network (2004) revealed there was a 180% increase between 1996-2001 in the number of urban households with no measurable income at all. A 2006 report by the University of South Africa - 'Projection of Future Economic and Sociopolitical Trends in South Africa up to 2025 - put South Africa’s unemployment rate at “between 30 and 40 percent, depending on which definition of 'unemployed' is used” and concluded that, "the economy is not creating jobs - to a large extent it's jobless economic growth." The 2005 United Nations Development Fund’s Human Development Index (using measurements of life expectancy, educational attainment and adjusted real income) placed South Africa 120 th out of 177 countries measured. By comparison, the occupied Palestinian territories ranked 102 nd.

            Underlying this mass poverty and inequality is the widespread lack of quality basic services, especially in rural parts of the country. The United Nations Development Programme’s Report entitled, ‘South Africa Human Development Report’ (2003), found that the number of households considered deprived of access to ‘good’ basic services increased from 5.68 million to 7.24 million between the 1996 and 2001 censuses. Relative to the size of household population in 1996 and 2001 respectively, the percentage of the population deprived of such basic services increased from 63% to 65% of the overall population. In South Africa’s main urban centres, the ‘Cities Report’ revealed that the increase in the amount of shack dwellings is almost equal to the total number of houses built between 1996-2001, that the number of households without electricity and water (whether unconnected or disconnected) virtually matches the number of those who receive these services and that 2/3rds of urban adults have not completed basic secondary schooling.


Facing realities


It is, by any measurement or post-1994 timeframe, a pathetic state of affairs given the considerable human, natural and capital resources in a country like South Africa. Even more so, for a government and President (cheered on by an opportunistic private sector) that boast about South Africa’s ‘world class’ standards and seek to occupy the moral high ground by purportedly speaking on behalf of South Africa’s and the world’s poor, but who appear wholly unwilling to face reality. As the poet and writer James Baldwin once stated: ‘Not everything that is faced can be changed, but nothing can be changed if it is not faced’.

            What needs to be ‘faced’ is this - at the heart of the neo-liberal growth myth is the political/ideological understanding of, and practical approach to, development and democracy that has been accepted and institutionalised by South Africa’s political and corporate elites. Rather than seeing development as a metaphorical ‘house’ whose stability and habitability requires, first and foremost, the laying of a foundation of basic needs/services for the majority who live in it, they have chosen to focus on supporting and strengthening the upper ‘floors’ in the (vain) belief that doing so will not only make the house look more presentable but will somehow work its way down to the foundation. This reverse, neo-liberal developmental logic and approach is captured in President Mbeki’s ‘two nations/two-economy’ thesis, where the ‘first economy’ (which in real terms represents the upper floors of the developmental ‘house’) is seen as the foundation for development, and the ‘second economy’ (which in real terms represents the foundation of the developmental ‘house’) is seen as secondary construction. In Mbeki’s own words: “We must work hard to ensure that our centre, the first economy, grows and develops to generate the wealth we need to achieve the goal of a better life for all … poverty and underdevelopment [the second economy] act as a fetter on the further development of the first economy”.

            The pursuit of this kind of developmental plan not only demands that the accumulative ‘needs’ of the capitalist class (the first economy) be the fount of growth and prosperity ‘for all’, but also that the enduring socio-economic conditions of the workers/poor themselves be identified as the main impediment to such accumulation and thus to development itself (as opposed to the other way round). This is hardly a ringing endorsement for a meaningful democracy which surely requires that the ‘empowerment’ of the ‘people’ is grounded in meeting their basic needs, so that they can participate actively in framing and building the developmental ‘house’. What has been done, is to falsely twin democracy to the needs of the capitalist market. In turn, this has produced an ongoing ‘crisis of democracy’ wherein institutionalised practices and forms of representative democracy such as elections and local government structures make little difference since the key societal (developmental) decisions are taken by the ‘market’.

            The result is a forced and false ‘growth’ consensus that will mainly benefit the capitalist bosses and the new black elite that the ANC government is so keen to build. The growing class inequalities between rich and poor and the continued exploitation of workers will only be further masked by the manufactured appearance of a political and socio-economic consensus amongst all South Africans. While the capitalist and political elites occupy centre stage and gorge themselves, the poor are simply being asked to embrace and celebrate their continued political marginalisation and to be happy for the economic crumbs they will be thrown from the ‘masters’ table.

            South Africa’s ‘transitional’ experience since 1994 bears this out. The failure of vision and will to address fundamentally the roots of South Africa’s developmental, and by consequence democratic, crisis that is umbilically linked to the crisis of basic service delivery, has resulted in an increasing developmental burden being placed on those least able to take on that burden. As the Minister of Provincial and Local Government Development, Sydney Mufamadi, recently told the National Forum on Municipal Finance, municipalities have to start generating their own income to “reduce their reliance on national government”. Practically, this has meant that local government structures are forced to privatise/corporatise basic service delivery in order to recover ‘costs’, while poor communities are forced to try and fill the ‘gaps’ and are squeezed of whatever minimal capacity and resources they have. It is more than ironic that this resembles a return to the kind of ‘self-help’ development approach that existed during the colonial period. We need look no further than the recent experiences in Delmas to see how this approach plays itself out – namely, if the ‘patients’ don’t get better, then blame the ‘patients’ and give them a clap for good measure.

            The cumulative impact of this disabling (at least for the poor) neo-liberal development framework and practice has been two-fold: to widen the fault-lines of poverty, inequality, accessible/affordable basic service provision and enjoyment of the full panoply of human and constitutional rights; and, to substantively diminish the entire concept and experience of citizenship and thus also, of democracy. The commodified ‘private goods approach’ that lies at the heart of neo-liberalism, reduces citizens to individual consumers whose relationship to the state and those who inhabit and run it mirrors the relational world of business. Public goods and collective values are replaced by private commodities and individual preference.

            The systemic socio-economic, moral and political crisis of neo-liberal capitalism represents a crisis of development and democracy that is not confined to South Africa but which, unfortunately, is to be found, in varying forms and degrees, across the entire globe. In South Africa, the results are clear to see for those who have their eyes open and who are paying attention – namely, the institutionalisation of an ever-widening class divide marked by the empowerment of a rapidly deracialising elite alongside the intensified impoverishment of the majority, for whom life has become a constant battle of survival. 


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