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South Africa's “Developmental State” Distraction Patrick Bond Patrick Bond. “South Africa’s ‘Developmental State’ Distraction.” Mediations 24.1 (Fall 2008) 8-27. www.mediationsjournal.org/articles/developmental-state-distraction. South Africa’s “Developmental State” Distraction Patrick Bond Introduction The African National Congress victory in the April 2009 elections was never in doubt, but what is of crucial importance for durable radical politics in South Africa was the prior, dramatic turn-out of the Thabo Mbeki faction of the African National Congress (ANC) by those loyal to Jacob Zuma, first at the Polokwane party conference in December 2007 and then from govern- ment in September 2008. Crucial as this is as a marker of ruling party instability, will it or will it not derail South Africa’s faux “developmental state”? Though it typically refers to the East Asian experience combining manufacturing-sector growth and diversification with authoritarian politics, I take this oft-abused phrase to mean — in the South African context — a combination of macroeconomic neoliberalism and unsustainable megaproject development, dressed up with rather tokenistic social welfare policy and rhetorical support for a more coherent industrial policy. Although finance minister Trevor Manuel was listed as fourth-highest ranked politician on the ANC 2009 electoral list, in turn signaling that his neoliberal economic policies would continue under president Zuma, there is nevertheless a potential shift leftwards on micro projects and the industrial side of economic policy. The man most often identified with grandiose, crony-capitalist, multi- billion, and export-oriented projects, Alec Erwin, resigned as public enterprises minister during the September 2008 Zumite political massacre of the leading Mbekites (curiously, Erwin was replaced by an ineffectual Mbekite, former justice minister Brigitte Mabandla, herself mired in various controversies). The former trade union strategist Erwin, who regularly 10 Patrick Bond South Africa’s “Developmental State” Distraction 11 proclaimed that in fact he remained a Marxist, had by then achieved a degree of struggle are, at least, hopeful. of public ridicule as the man most responsible for the Eskom electricity blackouts in early 2008. Neoliberalism and Its Damage To be sure, the rise of more genuine trade unionist and communist influ- ence in the ruling party since 2006 may also shift substantial public resources Consider, first, eight areas of socioeconomic and environmental progress and towards pro-poor not pro-business projects, such as National Health problems that represent socioeconomic flashpoints in the post-apartheid era, Insurance. Moreover, not only are real interest rates down dramatically from resulting from either post-1994 policy or even deeper structural forces dating the 1995-2005 double-digit levels (because inflation rose far faster than the back decades. nominal interest rate), but Trevor Manuel’s February 2009 budget also went sharply into deficit (3.8 percent) after three years of surpluses. Still, we • There was an immediate post-apartheid rise in income inequality, probably are safe in trusting Zuma when he swears to business leaders — which was slightly tempered after 2001 by increased welfare payments, such as officials of Merrill Lynch and Citibank, those bastions of sound but which meant the Gini coefficient soared from below 0.6 in 1994 to economic practices — his intent not to relax the existing monetary and fiscal 0.72 by 2006 (0.8 if welfare income is excluded).2 constraints. To illustrate, Zuma himself told one Los Angeles audience in December 2007, • The official unemployment rate doubled (from 16 percent in 1994 to around 32 by the early 2000s, falling to 26 percent by the late 2000s — Some have said that if Zuma is in charge of the administration, it will but by counting those who gave up looking for work, the realistic rate is move left because of his support from the trade unions, which are closer to 40 percent) as a result of imported East Asian goods in very left, and those from SA Communist Party … and therefore that relatively labor-intensive sectors (clothing, textiles, footwear, the economic policies of the government will change. I had thought appliances, and electronics) and capital intensive production techniques this was not a big issue but I am grateful that I have an opportunity to elsewhere (especially mining and metals). explain and would love to tell you, brothers and sisters, that nothing is going to change.1 • The provision of housing to several million people was marred by the facts that the units produced are far smaller than apartheid Of course, the trajectory might yet shift if a major push from the left gathers “matchboxes,” are located further away from jobs and community momentum, as the economy continues shrinking in 2009 (the last quarter of amenities, are constructed with less durable building materials, come 2008 witnessed a spectacular contraction in manufacturing, especially with lower-quality municipal services, and are saddled with higher- automobiles, and the first negative GDP growth in a decade). If that push priced debt if and when credit is available. runs out of steam and if cooption of key communist leaders into ANC and state leadership continues, as is far more likely, we will instead see a • While free water and electricity are now provided to many low-income relegitimization of neoliberal macroeconomic and microdevelopment people, the overall price has risen dramatically since 1994, leading to policies, with ongoing megaproject path-dependent waste and corruption. To millions of people facing disconnections each year when they cannot illustrate, electricity and water are two state services facing worsening afford the second block of water consumption. conditions of scarcity, which should be redistributed to low-income people for free in greater quantities, yet megaprojects are being built to allow large • The degeneration of the health system, combined with AIDS, has corporate users and wealthy white people inordinate access. caused a dramatic decline in life expectancy, from 65 at the time of White elephant megaprojects should all be subjected to critical analysis. liberation to 52 a decade later.3 Regrettably, although concerns are often raised about both macro policies and micro projects, a fusion of red-green, rural-urban, labor-community, • The education system is still crippled by excessive cost recovery and feminist, and anti-racist political forces required to halt these and pose fiscal austerity, leaving 35 percent of learners dropping out by Grade alternative development strategies is not yet available. But several indicators 5 (worse than neighboring Namibia, Lesotho, and Swaziland) and 48 12 Patrick Bond South Africa’s “Developmental State” Distraction 13 percent by Grade 12, and, according to the most recent (2001) survey of schools, leaving 27 percent without running water, 43 percent • The corruption-ridden R43 billion arms deal, which implicated a without electricity, and 80 percent without libraries and computers.4 wide slice of both Zumite and Mbekite ANC factions starting at the very top. • Ecological problems have become far worse, according to the government’s own commissioned research in the 2006 Environmental • Pebble Bed Nuclear Reactors potentially costing hundreds of billions Outlook report, which according to the leading state official, “outlined of rands, alongside hundreds of billions more rands spent on coal- a general decline in the state of the environment.”5 fired power plants (notwithstanding South Africa’s vast existing contributions to climate change through energy-related CO2 • High crime was accompanied by an arms race — private security emissions).7 systems, sophisticated alarms, high walls and razor wire, gated communities, road closures, and boom barriers — that left working- • The R20 billion plus Gautrain fast rail network that will link class households more vulnerable to robberies, house-breaks, car theft Johannesburg, Pretoria, and the OR Tambo airport, affordable only and other petty crime (with increases of more than 1/3 in these to elite travelers. categories from 1994-2001 and only slight declines since), as well as epidemic levels of rape and other violent crimes; additional corporate Space constraints permit us to examine only one of these (Coega) in detail, crime (including illicit capital flight) was generally not well policed, or below. Instead, fiscal resources could have gone to the base of society in a suffered from an apparently organized penetration of the South African much more direct way, were it not for the broader neoliberal context. The early Police Service’s highest ranks.6 2000s witnessed increasing optimism that the late 1990s emerging markets currency crises — including South Africa — could be overcome, and that the The “developmental state” is meant to reverse these processes. However, given offshore relistings of most of the country’s largest firms would not adversely the abuse of funding directed at a few major white elephants now under affect growth. Indeed, by 2001, the rate of profit for large SA capital was construction, the reversal will last only as long as the artificial construction- restored from an earlier downturn from the 1970s-90s, to ninth highest among sector boom. the world’s major national economies (far ahead of the US and China), accord- ing to one British government study.8 The reality, though, was that high • The Coega complex in Nelson Mandela Metropole (the old Port corporate profits were
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