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12/04/2006 | SOUTH AFRICA: Chasing the rainbow

The Economist Staff

Since the end of apartheid, South Africa has moved closer to becoming the “rainbow nation” of Nelson Mandela's vision. But not nearly close enough yet, says Richard Cockett.

 

In the 12 years since the African National Congress (ANC) party triumphantly took power in South Africa's first multiracial democratic election, there have been plenty of reasons to be disappointed, even disillusioned, with Africa. The “aid darlings” of the West have come and gone. Yoweri Museveni of Uganda changed his constitution to win a third presidential term in dubious circumstances, and Meles Zenawi, Ethiopia's prime minister, ruined his reputation when his police shot dead scores of opposition supporters last year. Robert Mugabe, the last of the original “big men” of Africa, seems bent on impoverishing what was once one of the continent's most prosperous countries, and the government of Sudan continues with its genocidal military campaigns against its own people. Nor has the continent yet conquered famine: in the Horn of Africa, parts of Kenya, Somalia and Ethiopia are currently facing critical food shortages.

But through all this, South Africa has plotted its own course to relative stability, democracy and prosperity. It has even been trying to nudge the rest of Africa towards emulating its own success. In that sense, South Africa is beginning to lead the continent in an entirely new way.

When the apartheid regime fell apart in 1990, South Africa, remarkably, did not erupt in flames. That it did not was due largely to the leadership of Nelson Mandela. No less remarkable since then has been the ANC's relentless campaign to alleviate the poverty and degradation of the victims of apartheid without resorting to counterproductive populism. Despite inheriting an economic mess from the outgoing National Party in 1994, the post-apartheid government has managed to build 1.9m new homes, connect 4.5m households to electricity and provide 11m homes with running water. Its targets for raising the living standards of its people are the most ambitious on the continent.

Yet a drive from Cape Town airport into the city's almost exclusively white suburbs at the foot of Table Mountain demonstrates that South Africa is still deeply scarred by the legacy of apartheid. Here the cars rush through miles of shanty towns and townships on the Cape Flats, the geography of apartheid very much intact. It is a similar story throughout South Africa. Yes, the shacks in Cape Town now have electricity. But what else has really changed? Yes, the giant township of Soweto, flashpoint of apartheid, now also has electricity and smart paved roads. But has its upgrading not further entrenched the separation of 3m blacks from the city of Johannesburg, from which many were forcibly removed 50 years ago?

Why are we waiting?

There is now a sense of impatience over the pace of change in South Africa. For many, the country's advance towards Mr Mandela's vision of a “rainbow nation” has slowed to a crawl. The government is well aware of this, and is now intervening in more and more areas of national life to try to speed up change.

Yet those interventions could do more harm than good. As this survey will argue, South Africa has some good stories to tell about change, but few of them are entirely the ANC's doing. From education to foreign policy to crime-fighting, the South African people have found creative solutions to many of their problems. That creativity is South Africa's most impressive asset, and increasingly comes from the poorest and historically most disadvantaged of South Africa's communities, who are now building their own ladders out of poverty.

The frustrating economy

By rights, the government should be basking in the glow of an outstandingly successful economic performance over the past decade. Having inherited a pile of trouble from the disintegrating apartheid government, the government has since presided over an impressive 87 straight months of growth (currently running at about 5% a year), low budget deficits and low inflation.

The Johannesburg Stock Exchange, riding the wave of the commodities boom, has been making record gains. Consumer demand has been buoyant, with the signs of conspicuous consumption all around, from the gaudy new gated housing estates to the increasing numbers of sleek European sports cars on the roads. House prices rose by 21% in 2005 (a welcome slowdown from 32% in 2004), and new-car sales in January this year were 22% up on a year earlier. For 2006 as a whole, the National Association of Automobile Manufacturers of South Africa expects them to be even higher than last year's 617,500.

South Africa

Buoyant domestic demand has recently been accompanied by the sort of foreign investment that some thought would never come. Barclays, a big British bank that withdrew from South Africa in 1986 under pressure from anti-apartheid campaigners, has just bought its way back into South Africa with the $4.5 billion purchase of a majority stakeholding in Absabank, the country's biggest retail lender. That is the largest foreign direct investment ever made in South Africa. And Britain's Vodafone has recently made a substantial investment in Vodacom, a South African mobile operator.

Yet for all the good economic news, the government is looking politically more vulnerable than at any time since 1994, for a simple reason: little of this growth has benefited its own core supporters, who are overwhelmingly poor and black (a term used in this survey to describe people of black African descent only, whereas the ANC applies it to all people of African, Indian and mixed-race origin). The problem is summed up by the unemployment rate, which even on the narrowest official definition stands at about 27%, a slight increase on a year earlier, despite the 5% GDP growth (see charts 1 and 2). The economy is generating jobs, but not enough to keep pace with the number of new entrants into the labour market.

The government's other big problem is rising inequality. There is a lot of talk about a growing black middle class, but the number of people living on the poverty line may actually be rising. Thabo Mbeki, the country's president, has spoken of the gaping divide between South Africa's “first economy” and “second economy”, echoing Benjamin Disraeli's analysis of early industrial Manchester.

The ANC has always pledged itself to work for the poor and the disadvantaged, so its grassroots supporters are particularly unhappy. Their discontent surfaced in the local elections on March 1st, at which the ANC faced a genuine challenge for the first time in its brief democratic history. It did better than expected, but still saw its vote fall in some areas. Last year, in the absence of any elections, there were about 880 illegal street protests, mostly about the lack of basic services and housing.

In the years after 1994, the ANC had to reassure the international financial community and the money markets that investments in South Africa were safe and that the government was not going to nationalise everything in sight. Thus the new leadership spent most of its time looking over its right shoulder, wondering how to reassure capitalists and whites—which usually amounted to the same thing. Its answer was the GEAR (Growth, Employment and Redistribution) programme, launched in 1995, which committed the government to an orthodox, prudent economic package.

That prudence paid off, bringing economic stability and launching a consumer boom. But as the government has conceded, GEAR did not create enough jobs, nor did it produce the hoped-for investment, domestic or foreign, that might have generated more of them. So now the ANC leadership is looking more over its left shoulder, at the disgruntled activists who feel let down by the government.

Since the early 2000s, the “fiscal stance began to move into a more expansionary phase”, as Alan Hirsch, the head of the president's economic policy unit, puts it. That meant, in the first instance, more money for a programme of social grants, mainly for child support and pensions, which go to about 10m people (out of a population of 47m). But now Mr Mbeki is embarking on a more ambitious programme to find the jobs that have so far eluded him: the Accelerated and Shared Growth Initiative for South Africa (ASGISA). According to Joel Netshitenzhe, the government's chief spokesman, this is “very Keynesian, with a bit of Roosevelt's New Deal”. It will involve spending 370 billion rand over the next three years on public works, mainly infrastructure, to boost jobs and create more demand that will also be spread more evenly. Some sectors, such as tourism, will be specially targeted. The longer-term aims are to raise the growth rate to 6% by 2010 and to halve unemployment and poverty by 2014.

Alec Erwin, the minister of public enterprises, argues that the country can well afford this, given its excellent economic record and low budget deficit; there will be no new taxes or borrowing. The government has also promised to continue with its supply-side reforms, such as cutting red tape for small and medium-sized firms.

South Africa

So will ASGISA deliver the goods? Undoubtedly some jobs will be created, and there is even a neat deadline for getting things done: South Africa is due to host the football World Cup in 2010, and plans to build five new stadiums and renovate another five. But as likely as not, the project will get caught up in the twin bottlenecks that have already caused much trouble in the new South Africa: a severe skills shortage and a failure to deliver services at the local level. In 2002, a bank estimated that 300,000-500,000 vacancies remained unfilled because there were not enough skilled people to recruit. The proposed infrastructure projects will call for large numbers of the engineers, technicians and other skilled professionals that South Africa lacks. Already there are stories of state-owned companies looking abroad to recruit skilled workers that they cannot find at home. There is a plan, the Joint Initiative for Priority Skills Acquisition, to develop the skills base as ASGISA unfolds, but it will probably be too little, too late.

The proposal to spend a lot of the money at the municipal level is fraught with risks too. The provincial governments work quite well now, but the local ones less so. With more money flowing through them, inefficiency and corruption could simply become more entrenched.

The Economist (Reino Unido)

 


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20/03/2011|
19/03/2011|
19/03/2011|
19/03/2011|
13/03/2011|
13/03/2011|
12/03/2011|
11/03/2011|
11/03/2011|
09/03/2011|
07/03/2011|
07/03/2011|
05/03/2011|
04/03/2011|
04/03/2011|
04/03/2011|
18/02/2011|
21/01/2011|
21/01/2011|
16/01/2011|
16/01/2011|
11/01/2011|
08/01/2011|
02/01/2011|
02/01/2011|
29/12/2010|
29/12/2010|
28/12/2010|
26/12/2010|
13/12/2010|
13/12/2010|
08/12/2010|
02/12/2010|
30/11/2010|
30/11/2010|
28/11/2010|
26/11/2010|
26/11/2010|
24/11/2010|
16/11/2010|
16/11/2010|
16/11/2010|
09/11/2010|
07/11/2010|
31/10/2010|
31/10/2010|
31/10/2010|
26/10/2010|
25/10/2010|
22/10/2010|
18/10/2010|
16/10/2010|
16/10/2010|
11/10/2010|
10/10/2010|
10/10/2010|
09/10/2010|
05/10/2010|
28/09/2010|
28/09/2010|
24/09/2010|
24/09/2010|
22/09/2010|
22/09/2010|
15/09/2010|
15/09/2010|
15/09/2010|
12/09/2010|
12/09/2010|
12/09/2010|
12/09/2010|
06/09/2010|
06/09/2010|
05/09/2010|
05/09/2010|
29/08/2010|
29/08/2010|
29/08/2010|
29/08/2010|
22/08/2010|
22/08/2010|
21/08/2010|
21/08/2010|
21/08/2010|
21/08/2010|
21/08/2010|
21/08/2010|
14/08/2010|
13/08/2010|
13/08/2010|
07/08/2010|
07/08/2010|
12/07/2010|
12/06/2010|
12/06/2010|
12/06/2010|
24/05/2010|
24/05/2010|
11/05/2010|
10/05/2010|
09/05/2010|
09/05/2010|
09/05/2010|
01/04/2010|
01/04/2010|
31/03/2010|
31/03/2010|
31/03/2010|
28/03/2010|
28/03/2010|
28/03/2010|
20/03/2010|
12/03/2010|
12/03/2010|
12/03/2010|
08/03/2010|
07/03/2010|
06/03/2010|
05/03/2010|
03/03/2010|
03/03/2010|
28/02/2010|
21/02/2010|
19/02/2010|
14/02/2010|
11/02/2010|
11/02/2010|
10/02/2010|
08/02/2010|
08/02/2010|
08/02/2010|
28/01/2010|
25/01/2010|
20/01/2010|
20/01/2010|
16/01/2010|
16/01/2010|
15/01/2010|
15/01/2010|
11/01/2010|
11/01/2010|
10/01/2010|
07/01/2010|
03/01/2010|
03/01/2010|
03/01/2010|
17/12/2009|
15/12/2009|
15/12/2009|
13/12/2009|
13/12/2009|
28/11/2009|
28/11/2009|
28/11/2009|
28/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
21/11/2009|
21/11/2009|
18/11/2009|
18/11/2009|
16/11/2009|
16/11/2009|
30/10/2009|
30/10/2009|
11/10/2009|
10/10/2009|
10/10/2009|
07/10/2009|
07/10/2009|
04/10/2009|
30/09/2009|
30/09/2009|
27/09/2009|
27/09/2009|
27/09/2009|
22/09/2009|
20/09/2009|
18/09/2009|
18/09/2009|
18/09/2009|
16/09/2009|
16/09/2009|
16/09/2009|
08/09/2009|
07/09/2009|
06/09/2009|
06/09/2009|
05/09/2009|
05/09/2009|
26/08/2009|
21/08/2009|
19/08/2009|
19/08/2009|
15/08/2009|
15/08/2009|
15/08/2009|
11/08/2009|
11/08/2009|
11/08/2009|
11/08/2009|
19/07/2009|
19/07/2009|
18/07/2009|
18/07/2009|
27/03/2009|
22/03/2009|
22/03/2009|
27/01/2009|
27/01/2009|
27/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
11/01/2009|
06/12/2008|
06/12/2008|
06/12/2008|
06/12/2008|
23/11/2008|
23/11/2008|
16/11/2008|
16/11/2008|
04/11/2008|
04/11/2008|
03/11/2008|
03/11/2008|
24/10/2008|
24/10/2008|
24/10/2008|
24/10/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
06/09/2008|
06/09/2008|
05/09/2008|
05/09/2008|
05/09/2008|
05/09/2008|
01/09/2008|
01/09/2008|
01/09/2008|
01/09/2008|
22/08/2008|
22/08/2008|
17/08/2008|
17/08/2008|
16/08/2008|
16/08/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
19/07/2008|
19/07/2008|
24/05/2008|
24/05/2008|
03/05/2008|
03/05/2008|
29/04/2008|
11/02/2008|
05/01/2008|
09/12/2007|
18/11/2007|
10/11/2007|
10/11/2007|
06/11/2007|
06/11/2007|
06/09/2007|
26/08/2007|
25/08/2007|
11/07/2007|
16/06/2007|
16/06/2007|
10/06/2007|
10/06/2007|
19/05/2007|
19/05/2007|
19/05/2007|
19/05/2007|
24/04/2007|
24/04/2007|
14/04/2007|
14/04/2007|
05/04/2007|
05/04/2007|
05/04/2007|
28/02/2007|
28/02/2007|
05/02/2007|
05/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
29/01/2007|
29/01/2007|
29/01/2007|
29/01/2007|
11/01/2007|
11/01/2007|
11/01/2007|
11/01/2007|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
20/12/2006|
20/12/2006|
17/11/2006|
30/09/2006|
28/07/2006|
12/04/2006|
12/04/2006|
06/03/2006|
21/02/2006|
17/02/2006|
31/01/2006|
10/01/2006|
28/12/2005|
31/10/2005|
26/09/2005|
29/08/2005|
11/08/2005|
08/08/2005|
24/06/2005|
24/06/2005|
24/06/2005|
03/04/2005|
03/04/2005|
03/04/2005|
03/04/2005|

ver + notas
 
Center for the Study of the Presidency
Freedom House