Showing posts with label Mandela. Show all posts
Showing posts with label Mandela. Show all posts

Friday, December 20, 2013

More on Mandela and Inequality in South Africa

I discusses post-apartheid economic policy in a previous post. The Figure below from The Economist's Graphic Detail shows the evolution of average income by racial group during Mandela's life time.

Note that inequality actually increases during Mandela and post-Mandela ANC governments. From The Economist.
Towards the end of Mandela's incarceration—through to the abolition of Apartheid—fortunes did reverse slightly, but by now the disparity had grown so large that it barely made a dent. Income growth improved substantially for all South Africans after his 1994 election victory, but sufficiently more so for whites, and the balance has been disproportionately weighted in their favour—and increasingly that of Asian South Africans—since he stepped down in 1999. 
Under its own majority rule, the lot of the ever-growing black population—today forming over three-quarters of the national total—has been notably poor. Misguided governance, low-quality education, skills shortages and massive unemployment levels of around 40% have left it more disadvantaged today than when Nelson Mandela was still behind bars. Black income has virtually flat-lined, betraying tremendous gulfs between the wealth of the different racial groups. Sadly, the nation Mandela leaves behind today remains one of the least equal in the world.
 Read full story here.

Sunday, December 8, 2013

Post-Apartheid Economic Policy in South Africa: Putting Mandela's Legacy in Perspective

The coverage on Mandela, no doubt one of the greatest leaders of the 20th century, and essential for the ending of Apartheid, was as it is often the case a bit simplistic, which actually reduces the struggles he had to fight to relatively simple and manicheistic choices between good and evil (e.g. like in Bush's famous "if you're not with us, you're against us," meaning with the terrorists). His actually legacy is considerably more complex, and a few publications had noted it (see here for three myths about his political legacy, including the racist notion that without him blacks would have murdered all whites; h/t Butch Montes).

His economic legacy is also considerably more complicated than what one might expect, and there was virtually no coverage in the press about it. John Pilger in Counterpunch relates how Mandela was in neogotiations with the Apartheid regime since the early 1980s, and that "the apartheid regime’s aim was to split the ANC [African National Congress] between the “moderates” they could “do business with” (Mandela, Thabo Mbeki and Oliver Tambo) and those in the frontline townships who led the United Democratic Front (UDF)." He further quotes an ANC Minister suggesting that their policies were Thatcherite and saying: “You can put any label on it if you like…but, for this country, privatisation is the fundamental policy.”

He suggests that by the time Mandela was freed in 1989, the Apartheid regime had already helped build up a tiny black elite, supported by crony relations with the regime, which led to increasing the inequality among blacks. He argues, further, that: "Mandela, too, fostered crony relationships with wealthy whites from the corporate world, including those who had profited from apartheid. He saw this as part of 'reconciliation'." His conclusion is that even though racial Apartheid is over, economic Apartheid is very much alive.

A more thorough analysis of the failure of the post-Apartheid economic was presented a while ago in Patrick Bond's book Elite Transition: Form Apartheid to Neoliberalism in South Africawere he argues that: "post-apartheid policy-makers drew all the wrong lessons from ‘international experience’ and hence prepared to amplify rather than correct apartheid-capitalism’s main economic distortions." These wrong lessons implied "very conservative economic policies--fiscal restraint, an independent Reserve Bank (hence inoculation from democratic inputs), trade liberalisation and co-optive labour policies." Mandela resisted fiscal policies that favored redistribution, and maintained fiscal conservatism in order to avoid inflation (a very conservative view of the causes of inflation).

Inequality remains incredibly high (a Gini of 63.1 according to the World Bank data), unemployment is also at really high levels (at around 25%), and the economy has not grown very much. The groups favored are those connected to mineral and energy export-oriented corporations, which has been enough to keep the old white elites and a few in the new black elites well enough while the vast majority not only is left out and with very low living standards (with a ranking in UNDP's Human Development Index of 121 out of slightly less than 190 countries, and life expectancy of 53.4 years), but also suffering from one of the worse HIV/AIDS epidemics in the world.

PS: Similar arguments were put forward by my colleague Geoff Schneider back in 2003 here (subscription required).