Economics: South Africa's Game of Patience
Chote, Robert, The Independent (London, England)
THE success and durability of South Africa's embrace of multi-racial democracy this week depends on the patience with which the country's black majority is still prepared to wait for the prosperity denied it by 340 years of white rule.
Racial divisions in health, transport, education, employment and land ownership have opened a huge gulf between the wealth of the black and white communities, while economic mismanagement and international isolation have left everyone worse off than they were 20 years ago. Around 8 per cent of South Africans own about 90 per cent of the country's wealth, while the Development Bank of Southern Africa says 9 million people are "completely destitute".
The incoming coalition government - almost certainly dominated by the African National Congress, but also likely to include F W de Klerk's ruling National Party as a junior partner - will have to tackle these inequalities quickly if black South Africans are not to lose faith in their "managed revolution".
Nelson Mandela, the president-in-waiting, knows that this cannot be achieved overnight. Social reform can only be paid for if the economy performs better, and a better economic performance cannot be sustained without social reform. Mr Mandela will not have much time to square this circle and has warned his supporters not to expect too much too soon.
But expectations are still running high. Smartly dressed conmen across the country have made a fortune selling black families fake title deeds to houses in the white suburbs, saying that they will be handed over after the election. One white home-owner in Pietermaritzburg returned home recently to discover a black family working in her garden so that it would be tidy when they took possession on 28 April.
Free houses are not in the manifesto, but the ANC has campaigned on an ambitious programme to raise living standards. It plans to create 2.5 million jobs in the next decade through public works programmes, to build a million new homes, to provide electricity for 2.5 million families and to boost education, health and training services.
Land reform will also be high on the ANC's agenda, including plans to redistribute agricultural and residential land from whites to blacks. This is not simply an act of political revenge, but promises important economic benefits.
More than 85 per cent of South Africa's land had been set aside for white settlement by the early 1900s. White farmers have dominated commercial agricultural production ever since, but the World Bank argues that many of them are inefficient and make inadequate use of their land. Spreading land ownership more evenly could help.
But the ruling National Party last week dismissed the ANC's plans as "Mickey Mouse economics". It claimed the programme would cost around pounds 120bn, 15 times more than the ANC had estimated and nearly twice South Africa's annual output of goods and services. With government borrowing already running at about 6 per cent of national income, there is little scope for to run a more expansionary budget.
The NP argues that the transition to democracy will be better served by safeguarding the economy's emergence from recession, boosting investment, lowering inflation from its current 7 to 8 per cent and cutting government borrowing and tax rates.
The NP no doubt realises that this would not satisfy the black majority quickly enough, but its stance may nonetheless be politically canny. The NP is on a hiding to nothing in this election, but could regain credibility if a combination of political instability, external economic events and the difficulty of cranking up the country's capacity to supply goods and services blows the ANC off course.
Leaving aside the long-term problems of industrial and agricultural inefficiency and under-utilised human resources, the South African economy's short-term prospects are relatively favourable. …