South Africa's Economic Dilemma - Scylla or Charybdis?

By Farley, J. G. | Contemporary Review, January 1997 | Go to article overview

South Africa's Economic Dilemma - Scylla or Charybdis?


Farley, J. G., Contemporary Review


The success of Nelson Mandela's South Africa between now and the end of the century is likely to depend, almost wholly, on the viability of its economic development programme. Yet round the neck of that programme hang a number of albatrosses.

Four decades of apartheid have left a chasm between White and non-White which is massive in social and economic terms. Non-Whites are less well educated, less well paid and in less secure employment than their White counter parts, if indeed they are in employment at all. 3.6 million of all races are unemployed out of a working population of twenty-nine million. They also have inferior health care and housing: indeed, much of the housing available to Black Africans is unfit even for the beasts of the field. This was the price which the apartheid system exacted from the non-White majority for the protection of the White minority. Indeed, it would be no exaggeration to say that this policy distorted the country's whole economy. The current South African government is committed to dismantling this anachronistic structure and to 'empowering' the non-White majority. Even the National Party, until very recently participants with the African National Congress in government, shared this objective. The over-riding question now is how this can be achieved without threatening the country's political stability, debasing its currency or impoverishing any one of its ethnic groups.

The first contradiction in South Africa's economic development process lies in the nature of the A.N.C. itself, which is divided broadly into pragmatic and populist wings. The pragmatists, who are of the generation of Mandela or perhaps rather younger men, believe that there should be a reliance on market forces and orthodox economic management of the kind familiar in the Western world. They see the country's prosperity as being built on the basis of investment from the developed countries, which will both create jobs for the mass of the people and lead to the modernisation of South African industry. This in turn will enable it to compete more efficaciously than at present in foreign markets. The life of the average Black African will be slowly but surely enhanced by this 'trickle-down' process and the South Africa of the late 20th century will, by the early 21st, have matured into a democratic and pluralist society based on the rule of law and the equality of all its citizens.

The populist wing takes a rather different view. Its adherents, younger elements from the Black townships in the main, argue that this policy has the effect of perpetuating White economic supremacy, notwithstanding the political revolution made between 1990-94. By perpetuating White privilege, it will perpetuate non-White impoverishment. What is needed, in their view, are stiff doses of government intervention, on the scale of Roosevelt's New Deal of the early 1930s, to reduce unemployment by way of public works. If this means massive taxation of the prosperous White minority, so be it. The apartheid system was not overthrown, they argue, to render semi-permanent the squatter camps of Soweto and Kayelitsha where some seven million Black Africans live without electricity, without a proper water supply, without mains drainage, without access to decent education and without hope. The revolution was made to achieve radical social and economic change in months rather than years and strong centralised government was to be its instrument. They discount the view (which those members of the A.N.C. who have spent time in exile in countries north of the Zambezi do not) that governments of this kind presiding over 'command economies' had failed, despite years of effort, to deliver prosperity.

Closely related to this conflict between pragmatists and populists in the A.N.C. is the question of what kind of economy the new South Africa should pursue. It stands economically head and shoulders above its neighbours in Southern and Central Africa but is relatively backward by comparison with its Northern counterparts in Western Europe and the United States. …

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