The Politics of South Africa: The Transition to Democracy

— John Hinshaw

OVER THE PAST few years, South Africa has undergone the dramatic political transition from apartheid to non-racial democracy. As one might expect in a country where racial and economic inequality is so stark, dismantling the economic structures of apartheid has proven more difficult.

In 1994, the country experienced its first election open to all its citizens. The African National Congress (ANC) swept the election with over 60% of the vote. Even before Nelson Mandela assumed the presidency, “petty apartheid”(segregated neighborhoods, schools, pools, etcetera) had begun to fall. The ANC finished the job.

No longer is it a crime for black South Africans to live outside a township or a “homeland.”The infamous pass system has been abolished. The enormous burdens on family life posed by the “migrant”labor system are beginning to end as all blacks can now legally live in urban areas. The struggle for decent jobs, housing, and education now enters a new phase.

Under apartheid, over 80% of the land was held by 13% of the population and 80% of the Johannesburg stock exchange was controlled by five companies. Income disparities between managers and workers were and remain higher than Brazil. For instance, mineworkers and domestics earn between $200 and $400 a month and living costs are only marginally cheaper than in the United States. High-ranking executives and government officials earn over $20,000 a month.

Most black South Africans rely on buses for travel, but one quarter of the automobiles on the road are BMWs, Mercedes and Land Rovers. In a country of forty million, there are only five million jobs in the formal sector. Estimates of the unemployment rate range from 30-42%. These facts help explain why South Africa has one of the world's highest rates of murder, rape and street crime.

Under apartheid what social welfare programs existed were largely targeted at four million whites. Indeed apartheid, as discussed below, constituted in large part a massive affirmative action and welfare program for the white population, particularly Afrikaners, although the country's Indian and Coloured communities also benefitted.

In the 1980s, the apartheid regime attempted to extend some benefits to blacks, such as old-age pensions, but the efforts to win the hearts and minds of black South Africans only raised expectations for a better, freer life under majority rule. The social benefits of the white racial minority had been made possible by immiserating the majority of the population and how, or whether, the government can raise the living standards of everyone is an open question.

Despite its daunting social problems, South Africa is the most industrialized country in Africa. For instance, it produces 70% of Sub-Saharan Africa's electricity. Partly in response to economic sanctions, the old government developed a wide range of “import substitution”schemes, often through state-affiliated companies (parastatals). Some were costly boondoggles, such as the billions spent on developing nuclear power and weapons. Others, however—such as the electricity company (Eskom) and the steel firm (Iscor)—were relatively efficient providers of both jobs and services.

Until the late 1980s, the state sector was enormous: encompassing railroads, the electrical system, telephones, arms manufacturing, and much of the steel, housing and transportation sectors. Industrialization was uneven. Denel in South Africa (formerly Armscor) makes the world's finest long-range heavy artillery with a range of over sixty miles. Although semi-finished steel and armaments are significant sources of foreign currency, and despite its industrial base, South Africa primarily exports gold, other minerals, and agricultural products.

The roots of apartheid ran deep. From the early 1900s, South Africa privileged white labor by law and custom. South Africa has vast amounts of gold—and mining has historically set the pattern for labor relations. The gold is distributed throughout the Witwatersrand in consistent, but low-grade reefs that go to incredibly deep levels. Thus mining companies have required huge amounts of capital and labor, and the system they worked out was for vast amounts of low-paid black labor with smaller and better-paid white workers/supervisors. Migrant workers from South Africa, Mozambique and elsewhere were forced to live in prison-like hostels and have had to reapply for their jobs every year or so.

From World War II until the 1970s, the growth and profitability of South Africa rivaled Japan. Apartheid's industrialization relied on a low-paid and ubiquitous black working class, which developed into one of the system's gravediggers. As early as the 1930s, the South African government prevented African workers from enjoying formal union rights. For instance, African workers were not defined as employees but as migrants and companies were not legally obligated to recognize their organizations or to bargain with them.

Nonetheless unions were formed and strikes broke out, not always in that order, such as the massive 1946 strike of gold miners on the Witwatersrand or on the Durban docks. Strikers were brutalized, then blacklisted.

Beginning with a series of spontaneous strikes in Durban in 1973, non-racial unions made rapid headway in manufacturing, mining and then the public sector jobs. The unions then developed a radical political agenda tied either to the South African Communist Party (SACP), the ANC or the Black Consciousness Movement popularized by Steve Biko.

Many of the largest unions in the biggest federation of South African unions, the Congress of South African Trade Unions (COSATU), are formally committed to workers' control of unions and the economy. COSATU activists call each other comrade rather than brother and sister as befitting their formal commitment to socialism.

In the early 1990s, in order to come up with a plan to rectify the comprehensive racist social engineering of the apartheid regime, COSATU led a dialogue with its alliance partners, the ANC and the Communist Party (SACP). The result was the Reconstruction and Development Program (RDP), which committed the government to increase the spending power of the impoverished black majority by raising wages and expanding the public sector to meet basic human needs such as housing, education, water, electricity and sanitation.

In effect, the RDP sought to create a larger domestic market through an internal Marshall Plan. According to international financial organizations such as the World Bank, the International Monetary Fund or currency traders, the RDP was an idealistic but misguided economic policy.

In 1996, the ANC government implemented GEAR (Growth, Employment and Redistribution), a program even they admitted was Thatcherite. The ANC argued that GEAR was necessary to overcome the debt from the apartheid regime (25% of the annual budget) in order to restore the confidence of international investors and to make the country's manufacturing sector competitive internationally. If this sounds familiar, it should be: it is the one-size fits all corporate agenda that the World Bank and the IMF promote around the world.

In a government which has made transparency and “consulting the stakeholders”its bywords for transformation, GEAR was unilaterally implemented. A telling irony of the present government is that the Minister of Trade and Industry is a proponent of GEAR although he's also a member of the SACP.

COSATU formally opposes GEAR, and, after some reluctance to criticize the ANC, so does the SACP. But at the December, 1997 ANC Congress, the ANC affirmed its commitment to GEAR and despite earlier protests, SACP and COSATU members at the congress refused to publicly condemn the plan. This apparent schizophrenia is due in part to the fact that delegates and MPs from the SACP or COSATU are first and foremost members of the ANC and subject to ANC discipline.

While GEAR is increasingly unpopular, neither the unions nor the SACP have mobilized the mass struggle necessary to fight it. The ANC is the only game in town, and its near-military internal discipline, learned in exile and influenced by its ally the SACP, is notorious. In the newspapers and speeches of top officials, fiscal discipline has become the new watchword and “black empowerment”has meant little more than creating a few black-led companies while wages of black workers stagnate or suffer.

The ANC's promise that GEAR would spark 150,000 new jobs by 1997 turned into the loss of over 100,000 jobs. Trevor Manuel, the Minister of Finance, promises that job growth will occur in the “medium term,”with a revised figure calling for 400,000 new jobs by 2000. But in the short term the industrial sector continues to shed jobs.

In July 1998, the Rand has hit a record low of 6.75 against the dollar—a loss of 28% since the beginning of the year. The prime lending rate is 25% and scaled-down projections call for 1% growth.

The media, especially the business press, loves GEAR and eagerly promotes the positive economic news about reduced budget deficits, export opportunities, etcetera. The official over-optimistic projections and/or lies about job growth are familiar aspects of the process of structural adjustment.

What is sad is that the ANC government lowered tariffs on the auto industry to levels even lower than those proscribed by GATT, resulting in even more lost jobs. Government officials and the business papers promote the auto industry as an export-oriented success story, although gains have been modest.

While the ANC government is under pressure from global markets to embrace flexibility, the drop in the value of the Rand suggests the tangible rewards for the ANC's “good”behavior are few. Meanwhile in the business section of the newspapers, the only indictment against GEAR is that it hasn't moved far enough and fast enough.

From 1886 onwards, gold mining has been the economic engine of the South African economy. While in the mid-1970s gold fetched over $800 an ounce, today its price is under $300. Gold mines have laid off hundreds of thousands of miners as the price of gold drops below the threshold of profitability and another 100,000 are slated to lose their jobs. South African mines are forced to go deeper than 6,000 feet for the precious metal. Hundreds of miners die annually in SA mines, and thousands of retired miners die of silicosis.

As the mines close, related industries, especially in the engineering (steel and metal working) sector have followed. Furthermore, most workers support several family members with their wages, so the decline of jobs has hurt black workers throughout Southern Africa. One official in the metalworkers union observed that “the engineering industry is bleeding, and it is our members' blood.”Since 1994, downsizing and GEAR have resulted in the growth of income inequality in what was already one of the world's most stratified economies.

Under apartheid, the public sector grew into one of the largest in the industrialized world as the “civilized labor policy”could only come by circumventing the market. Black workers were always less expensive than whites, and left to their own devices, capitalists would have put many whites on the street.

Fear of the “black threat”to white jobs, as well as an indigenous critique of British imperialism and capitalism, led Afrikaner nationalists to develop the state sector from the 1930s until the 1980s. By the 1980s, 40% of the Afrikaner population were civil servants.

Over the last ten years, outright privatization has been relatively rare, although in 1989 Iscor was sold to private investors. Parts of the public sector have been partially privatized by the ANC. Adventura, the leisure parastatal, has just been sold as part of a black empowerment deal. Forty percent of Telkom (the Telecommunications parastatal) was sold to a Malaysian corporation to raise money for improving and extending services.

Whether Telkom can build four million phone lines in eight years, the goal set for it by the government, is an open question. It took Telkom over forty years to put in the first four million.

Many of the problems that the ANC confronts come from the “negotiated settlement”in the early 1990s. International pressure via sanctions and high levels of domestic protest meant that the Afrikaner nationalists agreed to free elections.

But the ANC paid a steep price for having their hands on the levers of state power. Part of the deal was apparently to demobilize their mass organizations. Furthermore, nationalization of the mines, factories and the land (the ANC's historic “Freedom Charter”promises) were abandoned by the ANC.

The ANC agreed to “sunset clauses”for civil servants who could not be laid off without golden parachutes. This promise has been scrupulously maintained. Thus South Africa's notoriously large, corrupt and inefficient bureaucracies have been incorporated with the even worse staff from the old homelands regimes.

While the integrated bureaucracy is directed by officials from the ANC and other parties, the results are problematic. In June 1998, thieves stole scores of heavy machine guns from the country's “elite”paratrooper base, leaving in two stolen armored cars. Many police are barely literate and all are poorly paid, leading to widespread cooperation with criminals. Many suspect that the police are either indifferent to fighting crime or have been corrupted by mafia-type syndicates.

About 1,000 of the country's 140,000 prisoners escape each year from jail. While this is arguably a lower rate than ten years ago, it is still high and includes high-profile mafia types who inexplicably produce guns in holding cells. Police dockets routinely disappear.

The negotiated settlement ended the murderous wave of killings and assassinations at the hands of the “third force.”However, the price of peace was to dramatically slow the pace and distort the goals of transformation. Crucial to the task of transformation was the character of the state.

Can the ANC Deliver?

Whether the ANC can deliver an improved life to the impoverished majority of South Africans within the parameters of GEAR remains very much in doubt. The prognosis is mixed and contradictory.

The ANC gets high marks for encouraging the democratization of society. The new constitution is one of the most progressive in the world, defending not only freedom of speech and assembly but also the right to strike or to choose sexual partners. But while education for all is protected by the constitution, university students are charged relatively expensive fees and many lower schools are short-staffed.

The SA Defense Forces now include former combatants from the old army and the military cadres from the ANC and liberation organizations. Levels of political violence have dropped dramatically, although they remain high in the Natal midlands as cadre from the ANC and the Inkatha Freedom Party continue to kill each other. In December 1997, the ANC offered to merge with the IFP (the largest black party outside of the ANC) in order to eradicate political violence, shore up its electoral base or both.

English and Afrikaans remain official languages, but are joined by nine more African tongues. However, inter-ethnic tensions remain a significant problem. Fears that “Africanization”will result in loss of resources and eventual racial domination is felt not just by English- and Afrikaans-speaking whites, but also the Coloured and Indian communities.

The National Party retained its control over the Western Cape because it won the support of its many Afrikaans-speaking Coloured voters. Anti-Indian sentiment has been a part of many other African nationalist governments and while this has not occurred in South Africa, neither has the ANC developed a strong base in the largely working-class Indian and Coloured communities.

The dark side of nation-building has been widespread xenophobia. There have been attacks on street vendors from Mozambique and Zimbabwe with little outcry from the government or media. At the recent ANC congress Mandela said the ANC would not abandon those countries that supported their struggle, but by this he meant Cuba, Libya and Iran, not Mozambique, Angola and Zambia. Ironically, these front-line countries' economies were devastated precisely because of their support for the ANC and the liberation of South Africa. Economic aid to Southern Africa by South Africa has largely taken the form of massive infrastructure projects to link the region into a giant free-trade zone.

The country has avoided the racial apocalypse that many feared would accompany the end of white supremacy. While fascist organizations still operate, political terrorists have been deprived of government aid and, based on election results, have lost much of their popular support.

Promises to build one million new houses by 1999 have resulted in less than 10% of that number to date, and many of the new homes are two-room affairs significantly smaller than the “matchbox”housing built for blacks in the bad old days. The end of the Group Areas Act has resulted in a rapid urbanization as many flee the impoverished “homelands”for a better life in the city. But this has led to a rapid growth of urban squatter camps on the fringes, and sometimes at the center, of urban areas.

Squatter camps have sprung up several blocks from the Johannesburg Stock Exchange, helping to fuel white fears of inner-city crime and accelerating the decline of downtown Johannesburg. In some areas the police have forcibly removed squatters while in other areas the government has delivered some basic services. Ironically, while low-cost housing develops at a snail's pace, there is a boom in suburban construction of high-security apartments and office buildings.

The desegregation of middle-class housing has been far more rapid and many middle- and working-class blacks have moved from the townships into formerly white suburbs. Whereas up to around 40% of the country lacked access to clean water or sanitation facilities in 1994, millions of South Africans have gained access to clean water, sanitation, telephones and electricity. However, the delivery of basic services is fraught with contradictions.

During the liberation struggle, the ANC and other struggle organizations urged township residents not to pay their bills to parastatals such as Eskom. Since Eskom was a state-run corporation, weakening it helped to impoverish the apartheid state. Furthermore, Eskom produced a surplus of electricity and many activists argued that it was inhumane to expect unemployed or impoverished workers to pay a large percentage of their income for what should be a human right.

Since 1994, the government has moved to end the “culture of non-payment”and recently has begun to cut off township dwellers who will not or cannot pay their bills—even while wealthy businesses that are tens of thousands of rands in arrears continue to receive service.

As a result, several “civics,”the representatives of township residents, have pulled out of the Alliance and have refused to endorse the ANC for re-election in 1999. There have already been riots and the use of police over the electricity issue, although the level of violence remains far lower than in the 1980s.

One indication of the desperate shape of the ANC government is the return of the once-discredited “site and service”approach to housing. The apartheid regime had often built concrete slab foundations serviced by water, electricity and sewage. The site and service developments were simply fields with flush toilets sticking up, leading many activists to call the developments “toilets in the veld.”

Once SACP leader Joe Slovo became Housing Minister, however, “site and service”was put back on the agenda. New policies floated by the World Bank and adopted by the government have seen the abandonment of flush toilets for pit latrines. In one infamous case, the Mpumalanga Housing Ministry paid extra to a politically connected construction company for “environmentally friendly”pit latrines.

Even in the best of circumstances, the maximum housing subsidy available is $3,000. The irony is that what was a reactionary scheme under apartheid, “site and service,”has become utopian under the ANC. No wonder many South African activists are disillusioned with the ANC government.

Empowerment or Gravy Train?

Unlike the National Party (the ruling party of apartheid), the ANC has not removed entire communities from the voters' list. No one has been banned by the ANC. The police and army have not systematically brutalized any community. Yet the ANC's economic policies owe a great deal to Afrikaner nationalism.

In 1948, when the National Party came to power, Afrikaners [whites of Dutch, rather than British origin—ed.] were mostly poor. There were a few rich farmers, but most Afrikaners were landless laborers, workers and a marginalized petit bourgeoisie. The National Party mobilized the enormous anger against English capitalists and the British Empire, a legacy of the bitter Anglo-Boer wars.

The National party promised to raise the living standards of Afrikaners, in part by promoting parastatal companies, Afrikaner businesses and enforcing a stricter “civilized”labor policy. In response, Anglo-American, the biggest company in South Africa, spun off companies to help empower the nascent Afrikaner bourgeoisie.

The government also helped foster the Afrikaner bourgeoisie with decades of farm subsidies, preferential loans and contracts, and the expansion of parastatal and civil service employment. By the late 1960s, the civilized labor policy was slipping, in part to service the demands by Afrikaner businesses for cheaper labor. But a wealthy Afrikaner elite had been created that has weathered the ANC government quite well.

In the 1990s, Anglo responded to the ANC government by creating “black empowerment”firms. In a ghostly echo of the National Party, the ANC's economic policy has been to create a black middle class through government jobs and contracts. Corporations have been keen to hire a few black staff or create empowerment firms.

Those individuals who benefit get a ride on what South Africans refer as the “gravy train.”The SACP terms this the “non-racial middle strata”and admits that this is the profile of most party members. The result for activist organizations and unions has been a “brain drain”of cadre to government and business.

This phenomena explains why workers' organizations are weaker in the face of an ANC government with unionists and communists as MPs than they were under the rule of the National Party.

Many former ANC activists have embraced empowerment. Cyril Ramaphosa, the former head of COSATU, is the most prominent and successful example of black empowerment, and suggestive of the problems that black empowerment poses for workers' organizations.

Another example is the female empowerment investment company controlled by many prominent ANC Women's League members. They bought a former mine hostel that is now being used as a temporary prison for illegal immigrants. The government pays 20 Rands a day to hold Mozambicans and other nationals in miserable conditions there before being shipped across the border. Some South Africans have been deported because they speak Mozambican languages and didn't have their identity papers on them.

Even on its own terms, it is unclear whether black empowerment in an era of retrenchment can work. One flagship of black empowerment was JCI, once part of Anglo-American. The black chief executive of JCI paid 55 rands a share for the company and proceeded to sell off all parts of the business that were not related to gold mining.

When the price of gold plummeted, the value of JCI stock dropped to sixteen rands. Then the JCI decided to sell off its gold mining assets and become a diversified conglomerate. At this point, the stockholders revolted and the company was divided yet again.

The most dramatic failure of black empowerment is New World Bottling. Rich black Americans, including Bill Cosby and Whitney Houston, bought into a scheme to bottle and sell Pepsi. Many laid-off South African workers paid thousands of Rands to become distributors of the beverage, using their homes to store the bottles. Coca-Cola played hardball and exploited the ill-advised “promises”of numerous jobs—allegedly paying workers to camp in front of the Pepsi bottling plant, demanding the jobs once promised to them.

In the end, the black South African executive robbed New World blind and left his American backers, and numerous would-be distributors, holding the bag.

One of the physical manifestations of the Gravy Train are the large number of cell phones. Calls on cell phones cost roughly half that of an international call but you can't go through any posh shopping mall without seeing numerous members of the bourgeoisie talking on them.

The cell phone is also called “Gauteng earrings”indicating the wealth of this ANC stronghold. One sociologist from Wits gave her largely black students cell phones when they conducted research on social stratification in Soweto. Many residents of Soweto assumed that because the students were black and had cell phones, they were from the ANC!

At the 1997 ANC Congress the number of cell phones was staggering. The chair made comments such as “the comrade from Mpumalanga has lost his cell phone, if you find it, please return it to the information desk.”“Please turn off your cell phones during debate.”

Another status symbol that many in the ANC have adopted are German luxury cars. Officials in Mpumalanga Province rejected Transportation Minister Mac Maharah's rules not to buy BMWs in favor of medium-priced cars. One MEC retorted that “I'm too important to drive a 1600 cc car”or a three-year old BMW. As one academic noted, something is wrong when the parliament votes itself a raise before passing any piece of reform legislation.

Tellingly, almost no ANC Ministers or MP has been forced out of office or the ANC because of corruption. However, Terror Lekota was forced to step down from the Premiership of the Free State, in large part because he made sustained criticisms of party members whose loyalty apparently lay with the gravy train rather than with their impoverished constituency.

COSATU: The Possibilities of Struggle

The South African labor movement has a deserved reputation as one of the most militant and politically sophisticated union movements in the world. COSATU is still growing, although the decline of manufacturing employment has pushed unions to recruit more heavily from the public sector. Unions have begun poaching each others' members, a signal that labor has lost momentum.

With many former union officials sitting in parliament and the cabinet, the ANC has passed several laws that improve the position of workers and unionists. For instance, South African labor law makes it relatively easy to establish unions and national councils to bargain for wage and workplace gains.

Yet the ANC is also capable of undercutting the strength of the trade union movement. For instance, under the ANC government, police helped to break a strike at Pick and Pay supermarkets. During a strike in the auto industry, the ANC government lowered the tariffs on imports, thus de-emphasizing local production.

Under the ANC government, unions are encouraged to participate in decision-making. But in an era of downsizing, part of giving unions greater power over industrial standards involves decisions over productivity. In essence, unions are asked to participate in deciding which workers are made redundant. GEAR has shifted the balance of power toward business despite the existence of new pro-labor laws.

The government's desire to increase the profits of companies combined with growing corruption means that companies can easily circumvent labor laws. For instance, mining companies are using subcontractors rather than full-time employees to open and operate new mines.

Although both COSATU and the SACP remain formally within the ANC alliance, in recent months their criticisms of GEAR have grown. At the SACP congress in early July, Nelson Mandela challenged COSATU and the SACP by stating: “GEAR is the fundamental policy of the ANC . . . . we are not going to change it because of your pressure.”

It is highly unlikely that labor would form its own party before the next elections, although the formation of an openly socialist workers' party after 1999 remains a logical possibility.

The legacy of apartheid means that the democratization of South Africa has resulted in what the SACP calls the 30-70 society. Thirty percent of South Africans continue to live well, but the majority are still impoverished.

While there is little chance of a formal one-party state, as in Zimbabwe, a post-Mandela ANC will likely have to resort to repression against workers to remain in power. The ANC has already shown itself willing to move against immigrants, and to a lesser extent squatters and the unemployed.

In short, South Africa's situation is messy. Creating a stable democracy, overcoming the legacy of apartheid, or creating a social democracy, would be daunting tasks even if the government had plenty time and resources. It has neither.

The economic policies favored by the United States, the IMF and the World Bank are guaranteed to undermine, if not destroy, the transition to democracy. The ANC has inherited a discredited and inefficient state, and in the main, has proven unable to overcome its shortcomings. Unfortunately, in the short run, it is doubtful that a credible, mass organization can develop to fill the vacuum left by the ANC.

The most likely scenario is that the economy and workers' situation will continue to deteriorate over the next few years. How long South Africa can remain stable with 30-40% of its population unemployed is anyone's guess.

ATC 76, September-October 1998

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Dear John

May you please send me your email address. Mondli Hlatshwayo

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