Tài liệu State of the Nation- South Africa 2004-2005 docx

Table 10.1 Muslim population per province and race 253Table 14.1 Government budget: size and distribution 371 Table 14.2 Decomposition of aggregate demand, 1989–2003 392 Table 14.3 Secto

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Introduction: President Mbeki’s second term: opening the golden door? xix

John Daniel, Roger Southall and Jessica Lutchman

Roger Southall and John Daniel

3 Rural governance and citizenship in post-1994 South Africa:

Part II: Society

Introduction 137

6 The state of crime and policing 144

Ted Leggett

7 The state of the military 117

Len Le Roux and Henri Boshoff

8 The state of South Africa’s schools 210

Linda Chisholm

9 HIV/AIDS: finding ways to contain the pandemic 227

Tim Quinlan and Sarah Willan

10 Multiple communities: Muslims in post-apartheid South Africa 252

Goolam Vahed and Shamil Jeppie

11 The state of the art(s) 287

Lynn Maree

12 The state of the archives and access to information 313

Seán Morrow and Luvuyo Wotshela

13 A virtuous circle? Gender equality and representation in

18 ‘Empty stomachs, empty pockets’: poverty and inequality

in post-apartheid South Africa 479

Benjamin Roberts

19 A better life for all? Service delivery and poverty alleviation 511

David Hemson and Kwame Owusu-Ampomah

Part IV: South Africa in Africa

Introduction 541

20 South Africa and Nigeria: two unequal centres in a periphery 544

John Daniel, Jessica Lutchman and Sanusha Naidu

21 South Africa’s quiet diplomacy: the case of Zimbabwe 569

programmes for the medium-term expenditure framework 2004–07(R thousands) 184

Table 7.2 Itemised expenditure for DoD, MTEF 2004–07 (R thousands) 184Table 7.3 Numbers of members of forces integrated into SANDF 187Table 7.4 Racial composition of the SANDF, 1994, 1998, 2003 188

Table 7.5 Gender composition of SANDF, 1994, 1998, 2003 188

Table 7.6 Approved force design of SANDF 192

Table 8.1 Provincial education expenditure per programme (R millions) 209Table 8.2 Expenditure per learner by province (Rand) 209

Table 8.3 Enrolment in educator training at universities and technikons, 2000

and 2001 214Table 8.4 Changing union membership, 1999– 2002 214

Table 8.5 Number of teachers in schools, per province 223

Table 9.1 Summary of HIV/AIDS-specific allocations in the

national Budget 233Table 9.2 Overall HIV prevalence (extrapolated from study sample)

by province, South Africa 2002 240Table 9 3 Provincial HIV prevalence, antenatal clinic attendees, South Africa

1994–2002 241Table 9.4 Extrapolation of HIV prevalence amongst antenatal clinic attendees

to the general population, 2000–02 241Table 9.5 Cost of HIV to three companies in KwaZulu-Natal,

Table 10.1 Muslim population per province and race 253

Table 14.1 Government budget: size and distribution 371

Table 14.2 Decomposition of aggregate demand, 1989–2003 392

Table 14.3 Sectoral output shares, 1995 prices 395

Table 14.4 Percentage shares of merchandise exports, by sector 396

Table 16.1 Unemployment rates by region and gender, 2003 (percentages) 424Table 16.2 Unemployment trends (percentages) 425

Table 16.3 Summary of net employment creation (thousands) 434

Table 16.4 Female earnings as a percentage of male earnings,

formal sector 2002 438Table 16.5 Mean monthly incomes 440

Table 16.6 Unionisation 443

Table 16.7 Average year-on-year growth rates of productivity

and real wages 444Table 18.1 Subjective assessment of food insecurity in South African

households by province and area of residence, 1995–2002 (percentage) 491

Table 18.2 Annual per capita income by race group (percentage of

white level) 494Table 18.3 Gini coefficients by population group using per capita income 495Table 18.4 Decomposition of national income by income source and poverty

status (percentage share in overall Gini) 496Table 19.1 Forms of household sanitation 1995 and 2001 (percentage) 521

Table 19.2 Main reason for interruption of water service for more than one day

by monthly household income 526Table 19.3 Human Development Index and life expectancy trends 531

Table 20.1 Rand value of South African exports by continent/region,

2000–03 547Table 20.2 South Africa’s top five African trading partners (R billions) 549

Table 20.3 South African investments in Africa by region and investment type,

value in R millions and by market share, 1997–2001 551Table 20.4 African investments by region in South Africa, value in

R millions and by market share, 1997–2001 552Table 20.5 Major South African companies in other African countries by sector

List of figures

Figure 2.1 Comparison of 1994, 1999 and 2004 elections by votes 39Figure 2.2 Voter registration and valid votes for 1994, 1999 and 2004

elections 39Figure 5.1 Comparative racial representation within central public

service 115Figure 5.2 Profile of public service, 2003 118

Figure 5.3 Racial composition of South African public service, 2003 119Figure 5.4 Senior managers by race and salary level 119

Figure 5.5 Senior managers by provincial administration and national

departments 121Figure 6.1 Percentage change in crime rates between 1994–95 and

2002–03 151Figure 7.1 Structure of the Department of Defence 181

Figure 9.1 HIV prevalence rate by skill level in South Africa 244Figure 14.1 Fiscal balances as share of GDP, 1990–2003 373

Figure 14.2 Exchange rate volatility, 1982–2003, percentage change in

effective rates, quarterly 377Figure 14.3 Capital inflows, quarterly, 1990–2003 379

Figure 14.4 Effective exchange rate indices, monthly 1990–2003,

1995=100 380Figure 14.5 Interest rates and inflation, 1983–2003 381

Figure 14.6 GDP growth, consumption growth and changes in capital

formation, 1983–2003 384Figure 14.7 Investment as share of GDP, 1982–2003 385

Figure 14.8 National savings as share of GDP, 1982–2003 388

Figure 14.9 Balance of payments, 1982–2003 390

Figure 14.10 Trade components as share of GDP, 1982–2003 391

Figure 16.1 GDP and unemployment 426

Figure 16.2 Unemployment by race 426

Figure 16.3 Comparing strict and broad unemployment 427

Figure 16.4 Number of unemployed by age 248

Figure 16.5 Employment and labour force 248

Figure 16.6 ‘Not working’, as a percentage of working age population,

by race 429Figure 16.7 GDP and employment growth – comparing formal non-

agricultural private sector employment in the LFS and SEE 431Figure 16.8 Employment in formal and non-formal sectors 432

Figure 16.9 Change in formal employment 433

Figure 16.10 Distribution of employment, broad sectors 433

Figure 16.11 Formal employment by skill level 435

Figure 16.12 Proportion of labour force, productive and unproductive 437

Figure 16.13 Wage trends by skill level in the formal sector, 2000 prices 437

Figure 16.14 Formal sector workers with written contract, by skill category 439Figure 16.15 Formal sector workers with pension plan, by skill category 439Figure 16.16 Earnings in the formal and informal sector, by level of

education, 2002 441 Figure 18.1 Incidence of poverty by province (percentage of households) 487Figure 18.2 Change in employment and economically active population

by race and gender, 1995–99 (percentage) 489Figure 18.3 Real annual per capita income by race group, 1970–2000

(constant 2000 Rands) 494Figure 19.1 Progress over the period, water delivery, 1993–2003 519

Figure 19.2 Progress over the period, sanitation, 1993–2003 520

Figure 19.3 Consumption of drinking water 524

Figure 19.4 Access to piped water by household income 524

Figure 19.5 Access to sanitation and household income 525

Figure 20.1 Market share of South Africa’s export trade by continent/region,

2003 547Figure 20.2 Market share of South Africa’s import trade by continent/region,

2003 548Figure 20.3 South Africa’s trade balances by continent/region, 2003 548Figure 20.4 South Africa’s investment partners in Africa, 2002 552

Figure 20.5 South Africa’s trade relations with Nigeria, 1992–2003 560

State of the Nation: South Africa 2004–2005 is the second issue of what, last

year, the Human Sciences Research Council (HSRC) announced wouldbecome an annual set of original essays dedicated to reviewing developments

in South Africa Recalling the format of the South African Review that was

edited by Glenn Moss and others in the 1980s, and drawing inspiration fromthe presidential ‘State of the Nation’ speeches which have become a feature ofour new democracy, these annual collections seek to provide empirically-based analysis and assessment of contemporary events and trends from adevelopmental perspective, reflecting the values that are embedded in theConstitution

The founding State of the Nation collection attracted widespread interest It

was commended for the quality and coverage of the contributions and thevigorous argument that they occasioned The current volume constitutes aworthy successor, and is sure to have a similar effect It is a project of theDemocracy and Governance Research Programme of the HSRC But it drawsupon original and stimulating work also undertaken elsewhere within theorganisation and, in addition, features contributions by a spread of analystsfrom universities and civil society As such, it powerfully illustrates both thebreadth of the expanded HSRC’s own capabilities and its commitment toundertaking such work in active collaboration with publicly and privatelyfunded research partners

The importance of the annual State of the Nation volumes in promoting

pub-lic debate in South Africa has been recognised by five donor organisations.Atlantic Philanthropy, the Ford Foundation and the Mott Foundation havegenerously provided funding for the project over three years Without theirassistance, the production of the book would not have been possible TheKonrad Adenauer Foundation and the Durban-based Democracy Develop-ment Programme helped to ensure that the first volume entered the main-stream of national policy discourse by providing funding for a series of three

launch workshops They have generously agreed to repeat the exercise for the present collection Without the extensive supplementation of its parlia-mentary grant by partners such as these, the HSRC would be far less able todischarge its statutory mandate of undertaking social-scientific research ofrelevance to public policy, public knowledge and public debate.

The HSRC’s mandate is a distinctively challenging one Any scientific researchthat is interesting and profound will engender controversy, in itself and itsapplications But this is notably true of social research, which deals with politics, the economy, and society, both locally and internationally It thuscovers matters which participants engaged in their respective institutions –such as politicians, managers and employees, activists, and diplomats – as well

as thoughtful citizens engaged in their everyday lives, may wish to apply intheir decision-making These participants and citizens are thus as intenselyconcerned to assess the research as the analysts who produce it The specialcontribution, and obligation, of the latter is to provide considered analysesthat are based on empirical evidence and the scholarly insights of their disciplines

In this regard the editors of this second volume of State of the Nation – John

Daniel, Roger Southall and Jessica Lutchman – and all its contributors,beyond and within the HSRC, continue to serve us well They are to bethanked for providing a wide-ranging work of intellectual substance that willhelp to advance democracy and development in our country and on our continent by provoking relevant reflection and lively discussion

ABET Adult Basic Education and Training

ACDP African Christian Democratic Party

Actag Arts and Culture Task Group

AG Auditor General

AGOA African Growth and Opportunity Act

AIDS Acquired immune deficiency syndrome

AMA Africa Muslim Agency

Amps All-Media and Products Survey (produced by the

South African Advertising Research Foundation [SAARF]) ANC African National Congress

Apla Azanian Peoples’ Liberation Army

ART Anti-retroviral treatment

AU African Union

BASA Business and the Arts

BEE Black economic empowerment

BEEC Black Economic Empowerment Commission

BIG Basic income grant

BMATT British Military Advisory and Training Team

BNC Bi-national Commission (South Africa-Nigeria)

Cals Centre for Applied Legal Studies

CAP Community Arts Project

CEDAW United Nations Convention on the Elimination of All Forms of

Discrimination Against Women CEO Chief Executive Officer

CESM Classification educational subject matter

CII Channel Islam International

CLRB Communal Land Rights Bill

Codesa Convention for a Democratic South Africa

Contralesa Congress of Traditional Leaders of South Africa

COP Community-oriented policing

Cosatu Congress of South African Trade Unions

CPF Community police forum

CPI Consumer price index

CSANDF Chief of the South African National Defence Force

CTA Ciskei Territorial Authority

DA Democratic Alliance

DAC Department of Arts and Culture, South Africa

DACST Department of Arts, Culture, Science and Technology, South Africa DEAT Department of Environmental Affairs and Tourism, South Africa DFA Department of Foreign Affairs, South Africa

DG Director General

DISA Digital Imaging Project of South Africa

DLA Department of Land Affairs, South Africa

DoD Department of Defence, South Africa

DoE Department of Education

DoH Department of Health, South Africa

DoHA Department of Home Affairs, South Africa

DoL Department of Labour, South Africa

DoSD Department of Social Development, South Africa

DoSS Department of Safety and Security, South Africa

DSAC Department of Sport, Arts and Culture, Eastern Cape

DTI Department of Trade and Industry, South Africa

DWAF Department of Water Affairs and Forestry, South Africa

ECD Early Childhood Development

ELSEN Education for Learners with Special Needs

EMIS Education Management Information System

EMS Economic and management sciences

EU European Union

FDI Foreign direct investment

FET Further education and training

FF+ Freedom Front Plus

GCIS Government Communications and Information System

GDP Gross domestic product

GEAR Growth, Employment, and Redistribution strategy

GET General Education and Training

GNU Government of National Unity

HDI Human Development Index

HE Higher Education

HIV Human immunodeficiency virus

HSRC Human Sciences Research Council

HBU Historically black universities

HWU Historically white universities

IBA Independent Broadcasting Authority

ICT Information and communications technology

ICVS International crime victim survey

ID Independent Democrats

Idasa Institute for Democracy in South Africa

IDC Industrial Development Corporation

IEC Independent Electoral Commission

IES Income and expenditure survey

IFP Inkatha Freedom Party

IJS Integrated Justice System

INCD International Network for Cultural Diversity

INCP The International Network for Cultural Policy

IPCI Islamic Propagation Centre International

ISS Institute for Security Studies

IT Information technology

IUC Islamic Unity Conference

JMC Joint Monitoring Committee on the Improvement of the

Quality of Life and Status of Women JSE Johannesburg Stock Exchange

KZN KwaZulu-Natal

LFPR labour force participation rate

LFS Labour force survey

LPM Landless People’s Movement

LPPPD Litres of water per person per day

LSM Living standard measure

MDC Movement for Democratic Change

MDG Millennium Development Goals

MK Umkhonto we Sizwe

MoD Minister of Defence

MTEF Medium-term expenditure framework

MJC Muslim Judicial Council

MP Member of Parliament

MPL Muslim Personal Law

MVA Manufacturing value added

MYM Muslim Youth Movement

NAC National Arts Council

NACCA National Action Committee for Children Infected and Affected by HIV/AIDS Nacosa National AIDS Committee of South Africa

Nacsa Network for Arts and Culture in South Africa

Naptosa National Association of Professional Teachers’ Associations of South Africa NASA National Archives of South Africa

NCCS National Crime Combating Strategy

NCOP National Council of Provinces

NCPS National Crime Prevention Strategy

NDPP National Director of Public Prosecutions

NDR National democratic revolution

Nedlac National Economic Development and Labour Council

NEP New Economic Policy

Nepad New Partnership for Africa’s Development

NGO non-governmental organisation

NLC National Land Committee

NNP New National Party

NP National Party

NQF National Qualifictions Framework

NSB National Sorghum Breweries

NVQ National Vocational Qualification

NYSE New York Stock Exchange

OAMU Organisation of African Muslim Unity

OAU Organisation of African Unity

OHS October household survey

OSW Office of the Status of Women

PAC Pan Africanist Congress

Pagad People against Gangsterism and Drugs

Pansa Performing Arts Network of South Africa

PAT After-tax profit

PCAS Presidential Policy Co-ordination and Advisory Services

PCPD Portfolio Committee of Parliament on Defence

PEP Post-exposure prophylaxis

PFMA Public Finance Management Act

PIR Poverty and Inequality Report

PL Poverty line

PLAAS Programme for Land and Agrarian Studies

PMTCT Prevention of mother-to-child transmission

PR Proportional representation

PSC Public Service Commission

RDP Reconstruction and Development Programme

RWM Rural Women’s Movement

SAA South African Airways

SACP South African Communist Party

SACU Southern African Customs Union

SADC Southern African Development Community

SADET South African Democracy Education Trust

SADF South African Defence Force

Sadtu South African Democratic Teachers’ Union

SAHRC South African Human Rights Commission

SALC South African Law Commission

Saldru South African Labour Development Research Unit

SAMP South African Migration Project

Sanac South African National AIDS Council

SANDF South African National Defence Force

SAOU Suid Afrikaanse Onderwysers’ Unie

SAP South African Police

SAPS South African Police Service

SAQA South African Qualifications Authority

SARB South African Reserve Bank

SAR&H South African Railways and Harbours

SARS South African Revenue Service

SASAS South African social attitude survey

Scopa Standing Committee on Public Accounts

SDI Spatial Development Initiative

SDP Strategic Defence Package

SEE Survey of earnings and employment

SGB Standards generating bodies

SIU Special Investigation Unit

SOE State-owned enterprises

SRNS School register of needs survey

Stats SA Statistics South Africa

STD Sexually transmitted disease

Swapo South West African Peoples’ Organisation

TAC Treatment Action Campaign

TI 2003 Transparency International corruption perception index

TIPS Trade and Industry Policy Strategies

Trac Transvaal Rural Action Committee

TRC Truth and Reconciliation Commission

UCDP United Christian Democratic Party

UCT University of Cape Town

UDM United Democratic Movement

UDW University of Durban-Westville

UMNO United Malays’ National Organisation

UN United Nations

UNDP United Nations Development Programme

UNODC United Nations Office on Drugs and Crime

Unicef United Nations Children’s Fund

Unita National Union for the Total Independence of Angola VIPs Ventilated improved privies

WC Western Cape

WTO World Trade Organization

Zanu-PF Zimbabwe African National Union-Patriotic Front

Introduction: President Mbeki’s second term: opening the golden door?

John Daniel, Roger Southall and Jessica Lutchman

The era’s beginning: are these ruined shacks,these poor schools, these people still in rags and tatters,this cloddish insecurity of my poor families,

is all this the day?

The Century’s beginning, the golden door?

Citation by President Thabo Mbeki of Chilean poet, Pablo Neruda, in Parliament, 5 February 2004

The celebrations of ten years of democracy in South Africa are continuing,and rightly so The elections of 1994 marked the most significant junctureever in South African history, away from a society which employed race as itsfundamental organising principle and which condemned the majority ofpeople to poverty and oppression on grounds of colour, to one which aspires

to the abolition of race as a criterion of status, class and wealth, to politicalequality and to ‘a better life for all’

In 2004, South Africa remains confronted by a wholly formidable raft of lems: the majority of people are still appallingly poor, economic growth isinsufficient to guarantee mass improvement, social inequality remains rife,and democracy itself faces major challenges And yet South Africa is a differ-ent country, a country which compared to ten years ago is more united, morepeaceful, more optimistic, more self-confident and more ambitious Lest weforget, it is a fundamentally better and morally far superior place than it was

prob-in 1994 Yet it is also one where progress towards a better future cannot beguaranteed, and depends significantly upon the choices that are made by gov-ernment It is therefore of considerable relevance that 2004 was a year inwhich the African National Congress (ANC) government of President ThaboMbeki appeared to confirm a significant change in direction But how big achange was it? And where is it likely to lead?

2004: a year of two speeches

The end of South Africa’s first decade of democracy was concurrent with theholding of a third general election, which took place on April 14 The expectedreturn of the ANC to power would also see the beginning of Thabo Mbeki’ssecond, and under the Constitution, his concluding term as president Thesewere all key factors which rendered 2004 a year of not just the customary onebut of two presidential speeches on ‘The State of the Nation’ The first wasdelivered on 6 February at the beginning of the last session of the outgoingParliament; the second on 21 May at the opening of the first session of thenew (Mbeki 2004a, 2004b) They were significantly different in style and con-tent The first celebrated achievement, reflecting Mbeki the seer, the visionaryand the poet; the second recorded ambition, emphasising Mbeki the leaderand the technocrat determined to make his mark on history

During the latter half of 2003, the government had undertaken a ten-yearreview of its record since taking power (PCAS 2003) This was to informMbeki’s first presentation, but only after he had recalled the triumph overapartheid and the way that it had ‘radically and irrevocably’ changed people’slives For the black, especially African majority, he declared, liberation in 1994had augured ‘a new dawn (that) proclaimed the coming of a bright day’, wherepreviously they had only known despair Despite having been victims ofracism and violence, the masses had stood side by side with their formeroppressors at the voting booths and embraced dialogue, reconciliation andpeace In so doing, they began the process of overcoming the fears of those –like Afrikaans journalist Rian Malan – who had predicted majority rule asushering in an apocalypse As demanded by Nelson Mandela when he haddelivered his own first ‘State of the Nation’ speech in 1994, South Africandemocracy had achieved ‘the frontiers of human fulfillment, and the contin-uous extension of the frontiers of freedom’

Borrowing from the ten-year review, Mbeki trumpeted the official statistics ofachievement Between 1994 and 2004, over 1.9 million housing subsidies hadbeen provided and 1.6 million houses built for the poor; more than 70 percent of households had become electrified and an additional nine millionpeople had been provided access to clean water By 2004, 63 per cent of house-holds had access to sanitation, the previously racially divided education system had been integrated (even though there was urgent need for more

resource allocation and capacity building in rural areas), secondary schoolenrolment had reached 85 per cent, and nutrition and early childhood inter-ventions had been established to improve the lives of children from poorbackgrounds He could also have added, had he drawn more heavily from theten-year review, that 1.8 million hectares of land had been redistributed, and1.6 million jobs had been created (even though unemployment had increasedbecause of job losses in established industries and the high rate of inflow ofnew entrants to the labour market), and poverty rates had declined signifi-cantly But he did also stress that these delivery gains had been matched by thereduction of a two-decade rate of double-digit inflation to less than 4 per cent,

a move from negative to the longest period of consistently positive growthsince the 1940s, and the transition from South Africa being a country con-stantly in debt to one which was now in surplus Much remained to be done

to meet outstanding challenges, and to eradicate poverty and ment, but the policies needed to meet them were in place, and there was noforeseeable reason to change them What was now needed was their vigorousimplementation to create a ‘winning people-centred society’ The first decade

underdevelop-of democracy, proclaimed Mbeki (before concluding his speech with the quotation from Chilean poet Pablo Neruda which is cited earlier), had laid thesure foundation for even greater advances in the second

Mbeki’s elegant first speech was more presidential than partisan, yet less presented the ANC’s platform for the forthcoming election Not surpris-ingly, with the polls in view, it put a strongly positive spin on the government’sperformance, glossed over its failures, and was strangely silent – no, mon-strously silent – on the challenges presented by HIV/AIDS Yet it also stressedcontinuity over change, obscuring changes which had already begun to takeplace in economic policy

nonethe-The story of the incoming ANC-led government’s shift from the social cratically-inclined Reconstruction and Development Programme (RDP) to theconservative Growth, Employment and Redistribution strategy (GEAR) is afamiliar one According to the government’s more radical critics, many ofwhom reside within its partners in the Tripartite Alliance, the Congress ofSouth African Trade Unions (Cosatu) and the South African Communist Party(SACP), it either ‘sold-out’ its liberatory ideals or buckled under pressure frominternational, ‘neo-liberal’ forces (notably the International Monetary Fundand World Bank) The outcome was its adoption of a home-grown structural

adjustment programme which, at the cost of jobs and the needs of the poor,stressed debt reduction and inflation control, privatisation, deregulation offinancial controls, trade liberalisation, export promotion, and labour-marketflexibility in order to achieve a more internationally competitive economy Forits part, the government maintained that global economic realities dictatedthe need for it to arrest the alarming decline of an economy battered by years

of international isolation and domestic turmoil, and to win international confidence Only by addressing the country’s macroeconomic fundamentalscould the objectives of the RDP be realised These issues and those discussed

in the two paragraphs that follow are examined in more detail in the chapters

by Stephen Gelb, Reg Rumney and Miriam Altman in the economy section ofthis volume

The government’s (relative) success in transforming a previously protected, inward-looking and inefficient economy to one that is financiallywell-managed, market-driven and more competitive has become the stuff ofinternational fiscal legend Furthermore, whatever their misgivings about theconservative nature of policy, the majority of South Africans were apprecia-tive of a government that was, in macroeconomic terms, self-evidently com-petent, and much more so than the National Party (NP) government whichhad preceded it Not for nothing was Finance Minister Trevor Manuel able

highly-to compound his high standing in international financial circles withimmense popularity within the ANC However, the problem that increasinglyconfronted the government was that its conservative strategies failed to deliver the returns that global economic orthodoxy promised for it

However much the government could redefine employment (to argue, inessence, that job losses in declining industries were more than compensatedfor by new ones in service industries and the informal sector), unemploy-ment went on increasing (to a level of over 40 per cent in 2003) Howevermuch it sought to tackle poverty (and the statistics are impressive that itdid), the government’s own instrument to examine the need and potentialfor a comprehensive system of social security (the Taylor Commission forthe Department of Social Development) was to admit in 2002 that between

45 and 55 per cent of the population were poor, that 10 per cent of theAfrican population were malnourished and that 25 per cent of African chil-dren are born stunted And however much the government preached greaterequality, it was faced by the news that whilst income differentials between

white and black were narrowing, those within the African population andthe country as a whole were widening (SAIRR 2001:374 citing Stats SA2000) The United Nations Development Progamme (UNDP) reported thatthe percentage of the population living below US$1 per day had increasedfrom 9.4 per cent in 1995 (3.7 million) to 10.5 per cent in 2002 (4.7 million),and that the extent of poverty in South Africa had increased absolutelybetween those years (UNDP 2003:42) Alarmingly, too, life-expectancy haddeclined from 57 to 55 years For all the government’s macroeconomic

‘responsibility’, economic growth was insufficient to keep pace with SouthAfrica’s minimum demands, domestic saving remained low (16 per cent

in 2002) (SARB 2003:19), and international investors continued to lookaskance Indeed, between 1994 and 2002, the average flows of incoming foreign direct investment (FDI) amounted to only 1.4 per cent of grossdomestic product (GDP)

Faced by strong indications of policy failure and mounting domestic politicalpressures (notably around poverty and jobs), the government began to quietlyquestion its own orthodoxy in favour of a more interventionist economic

strategy In the words of the Mail & Guardian (20–26.02.04), budgets from

2001 onward registered a thawing of the government’s self-imposed cal ice age’ and ‘acceptance that an active state role in the economy is inevitable

‘ideologi-in a country like South Africa’ This shift culm‘ideologi-inated ‘ideologi-in a pre-election budget

in February 2004 which featured a 9 per cent growth in government

expendi-ture featuring, inter alia, a large-scale public works programme, at a cost to the

state of over R15 billion over four years, and an increase in welfare and socialspending of 14 per cent over the next three years, following a 22 per cent risebetween 2002 and 2004 If market forces alone cannot resolve the problems ofpoverty and unemployment, Mbeki had mused in mid-2003, then the gov-ernment would have to intervene in the economy more directly The publicworks programme would be implemented through the private sector, whichwould be invited to tender for labour-intensive infrastructural projects, yetthe government’s thinking now also stressed an increased role for the publicsector, with privatisation now taking second place to reform of the paras-tatals (such as Eskom and Transnet) and public-private partnerships ‘Withthe renewed focus on poverty eradication,’ noted the prominent analyst

Robyn Chalmers (Business Day 31.05.04), ‘government has decided a new

approach is required, with the focus on parastatal investment rather than

big asset sales’ – all at the same time as giving assurances to foreign investorsthat it has not abandoned its privatisation policy! From 2000 onwards,meanwhile, the government had also begun to adopt a more vigorous set ofpolicies towards black economic empowerment (BEE), taking the view that

if white capital was not able or willing to create a new class of black, otic’ entrepreneurs, they should be propelled and assisted into doing so Formore discussion of BEE, see Roger Southall’s chapter in the economy section

‘patri-of this volume

The Mail & Guardian (20–26.02.04) had opined that the language of the

Finance Minister’s pre-election budget speech had harked back to the ‘halcyondays of the Reconstruction and Development Programme’ Mbeki’s post-election address at the inauguration of the new Parliament confirmed that thestate was about to play a considerably more activist economic role The gov-ernment’s response to poverty and underdevelopment, he declared, rested onthree pillars, namely, encouraging the growth and development of the ‘firsteconomy’, increasing its potential to create jobs; addressing the challenges ofthe ‘second economy’;1and building a social security net to meet the objective

of poverty alleviation

What was so thoroughly remarkable about Mbeki’s plans for the first omy was that although they promised greater efforts at attracting greaterdomestic and foreign investment, the overwhelming emphasis was placedupon government and public-sector action In recognition of the low rate ofdomestic saving, institutional investors would be ‘engaged’ to locate five percent of their funds in the ‘real economy’ (that is, labour-intensive invest-ments); the state-owned enterprises (SOEs) would announce new plans forinvestment in September; the cost of doing business would be aggressivelytackled through the restructuring of the public infrastructure, notably theports, railways and electricity provision; there would be more official atten-tion to the development of small and medium business, and the AgriculturalCredit Scheme re-established to provide capital for agriculture; and morewould be done to speed skills development, assist exports and increaseresearch and development A Black Economic Advisory Council would beestablished as a matter of urgency, and the National Empowerment Fundwould announce new measures within the next three months, mindful of thegovernment’s provision of R10 billion for BEE over the next five years

Plans for the second economy included the launch of the Expanded PublicWorks Programme in September, concentrating on the 21 urban and ruralnodes identified by the government’s Urban Renewal and Integrated andSustainable Rural Development Programmes The state’s extension of micro-credit would soon come on track, and the Department of Agriculture wouldintensify its support to agricultural activities in communal land areas and forco-operative enterprises.

However, it was very much the target setting for poverty alleviation whichinvited media comment that Mbeki meant serious business over the course of

his second term Government, he declared, will work to ensure that social grants reach all 7.7 million beneficiaries; it will add about 3.2 million children

to the child support grants register as the upper-age limit is raised to children

turning 14; it will allocate R166 billion over three years for social security; it

will ensure that all households have easy access to clean running water within

the next five years; it will provide 300 000 households with basic sanitation during the current year; it will ensure that each household has access to elec-

tricity within the next eight years Other targets, notably within the healthsphere (including a promise that 113 health facilities would be fully opera-tional by March 2005 to cope with the Comprehensive Plan on HIV andAIDS) and with regard to safety and security, were also proclaimed

This time round, a concluding poetical flourish was eschewed in favour of ablunt instruction to the South African people to ‘get down to work’

Mbeki, opined one columnist, was ‘a man in a hurry’ Unlike his predecessor,Nelson Mandela, he had not had sainthood thrust upon him, and he had asingle remaining term to make his mark on history But why set up such tightdeadlines? Because in three years the battle for the succession within the ANCwould be raging, and he would be a lame-duck president Unless he securedrapid achievements, he would, according to Justice Malala, become ‘a blip in

South Africa’s history’ (ThisDay 25.04.04).

Mbeki’s embarkation upon his final term was clearly a major factor in ing the pace and direction of the government’s priorities However, the biggerquestion is whether the second ‘State of the Nation’ speech represents merely

defin-a prdefin-agmdefin-atic shift in government strdefin-ategy or points to the consoliddefin-ation of defin-agrander vision for South Africa’s transformation

Towards a developmental state?

There is a growing sense that South Africa stands on the cusp of a significantchange, perhaps even a paradigm shift, in the direction of public policy Therehas been a careful review by government of the experiences of the first tenyears of democracy; there is a clear indication of a reconsideration of GEAR;there has been an election campaign in which the issues of equality and poverty ranked high upon the agenda; the ANC was returned with anincreased majority, and unarguably, has a mandate to pursue transformativepolicies; and, at the beginning of his second term, Mbeki is generally regarded,with perhaps three exceptions, as having favoured merit and ability to deliverover party standing in his appointment of a new Cabinet and new premiers.The ground seems to have been cleared for something big

There is one line of thought that, after encountering the inadequacies ofGEAR, the government is swinging back to the RDP The ANC leadership’srapprochement with Cosatu and the SACP within the Tripartite Alliancewhich took place in 2003, after the tensions of the previous year when the latter organisations were accused of being ‘ultra-left’, is also sometimes taken

as indication that the government is reverting to a more redistributive or even

‘socialist’ platform Indeed, this has even prompted the suggestion that theMbeki government is opting for third-way-style social democracy

This latter view was encouraged by Thabo Mbeki joining leading politicians

of the centre-left, including Prime Minister Tony Blair, at a second sive governance’ conference summit organised under the banner of the ‘ThirdWay’ in July 2003 The first such meeting had taken place six years previously,and had brought together centre-left governments and parties with similarly-minded governments from southern countries such as Brazil, Argentina,Chile, Taiwan and South Korea South Africa’s invitation to the second ofthese gatherings was viewed as public testimony to the ANC’s social-democratic inclinations

‘progres-The third way is a descendant of the ‘revisionist socialism’ of the early tieth century Its guiding principles have been the realisation of the classicgoals of social democracy (such as social equality, pluralism, human rightsand workers’ participation) through democratic means, and politically, it hasfavoured pragmatism over dogmatism In its more recent manifestations,associated with the philosophies of Blair and former US president Bill

Clinton, the third way argues the need to cope with globalisation by bining the benefits of the free market (economic efficiency, growth and competition) with a renovation of the welfare state to materialise sustainableconditions of economic growth in ways that do not imperil the improvement,

com-of social justice, social cohesion and individual liberty The rights com-of bothindividual and corporate citizens (that is, business) are said to be balancedagainst responsibilities (Blair 1998; Giddens 1998)

From this perspective, the ANC can be said to be following the third waybecause, under its rule:

• South Africa has embraced progressive governance policies with soundmacroeconomic policies which seek to reap the benefits of globalisationand market efficiency

• The relationship between state, market and civil society has been

redefined, so that market-oriented policies are articulated with the

promotion of democracy, engagement with civil society, and the

protection of the most vulnerable in society The government pursues

a social compact with all major ‘stakeholders’ through such devices as

the National Economic Development and Labour Council (Nedlac),

Growth and Development Summits and so on

• South Africa pursues progressive policies in the international arena,

most notably with regard to its central role in the promotion of the

New Partnership for Africa’s Development (Nepad), which seeks to

pursue third-way strategies revolving around market efficiency and goodgovernance continentally Mbeki has emerged as an African statesman

determined to reshape the architecture of global political and economicgovernance in order to cater for the needs of Africa, the South and the

global poor

A third-way interpretation of the ANC’s strategy is not without merit, notleast because it points to broad outlooks on the world which it shares with theEuropean centre-left, most notably the vision of ‘New Labour’ as presented byTony Blair Importantly, it also offers a counterpoint to views which charac-terise the government’s policy as neo-liberal, ignoring its very real commit-ment to poverty alleviation and redistribution to achieve greater racialequality More obliquely, it also raises important questions about the ideolog-ical reorientation not only of the ANC but also of its ally the SACP, whichremains shy about defining its relationship to social democracy following the

collapse of Soviet-style communism However, given the numerous objections

to what is widely perceived to be the incoherence and vagueness of the thirdway, and in recent times the alignment of its most eminent practitioner, TonyBlair, with American imperialism in Iraq, it does not seem to take us very far.This is apart from the fact that Mbeki can be arguably more strongly identi-fied with other projects such as the ‘African Renaissance’ and Pan-Africanism,whose relationship to third-wayism needs to be more elaborately defined

At a more directly policy level, too, the social-democratic credentials of thegovernment have been queried by Nicoli Nattrass in an important article in

the Mail & Guardian (21–27.11.03) It may have empowered rather than

weakened trade unions, but – in contrast to social democracies, which arecharacterised by high levels of taxation to pay for correspondingly high levels

of equalising social spending – the ANC continues to pursue an economicstrategy which hopes that low taxation and small budget deficits will boostgrowth and thereby alleviate poverty Trevor Manuel’s latest budget may haveannounced the new public works programme and promised to provide fund-ing for the comprehensive roll-out of anti-retroviral drugs in the war againstAIDS, but his allowing the budget deficit to increase over the short term formanifestly electoral reasons should not be confused with a major shift in economic direction The option of raising taxation was not placed on theagenda, and the government remains committed to ‘trickle-down’ economicsrather than social democracy It also remains firmly committed to loweringthe cost of business and offering incentives for business development.Even if the depiction of the government as pursuing a third way or social demo-cratic agenda is not convincing, a credible argument can be made that its recenteconomic policy shifts have been more than pragmatic, and that they articulatewith a comprehensive agenda of transformation that Mbeki, now a second andfinal-term president, is particularly concerned to pursue This would seem todraw inspiration far less from socialism than from the idea of an Asian-style(capitalist) ‘developmental state’ Most particularly, it would appear to borrowfrom the experience of Malaysia, which has been particularly influential in shap-ing the ANC’s ideas about how to combine growth with racial redistribution

A debate in the literature on the reasons for the success of high-performingEast and South-East Asian economies matches a neo-classical viewpointagainst revisionism The former argues that the high-performing countries

got ‘the basics right’, by which is meant that they provided a stable economic environment, a reliable legal framework and incentives for exportorientation, whilst refraining from interfering with price formation, foreigntrade and the economic functioning of private enterprises In addition, theirgovernments also invested heavily in health and education In contrast, revi-sionists like Amsden (1989) and Wade (1990) propose that these states havegoverned the markets in critical ways, notably by consciously manipulatingprices to promote selective sector development ‘The revisionists contend thatthe East Asian governments have consistently and deliberately remedied market failures and altered the incentive structure to boost industries thatwould not otherwise have thrived’ (Martinussen 1999:269) Overall, there is ahigh level of government intervention, yet the interventionism is differentfrom that which has normally obtained in post-colonial Africa Whereas thelatter has emphasised restrictions and control, the developmental states haveprovided a policy framework for competition, growth and export.

macro-Without being unduly mechanistic, it is arguable that the Mbeki government

is in the throes of a shift away from the neo-classical to the revisionist stance.Having provided a stable and investor-friendly macroeconomic environmentunder GEAR and deregulated the economy in order to equip it to compete in

an unforgiving global arena, the government has been pleased by the visibleextent of its progress and the favourable reception it has received from busi-ness However, it has been disappointed by the returns in terms of bothgrowth and the redistribution of ownership and wealth between whites andblacks, and it is uncomfortably aware that these relative failures present a serious threat to long-term stability (and hence threaten to endanger its earlier achievements and return the country to square one) Given additionaldifficulties such as the problems presented by privatisation (which, contra-dictorily, requires extensive state financing if the desirable end of black owner-ship is to be achieved), the government is therefore shifting towards a moreinterventionist posture which will see a reinvigorated, stimulating role forpublic-sector enterprises and a more concerted effort to promote employ-ment, growth and exports by its manipulating the market If overall the government will remain fiscally cautious and conservative, it will nonethelesscombine this with a greater sense of adventure

This interpretation blends in with the ANC’s own particular perspectivethat its task – as well as transforming the economy – has been to fashion a

modern, democratic state out of the backward-looking inheritance ofapartheid This has entailed the fashioning of an efficient machinery ofgovernance out of the amalgam of a racially-divided central authority and

‘self-governing’ and juridically ‘independent’ African homelands which

existed prior to 1994 This has entailed, inter alia, the pursuit of a fairly

centralised model of rule During the negotiations process, the ANC had had

to compromise upon its preference for a central state by agreement to the creation of the nine new provinces However, since being in power, the ANChas been determined to ensure that the provinces, most of which have incor-porated former homelands, shall not become obstacles to a common vision ofidentity, growth and development for the ‘new South Africa’ Through centralappointment rather than local election of premiers, and through assertion ofpresidential and party disciplines, the ANC has not so much threateneddemocracy (as federalist-inclined parties like the Democratic Alliance [DA]and Inkatha Freedom Party [IFP] imply) as ensured that development anddelivery shall not be inhibited by the growth of provincial baronies From thisperspective, the ANC’s political dominance is an expression of democratic willand modernisation, rather than the instrument of potential dictatorship anddevelopmental stagnation that some of its critics imply

The relationship between the three levels of power (national, provincial andlocal) prescribed by the 1996 Constitution is that of co-operative governance,yet the ANC’s vision, in practice, is that of highly centralised co-operation.This accords closely to the model of centralised federalism which obtains inMalaysia, where since the adoption of its New Economic Policy (NEP) in

1970, the ruling United Malays’ National Organisation (UMNO) has used itsstatus as a dominant party to combine its oversight and stimulation of therapid growth of the economy with a significant transfer of ownership andwealth away from the minority Chinese (37 per cent of the population) to thepolitically ascendant Malays (50 per cent of the population) and the ambigu-ously-situated Indians (11 per cent)

There is, inevitably, considerable debate as to the credit that the Malaysianstate can claim for the rapid growth that the economy enjoyed after 1970.However, what has particularly attracted the ANC is the way in which the NEPset and pursued targets for the increased employment, education and owner-ship for the disadvantaged Malays and other indigenous peoples over a 20-year period, in order to ensure that employment at all levels and in all sectors

should come to reflect the racial composition of the population Likewise, the

NEP also prescribed that these bumiputera (sons of the soil) should come

to own 30 per cent of total commercial and industrial enterprises over the same time span Although these targets were not uniformly met, they have accounted for a major transformation in employment and ownership patterns

in favour of Malays, and in particular given rise to the substantial growth of

the Malay middle class Given also that by 1990 the share of bumiputera

equity holdings amounted to over 20 per cent of the total, the attractions ofthe Malaysian model to the ANC are obvious (Southall 1997)

Of course, there are major differences between the historical and temporallocations of the South African and Malaysian developmental experiences.Indeed, there are strong grounds for believing that today’s ANC is far less incontrol of the possibilities for economic growth than was UMNO at the time

it launched the NEP (Southall 1997) Nonetheless, there can be no doubtingthe attraction that the Malaysian model holds for the ANC, not least because

it provides a template for its present more vigorous assertion of broad-basedblack economic empowerment

The proposition that the ANC is in the throes of shifting from GEAR to amore interventionist, developmental state needs to be treated cautiously Atthis stage, it is more a working hypothesis than an unambiguously assertedconclusion Nonetheless, it does make more sense than competing explana-tions that changes in economic policy since the start of the present centuryamount either to an adoption of social democracy on the one hand, or represent merely pragmatic adjustments to policy on the other As with anygovernment, the ANC is always forced to grapple with immediate and short-term considerations However, it is also a liberation movement which hasembarked upon a long-term project What recent developments suggest is thatshort-term policy changes are increasingly being influenced by long-termthinking, and that at the outset of his final term as President, Thabo Mbeki isdetermined to make his mark on history But if this is true, what are the fore-seeable difficulties and problems which this vision is likely to encounter?

Problems along the way

Whether or not the Mbeki government is on the way to refashioning itself into

a developmental state, it is going to encounter three sets of problems in its bid

to boost growth and development in South Africa These relate to first, state capacity; second, the global and African environment; and third, democratic accountability.

State capacity

Peter Evans (1995), a theorist who has made extensive studies of the state inthe Third World, has drawn a distinction between predatory, intermediate anddevelopmental states:

• The predatory state, which is controlled by a small political elite and

often an authoritarian leader, is characterised by an incoherent and inefficient administration The political elite use their power to

plunder resources, and as a result the state has very little capacity to promote development There are no shortages of examples from post-independence Africa of such states, the most spectacular being Mobutu’sZaire, Nigeria under a succession of military rulers and, of course,Zimbabwe today

• The developmental state is characterised by a coherent bureaucracy with

an homogeneous administrative culture which has the capacity to perform the functions assigned to it Importantly, this bureaucracy has a

considerable degree of autonomy vis á vis both political and economic

elites, even though it has many and close connections with private interest groups, especially large corporations Nonetheless there is a clear division of labour: the political elite dominates long-term strategic decision-making; implementation is carried out by the bureaucracy; andeconomic activity is left to corporations, which although enjoying free-dom in their day-to-day operations, function within broad parameterslaid down by the state South Korea is regarded as the major example

• Intermediate states, exemplified by Brazil, are located between the

two extremes They possess considerable administrative capacity,and in some respects enjoy independence from both political and economic elites, although they often face challenges of internal

coherence and stability.2

Chalmers Johnson (2001), another theorist, has endorsed the basic outline ofEvans’s theory, but stresses in addition that the developmental state enjoyspolitical stability, that its bureaucracy is insulated from direct political influ-ence so that it can operate technocratically, and that it engages in extensive

investment in education as well as pursuing concerted action to ensure theequitable distribution of opportunities and wealth In addition, ‘the capitalistdevelopmental state pursues market-conforming interventions, rather thanmarket repressing or replacing interventions’ (Martinussen 1999:239).

Even this brief review indicates that, for the Mbeki government, the mental state is more reference group than reality To be sure, and thankfully

develop-so, South Africa under the ANC is far distant from the predatory model,against which Mbeki – albeit diplomatically – has declared battle via hisstrong personal commitment to the African Peer Review Mechanism, whichconstitutes an essential aspect of Nepad However, apart from the question-able issue of the extent to which the government is prepared to risk loss ofinvestor confidence by the adoption of a less conservative fiscal policy, thereare arguably (at least) two major obstacles in the way of South Africa’s progressing towards the status of a development state

The first is the limited technical capacity of the public service, which blendswith deficiencies in human resource development more generally Andre

Kraak, writing in the Human Sciences Research Council’s recent Human

Resources Development Review 2003 (Kraak 2003) has elaborated with

impres-sive authority what is generally recognised: that South Africa does not possesshighly skilled labour in sufficient quantities to supply a rapidly modernisingeconomy and that the shortages of training and scientific achievement aremost acute amongst the black majority, and are made more acute by the emigration of professionals Significantly, Kraak recommends (and com-mends existing moves towards) ‘joined-up’ policymaking oriented towardsthe medium and long term and pursuit of priorities across the breadth ofgovernment (notably key line departments), alongside the determined pursuit

of industrial policy objectives (including research and development) and the

‘implementation of a multi-layered economic growth, employment and skillsformation strategy that will simultaneously build upon the country’s low-,intermediate- and high-skill bases’ (Kraak 2003:25) This issue is also explored

by Vino Naidoo in a chapter in the politics section of this volume

The racial disjunction is, of course, one of the most notorious outcomes ofapartheid, and its elimination constitutes one of the government’s most pressing priorities Inevitably, too, it has had a major impact upon the labourmarket, one of whose most defining characteristics is the enormous

demographic over-representation of whites in management Hence, according

to one account, although white male representation in management haddeclined since 1994, white males still held 63 per cent of managerial jobs in

2000, whilst blacks represented merely 20 per cent (Horwitz & Falconer 2003:616–20) In this context, although private industry is increasing-

Bowmaker-ly subject to ‘equity’ demands to employ more blacks, it is to increasedemployment of blacks in the public sector that the government has looked tocorrect the global imbalance (and to satisfy the demands of its political con-stituency) However, whilst this is a necessary and welcome development, therapid transformation of the public service has had to be carried through in theface of glaring training and skills deficiencies amongst blacks, with the inevitableresult that many government departments are severely under-capacitated.Although, as Naidoo indicates in his chapter, there has been a concerted shifttowards modern managerial systems to improve efficiency and effectiveness, it isthe failings of the civil service which continue to provide much of the stuff ofmedia reportage and urban legend In this context, however much the Office ofthe Presidency and other high-level bodies may devise ambitious long-termplans, severe problems of implementation are likely to remain over at least themedium term – and certainly for the duration of Mbeki’s second term

The second major obstacle to South Africa moving towards the status of adevelopment state is that of a lack of national coherence The country’s demo-cratic transition was famously erected upon a basis of reconciliation betweenoppressors and oppressed, black and white, in a land where race had histori-cally been the primary criterion for allocating wealth, power and life-chances.However, although it is generally acknowledged that considerable progresstowards a common sense of citizenship and nationhood has been made since

1994, fault lines based upon race continue to shape opportunity and attitudes.For instance, a recent survey conducted by the HSRC indicates consistentlythat, within an overall context in which less than half of respondents (45.8 percent) indicated that they were satisfied with democracy, whites were consis-tently more negative in their attitudes towards the state of the nation and itsprospects than Africans (who constitute a 70 per cent demographic majority).Thirty-eight per cent of Africans thought that life had improved since 1999,but only 13 per cent of whites; and whereas 62 per cent of Africans recordedtrust in national government, the corresponding figure for whites was only 25per cent (Daniel & Southall forthcoming) There is scarcely need to elaborate

that white perceptions of diminishing opportunity attendant upon equitypressures, BEE and a less than satisfactory rate of economic growth may easily lead to declining commitment to democratic South Africa, whilst blackimpatience with continuing white privilege (even if the latter is based uponthe possession of valuable skills) may equally likely translate into racial ten-sions To be sure, these tensions may be mitigated by the growth of a blackmiddle class and the resultant overall decline in economic inequality betweenblack and white Against this, class tensions (which will be interlaced with

those of race) may simultaneously be increased by the currently growing

over-all level of inequality within South Africa, one of whose major characteristics

is the divide between those employed in the formal, core economy and a largeunderclass, which is condemned to struggling for survival in an expandinginformal economy

In a context as peculiarly complex as that of post-apartheid South Africa, thechallenges posed by race and class are formidable, and undermine the desir-ability of the country as a site for investment For example, AngloGold’s ChiefExecutive, Bobby Godsell, recently reported that UK fund managers regardinvestment in South Africa as more risky than in Russia or China, largely

because of uncertainties regarding black empowerment (Business Day

25.05.04)

How the government manages these challenges and markets this management

to international investors will clearly be an important factor in determiningSouth Africa’s development status

The global and African environment

Democratic South Africa is engaging in its bid for development in ably less propitious circumstances than those which faced the East and South-East Asian development states They were able to take advantage of a majorshift in the international division of labour, which in the post-Second WorldWar era saw western corporations taking advantage of new technologies incommunications and production to move many of their operations fromhigh-labour-cost industrialised countries to low-cost, non-industrialisedcountries Some, like South Korea and Taiwan, were also to be direct bene-ficiaries of their strategic significance to the West in the Cold War, and were tobecome major recipients of US and multilateral aid The contemporary world

is very different, and is one in which the end of the Cold War has enabled thetransnational production process to become truly globalised, with China – inparticular – having entered the reckoning as a site of production with inex-haustible supplies of cheap labour subject to despotic control by a market-oriented communist party overseer The outcome is a highly globalisedproduction system in which the capacity of individual states – especially thosewhich are weak and poor – to steer their own economic fortunes has beensubstantially eroded as they are compelled to compete against each other forscarce supplies of foreign investment Hence, whilst international politicalgoodwill and an unwillingness to undermine the democratic transition mayhave provided South Africa with a degree of preferential market access duringits first ten years of democracy, the country is likely to become just one morecompetitor as the memory of its achievement fades.

As noted earlier, the South African government’s adoption of GEAR and itsbid to deregulate the economy were designed to render the latter more able tocompete internationally It has been rewarded with considerable successes, asvarious sectors of South African industry have conquered new export mar-kets A case in point is the motor industry, which has boosted its exports from

5 per cent with a value of less than R4 billion in 1995 to 35 per cent with a

value of more than R40 billion in 2004 (Financial Mail 21.05.04).

However, the major problem for South Africa, as for other countries of theSouth, is that the neo-liberal policies which favour and structure globalisationare increasing inequalities both within and between countries ‘Globalinequality has increased sharply since the 1980s, in a clear rupture with thepattern over previous decades The growth of extreme poverty coincides with

an explosion of wealth over the same time period’ (Pieterse 2002:1024).Within this context, the opportunities for poorer countries from the South toemulate the East Asian miracle are increasingly limited, especially given themigration of capital and production to post-communist Russia and EasternEurope Improvement of state and human resource capacities may serve toimprove competitiveness, but prospects of making significant strides up theglobal ladder are minimal, and in any case likely to accrue only to the moreadvantaged within each country ‘While East and South-East Asian countries

as a whole deviate from the pattern of increasing global inequality, inequality

within these societies has increased’ (Pieterse 2002:1029).

One major bright spot for South Africa is its growing trading and industrialpresence in Africa (Daniel, Naidoo & Naidu 2003) However, it is not for noth-ing that Africa is sometimes described as the forgotten continent According

to the World Trade Organisation (WTO), Africa’s share of world exportsdropped from a dismal 3.1 per cent in 1990 to an even more catastrophic 2.2per cent in 2002, whilst imports dropped from 2.8 to 2.1 per cent over thesame period This is against a background of the decline of Africa’s share ofworld trade from 4 to 2 per cent in the 1980s This truly appalling recordclearly sets limits to any idea of South Africa staging a major developmentprocess on the back of its ease of access to the continent Equally, it underlinesthe importance which President Mbeki attaches to Nepad as a platform forattracting higher levels of foreign investment in Africa as a boost to growth

In Africa’s miserable condition, even marginal improvements would be come Yet if, as critics suggest, Nepad is merely GEAR writ large for the conti-nent, there are limited prospects for growth save for bonanzas linked toresource exploitation (notably oil), whose benefits will accrue largely to for-eign oil companies and local elites and will do little to change the continent’srole in the chain of global production These issues are also touched upon inthe chapter by Daniel, Lutchman and Naidu in the last section of this volume.The indications that the South African government is rethinking aspects ofGEAR and contemplating a more assertive role for the state in developmentsuggest that it may become more willing to challenge the rules of the globaleconomic game as they are dictated by multilateral institutions such as theInternational Monetary Fund, World Bank and WTO Hence the importance

wel-of its linking up with other southern powers such as Brazil and India to challenge neo-liberal shibboleths Much is made of the commitments togood governance in Nepad However, it is only a revolution in governanceglobally, entailing a political choice to overcome global poverty, which is likely to alter the patterns of global inequality which are so sharply replicatedwithin South Africa

Democratic accountability and development

Stephen Friedman is among those who see the delivery targets established inthe President’s second ‘State of the Nation’ speech as providing a tool for

opposition parties and civil society to hold government accountable (Business

Day 2.06.04) He welcomes this as providing for the possibility of a dialogue

which involves ordinary people in the realisation of development goals, at the same time as it keeps government in touch with ordinary people’s wantsand needs.

Friedman is not alone in regarding Mbeki’s commitment to hard goals, whichmay open the government up to sharp criticism if it fails to achieve them, ascommendable However, whilst the prevailing wisdom today is very much thatdevelopment is promoted by democracy, developmental states have oftenleaned strongly towards authoritarianism

Malaysia, the country to which the ANC looks in such admiration, is a case inpoint Formally it is a democracy, but the challenges posed by combining inter-ethnic redistribution with development have led to severe restrictions of civilliberty Discussion of sensitive issues has been curtailed, the press has often beenrestricted, interest groups curbed, and the judiciary subject to political pres-sures Furthermore, notably under the long prime ministership (1981–2003) ofMahathir bin Mohamed, the autonomy of the federal states was reined in, andthe ruling party as well as the bureaucracy subjected to his highly personalisedauthority But as in South Africa, the opposition parties were fragmented andunable to pose a challenge to UMNO, which wins recurrent elections These arefree of gross fraud, and parties and interest groups are allowed to organise, butthey are subject to various restrictions, and ultimately ‘the government keepsthem so weak that they cannot mobilize a broad following and, in the end, wieldlittle influence’ (Neher & Marlay 1995:105)

It is scarcely surprising that Malaysia has been described by some analysts as

a ‘façade democracy’ Yet it is widely regarded as a qualified success because,for all its flaws, Malaysians have enjoyed a rate of economic growth that hasbeen achieved by few other developing nations In particular, the ruling partyhas attracted the support of the large middle class, which has been willing totrade its civil liberties for the benefits of prosperity (Kahn 1996)

UMNO has presided over the Malaysian development experience as a nant party, in much the same way as the ANC has established its hegemonyover the South African political arena since 1994 Most notably, it has becomethe vehicle of a new, largely Malay bourgeoisie, which has been largely

domi-empowered through bumiputerisation and privatisation However, this class

has become overwhelmingly dependent upon government favours and iswidely regarded as pursuing rent-seeking rather than profit-making goals In

other words, the inter-ethnic redistribution project may have weakened what might have been a greater growth effort, as it is widely believed that theethnic Malay-dominated government has actually favoured industrialisationunder foreign transnational auspices in preference to the likely alternative ofethnic Chinese dominance (Southall 1997).

The low inflow of foreign investment into South Africa suggests that an alent trade-off may not be possible, and that if black empowerment initiativesare to promote development at the same time as effecting redistribution, theywill have to work in harmony with and not at the cost of domestic white capital This suggests the need for greater stress upon good corporate gover-nance in South Africa than has historically obtained in Malaysia in order toconstrain the tendencies towards ‘crony capitalism’ which can so easily beencouraged by the centrality of the allocation of government contracts to thepromotion of BEE In turn, this will require of the ANC that it rises above thetemptation to inhibit democratic accountability, which is an inevitableaccompaniment of its status as a dominant party

equiv-Looking beyond tomorrow

It is easier to criticise than to govern Any recitation of problems facing thepost-apartheid government is likely to be both daunting and depressing andany examination of the dilemmas facing the development process will re-inforce convictions that there is no easy road ahead, whatever strategies areadopted However, what such considerations do suggest is that any govern-ment in Pretoria requires a long-term vision of South Africa’s development asmuch as the ability to cope with the multiple, often conflicting, demands ofthe short term During the first ten years of democracy, the ANC-led govern-ment was challenged by the immediacy of working a new Constitution,extending its control over the state, and renovating an economy which hadbeen run down by decades of apartheid

At the beginning of the second decade, there are indications that there is a shifttowards the taking of a long-term view, a perspective not unfamiliar to a libera-tion movement which struggled for 82 years to come to power This does notrender Mbeki’s South Africa a developmental state, for numerous contradictionsremain at the heart of government policy and numerous questions aboundabout whether the experiences of the likes of Malaysia can be replicated

However, it does suggest that during Mbeki’s second presidential term he isdetermined to push hard to open the golden door.

Most of the contributions to this second State of the Nation volume were

written before President Mbeki’s second ‘State of the Nation’ speech of thisyear was delivered

In his ‘State of the Nation’ speech in 2001, President Mbeki identified 43 ery targets A team at Stellenbosch University, under the economist, WillieEsterhuyse, analysed their implementation and reported that in an 11-monthperiod ‘65 per cent of these have either been achieved or are credibly inprogress’ (Mbeki 2002), while only 16 per cent had not been attained On therest there was insufficient information, the team reported, on which to make

deliv-a judgement If just 70 per cent of the tdeliv-argets ldeliv-aid out in this deliv-address deliv-areachieved, then the country will have moved beyond the cusp and be deeplyimmersed in a transformation project of major proportions

In its editorial comment after the second speech, ThisDay (24.04.04) noted

that this was ‘not an address by a politician sinking into complacency after anoverwhelming electoral victory Deadlines are a sure way to ensure accounta-bility … there was … no fumbling around Mbeki knows what he wants’.Target mapping will clearly have to form a central part of future annual edi-

tions of the State of the Nation volume We will be checking to see if the

President is getting what he wants and what the ANC believes the countryneeds We will, in short, be watching to see if the golden door is finally opening

Notes

1 The ‘first economy’ refers essentially to the modern, capitalist economy while the

‘second ecomomy’ refers broadly to those outside, or on the fringes of, the modern sector; that is, those in the informal, illicit and subsistence sectors.

2 This section is drawn from Martinussen (1997:238–39).