Sunday, October 28, 2012

Social Contradictions in South Africa

By Olu Akanmu

It has been an unprecedented season of labour strikes in South Africa in the last few months. Starting from a sit-in strike in an obscure Marikana platinum mine in which the South African state and its police acted reminiscent of the apartheid period and murdered 34 miners, strikes have spread to whole of the mining sector, the public service and the transport sectors. Strikes have spread in a virtual Mexican wave style, a new wave picking up as another one ends.  No one would have imagined in 1994 when Mandela took over as South Africa’s first democratic President, with a black majority government, that a post -apartheid South African police under a black government, will shoot down 34 black miners under whatever guise. It was like a black South African government murders its own.  The strikes are a big embarrassment to Jacob Zuma and the African National Congress (ANC) who came to power after one hundred years of struggles with a purpose to liberate the black South African majority from economic deprivation and poverty. The ANC was not just a political movement. It was an economic movement, a rallying point for the black working class and their unions such as the National Union of Miners (NUM) and the Congress of South African Trade Unions (COSATU).
An interesting feature of the strike movement especially the Marikana strike was that the workers took actions outside the union structure, setting up rival unions because they no longer trusted that union leaders in the NUM will genuinely support their economic struggle for better working conditions.  South African workers and its people seem to be losing faith in the ANC and the unions that have led them in the apartheid struggle. While would they not? They have grown to see union leaders and the ANC leaders co-opted by the white capitalist establishment as board members and Chairmen of Corporations under the guise of black empowerment.  Many of the old ANC leaders have become billionaires, some with obscene wealth while the living conditions of the larger number of black South Africans have not changed fundamentally from apartheid days. Yes, there has emerged a new black middle class, who have been coopted into management, riding BMWs and Mercedes in Sandton.  Soweto, Alexandria and Gugulethu however remain what they are, townships of black people with a huge youth populations that cannot get jobs. Shanties are still in place, people living in corrugated iron sheet houses as they lived under apartheid despite the fact that black brothers are now running the state house in Pretoria.  Unemployment in South Africa stands at 24 % with more than half of the children of South Africa according to a 2012 UNICEF report living in poverty.  Despite South Africa being classified as a middle income country, more than 50% of the population continue to live below the poverty line.   Eighteen years after apartheid, South Africa has become the country with highest income inequality in the world with gini index of 64% according to a Euromonitor report in June this year. 35% of the population lives below $2.5 per day. With such social misery indices, it is not surprising that South Africa has one of the highest crime and homicides rates in the world.  Nearly twenty years after apartheid, this could not have been the dream of Nelson Mandela.
South African economy must grow faster to create jobs for its people.  The problem however is that its internal social contradictions now manifested in waves of labour strikes, is a major disincentive for investment. It is estimated that the recent strikes have shaved off 8% of projected GDP growth of 2.5% in 2012.  Foreigners have also sold more than $1.3 billion of South African equities since the beginning of the labour strikes. South African labour laws, a gain of the anti-apartheid movement is extremely liberal and progressive, protecting workers right and unionization in the work place. Business however considers it too rigid and inflexible and a disincentive to investment. Given that capital has a choice of where to locate, a country with rigid and inflexible labour laws is unlikely to attract capital and investment needed for economic growth. South Africa has therefore lost out significantly to more competitive Asian economies like Vietnam for manufacturing investment.  South Africa needs to institute an urgent regime of labour market reforms. It however does not have the social consensus needed to do such given its internal social contradictions.
The widening inequality within South Africa has also fuelled calls for nationalization of its biggest corporations especially in the mining sector. Such extreme Hugo Chavez type of economic thought is driven by deep frustrations with South Africa’s social reforms and its slow pace of wealth redistribution. Jacob Zuma and the ANC leadership have outrightly ruled out nationalization of South African mining industry as an economic option. The ANC position is right as such moves will drive away much needed investment while stifling free market and its investment incentives that make business to run profitably. Zimbabwe, just across the border of South Africa has shown that expropriation of private capital and nationalization can only send an emerging economy down in a tailspin of economic abyss. The ANC leadership position is however also driven by self-interest. Many of its key leaders are now co-owners and Chairmen of the big mining corporations.  ANC leaders therefore have a moral issue on their hand even when their economic thoughts may be right given that they now preside over mining businesses whose working conditions are not really different from the same they fought in the apartheid days.
If nationalization is not an option and wealth would have to be redistributed to ease social tension, progressive taxation of the wealthy, their profits and their consumption would have to be squarely on the table.  It is economically and morally justified. Those who have been privileged as legacy white big business owners and their new black empowerment co-owners must give out more to fund investment in education, health and infrastructure that will liberate more South Africans out of poverty.  In addition there should be more social philanthropy especially from black business. Those who were prisoners just twenty years ago, who are now billionaires today because of the privilege of black empowerment have a strong moral duty and obligation to give, to donate to charity, black scholarship and entrepreneurship. The black billionaires must give not because it is compelled by law but that they recognize that they were privileged as a generation to be at the right place, at the right time, to be those who could take advantage of black empowerment opportunities in the early years of post-apartheid South Africa. .
A more fundamental issue however for South Africa in the resolution of its social contradictions is the need to reform its politics. South Africa is like a near one party state with the ANC by its legacy of anti-apartheid struggle virtually dominating its political structures. Yes, other parties exist and are protected by law even among the black population; they however do not command significant following to put the ANC on its toes.  No political party can command the credibility of the ANC among black South Africans.  The ANC is therefore comfortable that it will always win elections at least in the foreseeable future. This credibility legacy of the ANC while being well deserved might have become the greatest problem of South African democracy. ANC leaders seem to be able to get away with anything including the perceived sell-out of its poor black consistency for shares in white capitalist corporations and their use of the instrument of the state, (which they now control) to protect their business interests.  South Africa needs a credible black alternative movement that will compete with the ANC, put pressure on it and force it to reform. There have been allegations of corruption in government typical of sister African states where the people despite a democratic system seem to be unable to vote out governments that do not perform or get their hands soiled in immoral and unethical issues. Without a credible black alternative movement, there are real dangers that a complacent ANC could lead South Africa the way of the rest of Africa’s weak democracies.   
In the interim pending the reform of the ANC and an alternate credible black political party, critical political institutions in South Africa will need to be strengthened to moderate the dominating influence of the ANC. This includes the institution of free press and a strong and independent judiciary. The South African press has done a most credible job to expose corruption in government. It has provided an open space for public discourse outside the political party structures. And interestingly, the unions and organized civil society movement such as the churches will also be important in providing alternate critical and credible voices to the ANC.  South Africa needs a new generation of Desmond Tutus who will put the current ANC leaders on their toes, speaking the truth to power and challenging the moral conscience of ANC leaders.  And if labour strikes are needed to wake up the black political leaders of South Africa, perhaps there should be more until South Africa negotiates a new social consensus that does not leave majority of its people behind.
Olu Akanmu is an executive in the telecommunications industry. He was previously Managing Director/ CEO Retail and Consumer Banking at BankPHB. He publishes blog on Strategy and Public Policy on