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Between Globalisation and (Post) Apartheid: The Political Economy of Restructuring in South Africa

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Pádraig Carmody (2002). Between Globalisation and (Post) Apartheid: The Political Economy of Restructuring in South Africa. Journal of Southern African Studies, 28(2). Taylor & Francis (Carfax).
Type journal article
Scope Post-1994 South African economy
Method mixed
Period studied 1994–2001
Regions South Africa, Southern Africa, London
Themes transition post apartheid, business and state, macro fiscal finance debt, manufacturing industrial policy, inequality poverty unemployment, labour markets wages, comparative theory
Citation key carmody2002b

Argument

Globalisation in South Africa has been driven largely from within, by the post-apartheid state and the major conglomerates, rather than imposed by the IMF or World Bank as elsewhere in Southern Africa. Carmody argues that adopting GEAR, liberalising trade and moving conglomerate headquarters to London has left the state with 'negative autonomy' from domestic social forces and embeddedness with transnational capital. The result is job loss, deindustrialisation in some sectors, structural dualism and rising inequality, which undermine a national developmental project. The argument combines secondary literature, press and policy documents, official statistics and a few interviews, and ends with proposals for re-regulation: exchange controls, enforced saving and partial redistribution of conglomerate assets.

Evidence and method

Secondary literature, World Bank, IMF and government policy documents, SARB and Statistics South Africa data, press and business reports, and a few interviews with DTI, IDC and NUMSA officials (1999).

Findings

  • Employment fell after the 1996 adoption of neo-liberal reform, against the job-creation promises of GEAR. (p. 3)

    since 1996 when neo-liberal economic reforms were introduced more than a half a million jobs have been lost, in contrast to the 600,000 that were meant to be created.

  • Conglomerate concentration was extreme before the end of apartheid. (p. 3)

    The South African economy is dominated by a group of conglomerates, the four largest of which controlled 83 per cent of the companies listed on the Johannesburg Stock

  • Conglomerates had outgrown the small domestic market, which gave big business an incentive to press for a negotiated settlement. (p. 9)

    Consequently, large-scale Anglophone and Afrikaner capital pressed for a negotiated settlement with the ANC, so that they could globalise their activities.

  • Defines 'negative autonomy', the book's core concept of the state's relation to domestic and global forces. (p. 8)

    Negative autonomy is where the state appears autonomous from domestic social forces, but that autonomy is the obverse of dependence on global forces, and therefore reflective of their priorities.

  • South African firms invested more abroad than flowed in, undermining GEAR's FDI assumption. (p. 11)

    But South African companies invested $1.6 billion more abroad than came into the country between 1994 and 1999,

  • Black economic empowerment through unbundling benefited few and left black firms highly exposed to debt and high interest rates. (p. 12)

    the Reserve Bank pushed interest rates to 25 per cent to try to keep portfolio capital in the country.

  • Afrikaner capital gained share ownership as Anglophone capital divested, an irony given apartheid's aims. (p. 12)

    their ownership share of the JSE rose from 24 to 36 per cent from 1996-1999 as large-scale Anglophone capital divested.

  • Growth has been capital-intensive and job-destroying; metal and engineering employment fell. (p. 16)

    In the metal and engineering industry, employment declined by 9.2 per cent from 1994 to 1999.

  • The financial sector has expanded at the expense of production, and structural dualism is deepening. (p. 18)

    The (post)apartheid economy is experiencing deepening sectoral disarticulation, or structural dualism, as the conglomerates continue to invest in some major mineral processing projects, but divest from other sub-sectors

  • South Africa has extreme and rising income inequality despite falling inter-racial inequality. (p. 19)

    although inter-racial inequality is falling, South Africa has the first or second highest rate of income inequality in the world, and this is rising.