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The Political Economy of Transition in South Africa (review of Patrick Bond, Elite Transition, and Hein Marais, South Africa, Limits to Change)

Literature › Works

Ben Fine (2003). The Political Economy of Transition in South Africa (review of Patrick Bond, Elite Transition, and Hein Marais, South Africa, Limits to Change). Journal of Southern African Studies, Vol. 29, No. 2. Taylor & Francis (Carfax Publishing).
Type journal article
Scope Post-1994 South African economy
Method synthesis review
Period studied 1990–2003
Regions South Africa
Themes transition post apartheid, politics ideology elections, macro fiscal finance debt, business and state, inequality poverty unemployment
Citation key fine2003

Argument

Fine reviews Bond and Marais on why the ANC moved from nationalisation and the RDP to the neo-liberal GEAR. He holds that globalisation and external constraints cannot alone explain this, since alternatives such as the MERG report were available and rejected. He stresses three enabling factors: an unaccountable elite negotiation, the dismantling of the UDF/MDM, and the continuing ANC-SACP-COSATU alliance. He also suggests, in a self-described 'vulgarly materialist' aside, that declining gold and the interests of concentrated conglomerates drove the need for a settlement that secured continuity of economic power. He sees renewed mass movements as the basis for optimism.

Evidence and method

Secondary: the two reviewed books, with quotations from Marais (Mandela statements of 1990 and 1994). Fine also draws on his own experience writing the MERG report's housing, education and health policies. No new data.

Findings

  • Post-apartheid outcomes were disappointing, with extreme inequality and failure to deliver jobs and basic needs. (p. 2)

    South Africa has one of the most unequal economies in the world, marked by a continuing failure to deliver jobs and basic needs to much of its citizenry

  • GEAR was a self-imposed structural adjustment resembling IMF/World Bank orthodoxy. (p. 2)

    South Africa became subject to self-imposed stabilisation and structural adjustment.

  • GEAR was virtually indistinguishable from the outgoing regime's Normative Economic Model. (p. 3)

    a stance pretty well indistinguishable from that of both the IMF/World Bank and even the outgoing apartheid regime's Normative Economic Model.

  • Policy alternatives existed but were rejected, not absent for lack of capacity. (p. 3)

    alternatives were available and rejected (not absent due to lack of economics literacy and capacity, as is often claimed).

  • Three factors enabled the shift to neo-liberal accommodation. (p. 3)

    First, as is suggested by the title of Bond's book, is the negotiation of the transitional settlement by a small elite on the ANC side, with little or no accountability.

  • The policymaking mode changed from consultation to imposition. (p. 4)

    After the turn, the Ministry of Finance imposed GEAR as non-negotiable.

  • Fine links gold's decline and conglomerate interests to the settlement and capital outflow. (p. 4)

    gold was running out for South Africa with a fair degree of geological notice - a process accelerated by the boom in the gold price in the 1970s.

  • Conglomerates wanted both a settlement and the ability to move assets abroad. (p. 4)

    Highly concentrated domestic conglomerates desperately needed a settlement both to sustain profitability in other areas and to siphon assets abroad.