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From racial to class apartheid: South Africa's frustrating decade of freedom
Monthly Review, March, 2004 by Patrick Bond
Nine years later, the provincial housing minister responsible for greater Johannesburg admitted to a mainstream newspaper that South Africa's resulting residential class apartheid had become an embarrassment: "If we are to integrate communities both economically and racially, then there is a real need to depart from the present concept of housing delivery that is determined by stands, completed houses and budget spent." His spokesperson added, "The view has always been that when we build low-cost houses, they should be built away from existing areas because it impacts on the price of property." Rationalizing such policies, the head of one of Johannesburg's largest property sales corporations, Lew Geffen Estates, insisted that "Low-cost houses should be developed in outlying areas where the property is cheaper and more quality houses could be built."
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Unfortunately it is the likes of Geffen, the commercial bankers and allied construction companies who still drive housing creation, so it is reasonable to anticipate no change in Johannesburg's landscape--featuring not "quality houses" but what many black residents term "kennels." Several hundred thousand post-apartheid state-subsidized starter houses are often half as large as the 40 square meter "matchboxes" built during apartheid, and located even further away from jobs and community amenities. In addition to ongoing disconnections of water and electricity, the new slums suffer lower-quality state services ranging from rare rubbish collection to dirt roads and inadequate storm-water drainage.
Globalization Made Me Do It!
How did the degeneration of a once proud liberation movement occur so decisively, and so quickly? It is tempting to again point out that neoliberalism was dictated by the IMF in December 1993 before being codified in GEAR. But three prior decisions were also crucial: to drop "nationalization" formally from ANC rhetoric (April 1992); to repay the $25 billion of inherited apartheid-era foreign debt (October 1993); and to grant the central bank formal independence in an interim constitution (November 1993).
Various other international economic incidents should be mentioned. A few weeks after liberation in May 1994, when South Africa joined the General Agreement on Tariffs and Trade on disadvantageous terms, the country's deindustrialization was guaranteed. In January 1995, privatization began in earnest. Financial liberalization in the form of exchange control abolition occurred in March 1995, ironically in the immediate wake of the Mexican capital flight that destroyed the peso's value. South Africa's protection was to raise interest rates to a record high (often double-digit after inflation is discounted), where they have remained ever since. Later, from 1998-2001, the ANC government granted permission to South Africa's biggest companies to move their financial headquarters and primary stock market listings to London.
Under these circumstances, GEAR was merely a set of fantasy projections, and the failure of macroeconomic policy is even sometimes conceded in Pretoria. In an April 2002 article entitled "Great Leap into Stagnation Courtesy of World Bank," Bloomberg News Service reported that finance minister Trevor Manuel had loyally advocated "spending cuts, the dismantling of trade barriers and fighting inflation during the past six years, all under the guidance of World Bank economists. He is still waiting for the payoff. Now, Manuel and even some World Bank officials say Africa's largest economy has not gained as expected from the lender's advice." Manuel, who was chair of the Boards of Governors of the IMF and the World Bank and currently chairs the Development Committee of the joint body, admitted to Bloomberg, "We have undertaken a policy of very substantial macroeconomic reform. But the rewards are few." More generally, he conceded, "Developing countries have undertaken many reforms, but the benefits are, in fact, very slim."
