The South African transition from apartheid rule was hailed as one event that has defied the conventional political transitions of governments

Apartheid capitalists had succeeded in breeding divisions within the black and white working class. The then emerging ethnicity created for divisive reasons by apartheid administrators, had a contradictory effect on the development of a working class consciousness. While it divided and weakened the labour involvement as whole, it strengthened segments of the workforce, for without trade unions to represent their interests, workers often sought political and social solidarity in a shared race and ethnicity.

In the white sector, workers identified themselves as Boers and/or English as opposed to identifying themselves members of the class they were in. A proletarian Boer viewed himself as having much in common with a capitalist Boer as opposed to an English and/or black worker. Even within the black labour force, workers, mostly in the mining sector viewed themselves as belonging to their ethnic groups before being conscious of their social position and class. Apartheid administration in mines fostered these odious from of ethnic consciousness as opposed and in antagonism to class-consciousness.  

What then was the South African government’s response to the racial divisions created by apartheid rule? In 1996 the government announced the misnamed Growth, Employment and Redistribution programme (GEAR), which basically meant adopting strict monetarist economic policies. Though opposition to GEAR from the civil society was not insignificant, the government never reneged from its implementation of the monetarist strategies as pronounced by GEAR. In fact, the ANC resolved in its 50th national Congress in Mafikeng to create a black bourgeoisie and speed up affirmative action. The black bourgeoisie was obviously going to be selected from few political figures, who would benefit from capitalism created by apartheid system.  

The end of apartheid has allowed a small but very vocal layer of black businessmen to come to the top of the social pyramid. Many of them come from the leadership of the ANC and even of the unions. Some in the leadership of the ANC have started to give their new acquired wealth and privileges a political justification. There is a lot of talk about the "patriotic bourgeoisie", about "black empowerment" and so on. But in reality, South Africa remains one of the most unequal societies in the world and the majority of black workers and youth who support the ANC have not benefited at all from the fact that black businesses in the Johannesburg Stock Exchange now represent 5.5% as opposed to 1% three years ago.

The influence of Bretton Woods’ institutions is highly perceptible in the GEAR. Of all, an informed expectation from World Bank and/or International Monetary Fund policies would be conspicuously that which expects the drive towards market-oriented policies. Market-oriented policies in this context are understood to mean the drive towards privatisation, deregulation, stabilisation and/or promotion/implementation of capitalist policies.

To draw these conclusions is not for a moment to be blind to the very real setbacks that have been suffered, and the mistakes that have been made in South Africa over the last several years. GEAR is somehow eclectic, yet its core hallmarks are restrictive macroeconomic and continued liberalization measures, hoping that this will attract Foreign Direct Investment, which would enhance growth to a sustainable 5–6 percent by 2001. The thought of growth levels would then ensure substantial redistribution and employment for the South African poor and previously disadvantaged. GEAR rhetoric is not peculiar to traditional seductive terms used by neo-liberal developmental theorists. Perhaps the strength of GEAR, typical of development programmes, came with the power of its rhetoric to seduce, to charm, to please, to fascinate, to set dreaming, but also to abuse, to turn away from the truth, and to deceive. The promise to eradicate poverty is so charming that although the history of neo-liberal development in weaker states is littered with failures, the belief in development survives.  

Besides racially oppressive, the apartheid system was class exploitative. Poor black labourers were not benefiting from apartheid capitalism, instead, apartheid capitalism was benefiting from the labour sold by the working class, mostly blacks and Africans in particular. And in the first years of GEAR, the standard fare was partially alloyed with “black economic empowerment” measures, largely directed at consolidating black participation in the upper echelons of the capitalist economy. What the South African government did was deracialise the very exploitative system by facilitating the entry of black elites into South African capitalism as owners of means of production. Because capitalism needs cheap labour to thrive, black elites had to rely on the already super exploited working class to continue with capitalist production. Capitalism is capitalism, regardless of who controls and facilitates the system. The legislation of the black empowerment Act was tantamount to allowing for the repaint of a gun, yet continue to kill people.  

While the fiscal restraint “fundamentals” have been overachieved, the flows of foreign direct investment (FDI), have been exceedingly disappointing, and growth has been sluggish, touching just over 3 percent in some years, and currently around 2 percent. More disastrous, however, are the other socio-economic indicators. Over one million workers have lost their jobs in the formal sector since 1994. While current levels of unemployment are contested, no one disputes that we have an extremely serious problem. The most recent government figures, which exclude all of those who are unemployed but not currently seeking work, suggest an unemployment figure of around 27 percent. This is but some of the conditions the South African poor and working class have to endure, whilst the black elitist few have joined white exploiters/oppressors in depriving ordinary South Africans access to wealth. Unemployment resulted perhaps from various other factors, yet GEAR is preponderantly responsible.  

A more recent study commissioned by Department of Labour finds that about 32 percent of the labour force is now unemployed, on the narrow definition, and fully 45 percent are unemployed if all those without work are included. South Africa remains, along with Brazil and Guatemala, the most unequal society on earth. This inequality continues to be highly racialised—average African income is 1,638 rand, while average white income is 6,131 rand. However, reflecting the rapid development of a small but not insignificant black elite, intra-“race” inequalities are now at their greatest among Africans—with top African income earners earning twenty-one times that of lowest income earners. Among whites, the top earners earn twelve times that of the lowest income earners.

Faced with deepening unemployment, poverty, and inequality, and with disappointing growth and investment, the GEAR policy framework has met with persisting criticism from COSATU and the SACP in particular. From the side of its principal proponents within the government, there have been several adjustments in the face of disappointment. Increasingly, GEAR has been redefined as a stabilisation programme based on conjecture and not what its acronym suggested it once aspired to be (a growth, employment and redistribution strategy). In this rereading, GEAR was necessitated by global turbulence and by a very precarious foreign currency reserve situation in 1996. Its “success” is now measured not in terms of growth, employment, and redistribution outcomes, but anecdotally and by way of comparison—“whatever our problems, South Africa’s economy is not in the same predicament as Argentina, or Turkey, or Zimbabwe,” or “GEAR has helped us to survive the worst of global turbulence” which may not be completely incorrect. Even if correct, the socio-economic conditions that came as direct result of GEAR can’t be justified.  

As part of the process of “normalization,” GEAR aims toward “a fundamental shift away from the ‘statist’ service delivery models of the past where the state subsidised and delivered municipal services (albeit in a racially-biased manner), towards a more ‘neo-liberal’ service delivery model where the private sector (and private sector principles) dominate. In the latter model, the state acts as a service ‘ensurer’ rather than a service ‘provider’ and municipal services are ‘run more like a business,’ with financial cost recovery becoming the most effective measure of performance.”  Ownership and/or directorship of service provision is mostly given to the emerging black bourgeoisie, which regardless of their liberation struggle credentials, apply capitalistic means of distribution to South Africa poor masses. The result denying the poor’s access to basic services, and continued exploitation of the working class, whilst some are being retrenched.  

The shift towards privatisation of service provision has seen the costs of basic services escalate. This, in turn, has caused increasing cost-recovery mechanisms such as disconnections of water and electricity to occupy the attention and energy of the local state, as opposed to delivery in the first place. Between 1999 and 2000, for example, some 75,400 water cut-offs occurred in the Greater Cape Town area. In Soweto after the 1999 general election, some 20,000 houses had their electricity supplies disconnected every month. Brian Johnson, the manager of Eskom, the state-owned electricity supply company, indicated that “the aim is to disconnect at least 75 per cent of Soweto residents.” Since 1994, some ten million South Africans have had their water and electricity cut-off for non-payment, while two million have been evicted from their homes for the same reason.

Conglomerate business (mostly owned by whites), the crafted black bourgeoisie, and black professionals have benefited in the short term from the imposition of neo-liberal economic policies. The conglomerates have benefited from the tax concessions, the lowering of inflation, and the privatisation programme. They have also benefited from steady exchange control liberalization (which has permitted the outward flow of increasing amounts of South African capital abroad) and from the opening up of new export markets and some new investment opportunities, especially in Africa and Asia. The aspirant black bourgeoisie has benefited from the privatisation of public enterprises; the voluntary asset swaps from domestic white companies, and from the partnerships established with foreign investors.... Black professionals have also benefited from promotions and more open employment practices as companies scramble to fulfil affirmative action quotas. But did the poor, and working class benefit from GEAR? It does not warrant rocket science or Planometrics to realise that they never benefited, instead they suffered the consequences of GEAR.         

On the much-harped on debate of motive forces of the ANC’s purported National Democratic Revolution (NDR), one writer argues, “In this complex transitional period, it is the "patriotic bourgeoisie" and emerging black petty bourgeoisie who are privileged and lucky. Lucky because they have earned a place to be counted as one of the motive forces for the deepening of the National Democratic Revolution (NDR) - a conclusion that still needs explaining. Maybe the next appropriate question to ask is, what have the "patriotic bourgeoisie" and emerging black bourgeoisie done which is of benefit to the NDR? What makes them different to other capitalists?”. It can’t be overstated, yet it’s reality that the main motive behind capitalism is to maximise profits, at the expense of workers. This explains why workers in a Gold Mine owned by Patrice Matsepe are not sufficiently salaried, yet his wealth is currently counted in billions.

Conclusion

It is enlightening to note that even “the President of South Africa, Thabo Mbeki acknowledges that the programme (Black Economic Empowerment) had succeeded only in creating allies of big business with a few blacks, ending up in preserving the status quo in SA with little or no economic growth, but creating a few black elite in the process”. Though he is completely dyed in the wool about the probable success of GEAR, with this sense of confessions, Mbeki will probably realise the root cause of this commotion. To extend and make straightforward Mbeki’s statement in conclusion, “the programme had succeeded only in creating allies of big business with a few blacks ending up in preserving the status quo in South Africa with little or no economic growth (which leads to unemployment and poverty)…but creating a few black elite (at the expense of the poor and working class) in the process”.

The writing has made attempts to critically, perhaps hypercritically discuss whether the introduction of GEAR has meant the creation of a black capitalist class at the expense of the poor and working class. A variety of issues were raised, and the perceptible dominant view was that GEAR is problematic and not going to address the development question in South Africa.    

Reference List: 

• Anders Aslund, How Russia Became a Market Economy (Washington, D.C.: Brookings Institution, 1995), page 5.
• P. Harris ‘Exclusion, Classification and Internal Colonialism: The emergence of ethnicity among in South Africa’ in Vail, Leroy, ed, The Creation of Tribalism in Southern Africa, London: Currey, 1989, page 102.  
• African National Congress Resolution on the National Question, Mafikeng, 1997
• Rist, G. The History of Development: From Western Origin To Global Faith, Zed Books,, London, 1997, page 1.
• Jeremy Cronin, Post Apartheid South Africa: A Reply to John S. Saul, Monthly Review, Volume 54, Number 7.
• Mesebetsi Labour Force Survey, February 2002, by the Norwegian Institute for Applied Social Science (FAFO), funded by South Africa’s Department of Labour and the Norwegian Development Agency.
• D. McDonald, “The Bell Tolls for Thee,” D. McDonald and L. Smith, “Privatising Cape Town,” Municipal Services project paper, 2002.
• Adam Habib and Vishnu Padayachee, “Economic Policy and Power relations in South Africa’s Transition to Democracy,” World Development 28 (2000), 25
• Xolile Nqata, A response to Social emancipation and national liberation, Umrabulo issue No. 10 1st Quarter 2001
• Patrick Wadula, Erwin pleads for more time on empowerment, Business Day 1st Edition:  May 10 2004.