What is it about South Africa, post the democratic elections of 1994 that keeps us mired in a seeming quagmire of such slow economic progress? We are 5 democratically elected presidents into our democracy, with 26-years under the belt but, we still struggle with abnormally high unemployment rates, the resultant poverty, high crime rates and very little government intervention as a “social change agent” why?
Throughout 50-years, the then Soviet Union was able to catapult more than 50-million of its people into the 20th century through a massive state-sponsored program of industrialisation and social reorganisation, at the time, the largest transfer of wealth and education to the largest number of people in the history of the world. That is until China achieved an even bigger socio-economic feat by transforming the lives of 600-million of its fellow citizens in just over 30-years.
It is estimated that the troika of China, India and Russia will be the largest and most powerful economic bloc the world has ever known in just one generation, changing the global economic landscape forever. So why is it so difficult for South Africa, the 2nd largest economy in Africa?
Let’s go back to where it all started just after Nelson Mandela was released from prison in February 1990, which actually feels like aeons ago.
Before, 1992 there was this fever of “triumphalism” underscored by a nationalistic political mood that swept the country. Once the drudgery of the negotiations had been concluded, people across the length and breadth of the country could almost “see” the seminal document, “The Freedom Charter,” being implemented. In a sense, this was South Africa in the pre-party mode, excited but not yet delirious, happy but not yet ecstatic, joyful but not yet mirthful, upbeat but not yet convivial.
At around the early parts of 1992, he (Nelson Mandela) is asked to join Harry Oppenheimer, boss of the giant Anglo-America and some other interested parties (read Anton Rupert, Clive Menell, and other powerful white industrialists) for a spot of lunch, and history would, one day record that fateful meeting and its subsequent follow-up meetings as the de facto negotiations and the decisions reached, the ones that actually set the tone for South Africa for its foreseeable future. Some key members of the ANC together, with what was then known as the “Brenthurst Club,” would over a few weeks meet and the ANC would be read the “riot act” and be told in no uncertain terms what it can or cannot do, what it is allowed to say and how it will govern. That is the first time WMC (white monopoly capital) made its presence felt, and it wouldn’t be the last time either.
So here’s what Nelson Mandela and his intrepid bunch of future South African politicians were told,
“The ANC as the incoming government of the country will be held liable for the massive, outstanding Apartheid debt and will be expected to pay it off.”
No senior past or present National Party politician will be held liable for the Apartheid atrocities; in other words, there will be no “Nuremberg” type trial.
No wealth tax will be imposed on any private or publicly owned white company.
No wealth tax shall be levied on the JSE (the Johannesburg Stock Exchange)
There will be no land invasions or repossession of any white-owned land, farms or holdings.
No white-owned business will be held responsible for Apartheid, whether individually or severally.
The personal tax rates shall not be raised above a threshold of 26% as a percentage of GDP, ever.
All the past white MP’s, civil servants and politicians shall receive a “golden handshake” and pension pay-out upon their retirement if they’ve served for 10-years or more, commensurate with their monthly salaries.
Finally, the ANC was allowed to create a version of the American “Affirmative Action Economic Programmes,” which later became known as B-BBEE, Broad-based Black Economic Empowerment, basically a reward system for the “politically connected,” for their compliance with the white capital class.
“The main causes of social, economic and political violence are those that divided the population into the superior and the inferior, the strong and the weak, the rich and the poor. The more highly unequal a society is, the higher its rates of violence.”
-Dr James Gilligan
