Neoliberalism and the Political Economy of the New South Africa

New Political Economy, Vol. 5, No. 1, 2000

Neoliberalism and the Political Economy of the ‘New’ South Africa

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PAUL WILLIAMS & IAN TAYLOR

South Africa’s relatively smooth transition from the institutionalise d racism of apartheid to a universally franchised democracy was, from any perspective, remarkable. Even the most astute political pundits would have struggled to predict the process which would see Nelson Mandela and the African National Congress (ANC) dominate a Government of National Unity (GNU) less than a decade after the traumas of the states of emergency of the 1980s.1 In this sense, much has changed in the ‘new’ South Africa. However, this article is more concerned with what has stayed the same and why.

We believe that the economic continuitie s evident in so-called post-apartheid South Africa are just as interesting, and perhaps even more fundamental, than the more celebrated and obvious constitutiona l changes. The article examines one signi cant part of the process that altered the economic trajectory of the ANC from being broadly social democratic, to the conservative, neoliberal position it advances today. In particular, our interest lies in understandin g how the ANC’s de nition of what constituted ‘good’ economic policy underwent a dramatic transformation from the promises articulated during the liberation struggle, to the policies pursued via the GNU. We believe that the international discourse of neoliberalism has played a crucial, and often underestimated, role in this process. After outlining what we mean by neoliberalism , the article charts the major shifts in the ANC’s economic policy and offers an explanation of how these shifts occurred, with particular reference to the role that the neoliberal discourse played in delegitimisin g alternatives and sti ing debate during the transition.

De ning neoliberalism Neoliberalism as an ideology did not emerge from a historical or political vacuum. The neoliberal point of view had to be actively disseminated by an array of social forces, institution s and intellectual agents. By the early 1980s, as Roger Tooze has argued, neoliberalism had achieved ‘a special status in society: it [was] taken to represent the reality of the global economy, against which other views … [were] judged and evaluated’.2 But this had not always been the case.

Paul Williams & Ian Taylor, c/o Department of International Politics, University of Wales, Aberystwyth, Ceredigion SY23 3DA, Wales, UK. ISSN 1356-3467/00/010021-2 0 Ó

2000 Taylor & Francis Ltd

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Paul Williams & Ian Taylor After the devastation wrought by World War II, ‘embedded liberalism’ represented the orthodox stance in Western economic debates. 3 Indeed, during the late 1960s, proponents of neoliberalism were still derided as ‘stupid’ and in danger of leading society down the ‘road to reaction’.4 In short, neoliberalism as a project had to be actively promoted by an array of actors in speci c historical contexts. In this sense, its rise to dominance was neither natural nor inevitable.

We label this discourse neoliberal to emphasise how the contemporary articulation of this orthodoxy shows a blatant disregard for the traumatic social consequences which arise from the imposition of unfettered market-logic to the international realm. By contrast, the classical liberal theorists such as Adam Smith exhibited a concern for the well-being of society as a whole which is lacking from the chief exponents of neoliberalism . Today’s disciples of this discourse seem happy to live in what J.K. Galbraith called a ‘culture of contentment’ in which those at the top of the social ladder ignore those at the bottom and spend their leisure-time justifying the growing inequalities and demonising the poor as ignorant, lazy and criminally motivated.5 The wider objective of the neoliberal project is to engineer a stable environment in which internationall y mobile capital can reproduce and which signi cantly constrains the possibilitie s of collective action in the global political economy. In the South African context, neoliberalism became increasingly in uential in ANC pronouncements, such as the 1990 Discussion Document on Economic Policy; the 1992 draft policy guidelines; and both the 1994 Reconstruction and Development (RDP) and the 1996 Growth, Employment and Redistributio n (GEAR) programmes. Part of this article will chart the shifts in ANC economic policy, broadly from the Freedom Charter to the RDP and GEAR. The con guration of neoliberalism currently dominating the theory and much of the practice of the global political economy is based on a number of assumptions, many of which have their origins in liberal political economy and have been transposed to the international realm. Since the end of the Cold War these assumptions have come to de ne the rules of what is now often perceived to be ‘the only game in town’ as far as paths to economic growth and development are concerned. Although alternatives have been proposed, such as UNICEF’s notion of ‘adjustment with a human face’ or, in the African context, the African Alternative to Structural Adjustment Programmes, they have failed to materialise in any signi cant form. The central questions for this discussion are how and why neoliberal interests and practices have prevailed in South Africa and particularly within the ANC. So what assumptions underpin the neoliberal position?

First, neoliberal political economy ‘demands nothing less than the institutiona l separation of society into an economic and political sphere’.6 This forms part of what Karl Pola´nyi called the ‘economistic fallacy’ whereby this separation of spheres is assumed to be common to all societies regardless of their historical context. Crucially, this separation is not neutral: economic activity is viewed as conforming to an inherent rationality which distinguishe s it from the (inherently irrational ) political sphere. From this perspective, liberals can claim that problems de ned as ‘economic’ can be solved by ‘experts’ through the application of a socially-neutral , technical rationality. This leads quickly to the assumption 22

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Neoliberalism in South African Political Economy that economic motivation is the dominant driving force behind all human activity.

Secondly, economics, with its supposedly inherent rationality, should govern the irrational processes of political decision making. This normative claim rests on the liberal belief that a long-term harmony of interests is implicit in economic activity within the framework of a free market. Any subsequent ‘policy prescriptions’ will therefore inevitably emphasise market solutions to relieve the headache of (re)distribution problems. Witness the ‘one-size- ts-all’ approach to adjustment programmes: reduce public investment and current expenditur e (including wages), devalue the currency and curtail in ationary tendencies. For liberals, the market (if left free from unnecessary state/political/irrational intervention ) represents the primary mechanism to resolve policy problems at both the domestic and international level. However, the political consequence of such prescriptions is to privilege the desire for maintaining the smooth and ef cient running of the status quo over claims for redistributiv e justice. In practice, this often goes hand in hand with policies designed to maintain a system of law and order based on the protection of the rights of the property-owning individual .

As is implicit above, neoliberal political economy also proposes that ‘a natural community of interests would be brought about by the operation of free markets’.7 This allows for the reconciliation (de ned as ‘natural’ and noncoercive ) of the individual to the nation and the nation to mankind. As David Ricardo famously declared: Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employment as are most bene cial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole.8 Thus, by pursuing one’s own advantage everyone, given time, would bene t absolutely—although the bene ts would not be distributed equally throughout society. In addition, in the international realm such a ‘harmony of interests’ represents a necessary element for long-term peace between nations.

Finally, neoliberalism , with its focus on ‘economic man’, a rational egoist constantly seeking to optimise his position, ultimately stresses that the natural size for an ef cient economic community is the global market. National governments have their uses, but should not be allowed to impose rigid boundaries around economic activity. Within the framework of a free market, government should play the crucial but limited functions of providing security from external threats and ensuring law and order at home. Nevertheless, the irrationalitie s of government intervention constitute the main source of anxiety for liberals. John Gray’s comments are typical of this view: Every governmental intervention has real costs, and there is strong evidence to suggest that the vagaries of governmental policy constitute the chief source of economic disturbance in recent decades. It is a general truth … that the imperfections of the market are never suf cient to justify intervention.9 23

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Paul Williams & Ian Taylor In short, the larger the sphere of market relations and the less state/political interference, the better.

Our claim is that this neoliberal ideology (supported of course by considerable material interests) has played a necessary but not suf cient role in the dramatic about-face in the ANC’s de nition of what constitutes ‘good’ economic policy.

The ANC’s acceptance of neoliberalism , we believe, re ects not only a highly selective reading of the empirical evidence concerning the ‘success’ of numerous neoliberal-inspire d development projects emanating from the international nancial institution s (IFIs), in particular the World Bank, but also a failure to acknowledge the amount of ‘theory’ implicit in their own position. The result is a deeply political policy, portrayed as solely ‘economic’, which has enormous repercussions for the whole of South African society but most notably the richest and poorest elements. It is to how the ANC’s economic thinking came to embody neoliberal principles and how this has been translated into policy objectives that we now turn.

The early phase of ANC economic policy At the time of the ANC’s unbanning in 1990, the organisation had no clearly formulated political and economic policies. Instead, the organisation had relied on an emotional attachment to the principles of the 1955 Freedom Charter with its vague but prominent redistributionis t slogans: The People shall share in the country’s wealth!

The national wealth of our country, the heritage of all South Africans, shall be restored to the people; The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole; All other industries and trade shall be controlled to assist the well-being of the people; All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.10 On paper, at least for most of the struggle, the ANC (encouraged by its strategic ally, the South African Communist Party (SACP)) was committed to a mixture of dirigisme and socialist reform of the economy via nationalisatio n of the mines, banks and monopoly industries. However, the exact manner and policies by which the ANC was to pursue this were never formally enunciated. The reasons behind this lay primarily in the diverse membership pro le of the movement. As Murray suggested: Its purposefully vague anti-capitalist rhetoric gave the ANC leadership considerable ideological leeway successfully to stitch together a loosely de ned coalition of interest groups that included workers and aspirant entrepreneurs, Christians and Communists, and the unemployed and middle class, around a shared objective of dismantling apartheid.11 24

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Getting ready to govern The rst concerted effort to ll this gap in ANC policy came at the Harare Conference in April–May 1990. This was followed by a draft ANC Economic Manifesto (prepared for but not adopted by the 1991 National Conference) and the ANC’s Ready to Govern document of May 1992. Central to this was a basic commitment to the restructuring of society and a dynamic role for the state in the economy. However, the document continued the ANC’s track-record of vague statements on economics, to the extent that its readers could infer ‘anything from extensive state intervention to conventional market-driven structural adjustment’.12 Nevertheless, the document did call for the unbundlin g of the four massive corporations that dominated the South African economy and a rejection of capital’s familiar demands for low labour costs. Simultaneously, labour was accorded a pivotal role in the planning and execution of industrial policy.

In a rejection of economic ‘trickle-down’ thinking, the document’s central message was ‘growth through redistribution ’. The assumption was that growth would be promoted by meeting ‘the basic needs of the majority through a redistributio n of income which would increase employment, demand and production’.13 Such a strategy clearly demonstrated the residual in uence of socialist ideas within the alliance at this juncture. This was partly because the document appeared early on in the transition process before the ideological onslaught from neoliberal intellectuals began signi cantly to in uence the decision-makin g elite within the ANC. However, this breathing space for ideas outside of neoliberal strictures would not last long.

Indeed, the prescriptions of the document, in particular its ‘growth through redistribution ’ agenda, were immediately attacked by a disparate array of pro-business elements in the media and various ‘independent’ policy think-tanks and economists. These attacks ‘ranged from consternation about the “socialist” undertones of the document to a more sophisticate d set of objections to its alleged overtones of macro-economic populism’.14 At the same time, the probusiness media ran a string of hysterical articles warning about the ‘foolishness’ of redistributin g wealth from the massively privileged to the chronically disadvantaged. The Financial Mail, for example, warned: There will be a massive loss of jobs, shops will empty of goods, housing will fall into ruin, disease and misery will predominate— Comrade Nelson, like Comrade Nyerere of Tanzania, will say: ‘Sorry, we made a mistake. We’ve redistributed all we have’.15 However, such criticism generally lacked detailed analysis of what ‘growth through redistribution ’ could mean and instead simply dismissed alternatives to neoliberalism as nonsensical. These scare-mongering tactics coincided with a remarkable project to ‘educate’ the ANC elite and the public about the foolishness of non-neoliberal approaches to the economy. As the Financial Mail put it, ‘the ANC is muddled and confused. It needs to be guided and educated—taught to face harsh economic reality and the need to modify the expectations of its cadres’.16 Under the weight of this intellectual onslaught, the ANC’s economic thinking increasingly came to bear the hallmarks of neoliberalism . In particular, 25

Paul Williams & Ian Taylor promotion of macro-economic stability (through scal and monetary stringency, deregulation, privatisatio n and export-led growth strategies) was pushed closer to the top of its agenda.17

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Preventing an alternative?

A number of factors militated against the introductio n of a viable non-neoliberal approach. First, the collapse of the Soviet economies threw many socialist intellectuals into a state of conceptual and practical disarray and strengthened the hand of those who argued that there was ‘no alternative’ to neoliberal capitalism.

Second, there was the more pragmatic question of resources. In the face of a well-funded array of pro-neoliberal groups in civil society, the ANC’s economic strategists were swamped by this ideological tidal wave. As Karl von Holdt remarked: How big is the ANC Economics Department? Very, very small and very new in a lot of ways. And yet you’ve got the captains of industry, with their think tanks that have got a whole lot of policy studies coming out. That can be quite seductive.18 At the same time, the representatives of big business continued their educational ‘charm offensive’ on the ANC elite in general, and Mandela in particular, to ‘correct’ any remaining heresy. This process was helped by Mandela’s eagerness to mix with the privileged elite, in particular the so-called Brenthurst group, an informal association of monopoly capitalists meeting under the aegis of Anglo– American magnate, Harry Oppenheimer. This was a re ection, perhaps, of the petit bourgeois aspirations that many ANC leaders have long held. As Waldmeir observed: [Mandela] constantly sought the views of international businessmen and bankers on South Africa’s future and he cultivated close relationship s with top local businessmen—he spent holidays with the head of one of the country’s leading mining families [and] entertained at the home of one of Johannesburg ’s most ostentatious businessmen … where guests were met in the driveway with champagne on silver salvers. [He also] dined regularly with Anglo patriarch Harry Oppenheimer.19 Dinner apparently got results, as a satis ed Oppenheimer explained: ‘when you talked [to Mandela] about the future of the country, particularly on the economic side, he said a great many things that seemed to me very silly, but he says many of them less now’.20 Such sentiments were echoed by another analysis: ‘the close-knit circle of associates together with their coterie of supporters in the media and academia now pride themselves on having “weaned off” the ANC of its past economic fantasies … and generally “saved the country” from becoming another Bosnia’.21 Tactically, this offensive was designed to bolster the hegemony of neoliberal ideas in South Africa through consensual means. However, coercion was not 26

Neoliberalism in South African Political Economy ruled out by the establishment . For example, the then Finance Minster Derek Keys

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gave ANC economics head Trevor Manuel a brie ng on the economy, and Manuel repeated it to Mandela. ‘And I got frightened’, Mandela recalls. ‘Before Trevor nished, I said to him, “Now what does this mean as far as negotiations are concerned?

Because it appears to me that if we allow the situation to continue … the economy is going to be destroyed” ’.22 Such assertions were given added credibility in light of the dramatic increase in South Africa’s budget de cit under the stewardship of the National Party (NP).23 Not only had the 1980s witnessed massive spending in the defence and ‘sanctions-busting ’ industries, but corruption had become endemic.24 The national debt was further aggravated between 1990 and 1994 with the NP’s indulgence in reckless spending and practices of personal enrichment, particularly through in ated contribution s to civil servants’ pension funds. In addition, the scramble for state funds by various homeland bureaucrats during this period only compounded the situation. Whatever motives lay behind the de cit, the deteriorating situation severely circumscribed any future ANC government’s room for manoeuvre as further spending, in order to redistribute wealth for example, would have led to in ation and unacceptable debt. Moreover, by maintaining most of the old apartheid bureaucrats, not only did the GNU continually receive ‘economic [advice] almost exactly the same as under the National Party regime’,25 but upon leaving the public service, these individual s received substantial golden handshakes.

The ANC and its partners were also constrained by the scal and monetary prescriptions of the IFIs. Throughout this period, a deluge of high-pro le studies and conferences funded by the World Bank and IMF promoted the neoliberal message. While the IMF delivered sharp prescriptions about what was ‘reasonable’ and ‘realistic’, the World Bank began discussion s with the ANC and its liberation partners. The Bank enjoyed considerable access to the ANC elite and, ‘even by World Bank standards’, its presence in South Africa during this period represented ‘an unusually large … effort’.26 Consequently , ‘big business, the IMF and the World Bank [became] increasingly in uential in the top ranks of the ANC leadership’.27 Indeed, one World Bank representative later boasted that ‘this is the only country in the world where we speak to the opposition ’.28 Such activity only con rms the assertion of two Bank of cials that one of the organisation ’s main tactics was to ‘win access to the most senior policy-makers, thereby permitting the Bank staff to accelerate reform and to in uence its character [by securing] a place at the policy table’.29 The Bank’s Reducing Poverty report became the public symbol of this process of coercion and consent—pressurising and ‘trust-building ’—with the ANC elite and its liberation partners. The Report combined elaborate probes of Pretoria’s economic situation ‘with somewhat restrained neoliberal directives that were often offset by incorporating aspects of progressive thinking’.30 Incredibly, the Bank adopted a more progressive perspective than many of the South African ‘captains of industry’, arguing that ‘South Africa’s unequal legacy cannot be 27

Paul Williams & Ian Taylor reversed solely by market reforms because those disenfranchised by apartheid will be unable to obtain the resources necessary to exploit market opportunities’.31 But even this relatively moderate position was unacceptable for some of the South African elite. For example, the National Manpower Commission’s chair, Frans Baker, demanded that ‘employers and unions negotiate wages in the face of the cold winds of international competition’.32 Little concern was devoted to the structural inequalities that labour had historically faced in South Africa.

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Manufacturing the future: corporate scenarios The assault on any lingering socialist tendencies within the ANC continued through a plethora of corporate scenario planning exercises aggressively promoted after 1990.33 The role of such scenarios in moulding future options was quite explicit: to ‘signi cantly alter the mindsets or paradigms through which decision makers see the world’.34 The rst was Nedcor/Old Mutual’s Prospects for a Successful Transition, launched in 1990. Between January 1991 and June 1992 over 45,000 handpicked South Africans, invariably from the decision-making levels of society and the ANC, attended the presentation of the Prospects. 35 This scenario was quickly followed by Sanlam’s Platform for Investment and the more eclectic Mont Fleur Scenarios. Simultaneously , other documents, such as the South African Chamber of Business’ Economic Options for South Africa, were aggressively advertised as offering ‘realistic’ blueprints of South Africa’s future. These supposedly ‘diverse’ scenarios—which in practice differed only super cially—were coordinated by a close-knit circle of managers and corporate strategists. As Robin Lee observed, ‘Wack and Newland were both part of the Sunter exercise, while Wack was also a member of the Nedcor/Old Mutual team—and the present scenario planner at Shell, Adam Kahane, was the facilitator of Mont Fleur’.36 The multiple linkages between the organisers supports the assertion that ‘debates’ over the terms of South Africa’s economic strategy were (and remain) carefully concocted by selected representatives. As Susan George explains: There has been a concerted effort, an extremely well-funded ideological effort, to make [neoliberalism ] and all that goes with it seem bene cent and necessary. You fund people to create an ideological climate which becomes the life support system for the doctrine…. You create the colloquia and the symposia, open to the press that you sponsor. And they all write [in] journals that you also fund, and from there they get on the editorial pages and on the air. Pretty soon you have those three-man … pseudo debates on television between the raving radical right, the extreme right and the right of centre…. Anyone who thinks differently … must make apologies for his or her beliefs.37 This ideological bombardment from neoliberal management gurus was also replicated by the business press which continued its savaging of any nonneoliberal messages from the ANC. 28

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Despite such pressures it would be incorrect to describe every element of the ANC as passive observers in this process of deradicalisation . For example, any progressive economic policies were increasingly quali ed with strong caveats (such as the need to protect property rights and privatisatio n) designed to reassure big business. Furthermore, as the negotiation process wore on, such caveats were put in place with only the barest level of consultatio n between the ANC elite, its membership and political allies. 38 Capital had long demanded such guarantees as a foundation for post-apartheid South Africa and this was re ected in the appeal made by the South African Chamber of Business for a constitutional bill of rights, described as ‘a way of protecting the minority’s privileges rather than enlarging the freedom of the majority’.39 In his study of South Africa’s transition to democracy, Adam Habib agrees, arguing that one of the outcomes of the transition had been to bring about: the ANC’s commitment to manage, and to locate its programme of economic reconstruction within the framework of, a market economy. This commitment was captured in a range of clauses in the Bill of Rights, which recognised the rights of individual s to own property and accumulate capital, and to dispense with these as they please. The settlement thus established the parameters of the GNU’s economic programme and conditioned its evolution in a neo-liberal direction.40 Indeed, the ANC’s draft policy guidelines of April 1992 made no reference to higher taxation thresholds for the massive corporations, suggested privatising elements of the public sector and ditched calls for a restructuring of the nancial sector.

Forging a consensus or manufacturing consent?

Although elements from the left, and the Congress of South African Trade Unions (COSATU) in particular, attempted to stem the drift rightwards, by the time of the 1994 election the Financial Mail could triumphantly claim that macroeconomic policy was tilting ‘in the right direction’, with the ANC adopting ‘a steadily more realistic approach to the economy’.41 Symbolically, the new ANC government retained Derek Keys (an ex-chief executive of Gencor) as Finance Minister. By doing so, Mandela ‘delighted investors, businessmen and White South Africans … Nothing else would have persuaded the outside world—not to mention sceptical South Africans—of his commitment to freemarket economies and political moderation’.42 Keys’ appointment was certainly interesting for a number of reasons. As a report in the corporate mouthpiece, Business Day, commented approvingly : We can look with some hope to the evolution in economic thinking in the ANC since the occasion nearly three years ago when Nelson Mandela stepped out of prison and promptly reaf rmed his belief in the nationalisatio n of the heights of the economy. By contrast … Mandela [has gone] out of his way to 29

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assure a large group of foreign (and local ) journalists that the ANC was now as business-friendl y as any potential foreign investor could reasonably ask. He indicated further that ANC economic thinking was now being in uenced as much by Finance Minister Derek Keys and by organised business as anyone else. 43 When Keys resigned a few months later, Mandela replaced him with another white, conservative banker, Chris Liebenberg, whose 1995 budget spoke ‘volumes about the new-found conservatism of the … government of national unity’.44 Whilst by this stage the ANC had not entirely surrendered to the demands of capital, its economic proposals had taken a de nite neoliberal slant. Thus the new government accepted the compulsions of nancial and monetary ‘discipline’, defended the reorganisation of South African trade policies to foster an export-led growth plan and envisaged a reduced role for the state. Economic regeneration was predicated on sustainable growth via a surge of foreign investment (which never materialised), whilst domestic capital was supposed to intensify its investment, not indulge in off-shore relocation as frequently occurred. Ironically, this had been facilitated—at the demand of capital—by the removal of exchange controls. At the same time, the GNU was bombarded with ‘advice’ that it ‘should act decisively to reassure the nancial markets rather than concentrate on ful lling the expectations of its supporters’.45 As Marais highlights, an important factor in shifting ANC policy was the alteration (at the behest of capital) of the terms of the debate from the ideological, where the ANC was at best in a state of confusion, to the technical, where the organisation was most certainly disadvantaged . 46 As indicated above, ANC efforts to produce a coherent macroeconomic framework were hampered not least by the lack of attention afforded to bodies such as its Economic Department. Moreover, concentrating on the intricacies of an economic policy was a luxury that an organisation which had been banned and persecuted until very recently could ill afford. This subtle alteration turned out to be crucial in deciding how the economic debate unfolded. The fact is that the ANC and its liberation partners were severely constrained in their technical ability to combat the rush of neoliberal ideas that engulfed the movement in the transition period. The situation was not helped by ‘patent abuse of technically rigorous economists at the helm of the ANC’s DEP [Department of Economic Planning]’.47 Consequently: In terms of the economic debate, the ANC was … clearly on the defensive at the beginning of the negotiation process. It simply did not have a set of new progressive ideas and strategies to counter those neo-liberal ideas so powerfully proposed by the Washington institutions , western governments, local business interests, and the De Klerk regime.48 This factor considerably strengthened the hand of capital and its intellectuals who embarked on a concentrated political struggle to promote the neoliberal principles to which they subscribed. Moreover, it allowed them to dismiss 30

Neoliberalism in South African Political Economy alternative policies on relatively basic, technical grounds. This not only emasculated the progressive wing of the liberation movement, but it also encouraged conservative elements within the ANC who, in tandem with erstwhile ideological partners in the business community, rapidly moved to direct the ANC’s economic policy down more ‘realistic’ paths.49 As Nicholas Oppenheimer later asserted, ‘in a remarkably short time [the ANC] matured into a government which understands and accepts the disciplines of the marketplace’.50 Prior to this, a holding action centred around the RDP had temporarily placated many left-wing critics and postponed a wholesale swing to neoliberalism . This temporary alternative re ected the ambiguities and tensions in the ANC’s stance as it struggled to reconcile disagreements within the alliance.

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The Reconstruction and Development Programme: neoliberalism in waiting?

Although it represented the socioeconomic platform upon which the ANC fought the elections, a White Paper on the RDP indicating how the government would translate these vague proposals into policy only appeared on 23 November 1994.

However, previous drafts of the White Paper had emerged—and were heavily criticised by COSATU—from August onwards. The RDP was largely the brainchild of social democratic forces within COSATU, particularly the National Union of Metalworkers, which became increasingly disgruntled as more and more of the progressive content of the document was watered down with each new draft.51 Eventually, those alienated elements agreed to publish the seventh draft as the White Paper in the (vain) hope that publication would prevent any further dilution of the document.52 This formative process clearly re ected the ongoing tensions within the GNU exacerbated by the pressures of capital. The Base Document (February 1994) had been widely interpreted as a compromise by the ANC elite to keep COSATU and the SACP onboard during the immediate pre-election period. Indeed, the South African labour movement had ‘made its entry into the Tripartite Alliance contingent upon the ANC and SACP adopting [the RDP] as the basis of all subsequent development policy’.53 Yet, after the elections, the ANC was constitutionall y obliged to share of ce with the NP and absorb pressure from both domestic and international capital to dilute the RDP. Acceptance of the programme was made easier by its vagueness and lack of concrete proposals. The result was a compromised document from a compromised administration , desperate to reconcile the multiple voices in South Africa’s domestic polity with the mantras of globally- orientated capital.

Hence the RDP has been seen as a ‘very signi cant compromise to the neo-liberal “trickle down” policy preferences of the old regime’.54 For example, eliminating calls for nationalisation , even as a policy option, whilst pushing for privatisatio n and ‘ scal discipline’, was just one way the White Paper had changed from the initial Base Document. Whereas the Base Document had viewed scal discipline as a means to achieve development, the White Paper saw scal discipline as an objective in its own right, irrespective of its effect on development. The White Paper also differed from the Base Document over the state’s role in the economy. In accordance with the dictates of neoliberalism , the 31

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Paul Williams & Ian Taylor White Paper reduced the state’s role to a ‘neutral’ source of management. The business community predictably welcomed the programme (while expressing concern at the cost) as a great deal of its enthusiasm was based on ‘expectations of major new business opportunities ’ in the various expansion schemes promised by the RDP.55 However, a more sophisticate d interpretation might see capital’s support for the programme arising from its perception that the RDP was based ‘on the balance of evidence’ that would ‘guide the decision for or against economic policy measures’.56 The key question thus became: who decides what constitutes the balance of evidence? It was quite apparent that capital’s intellectuals had lost no time in persuading the government which factors counted as ‘evidence’ and which should be dismissed as mere anomalies.

The RDP’s weaknesses were increasingly evident in ‘the disjunctio n between the RDP as an economic programme and other aspects of economic policy’.57 In particular, the contradiction s that the RDP engendered made its place within the wider economic framework ‘unclear [and] at worst … potentially antithetical’.58 The fact that the RDP could be seen as arguing for the creation of an ‘enabling environment’ through macroeconomic balance and ‘sound scal policy’ compounded this ‘cocktail of confusion’.59 Moreover, the palpable lack of delivery on the ground proved a major embarrassment to the government and it became a relatively simple exercise for critics (from both left and right) to point to such failures as evidence of the inherent ‘unworkability ’ of the RDP. Indeed, the business community increasingly bemoaned the government’s lack of a clear macroeconomic blueprint and continued its campaign for an all-out neoliberal programme. This was symbolised by the South Africa Foundation’s (SAF) publication of a rabidly orthodox economic strategy entitled Growth for All, to which Mandela was treated to a private presentation prior to its release. 60 Representing a consortium of 50 of South Africa’s most powerful corporations, the document endorsed capital’s call for a wholesale embrace of neoliberalism by the GNU. The pro-business media saw the SAF document as an opportunit y to blackmail the government into embracing the neoliberal position of the SAF, asserting that, ‘if government reacts negatively, it will draw attention to its quali ed endorsement of market-oriented economics. That in turn will discourage investment, undermine the Rand and lock this economy into a low-growth trap’.61 Coincidentally , the document was released at a time when the South African economy was in a state of ux. The Rand was in free-fall (losing 25 per cent between February and July); interest rates remained high; whilst the trade account of the balance of payments moved in a highly erratic fashion. At the same time, the foreign exchange reserves were being steadily depleted until, by mid 1996, they were equivalent to only 5 weeks’ import cover. As Michie and Padayachee remarked, ‘these factors and pressures all served to focus attention on the appropriateness or otherwise of the government’s macro-economic policy’ and further undermined the RDP.62 Indeed, the Financial Mail claimed that such failings in the economy were due to the failure of the RDP.63 Not surprisingly , the programme was hastily abandoned in ‘a panic response to the … exchange rate instabilit y and a lame succumbing to the policy dictates and ideological pressures of the international nancial institutions ’.64 32

Neoliberalism in South African Political Economy The Growth, Employment and Redistribution Programme: neoliberalism triumphant

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In February 1996 Thabo Mbeki, then Mandela’s deputy-president , announced a new strategy for the nation’s economic development. Although the government continued to pay lip-service to the RDP, its of ce was closed (28 March 1996 ) and its nominal head—Jay Naidoo—was reassigned. This was rapidly followed in June by the government’s hasty release of its new macroeconomic strategy, the GEAR programme.65 This document ambitiously claimed it would increase annual growth by an average of 4.2 per cent, create 1.35 million jobs by 2000, boost exports by an average 8.4 per cent per annum and improve social structure. To date, it has failed even on its own terms.66 The new policy’s adoption derived from a coalescence of factors which has been summarised as follows: The ANC, pressured by advisers from the old regime, economists from the World Bank and IMF [and] experts from the business community … stepped back from the RDP’s emphasis on social spending … and instead adopted a neo-liberal economic export strategy which emphasised free markets, scal discipline and building business con dence, even if that meant ‘downsizing’ to be competitive in the global economy.67 In an attempt at sti ing genuine debate, the government’s Finance Minister, Trevor Manuel, immediately declared GEAR ‘non-negotiable ’ in its broad outline—a move applauded by investors, both local and foreign, but which those on the left saw as ‘utter arrogance’.68 Indeed, contrary to previous assurances and continuing its tendency to eschew genuine consultation , the government did not submit the programme for prior consideration by NEDLAC (the business/labour/government national economic and labour council). Incredibly, as Mandela later admitted, even senior ANC leaders were not informed of its contents.69 ‘Produced in great secrecy by a small team of technical experts’,70 GEAR was modelled on a South African Reserve Bank econometric model (used by the Bank during the late apartheid years) and was ostensibly ‘consistent with the results obtained using models of the Development Bank of Southern Africa, the Bureau for Economic Research and the World Bank’.71 This alone invited criticism, but was further exacerbated by the fact that ‘the main model used … [w]as never … made public and thus [w]as never … the subject of an independent and rigorous debate by professional economists’.72 The document did, however, exhibit a ‘commitment to conservative scal policies, trade liberalisatio n and a shift from consumption to investment spending’.73 GEAR thus tted neatly into the so-called international consensus around ‘good’ economic policy elucidated by such neoliberal gurus as Standard Bank’s Conrad Strauss.74 Whilst the new framework stunned many on the left within the ANC alliance, it offered conclusive proof that the neoliberal path to development was nally entrenched in government thinking. 75 33

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Paul Williams & Ian Taylor Although the government had appeared sensitive to accusations that its policies constituted neoliberal monetarism, a 1996 document openly admitted that ‘certain measures in GEAR are similar to many neoliberal packages’. 76 According to one analysis, ‘to all intents and purposes, the policy that almost replaced the sacred Freedom Charter [i.e. the RDP] in its vision of a more equal and progressive order has now been shelved [and a] Thatcherite discourse of scal discipline and market forces has taken over’.77 Mandela himself later admitted that people ‘can say [our policy] is Thatcherite, but for this country, privatisatio n is the fundamental policy of our government’.78 Although GEAR was justi ed as a continuation of the RDP by other means, the RDP is only referred to in the GEAR policy document on four occasions. 79 Furthermore, in contrast to the RDP, GEAR explicitly posited ‘redistributio n as a by product of growth instead of an integral part of its economic strategy’.80 It was not surprising therefore that, upon re ection, GEAR was denounced as ‘a recourse to the policy goals and instruments of the past apartheid regime’,81 which shared many of the ideological commitments of the SAF document.82 Such criticism stemmed primarily from the economic methods chosen to deliver GEAR’s ambitious promises. GEAR privileged the position of mobile capital (both foreign and domestic) within South Africa and relied on it to empower the disadvantaged through increased private investment. This dynamism was to be achieved by cutting state spending in an attempt to lower the budget de cit to 3 per cent by 2000; maintaining a low in ation rate; reducing corporate taxes; phasing out the remaining exchange controls; promoting wage demand restraints by labour; creating a more ‘ exible’ labour market; and pushing for the privatisatio n of state assets. The model was based on ‘a set of orthodox, outward-oriented, investor-friendl y stabilisatio n and adjustment policies’, which re ected the concerns and aspirations of the neoliberal elite within South Africa.83 In so doing, GEAR adopted ‘market reaction (for example, in the foreign exchange market) and notions of business con dence’ as the yardstick ‘to assess government’s performance’, further strengthenin g the hand of the outwardly-linke d classes in the country.84 This fraction of capital and its allies fell over itself in praising GEAR as ‘investor friendly’ and ‘responding to many of the concerns expressed by business’. 85 As a Financial Times writer asserted, with GEAR ‘the ANC emerged with as powerful a commitment to budgetary discipline and scal conservatism as White South Africa could have wished’.86 Such a situation was due in large part to the international discourse of neoliberalism which helped create a climate wherein, if the ANC ‘come out and say: “Our rst obligation is to our people”, there [would] be some very heavy choking’ by capital. 87 Hence, an ostensible liberation movement that had struggled under the banner of socialism now saw as its priority the soothing of international capital’s demands as the only, and for some the best, way forward. Moreover, with the NP’s departure from the GNU in June 1996, the argument that conservative, non-ANC elements were responsible for the organisation ’s economic direction proved false: GEAR was ultimately a product of the ANC elite.

The scrapping of the RDP and the adoption of GEAR nally saw neoliberalism triumphant.

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Explaining the shift Why the ANC changed its macroeconomic stance during the transition has often been reduced to the simplistic view that the movement simply ‘woke up’ to economic ‘realities’ and subsequentl y ditched its socialist pretensions in favour of neoliberalism. Obviously, the ANC was faced with the appalling socioeconomic legacies of apartheid which undoubtedl y deepened during the last years of NP rule. Chronic unemployment, low levels of investment, high public debt, a low human capital base situated within a brutalised society and an unstable currency all acted to restrict the ANC’s room for manoeuvre. As noted above, the ANC’s predicament was further compounded by inheriting an inef cient and often intransigent civil service whose aspirations were in the main unsympatheti c to the new dispensation ’s political project.

Nevertheless, whilst acting as powerful constraints on any redistributionis t proposals, such factors alone cannot account for the ANC’s ‘ideological quantum leap’. As Terreblanche suggested: In an attempt to solve this riddle one can either blame it on the imperatives of the South African situation after decades of apartheid, or we can blame it as the outcome of an intense ideological ‘power struggle’ behind the scenes in which pressure groups on the right of the ideological spectrum emerged as ideological conquerors in June 1996 … the quantum leap [was] the outcome of the ideological ‘power struggle’, although the hard reality of the South African situation also played a minor role.88 Undoubtedly, the ANC’s ideological incoherence over ‘economic’ policy did not help in this struggle. However, for an organisation ‘whose raison d’eˆtre before 1990 was liberation from apartheid, it was perhaps not surprising that formulating [an] economic strategy was not a priority’.89 In the face of a well-funded and co-ordinated onslaught from neoliberal intellectuals and institutions , the ANC’s pro-redistributio n cadres were marginalised. In sum, the ANC’s ideological quantum leap resulted from a number of contributory factors. We will focus on: the ANC’s relationship with the IFIs, on the one hand, and the old apartheid structures, on the other; and the process of dispute within the Tripartite alliance itself.

Undoubtedly, the structural context within which any economic restructuring would necessarily have to take place weighed heavily upon the ANC’s shoulders, with the IFIs pushing a rigidly neoliberal line. For example, Mandela’s attempts to address the issue of social transformation in his presidential address were derided as ‘antiquated Marxist gibberish’ by one set of respected international observers.90 The IFIs have provided what Michel Camdessus, Managing Director of the IMF, has referred to as a ‘permanent discipline’, pushing states in the direction of economic liberalisation . In addition, two members of the 15-person technical committee that compiled the GEAR document were from the World Bank and were in a strategic position to convince the other team members of the virtues of the so-called Washington consensus. 91 That said, and as noted 35

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Paul Williams & Ian Taylor above, some internal voices in South Africa’s debate were often more fanatically neoliberal than representatives of the IFIs themselves.

The fact is that, despite this process of structural conditioning , a number of prominent ANC intellectuals, in particular Thabo Mbeki, Trevor Manuel and Tito Mboweni, played an important role in shaping the terrain of debate. In short, speci c decisions were taken which could have been made differently. For instance, these individual s could have been more sympathetic to the proposals of COSATU and the SACP as outlined in the preliminary drafts of the RDP; or paid closer attention to the recent observation of the senior vice-president of the World Bank, Joseph Stiglitz, that the policies of the Washington consensus were too anti-state. This is not to say that following these suggestion s would have been free from costs or would have offered an ideal solution to the grievances of South Africa’s impoverished majority; rather it highlight s that neoliberal prescriptions were but one imperfect option among many.

In relation to the old apartheid structures, we have already noted how the NP’s recklessness contributed to a huge increase in the national debt prior to the GNU assuming of ce. Clearly, this unwelcome inheritance severely circumscribed the new government’s ability to ful l numerous promises made during the struggle. Indeed, even if the ANC had vigorously embarked upon a programme of genuine socioeconomic transformation, they would have found themselves in command of a state which lacked the resources and capacity to implement such a process. However, this is only half the story.

Another crucial, but often neglected, component of the old apartheid structure was the white (both English and Afrikaner) business sector. South Africa’s major corporations, which had undergone only super cial alteration during the transition, and the associated business press were also very effective in pressurising socialist elements within the ANC to conform to neoliberal principles. In addition, the business sector played an important role in facilitating and funding the negotiation process itself and was keen to ensure that a break with apartheid did not threaten its ability to pro t from a severely exploitativ e labour system.

In relation to ‘economic’ policy, therefore, South Africa’s major corporations were (and largely remain) forces for continuity rather than change.

The process of dispute within South Africa, and within the Tripartite alliance in particular, was perhaps most notable for the way in which appeals to neoliberalism were assumed to trump all other considerations and perspectives.

The disputes occurred in an intellectual climate where neoliberalism was taken to represent the ‘gold standard’ against which rival perspectives were judged. In short, the agents of neoliberalism successfully managed to conceal the (considerable) ideological content of their position, portraying it instead as the only sensible and socially-neutra l policy option. This process stymied genuine debate by delegitimisin g (and often ridiculing) alternative positions. Manuel’s presentation of GEAR as ‘non-negotiable ’ is a case in point. However, the ideological struggle that took place within South Africa was never just about winning intellectual arguments; rather it represented a con ict of interests in which the powerful social, political and corporate proponents of neoliberalism effectively steamrollered a somewhat confused and incoherent opposition . Compromise, it appeared, was out of the question.

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Neoliberalism in South African Political Economy Finally, although very much implicit in our analysis, there is a need brie y to ask what the costs of neoliberalism are for South Africa. First and foremost, adoption of neoliberal principles has exacerbated inequality and increased the concentration of wealth in the hands of the privileged few.92 Apart from the ethically odious (and increasingly dangerous) prospect of living in one of the world’s most unequal economies, such a polarised environment is fertile ground for social and political instabilit y which will ultimately repel the very ‘investors’ GEAR was designed to attract.

Second, by pursuing a neoliberal agenda with scant regard for its tradition of democratic consultation , the ANC is in danger of alienating its traditional constituencie s of COSATU and SACP members. While a ‘workerist’ alternative to the ANC remains unlikely, the potentially damaging effects of a fractured alliance should not be dismissed out of hand. In addition, South Africans of all persuasions should look to the horrendous tearing of the social fabric that has occurred elsewhere, not only in Africa but also in Latin America and eastern Europe, where neoliberal prescriptions have undoubtedly aggravated contradiction s within these societies. In South Africa, evidence is already apparent that the GNU’s scal policies have constructed ‘an economy which goes nowhere in terms of conditions of life for the greater majority of people’.93 Conclusion The shift in the ANC’s macroeconomic policy clearly demonstrates that debates about economics can never be separated from politics. ‘Economics’ is not an inherently rational, technical process: it is a social activity in which various interests compete to determine who gets what, when and how on a global scale.

In our opinion, such attempts to remove the ‘politics’ from political economy should be viewed with profound distrust.

Backed by a daunting array of material and nancial interests both inside and outside South Africa, successive groups of intellectuals (some of whom held ANC membership) successfully persuaded the ANC elite of neoliberalism ’s merits. In particular, neoliberalism was portrayed as ‘the only game in town’, discrediting alternatives before they even reached the negotiating table. The result has been a dramatic about-face in the ANC’s economic thinking, whereby the redistributio n of apartheid’s considerable inequities is no longer the primary goal. Instead, ‘good’ economic policy fetishises transnational capital in an effort to make South Africa ‘competitive’ in the global market-place. In practice, this has meant competing with other destitute regions to provide the cheapest and most ‘ exible’ labour-force.

In sum, there is considerable cause to regret the current shape of South Africa’s transition. As always, it is the poorest who have suffered the most.

GEAR has done little to address the chronic unemployment that plagues black South Africans and even less to redistribute the pro ts of apartheid. In this sense, GEAR has failed even on its own terms. Only when the ANC is able to concentrate its efforts on the eradication of poverty and confront the question of redistributio n head-on will a genuine transition occur. While the ANC may be 37

Paul Williams & Ian Taylor all geared up for the journey ahead, unfortunately it is heading in the wrong direction.

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Notes The authors would like to thank Anthony Payne, Philip Nel, Peter Vale and the anonymous reviewers for their constructive advice.

1. As late as July 1989 some prominent academics remained convinced that ‘it is unlikely that the ANC will gain (any form of) power by 1992 or 2000. However, by 2010 and 2020 the ANC might share some power as a coalition partner’. W. J. Breytenbach , The ANC: Future Prognosis (University of Stellenbosch: Institute for Futures Research, 1989), p. vi.

2. Roger Tooze, ‘Conceptualizin g the global economy’, in: Anthony McGrew, Paul Lewis et al., Global Politics: Globalization and the Nation-State (Polity Press, 1993), p. 235.

3. John Gerard Ruggie, ‘International Regimes, Transactions and Change: Embedded Liberalism in the Postwar Economic Order’, International Organization, Vol. 36, No. 2 (1982), pp. 379–415.

4. See Herman Finer, Road to Reaction (Quadrangle Books, 1963), p. 67.

5. J.K. Galbraith, The Culture of Contentment (Sinclair-Stevenson, 1992).

6. Karl Pola´nyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon Press, 1957), p. 71.

7. James Mayall, ‘The liberal economy’, in: James Mayall (Ed.), The Community of States: A Study in International Political Theory (George Allen & Unwin, 1982), p. 97.

8. Cited in ibid., p. 98. Emphasis added.

9. John Gray, Liberalism (Open University Press, 1986), p. 71. Emphasis added.

10. Cited in ‘The Freedom Charter’, Third World Quarterly, Vol. 9, No. 2 (1987), p. 673.

11. Martin Murray, Revolution Deferred: The Painful Birth of Post-aparthei d South Africa (Verso, 1994), p. 18.

12. Nicoli Nattrass, ‘Politics and Economics in ANC Economic Policy’, African Affairs, Vol. 93, No. 372 (1994), p. 6.

13. Matthew Kentridge, Turning the Tanker: The Economic Debate in South Africa (Johannesburg : Centre for Policy Studies, 1993), p. 6.

14. Hein Marais, South Africa: Limits to Change—The Political Economy of Transformation (Zed, 1998), p. 148.

15. Financial Mail (Johannesburg), 18 October 1991.

16. Financial Mail (Johannesburg), cited in Patrick Bond, Commanding Heights and Community Control: New Economics for a New South Africa (Ravan Press, 1991), p. 60.

17. Marais, South Africa: Limits to Change, pp. 149–50.

18. Karl von Holdt, quoted in ‘Strategy and Tactics: Karl von Holdt and Devan Pillay’, in: Alex Callinocos (Ed.), Between Apartheid and Capitalism: Conversation s with South African Socialists (Bookmarks, 1992), p. 57.

19. Patti Waldmeir, Anatomy of a Miracle (Penguin, 1997), p. 256.

20. Ibid.

21. Heribert Adam, Frederik van Zyl Slabbert & Kogila Moodley, Comrades in Business: Post-Liberation Politics in South Africa (Tafelberg, 1997), p. 171.

22. Waldmeir, Anatomy of a Miracle, p. 213.

23. The budget de cit rose from 0.9 per cent of GDP in 1989–90 to 10.8 per cent in 1993–94. This directly contributed to the stock of governmen t debt rising from approximatel y R100 billion to R250 billion. See Gavan Duffy, cited in ‘On Macro-economi c Policy’ at http://www.aidc.org.za/themba/on_macro_ eco_pol.html. Interestingly, this increase in debt of R150 billion could have covered expenditure for essential services in South Africa for nearly twenty years. Business Day (Johannesburg) estimated it would require R90 billion for ten years. 15 September 1998.

24. Most of this paragraph is based on the authors’ interview with Professor Sampie Terreblanche, 15 July 1999, Stellenbosch, South Africa.

25. Philip Dexter, ‘The RDP’, South African Labour Bulletin (September 1995), p. 58.

26. Economic Trends, internal memorandum (1991), cited in Vishnu Padayachee , ‘The evolution of South

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27.

28.

29.

30.

31.

32.

33.

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34.

35.

36.

37.

38.

39.

40.

41.

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48.

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51.

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58.

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60.

61.

62.

Africa’s international financial relations and policy: 1985–1995’, in: Jonathan Michie & Vishnu Padayachee (Eds), The Political Economy of South Africa’s Transition (Dryden Press, 1997), p. 30.

Karl von Holdt, ‘What is the Future for Labour?’, Southern African Labour Bulletin, Vol. 16, No. 8 (1992), p. 34.

Isaac Sam, Business Day (Johannesburg), 15 August 1994.

E. Berg & A. Batchelder , Structural Adjustment—Lending a Critical View (World Bank Country Policy Department , 1985).

Marais, South Africa: Limits to Change, p. 152.

Business Day (Johannesburg), 15 August 1994.

Sunday Times (Johannesburg), 17 July 1994.

See Patrick Bond, ‘The making of South Africa’s macro-economi c compromise’, in: Ernest Maganya (Ed.), Development Strategies in South Africa (IFAA, 1996).

Robin Lee, ‘Choosing Our Future’, Leadership, Vol. 12, No. 3 (1993), p. 72.

‘Foreword’, Nedcor—Old Mutual Scenarios, South Africa: Prospects for Successful Transition (Juta, 1992).

Lee, ‘Choosing Our Future’, p. 73.

Susan George, The Debt Boomerang: How Third World Debt Harms Us All (Pluto, 1992), p. 109.

See Marais, South Africa: Limits to Change, p. 154; and Tom Lodge, ‘Policy Processes within the African National Congress and the Tripartite Alliance’, Politikon, Vol. 26, No. 1 (1999), pp. 5–32.

Sammy Adelman, ‘Capitalising on a New Constitution’, Work in Progress, No. 68 (August 1990), p. 34.

Adam Habib, ‘Defeat in Victory: A Macro-study of the Transition to Democracy in South Africa’ (PhD dissertation in progress, City University of New York, 1996), p. 101. Cited in Michie & Padayachee , The Political Economy of South Africa’s Transition, p. 230. Emphasis added.

Financial Mail (Johannesburg), 4 November 1994.

Financial Times (London), 7 May 1994.

Business Day (Johannesburg), 13 January 1993. Emphasis added.

Weekly Mail and Guardian (Johannesburg), 17 March 1995.

Financial Mail (Johannesburg), 9 September 1994.

Marais, South Africa: Limits to Change, p. 158.

Ibid., p. 158.

Jonathan Michie & Vishnu Padayachee, ‘The South African policy debate resumes’, in: Michie & Padayachee, The Political Economy of South Africa’s Transition, p. 228.

Marais, South Africa: Limits to Change, p. 158.

Nicholas Oppenheimer , deputy chairman of Anglo-American Corporation and De Beers, London, 10 December 1996, cited on South Africa Foundation web page at http://www.safoundation.org.za /psaecon.html.

The Labour Left Collective, COSATU, the SACP and the ANC: The Parting of the Ways? (Read, Act & Struggle Series, No. 1, August 1998), p. 11.

For a more detailed discussion of the RDP’s genesis, see Lodge, ‘Policy Processes within the African National Congress and the Tripartite Alliance’.

David Ginsburg, ‘The Democratisation of South Africa: Transition Theory Tested’, Transformation, No. 29 (1996), p. 87.

Ashgar Adelzadeh & Vishnu Padayachee , ‘The RDP White Paper: The Reconstruction of a Developmen t Vision?’, Transformation, No. 25 (1994).

Jesmond Blumenfeld, ‘From Icon to Scapegoat : The Experience of South Africa’s Reconstruction and Developmen t Programme’, Developmen t Policy Review, Vol. 15, No. 1 (March 1997), p. 76.

White Paper on Reconstruction and Development : Government’s Strategy for Fundamental Transformation (Government of the Republic of South Africa, 1994).

Blumenfeld, ‘From Icon to Scapegoat ’, p. 69.

Ibid.

Nicoli Nattrass, ‘The RDP White Paper: A Cocktail of Confusion’, Indicator SA, Vol. 12, No. 1 (1994), p. 36.

See South Africa Foundation, Growth for All: An Economic Strategy for South Africa (South Africa Foundation, 1996).

Financial Mail (Johannesburg), 8 March 1996.

Michie & Padayachee , ‘The South African policy debate resumes’, in: Michie & Padayachee, The Political Economy of South Africa’s Transition, p. 224.

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Paul Williams & Ian Taylor 63. Financial Mail (Johannesburg), 6 October 1995.

64. Ashgar Adelzadeh, ‘From the RDP to GEAR: The Gradual Embracing of Neo-liberalism in Economic Policy’, Transformation, No. 31 (1996), p. 67.

65. ‘Growth, Employment and Redistribution: A Macro-economi c Strategy’, unpublished , 1996. For the rather limited of cial debate that greeted GEAR’s arrival, see Debates of the National Assembly, 14 June 1996, Cols. 3041–3099.

66. For a discussion, see Jesmond Blumenfeld, Assessing South Africa’s Growth Strategy (Brie ng No. 49: RIIA, 1998).

67. Nancy Murray, ‘Somewhere Over The Rainbow: A Journey to the New South Africa’, Race and Class, Vol. 38, No. 3 (1997), p. 5.

68. First vice-president of COSATU, Connie September, cited in Umsebenzi (July 1998), p. 2.

69. SouthScan , Vol. 12, No. 34 (19 September 1997).

70. Jeremy Cronin, ‘Why the SACP Rejects GEAR’, Weekly Mail and Guardian (Johannesburg), 10–16 July 1998.

71. Growth, Employment and Redistribution: A Macro-economi c Strategy (1996), appendix, p. 10.

72. Adelzadeh, ‘From the RDP to GEAR’, p. 68.

73. Business Day (Johannesburg), 30 October 1998.

74. See Conrad Strauss, chairman of Standard Bank, London, 10 December 1996, cited on South Africa Foundation web page at http://www.safoundation.org.za /psaecon.html.

75. See Anthony Leysens & Lisa Thompson, ‘A Paper Tiger? Political Implications of an Export-Led Growth Strategy for South Africa’, South African Journal of International Affairs, Vol. 1, No. 2 (1994), p. 56.

76. Quoted in Rob Davies, ‘Engaging with Gear’, mimeo, 1997, p. 3, cited in Marais, South Africa: Limits to Change, p. 161.

77. Heribert et al., Comrades in Business, p. 161.

78. Nelson Mandela interview with John Pilger, cited in John Pilger, Hidden Agendas (Vintage, 1998), p. 606.

79. For such a justi cation, see Thabo Mbeki’s statement to the National Assembly in Debates of the National Assembly, 14 June 1996, Cols. 3041–3045.

80. James Heintz, National Labour and Economic Developmen t Institute, ‘GEAR: A Labour Perspective’ at http://www.und.ac.za/und/indic/archives/indicator/spring97/HEINZ5.html.

81. National Institute for Economic Policy, From the RDP to GEAR: The Gradual Embracing of Neo-liberalism in Economic Policy (NIEP, 1996), p. 2.

82. Nicoli Nattrass, ‘Gambling on Investment : Competing Economic Strategies in South Africa’, Transformation, No. 31 (1996), p. 26.

83. Nattrass, ‘Gambling on Investment’, p. 29.

84. Simon Roberts, ‘Monetary Policy within Macro-economi c Policy: An Appraisal in the Context of Reconstruction and Development ’, Transformation, No. 32 (1997), p. 68.

85. Business Times (Johannesburg), 16 June 1996.

86. Waldmeir, Anatomy of a Miracle, pp. 257–8.

87. Nico Czypionka, economi c consultant , in Cape Times (Cape Town), 30 October 1998.

88. S.J. Terreblanche, ‘The Ideological Journey of South Africa: From the RDP to the GEAR Macro-economi c Plan’, paper for the conference Transforming Public Life: Religion in the Making of Cultural Values and Public Policy, Cape Town, 16 February 1999, p. 10.

89. Alan Ward, ‘Changes in the political economy of the new South Africa’, in: Francis Toase & Edmund Yorke (Eds), The New South Africa: Prospects for International and Domestic Security (Macmillan, 1998), p. 38.

90. The Independen t (London), 18 December 1997, cited in Lodge, ‘Policy Processes within the African National Congress and the Tripartite Alliance’, p. 27.

91. Of the other committee members, three were from the Developmen t Bank of South Africa, two from South Africa’s Reserve Bank and one from each of the Departments of Trade and Industry and Finance. See Terreblanche, ‘The Ideological Journey’, p. 16.

92. See the results from the latest ‘Gini co-ef cients’ from Wharton Economic Forecasting Associates, Sunday Times (Johannesburg), 11 July 1999, p. 7.

93. Vella Pillay, The Natal Mercury (Durban), 6 March 1996.

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