Mhambi has been redeployed.

Thursday, March 15, 2007

Left rhetoric right wing actions

James challenged me the other day because of something I said in my post "De la Rey is a left wing icon":

"It is a somewhat astounding fact that the Nats during their rule, consistently decreased economic inequality amongst and between all South Africans".

What did you base that on? Not to be argumentative, but if inequality was decreasing in a noticeable way between black and white under apartheid, then why was there any disatisfaction with it? If you have some kind of source that you drew that statement from, I'd really like to read it....

And too right. It is a contentious statement and deserves to be backed up with fact. Especially since the ANC has come to power South Africa has endured its longest peroid of continued economic growth in history. All south Africans should be richer.

All South Africans should be richer

The Nat's record was not consistent in the beginning but they did reduce poverty AND inequality, especially under Vorster and PW Botha.

"Despite the steady improvement in the wages of workers since the 1960's, the racial disparities were such that South Africa was near the top of the inequality league in the world."

(South Africa now tops this league.)

"From the early 1970's the government and employers initiated a steady process of redistribution away from whites that changed the position considerably. A significant redistribution of income was the result...

By 1994, blacks contributed R23 billion to government revenue, and received R34 billion in cash and in-kind transfers from government of which the largest part went on social welfare, housing, health and education."

"Whites still received nearly half of the amount the state spent on public services, but they received much less in services than the amount of tax they paid, while blacks were receiving considereably more.

Spending on social welfare for colored and Asians rose at an even more rapid rate than on blacks, and accelerated after 1984 when the government embarked on systematically reducing the disparities that still existed between the three groups that participated in the Tricameral parlaiment."

The social spending contributed to a severe fiscal crises that the state experienced from the mid 70's, other contributing factors being the War in Namibia and Angola, and the expansion of the civil service.
"A severe tax burden now weighed heavily on middle-class whites... according to an IMF study, whites by 1987 paid on average 32 percent of their incomes in tax, but received only 9 percent back in benefits."

These qoutes are from Stellenbosch academic Hermann Giliomee's book. The Afrikaners - Biography of a People.

He notes that the government started to encounter serious resistance from certain whites because of these progressive taxation policies.

He concludes his book with the end of the Nat's rule. He states that during 1948 to 1994 - the period of their rule - the economy grew four and a half times, and that the life expectancy of all South Africans increased. He notes however that the phycological damage of apartheid was heavy. The book has allot more information, numbers and references if your interested.

Contrast that to the dramatic drop in South African life expectancy since 1995.

The World Socialist website analyses the UN Development report on South Africa for 2004:

It acknowledges that there have been some positive aspects, like the building of many houses, but cats aspersions on the quality of these house since the housing subsidy dropped. It continues:
"Between 1995 and 2002, life expectancy at birth is estimated to have declined from 61.4 years to 51.4 years, indicating a 16.3 percent drop. This is largely due to the massive impact of Aids.

The statistical average hides a worse reality. In 2001 the life expectancy of blacks was 51, contrasted to whites with a life expectancy of 69. In 2001 more than 28 percent of blacks in the 30 to 39 age group were estimated to be HIV positive.

This is compounded by the drop in the total number of health professionals, which, according to the South African Health Review, declined between 2000 and 2002. According to the UNDP report: “In many hospitals and clinics around the country, there are insufficient medical and support staff to handle the workload. There are simply not enough funds being allocated to the hiring of additional staff and the payment of more attractive salaries.” The inequitable distribution of health services is also evident...

The level of inequality is confirmed by the Gini coefficient. A Gini coefficient of one indicates perfect income inequality, while a Gini coefficient of 0 indicates perfect equality. The report notes that in 1995 the Gini coefficient for South Africa was 0.596, rising to 0.635 in 2002. The report goes on to note: “In view of this rising income inequality, only six percent of all people who reached retirement age of 65 in 2000 can be regarded as financially independent. About 47 percent of people retiring are dependent on their families, 31 percent have to continue working and 16 percent rely solely on a pension from government...

The UNDP report states: “Steep wealth inequality ... contributes to persistent and rising income poverty and inequality.” This is in a context where the ruling class has “enormous corporate power and a direct influence over the economic lives of the majority of South Africans.” The government’s pro-business policies have undoubtedly added weight to already powerful corporate influences...

Ernst and Young Management Services reported that in 2003 R42.2 billion ($US620 million) worth of BEE deals were made. But the beneficiaries of these deals belonged largely to the politically well-connected elite.

The opposition Democratic Alliance noted that 60 percent (R25.3 billion) of these deals “accrued to the companies of two men [both close to the ANC leadership]: Patrick Motsepe and Tokyo Sexwale”."

One of the most worrying aspects is that school enrollment has also dropped, and while some claim the average South African is not getting a better edication, this is contested by some Wits academics I spoke to. Mhambi can stomach allot, provided he knows that South Africans are getting a propper education. But if we are not bettering the youths education, then our tomorrow will probably be worse.

Symbolic and material happiness

You ask that if the Nats decreased inequality, why were black South Africans unhappy? I spoke only of economic inequality. I don't know how old you are, but if you were old enough to have rememered the apartheid days, you would hopefully realise how dehumanising it was. It made you feel as if you don't belong, that your a second class citizen.

Essentially black South Africans were unhappy for the same reasons asAfrikaners today, who are by and large doing well economically, but very unhappy.

Don't believe the World Socialists? You can read the 2006 UN Human development report for yourself, where south Africa did significantly worse.

And chew on this chart of South Africa's Human Development Index vis-a-vis other territories from the UN's 2006 report.

But if you drove around South Africa today you knew this already. Quite frankly the poverty and conspicious consumption you see everywhere is obsene.

Sphere: Related Content


Steve Hayes said...

South Africa began to move towards Thatcvherism in the 1980s, under PW Botha, and the ANC has simply continued on this course (which is probably why it was so easy to absorb the rump of the NP).

The abolition of the building societies removed one of the tools for solving the housing problem. The demutualisation of life insurance was part of the same process. The biggest fraud is that "Old Mutual" keeps its misleading name, it's not the Old Mutual, it's the New commercial.

Wessel said...

True Steve. Botha did indeed follow that course, and this probably also increased inequality between whites, but at the same time he spent heavily on the upliftment of black, coloured and asian South Africans.

Rump of the NP? It was more like a skeleton that was absorbed.

James said...

Hi Wessel,

Thanks for a comprehensive and thought provoking post. I haven’t read most of your sources (something I’ll aim to do), but did want to share some of the thoughts I had while reading your post: none of which are intended as pro-ANC or anti-NP, just purely economic.

Inequality may indeed have decreased under the NP, but I would also contend that the economic course of the country was unsustainable under the NP – this has been, I think, well documented by Cees Bruggemans in “Change of Pace”, which argues for the necessity of painful reform and how it is now starting to pay off. It was published in 2004, but I think large chunks of it are still relevant and it’s worth a read.

For example, the economy may have grown four times under NP rule, but economic growth was locked in a downward trend: In the 1960s, SA’s average annual GDP growth was 5,7%. In the 70s it was 3.3%, in the 80s it was 1.5% and from 1990-1993 the economy shrank by an average of 0,4% per annum. By the time the ANC took power, it’s been documented that SA only had a few weeks worth of foreign currency reserves left and that the country was dangerously close to a debt trap (i.e. having to borrow money in order to meet debt repayments). So even if the ANC wanted to take a left wing approach to economics (and there’s plenty of evidence to suggest that they did), it was pragmatically impossible.

In addition, I think there were also external forces at play though that made it difficult for the ANC to take a left approach. After all, the 90s were the time of the Washington consensus. And I think that if the ANC had actually taken a left approach to economic policy, investors would likely have been spooked and the situation would be even worse than the inequality SA is battling with now.

So, that’s my 2c. I’d be interested in hearing your thoughts on how far left SA’s economic policy should go (assuming that is what you think).

Also, and this is completely off topic, just a suggestion for another post, what are your thoughts on Dan Roodt? You listed him as an Afrikaans intellectual “heavyweight” in a recent post of yours. I’ve read some of his writing and always come away with the impression that he is a buffoon of epic proportions. But perhaps I’ve misunderstood him…?