Series: Adverse International and Local Conditions for Sub-Saharan Africa (Part 6)

New Threats, New Resistances and New Alternatives

12 November 2019 by Eric Toussaint , Patrick Bond , Ishmael Lesufi , Lisa Thompson

Polokwane, Limpopo, South Africa (CC - Flickr)

We conclude with thoughts about the agency for resistance to these neoliberal policies, both ones in existence since the early 1990s (Bond 2014) and those that are being re-introduced through SEZs and the renewed export-led ‘growth’ strategy.

The SEZ strategy did not begin well, Treasury at least admits in its new policy paper:

In South Africa, broader questions need to be asked about the efficacy of how SEZs are currently being used as industrial policy instruments. It is unclear whether the incentives put in place to encourage firms to locate in SEZs, such as lower corporate income tax rates, are effective at crowding in the desired private investment (Treasury 2019, 47).

Part 1 South African Special Economic Zones : History of Limited Successes

Part 2 Global Economic Volatility and Socio Political Reactions

Part 3 The China Factor

Part 4 Africa’s Renewed Crises of Unbalanced Trade, Disinvestment, Debt

Part 5 Local South African Economic Conditions

Part 6 New Threats, New Resistances and New Alternatives

The failure to ‘crowd in’ investment and the ability of multinational corporations to use lower taxes but not deliver the promised jobs and durable, sustainable income, are indeed some of the questions that need to be asked about SEZs and export-led growth. But South African activists’ questioning of multinational corporate exploitation is by no means new. Since the slave trade and other abominable origins of white-settler profiteering emerged even before the Dutch East India Company invasion of 1652, later amplified by the likes of Cecil Rhodes and Ernst Oppenheimer’s Anglo American Corporation, resistances have always arisen from South African grassroots, labour, communist and nationalist (both Boer and Black) activists. Over the past century of fighting for democracy, and quarter-century fighting for social justice, targets included not only local but especially global corporations whose interests were inimicable to the South African citizenry:

Today, with South Africa’s SEZ policies and practices continuing to unfold, the involvement of people like those who fought the battles above will be the most vital ingredient. To the extent that there have been genuine bottom-up victories against neoliberalism, these are deeply instructive as to the core elements of a more robust and enduring post-neoliberal politics. They include early service delivery protests which catalysed a Free Basic Services policy providing at least tokenistic supplies of water and electricity (at least 25 liters/person/day and 50 kWh/ household/month), a small monthly welfare grant to 17 million people (nearly a third of the population), and – much more substantively – the commoning of HIV/AIDS medicines (Bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. , 2014).

The future of a South African post-neoliberalism capable of contesting the SEZ model and neoliberalism more broadly depends upon whether resistance politics continue to focus upon these four themes, and whether the activists collectivize their experiences, moving from local to national terrains of struggle. Ongoing mass campaigns in water, electricity and university education had for many years faced fiscally conservative finance ministers. The latter rejected student demands for R25 billion in additional annual spending to make higher tertiary education free. In October 2015, a few thousand students won stunning short-term victories after national protests on consecutive days at parliament in Cape Town, the ANC’s national headquarters in Johannesburg and the president’s Pretoria office.

In addition to a (real) 5% fee cut, nearly all universities also agreed to ‘in sourcing’ of low-paid university workers. Then in late 2017, Zuma’s last promise as ANC leader was to find R15 billion in the 2018 budget and from there on, around R40 billion per year to offer 90% of students free education, by raising state funding of tertiary education from 0.68% to 1% of GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
. To be sure, this was a populist gesture widely interpreted as consolidating support for the Zupta camp in the following day’s ANC presidential race between Ramaphosa and Dlamini-Zuma, but it was still declared as a victory by students and their supporters.

Like the fight for a policy ensuring free basic supplies of water and electricity, the campaign for free tertiary education teaches the importance of scale-jumping, in a myriad of physical micro-space contestations, because they were only successful by moving from micro-sites to generate a sense of national purpose. Yet there are evident limits to the thousands of township-based ‘service delivery protests’ that occur each year. In part due to localism, community activists often do not identify the source of harm (e.g. in the national treasury) beyond the immediate geographical settings of the slums.

Two more caveats are in order, regarding the possibility of a national power shift, without which South African progressive activists are likely to remain within their issue-specific silos. First, residents’ grievances against immigrants have sparked tragic conflict. The xenophobic attacks that became national news in 2008, 2010 and 2015 were just one of the dangers of turning inward against the Other close at hand. This violence targeted immigrant workers as well as shop-keepers from Somalia, Ethiopia, Pakistan and Bangladesh, whose economies of scale had swamped the market and threatened local residents’ much smaller ‘spaza shops’ (Bond 2014).

Second, an epidemic of domestic, gendered violence among a patriarchal South African working class is another self-destructive way that the scale politics of social grievances have telescoped backwards, in this case into the home.

Just as important a missing link, is an ideologically coherent approach to an alternative strategy. An egalitarian economic argument will be increasingly easier to make now that the world economic crisis and the dynamics of deglobalisation are forcing South Africa and other African countries towards rebalancing.

One alternative worth discussing entails what the African continent’s greatest political economist, Samir Amin (1990), termed ‘delinking.’ He stressed that this is not a formula for autarchy, and certainly would gain nothing from North Korean-type isolation. But it would entail a sensible approach to keeping some of the adverse international economic and geopolitical tendencies reviewed above, as far away as possible.

The greatest economist of the 20th century, John Maynard Keynes (1933), agreed with this strategy. He wrote in 1933: “I sympathise with those who would minimise, rather than with those who would maximise, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible and, above all, let finance be primarily national.”

These are the concepts that are motivating discussions over the successes and failures of localised SEZ model, as well as all the neoliberal assumptions that this model contains. As an illustration of this view from the point of view of the voices of workers, the last words of this paper go to the South African Federation of Trade Unions (SAFTU), with around 800,000 members, which in August 2019 made a call for a very different kind of approach to economic poilcy.

Saftu Calls for Extraordinary Interventions to Stop South Africa Reaching the Rock Bottom and a Point of no Return!

Johannesburg, 5 August 2019

The South African Federation of Trade Unions, in its response to the StatsSA second labour force survey,

  1. Announce a real stimulus package at least to the region of R500 billion rands to save the situation from getting worse in the third and fourth quarter.
  2. Introduce a wealth tax and solidarity tax,
  3. Implement legislation such as a general anti-avoidance tax act to halt base erosion, profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. shifting and the loss of the country’s resources to illicit financial flows, that not only reduces the tax base but more significantly perpetuates wage inequality.
  4. Review the corporate taxes that were around 45% during the apartheid era but driven down to 28% after 1994.
  5. Review personal income tax to ensure that those who can pay more make more contributions to the fiscus.
  6. Cap the salaries of those earning gruesome amounts and introduce a meaningful National Minimum Wage that could close the worsening income inequalities and address the crisis of poverty amongst the employed workers.
  7. Find creative ways of effectively taxing incomes gained in the financial markets.
  8. Raise government revenue to 33% of the GDP.
  9. Scrap the Labour Bills that have been introduced to undermine the right of workers to strike.
  10. End to the private sector investment strike. The private sector is hoarding a R2 trillion rands investable cash
  11. Adopt industrial policy aimed at import substitution, sectoral re-balancing, social needs, eco-sustainability
  12. Increase state social spending, paid for by higher corporate taxes, cross-subsidisation and more domestic borrowing (& loose-money, ‘Quantitative Easing’, too, if necessary)
  13. Reorient infrastructure to meet unmet basic needs, and expand/maintain/improve energy grid, sanitation, public transport, clinics, schools, recreational facilities, internet
  14. Adopt ‘Million Climate Jobs’ strategies to generate employment for a genuinely green ‘Just Transition’
  15. Address the land and property poverty of the majority by nationalising land and minerals under the democratic control of workers as called for in the Freedom Charter.

Source: Friedrich Ebert Stiftung Policy Paper #1/2 on South Africa’s Special Economic Zones in Global Context September 2019 By Eric Toussaint, Ishmael Lesufi, Lisa Thompson and Patrick Bond

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

Other articles in English by Eric Toussaint (505)

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Patrick Bond

is professor of political economy at the Wits University School of Governance in Johannesburg and co-editor of BRICS: An anti-capitalist critique (published by Haymarket, Pluto, Jacana and Aakar).

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Other articles in English by Ishmael Lesufi (5)

Other articles in English by Lisa Thompson (4)



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