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article imageOp-Ed: Mandela and Neo-liberalism in South African

By Ken Hanly     Dec 18, 2013 in Politics
Pretoria - Nelson Mandela is rightly revered for his successful challenge and eventual triumph over the apartheid system in South Africa. However, Mandela left in power the same companies and individuals who dominated the economy during the apartheid era.
Mandela abandoned the plans of the African National Congress (ANC) to vastly change the economy by nationalization of mines and taking over key financial institutions. Very quickly he adopted a variant of neo-liberalism. Mandela said at the time he was released from prison in 1990: “The nationalization of the mines, banks and monopoly industries is the policy of the ANC, and a change or modification of our views in this regard is inconceivable."
Within two years the inconceivable became actual. An article in the New York Times explains: It happened in January 1992 during a trip to Davos, Switzerland, for the annual meeting of the World Economic Forum. Mr. Mandela was persuaded to support an economic framework for South Africa based on capitalism and globalization after a series of conversations with other world leaders.
Mandela told Antony Sampson a friend and author of a biography on him:
“They changed my views altogether. Chaps, we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment.” Tito Mboweni, former governor of the South African Reserve Bank who was with Mandela at Davos, claims that Mandela's change of heart was genuine. Even when they arrived at Davos, Mandela decided not to give a speech on the nationalization policy on the grounds that the content was inappropriate for a Davos audience. Mboweni drafted a new short speech: “That message was about how the ANC intended to achieve social justice for the majority black people: decent housing, health care, decent education, public transport, access to clean water, sanitation and access to what I called ‘the means of production,’ that is, the creation of a black business class. That is all. No capitulation.” The creation of a black business class had also been a priority of the Botha apartheid regime. This was meant to ensure that at least some blacks would have a stake in the system: During the 1980s, the Botha regime had offered black businessmen generous loans, allowing them set up companies outside the Bantustans. A new black bourgeoisie emerged quickly, along with a rampant cronyism. ANC chieftains moved into mansions in “golf and country estates.” As disparities between white and black narrowed, they widened between black and black.
The NYT article stresses the role that Mandela's conversations with Communist governments had: “Madiba then had some very interesting meetings with the leaders of the Communist Parties of China and Vietnam. They told him frankly as follows: ‘We are currently striving to privatize state enterprises and invite private enterprise into our economies. We are Communist Party governments, and you are a leader of a national liberation movement. Why are you talking about nationalization?’ ” By 2001 George Soros was able to tell the Davos Economic Forum: "South Africa is in the hands of International Capital." Certainly international capital did takeover some South African companies. Barclay's took over a large bank. Walmart took a majority stake in Massmart a South African supermarket chain. But from 1993 to 2012 the South African economy averaged a 3.2 per cent annual growth far below that of many developing economies such as China or India.
Not everyone agrees that it was a simply change of heart that changed Mandela's views. Some emphasize that the change in strategy, was to a considerable degree a function of global pressure and threats against the new government. An article here is a critique of the New York Times article that shows the background of Mandela's conversion. Mandela had no experience in economics but he accepted the imperatives of the global economy as it was developing under a neo-liberal model. Rather than engaging in conflict with the elite that owned the banks and mines in South Africa he actually appointed representatives of that elite to run the economy. He appointed as finance minister Derek Keys, who had been finance minister under the de Klerk regime and was strongly pro-market. He also left Chris Stals, a conservative, on the Reserve Bank.
The transition to neo-liberalism can be traced back to at least 1993 when there were top-secret meetings of the Transitional Economic Council made up of equal numbers from the ANC and the old government just six months before elections were to be held.
The ANC discovered that South Africa was virtually broke. Sampie Terreblanche an economist at Stellenbosch University and former adviser to the apartheid government claims that the International Monetary Fund(IMF) agreed to provide a loan but members of both groups had to agree unanimously to the attached conditions. In a book on the transition Terreblanche explained :“Call it a sellout, an elite compromise, or the elite conspiracy, call it what you like, it happened six months before the general election of 1994, sum, the economic philosophy that was favored by the U.S. in Washington, in London, at the big banks, and the values behind it, were imposed on the negotiating parties. They said, ‘We’ll give you the money but you have to agree to our terms.’ ” Terreblanche claims that through accepting the loan and its conditions the transformation that was the earlier vision of the ANC and Mandela was lost for a loan of $850 million as South Africa committed itself to austerity, liberalization, and privatization.
As Patrick Bond of the University of Kwa-Zulu Natal put it: "..not only were free enterprise and property rights enshrined in every major economic policy statement and the Constitution itself, full-blown neo-liberal compradorism became the dominant (if not universal) phenomenon within the ANC policy-making elite.” Bond elaborates on this in an article "Neoliberalism in the Post-Apartheid Era; The Legacy of Nelson Mandela and the IMF". The transition of Mandela from a radical to a supporter of neo-liberal policies is also described in an interview with Ronnie Kasrils on Democracy Now.
Finally there is the classic film by John Pilger that is appended. Although the film Apartheid is not Dead came out in 1998 it is crucial to understanding the legacy of Mandela. It also has interviews that illustrate how a skillful journalist can really confront those interviewed with very tough questions.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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