From racial to class apartheid: South Africa's frustrating decade of freedom

Monthly Review, March, 2004 by Patrick Bond

The reality is that South Africa has witnessed the replacement of racial apartheid with what is increasingly referred to as class apartheid--systemic underdevelopment and segregation of the oppressed majority through structured economic, political, legal, and cultural practices. Although slightly more expansive fiscal policies were adopted after 2000, Pretoria's neoliberal orientation has never been in doubt. Current president Thabo Mbeki succeeded Mandela in May 1999, but had served as the government's main policy architect and administrator from the start of the transition, as well as the key arbiter in the ANC's unending internecine conflicts.

Job loss has been the most damaging aspect of South Africa's embrace of the neoliberal economic approach. Instead of the employment growth of 3-4 percent per year promised by GEAR proponents, annual job losses of 1-4 percent characterized the late 1990s. South Africa's official measure of unemployment rose from 16 percent in 1995 to 30 percent in 2002. Adding frustrated job-seekers to that figure brings the percentage of unemployed people to 43 percent. Meanwhile, labor productivity increased steadily and the number of days lost to strike action fell, the latter due, in part, to the ANC's demobilization of unions and hostility to national strikes undertaken for political purposes, such as the national actions against privatization in 2001 and 2002.

White businesses wanted to escape the economic stagnation and declining profits born of a classic overaccumulation crisis. They felt besieged by international sanctions, and even more by the rise of black militancy in workplaces and communities during the 1970s and 1980s. It is here that the core concession made by the ANC during the transition deal is apparent. The deal represented simply this: black nationalists got the state, while white people and corporations could remove their capital from the country, although continuing to reside in South Africa to enjoy even greater privileges through economic liberalization. As for division of the national surplus, the pre-tax profit share soared during the late 1990s, to 1960s-era levels associated with apartheid's heyday. Pretoria also cut primary corporate taxes dramatically (from 48 percent in 1994 to 30 percent in 1999) and maintained the deficit below 3 percent of GDP by restricting social spending, notwithstanding the avalanche of unemployment.

As a result, according to even the government's statistics, average black African household income fell 19 percent from 1995-2000 (to $3,714 per year), while white household income rose 15 percent (to $22,600 per year). Not just relative but absolute poverty intensified, as the proportion of households earning less than $90 of real income increased from 20 percent of the population in 1995, to 28 percent in 2000. Across the racial divide, the poorest half of all South Africans earned just 9.7 percent of national income in 2000, down from 11.4 percent in 1995. The richest 20 percent earned 65 percent of all income. It is fair to assume that inequality continued to worsen after 2000.