20th century AD

Social Research, Fall, 2005 by Vishnu Padayachee

MERG took what might be characterized as a post-Keynesian approach, where effective demand failures and the possibility of under-full-employment equilibrium are recognized as key problems. MERG envisioned a two-phase, "crowding-in" approach to South Africa's development: a state-led social and physical infrastructural investment program as the growth driver in the first phase, followed by a sustainable growth phase that would see private sector investment kick in as growth picked up (MERG, 1993). The MERG report emphasized the meeting of basic needs and the development of social and economic infrastructure designed to secure "a rapid improvement in the quality of life of the poorest, most oppressed and disadvantaged people of South Africa" (MERG, 1993: 2).

Although the MERG report was essentially cast in the form of a macroeconomic framework, attention was given to microeconomic issues. Thus, for example, the question of land and asset redistribution to poor rural households received not insignificant attention. The report far beyond supporting the removal of apartheid constraints on black access to land, calling for state intervention to support poor rural households and poor rural women (MERG, 1993: 191). MERG contrasted this to the World Bank approach, which it argued, was a vision of state support to a "class of male black rural capitalists (MERG, 1993: 192).

The ANC's Reconstruction and Development Program was published in March 1994. At one level it could be argued that the RDP broke with the view that growth and development are processes that contradict one another. Its powerful statement of principles sets out a development strategy that:

   integrates growth, development, reconstruction and redistribution
   into a unified program. The key to this link is an
   infrastructural program that will provide access to modern
   and effective services.... This program will both meet
   basic needs and open up previously suppressed economic
   and human potential in urban and rural areas. In turn this
   will lead to an increased output in all sectors of the economy,
   and by modernizing our infrastructure and human
   resource development we will also enhance export capacity
   (ANC, 1994: 6).

But in the details, it proposed sometimes contradictory ideas. The program attempted to marry the ANC's old social democratic and socialist values (redistribution, basic needs) with new neoliberal tactics (trade and financial liberalization, the independence of the central bank), ostensibly held together through (centrist) institutions and accords in which all the "social partners" would be represented. As Bond and others have noted, it was, in the course of its formulation, shaped by "status quo" forces, both South African and international, that had made great efforts since 1990 at influencing the political leadership of the ANC. In the end the RDP reflected an uneasy compromise between "the feasibility of combining a social welfare state in the developmental sphere with neoliberalism in the economic sphere" (Bond, 2000:54).