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2021 | Book

Financialization as a New Regime of Accumulation: Business, Apartheid, and the Neoliberal Transition Read chapter Read first chapter

Neoliberalism and Resistance in South Africa

Economic and Political Coalitions

Author: Shaukat Ansari

Publisher: Springer International Publishing

Book Series : Contemporary African Political Economy

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book critically examines the persistence of market orthodoxy in post-apartheid South Africa and the civil society resistance such policies have generated over a twenty-five-year period. Each chapter unpacks the key political coalitions and economic dynamics, domestic as well as global, that have sustained neoliberalism in the country since the transition to liberal democracy in 1994. Chapter 1 analyzes the political economy of segregation and apartheid, as well as the factors that drove the democratic reform and the African National Congress’ (ANC) subsequent abandonment of redistribution in favor of neoliberal policies. Further chapters explore the causes and consequences of South Africa’s integration into the global financial markets, the limitations of the post-apartheid social welfare program, the massive labour strikes and protests that have erupted throughout the country, and the role of the IMF and World Bank in policymaking. The final chapters also examine the political and economic barriers thwarting the emergence of a viable post-apartheid developmental state, the implications of monopoly capital and foreign investment for democracy and development, and the phenomenon of state capture during the Jacob Zuma Presidency.

Table of Contents

Frontmatter
Chapter 1. Financialization as a New Regime of Accumulation: Business, Apartheid, and the Neoliberal Transition
Abstract
This chapter examines the structural and agential factors responsible for South Africa’s transition to a liberal democracy, as well as the economic and political dynamics that cemented the country’s abandonment of Keynesian redistribution in favour of a neoliberal growth path. It argues that in the aftermath of declining gold prices and a new international environment, the conglomerate companies that were nurtured under apartheid and segregation adopted a new accumulation and profit-making strategy predicated on outward expansion and global investment. The chapter also critically examines the ANC’s initial shift away from the party’s commitment to Keynesian redistribution and state-led industrialization to official market orthodoxy in 1996. It will be shown that this new regime of economic governance has entailed extensive financial liberalization, which has generated unproductive domestic investment and policymaking driven by short-term capital gains, fiscal restraint, and high short-term interest rates. Such measures and practices have contributed to high unemployment and inequality while benefitting a small coalition of political and economic actors.
Shaukat Ansari
Chapter 2. Bureaucratic Fragmentation, Cash-Transfers, and Financial Markets: Policymaking in the Post-apartheid Neoliberal Landscape
Abstract
This chapter further unpacks some of the economic and political incentives, as well as constraints, that have served to lock-in certain neoliberal orthodox policies over a twenty-five-year period in post-apartheid South Africa. Specifically, the chapter focuses on the country’s integration into the global financial markets and the consequences of this policy. It is argued that portfolio capital inflows have provided an excess of liquidity that has in turn enabled the governing party to finance its fiscal deficits, and hence social programmes, despite stagnant economic growth and low tax revenues. Moreover, financial liberalization has empowered global asset investors and provided them with a potential veto over more heterodox economic policies—such as capital controls and an expansive monetary programme. Thus, in the context of a fragmented bureaucratic landscape, the dominance of mobile investors in the post-apartheid period has empowered the Treasury over other bureaucratic centres in the realm of economic policymaking.
Shaukat Ansari
Chapter 3. Political Resistance to Neoliberalism: Cracks in the Post-apartheid Corporatist Arrangement
Abstract
Neoliberalism has generated a great deal of protest and civil resistance at the grass-roots level throughout the post-apartheid period. This chapter examines the tripartite alliance between the African National Congress (ANC), the Congress of South African Trade Unions (COSATU), and the South African Communist Party (SACP) as a corporatist arrangement that was largely designed to contain civil society challenges to neoliberal orthodoxy. It further examines the radical opposition parties (such as the EFF) that have emerged in recent years to challenge the ANC’s political hegemony. Moreover, in the last decade, numerous wild cat labour strikes have erupted to destabilize the mining industry, and the Marikana massacre in 2012, the worst state atrocity against civilians since Sharpeville, triggered new break-away unions from COSATU, additional labour unrest, and increasing dissatisfaction with the neoliberal growth regime. Yet, thus far the tripartite alliance, and hence labour corporatism, has been kept intact by the ANC through various political incentives.
Shaukat Ansari
Chapter 4. Early Forms of State Resistance to Neoliberalism: The International Monetary Fund in South Africa
Abstract
This chapter examines the role played by the multilateral organizations, specifically the International Monetary Fund (IMF) and the World Bank, in influencing the reproduction of neoliberal policies throughout the post-apartheid period. It argues that, despite some conventional beliefs, the Fund played a negligible role in cementing the neoliberal growth regime during the democratic transition, and neither the IMF nor the World Bank can be credited with significantly influencing economic policymaking since the termination of apartheid. It is argued that the primary reason for this lack of influence has to do with the nature of the liberation struggle. The ANC and its allies fought an anti-imperialist struggle against apartheid, and thus did not want to give the impression that they were succumbing to external forces. The chapter draws on the work of James Boughton, who was part of the IMF delegation to a newly democratic South Africa. It is also suggested that this early form of resistance offers a potential blueprint for future resistance to neoliberal orthodoxy and international finance capital.
Shaukat Ansari
Chapter 5. Forging a Developmental State in Post-apartheid South Africa: A Comparative Analysis of the Structural and Political Barriers to Industrialization
Abstract
The concept of a developmental state has become part of the political discourse in South Africa over the last decade. This chapter examines the structural and political barriers currently impeding the implementation of the type of economic policies that would allow for industrial upgrading in the context of inclusive development in post-apartheid South Africa. Is a developmental state possible in the current neoliberal macroeconomic environment? The chapter seeks to answer this question through an examination of several successful, and unsuccessful, case studies, including South Korea, India, and Brazil. What type of policies did the successful industrial states implement, and why might it be difficult to replicate these programmes in the context of market orthodoxy in South Africa? The answer to this question will be fleshed out through an examination of South Africa’s Motor Industry Development Program (MIDP) and other industrial policies and blueprints. The chapter will also interrogate the claim that “White Monopoly Capital” is primarily responsible for the obstruction of a developmental state during the post-apartheid period.
Shaukat Ansari
Chapter 6. Conclusion: Incentives for ‘State Capture’ and Dis-Incentives for Industrialization 
Abstract
The conclusion reviews some potential answers to a research question that is seldom explored in the development literature: How, exactly, do some nations manage to construct the type of bureaucratic expertise and capacity that allow for the emergence of truly effective developmental states? This final chapter argues that state capacity evolves in response to very specific economic and political incentives, and that there is no reason why a viable developmental state could not emerge in South Africa, or other African countries, under the right conditions. The relevant literature on state capacity indicates that developmental states arise in the context of resource scarcity, external security threats, and broad economic and/or political coalitions. Moreover, the chapter posits that not all forms of corruption thwart the functioning of a developmental state, and that some even aid in industrial upgrading. It concludes by examining the phenomenon of “state-capture” that embroiled the Jacob Zuma administration, and links this development to neo-patrimonial tendencies within the ANC, as well as the broader economic environment and ideology within which the actors were operating.
Shaukat Ansari
Backmatter
Metadata
Title
Neoliberalism and Resistance in South Africa
Author
Shaukat Ansari
Copyright Year
2021
Electronic ISBN
978-3-030-69766-2
Print ISBN
978-3-030-69765-5
DOI
https://doi.org/10.1007/978-3-030-69766-2