Apartheid versus post-apartheid
The economy thrived in the early years of both apartheid and democracy, but it then took turns for the worse
It’s convenient to split both the post-apartheid era and the period of apartheid into economic eras – an era of growth followed by an era of economic decline. But it’s a bit more complicated than that.
We mark history with “turning points”, but we probably underestimate the times of consolidation and unfolding when “history” seemed less momentous.
Important eras don’t always coincide with decades or centuries. Yet, as an exercise, let’s assume that we can divide the 30 years of democracy into two periods, as Business Leadership South Africa’s chief executive, Busi Mavuso, has done so interestingly.
And perhaps we can extend that to the apartheid era, as writer Andrew Kenny has set out powerfully.
Mavuso’s point is that there have been two distinct eras during the post-apartheid period: the first was marked by SA’S economic reintegration into the global economic system. The economy and business “leapt forward”. By 2008, SA was regularly recording economic growth above 5%, boasted an investment-grade credit rating, had a sovereign debt-to-gdp ratio of 24% and an unemployment rate of just under 20%.
“Per capita GDP had leapt from $3,786 in 1994 to $6,356 and would go on to peak at $8,800 in 2011.” But in the second “era”, this progress was unwound after “government-led extortion and corruption took hold”. South Africa has slid backwards on just about all these indicators.
“Debt to GDP is now about 75% and growing. We will not even manage economic growth of 1% this year and barely more than that next year. Unemployment is at 32%, while GDP per capita has fallen to $6,130,” Mavuso points out. Her main hope is that we have turned the corner.
What about extending the examination further back? Kenny asks how do the first 30 years of National Party rule compare with the first 30 years of ANC rule? There are interesting similarities, including that the first portions of both were marked by economic advances.
The mad ideology of grand apartheid converted the free-spirited Boers of the Great Trek and the South African War into “spiteful little bureaucrats”, Kenny writes, flashing their torches into a car parked at the side of the road to check whether the copulating couple inside were of the same race.
But, at another level, the Nats were developing the economy. They promoted industrialisation, built roads, railways and waterworks, constructed the world’s biggest coal power stations and pioneered coal-to-liquidfuel technology with Sasol.
“The economy grew over 6% under [Hendrik] Verwoerd,” Kenny writes.
How do 30 years of apartheid compare with 30 years of ANC rule? “Both began by being obsessed with race; the ANC still is. Both loved state control and bureaucracy; the ANC still does,” according to Kenny.
One important difference, Kenny says, is that Afrikaners went to great pains to develop good education – in Afrikaans – for working-class Afrikaners.
“The ANC leaders dump working-class black children into ghastly state schools.”
Both articles are worth reading, but my perspective is slightly different. The era of grand SA economic growth was in the 1950s, which arguably had nothing to do with local politics but coincided with the global bounce-back after World War 2. The Nats managed to take this international gift and gradually grind it down into almost nothing.
In the early post-apartheid era: people forget that there was a global emerging market crisis in 1998 and a banking crisis in 2001 and, in both cases, SA’S growth was hit badly. But it is true that in general the SA economy benefited from its reintegration into the global economy, and that its average growth rate flattened after 2008.
It’s more a moribund economy than an actively declining one and, in this sense, the moment is different from late apartheid, when the economic mood was dire.
Football coach Dan Quinn said that the longer we keep looking back in the rear-view mirror, the more it takes away from everything that’s moving forward.
Clearly, he was trying to get past a bad season, as SA should too. It’s not about the last 30 years; it’s about the next 30 years.