Assessing South Africa's New Growth Path: framework for change?

Abstract

The New Growth Path (NGP) is the symbolic policy document of South Africa's newly formed Department of Economic Development. It marks an intended break with the growth path of the first two decades of the post-apartheid era. But does it do so in principle and is it likely to do so in practice? This paper suggests otherwise because of its failure to address, let alone remedy, the key determining features of the post-apartheid economic landscape. These are the (international) financialisation of (domestic) conglomerate capital especially associated with (illegal) capital flight, the complicity of a newly formed black elite, and the continuing reliance upon how these interact with South Africa's longstanding minerals–energy complex (MEC). Without breaking with these features, the NGP in particular, and policy more generally, will seek to temper the gains and organisational opposition of better-off workers for putative benefits to those deprived of employment and basic levels of public provision.

[Évaluer la nouvelle direction de croissance d'Afrique du Sud : cadre pour le changement?] La nouvelle ligne de croissance (NGP) est le document de la politique symbolique du nouveau ministère sud-africain de développement économique. Il marque une pause prévue avec la ligne de la croissance des deux premières décennies survenues après l'ère de l'apartheid. Mais est-ce que cela se confirme dans le principe et dans la pratique? Ce document suggère le contraire, à cause de son incapacité à répondre - sans parler de remède – aux principales caractéristiques qui déterminent le paysage économique de la période après l'apartheid. Il s'agit de la financiarisation (internationale) du capital conglomérat (domestique), en particulier associée à la fuite (illégale) des capitaux, la complicité d'une élite noire nouvellement constituée, et d'un appui persistant sur la façon dont ceux-ci interagissent avec le complexe de longue date des minéraux d'énergie de l'Afrique du Sud. Sans rompre avec ces caractéristiques, la NGP en particulier, et plus généralement la politique, cherchera à tempérer les gains et l'opposition de l'organisation des travailleurs plus aisés pour des avantages supposés aux personnes privées d'emploi et les niveaux de base de la prestation publique.

Mots-clés: La Nouvelle trajectoire de croissance  ; financiarisation  ; complexe des minéraux d'énergie  ; Afrique du Sud

Keywords:

• New Growth Path
• financialisation
• minerals–energy complex
• South Africa

Notes

‘The New Growth Path: The framework’, Economic Development Department, South Africa, 2010. Some of the arguments offered here are developed at greater length in the references listed. Thanks for comments on an earlier draft, especially from referees and editor, account of which was not always possible in view of a wish to retain the draft in its original form other than for minor corrections.

See http://www.anc.org.za/docs/discus/2012/.

See Handley (2005) including discussion on whether pressure from international markets needs to be overt and direct or is internalised by policymakers.

See also Bassett (2008) for the need for elite interests to be embedded in, or accommodating to, a broader hegemonic politics – but how broad, and deep, is a moot point.

See Cornwall and Eade (2010).

The text immediately continues, ‘The deep inequalities that rend our society complicate efforts to reach consensus’, a recognition perhaps that the rich and powerful will defend their privileges and that consensus will not be able to redress them?

It is necessary to be mindful that this is a framework and not a work of scholarship, and to be assessed as such. Nonetheless, the framework reflects analytical stances, however consciously, fully, and consistently, and is open to be assessed as such.

The term risk recurs throughout the document and is indicative of being sensitive to conservative and financial reaction as well as unwittingly symbolic of the supposed commodity, risk, that is traded in financial markets.

For a full account, see Ashman et al. (2011), a contribution based on submission in response to declaration of amnesty (see below).

Note also that, in my debate with the Harvard Group, it continues to fail to address this problem even though it could not be made more prominent in critique of them, (Fine 2009a, 2009b) and (Hausmann and Andrews 2009). See below for implications for macroeconomic policy.

For an overview of financialisation, see (Fine 2011b).

See (Freund 2011) for South Africa as a developmental state in the apartheid past.

There has been a subtle and unnoticed redefinition of GDP to include financial services where previously it was excluded. But what is provided in practice by financial services? The answer is trading in risk, putatively redistributing it to those more willing to bear it (as opposed to the reality of creating it for those who cannot). See Christophers (2011).

The elephant of capital flight is also to be found across Africa as documented in a series of co-authored papers and, most recently, Ndikumana and Boyce (2011).

For a critique of the space being opened by the IMF in this regard, see Gallagher (2011).

See Fine (2012a) for some discussion of this, noting that it has only recently become more prominent in Chinese policymaking.

For my own (co-authored) contributions on this, see Ashman et al. (2010a, 2010b) and Fine (2004, 2006, 2007, 2008a, 2008b, 2010a, 2010b, 2011a), Fine and Stoneman (1996) and Fine and Rustomjee (1997).

See Bayliss and Fine (2008) for general arguments around water and electricity, and Kgara and Barsel (2010) for pharmaceuticals, for example.

A fourth section offers a cursory programme for implementation and is followed by an appendix with an outline for the five job drivers.

Those not mentioned in what follows are Programmes 8 (technology), 9 (trade) and 10 (Africa).