by Guy Arnold
It was inevitable that as the ANC settled into its role as the ruling party of South Africa, strains would develop with its former allies, COSATU and the SACP. The issue most likely to cause tensions was that of free market growth and its impact upon the large numbers of unemployed, with COSATU attacking the GEAR strategy as ‘Thatcherite’. The greatest concern of ordinary members of the ANC, its wide constituency throughout the country and its two allies – COSATU and the Communist Party – was how the party would deliver services, shelter, employment, alleviation of poverty, safety and security effectively. More ominous for future harmony was the suggestion advanced in 1997 (prior to the ANC conference) by Peter Mokaba, who was a deputy minister and member of the ANC executive committee, that the Communist Party should be dropped from the tripartite alliance and that the ANC should be converted into a party of free market capitalism. The Communist leader, Charles Nqakula, who could only take 14 delegates to the ANC national conference as non-voting members, claimed that many ANC members were also card-carrying members of the Communist Party. As he said on the eve of the conference: ‘We have to ensure the ANC retains its character as a movement of workers and poor people in rural areas and townships. At the same time, we have to jealously consolidate the space the ANC has created in its ranks for the progressive democrats. As party delegates, as members of the movement, we have to make sure the ANC does not veer away from its original mission of raising the standard of living of the disadvantaged.’17 Times, however, were changing, as Nqakula had rightly feared. The ANC was moving away from the championship of the poor and dispossessed and it was clear that its pragmatic free market economic policy would remain in place. Others, too, feared its flirtation with capitalism, the ‘secret weapon’ of the whites. Mandela’s parting speech as President of the ANC at the December 1997 conference was in part, perhaps, designed to spare Mbeki the need to say such things. He said the ANC was being thwarted by those ‘committed to the maintenance of white privilege’ and he warned against the dangers of corruption and greed; he attacked other African countries where ‘predatory elites that have thrived on the basis of looting the national wealth’, and he called for a moral renewal to achieve an African renaissance. He warned against political careerism to make money and he criticized white businessmen for the slow pace of transformation and black empowerment. He blamed the media for perpetuating old hierarchies and neglecting black viewpoints. He warned against an Afrikaner ‘counter revolutionary network’ trying to subvert the economy and use crime to make South Africa ungovernable. There was a predictable white press reaction in both South Africa and Britain, claiming that Mandela had destroyed his earlier reputation for conciliation, yet the fury of the reaction was only commensurate with the accuracy of Mandela’s accusations.
Mandela’s foreign policy was a curious blend of straightforward resolve and naïve hopefulness that the reconciliation, which he had practised so successfully in South Africa, could work as easily elsewhere on the continent. Refreshingly, he refused point blank to give in to American pressures when he insisted upon allowing visits from the heads of state of Cuba, Iran and Libya, for those three countries, on Washington’s black list for supporting terrorism, had each given aid to the ANC in the dark days when apartheid appeared to be set in stone. It was a duty he owed and repaid. He was criticized for not applying far greater pressure to the military regime of Gen. Abacha in Nigeria to prevent the execution of Ken Saro-Wiwa in 1995. He argued for a ‘softly softly’ approach although later he denounced the Nigerian government when the country had been suspended from the Commonwealth. He attempted to mediate a peace in the Congo when Laurent Kabila’s forces were in striking distance of taking Kinshasa and ousting Mobutu and appeared not to understand the geopolitics of the situation on the ground. He also wanted to mediate with Indonesia about the war in East Timor and the endless war in Sudan. On the other hand, a compliment to the emergence of a democratic South Africa, the country played host to the Non-Aligned Movement summit in 1998 and the biennial Commonwealth Summit in 1999, both of which were held in Durban.
Ex-President de Klerk now bowed out of politics. Back in 1989, when he became President, he had adopted a pragmatic approach to South Africa’s race divide for by then apartheid was clearly untenable any longer as a policy. He was deeply influenced in his decision to come to terms with the African majority by external events and ‘According to Willem (de Klerk’s brother), the principal reasons for F. W. de Klerk’s dramatic change of policy were the end of the Cold War, which removed both the (largely illusory) Soviet threat and the (rapidly crumbling) US support’.18 On a visit to Britain in 1997 de Klerk defended his record and claimed that under his leadership the NP abolished apartheid. In August 1997 he resigned the leadership of the NP leaving a party deeply divided. He denied he had ever thought Africans inferior to whites, only different: ‘The two things are not the same. Times have changed and we now firmly believe in a single, unified state. But 20 years ago the hope was for separate development, parallel improvements for all races.’ And waxing eloquent about the future, he argued: ‘The whole continent needs a success. We can provide it. I don’t want to import pollution, but we have vast open spaces. They provide a fine environment for basic industry. We can provide the infrastructure for the whole continent. We can provide the building industry with bricks and not just copper but copper wire and the covering of copper wire. We are going to privatize the mines. The commercial centre of Africa will soon be neither London nor Paris but Johannesburg.’19 It was an odd swansong and somehow suggested that deep down de Klerk thought the whites were still running South Africa. Following de Klerk’s resignation, the National Party continued on its downward slope until it finally merged with the ANC.
The economy was the key to the future. Just as the economic imperatives of development had persuaded the white business community to abandon apartheid so in the post-apartheid age its correct management would provide the means whereby the expectations of the people could be met. The South African economy is one of the most widely developed and sophisticated in the South as a whole and the best developed on the African continent. In the long run it ought to meet adequately the needs of all the people, but given its history – geared to the needs and supremacy of the whites and linked by investment to Britain and the United States – there were many problems and adjustments to be made before it could meet the expectations of the black majority. The strength of the economy had encouraged the white minority to hold onto power. The requirements for expansion led white businessmen to undermine apartheid. The transition to full democracy required black empowerment. The country is blessed with immense actual and potential economic capacity: it possesses huge mineral resources; can feed itself in normal times though subject to periodic droughts, and produce a surplus of agricultural products, both staples and commodities, for export; has some of the world’s finest offshore fisheries and the best developed business-commercial infrastructure on the continent. Further, its road and rail system is not only geared to serve its own needs but those of its neighbours to the north as well. It has never achieved its full potential because of the inhibitions imposed by the apartheid system and in the latter 1980s also by sanctions.
The pressures the economy faced in the new South Africa were formidable. Thus, at the beginning of 1995, when the civil service advertised 11,000 posts for managers, clerks and cleaners, more than 1.5 million applicants came forward. That year Trevor Manuel, the Minister of Finance, highlighted the need to unbundle the conglomerates that in the apartheid 1980s had acquired a range of companies cheaply as expatriate corporations disengaged. Exchange controls had prevented them from investing their surplus revenues outside South Africa with the result that they invested inside the country in activities away from their core businesses and also, within the limited framework of South Africa, became increasingly antagonistic to competition. The willingness of international business to reinvest in South Africa under Mandela’s presidency became both the touchs
tone of the country’s new acceptability and the measure of its economic success. By the end of 1997 British companies had invested R6 billion since 1994 most of which, they claimed, had created real business. This investment was on top of the R12 billion already invested in the country. At the same time, major South African companies were investigating the possibility of flotations on the London Stock Exchange and two mining conglomerates, Gencor and Billiton, led the way. The new government was unhappy that its companies were seeking primary stock exchange listing in London. By the beginning of 1998 an estimated 150 US companies had returned to South Africa, following the abolition of sanctions, although the major US pension funds that had disinvested did not return. Manufacturing accounts for a quarter of South Africa’s GDP and provides employment for about 14 per cent of the labour force. The principal manufactures are wide-ranging and include food, beverages, soaps, paints, pharmaceuticals, refined petroleum, iron and steel, transport equipment, metal products, non-electrical machinery, paper and paper products and construction. After more than a century of heavy exploitation, South Africa remains a storehouse of minerals and these have long constituted the lead sector in the economy. In the 1990s mining contributed 9 per cent of GDP though only employing three per cent of the labour force. Gold, diamonds, coal and the platinum group of ores are the leaders though gold output, after a century of predominance, was in serious decline.
Anglo American had long been the country’s premier industrial corporation so that its lead always had a significant impact upon industry as a whole. During October 1998 it unveiled a plan to bring all its assets under the control of a single company and transfer its main stock exchange listing from Johannesburg to London. This move came as a psychological blow to the South African economy just as the country sought to make a fresh impact upon the international business scene. The stock market evaluation of Anglo American then stood at £6 billion. When the move to London was carried through it caused consternation in South Africa where it was regarded as both a snub to Mandela and a blow to the Johannesburg Stock Exchange. Given the history of Anglo American, which had been identified for the best part of a century with the mining structures upon which the South African economy had been based, this move from Johannesburg to London, as soon as it was possible for the company to do so after the end of the apartheid restrictions, came as a wounding blow to the new South Africa, especially as two-thirds of Anglo assets remained in South Africa. The National Union of Mineworkers (NUM) described the Anglo American move as ‘passing a vote of no confidence in the economy of South Africa and its government’. Other major companies were expected to follow suit. Gwede Mantashe, the General Secretary of NUM, said: ‘We are unhappy about the move because it is sending the wrong signals. Why should international investors be excited about coming to South Africa when all our major companies are going to have their primary listings in London?’20 Anglo American, he said, was shifting from creating jobs.
Although agriculture contributes less than five per cent to GDP its importance to the economy cannot be exaggerated. The agricultural sector employs 13 per cent of the labour force. South Africa is self-sufficient in food and a substantial exporter. However, possession of the land is wound inextricably into the history of the Afrikaner in South Africa and they possess more than 80 per cent of the arable farmland. A future political problem, highlighted by events in Mugabe’s Zimbabwe at the end of the century, will undoubtedly be some form of land redistribution. As it came to grips with economic realities, the new ANC government had to modify many of its earlier ideas about the economy. ‘One lesson quickly learned by the ANC leaders was that their previous vaguely socialist ideals would have to be modified. By 1994 few informed people believed that a centralized, state-controlled economy could work; the examples of the only surviving Marxist countries, Cuba and North Korea, were enough to prove the point.’21 Such logic was all very well but was a market-oriented economy going to solve the problems of expectations?
The emergence from the 1994 elections of a victorious ANC forming a South African government under Mandela created a totally different atmosphere in the region. South Africa joined the Southern African Development Community (SADC) and in 1995, largely due to South African pressures, Mozambique was invited to become a member of the Commonwealth. Speaking at the 1995 SADC summit, South African Foreign Minister Alfred Nzo said that membership of SADC was the realization of ‘a dream South African democrats have had for a very long time. That dream is to participate as a good neighbour in the affairs not only of the region, but of Africa as a whole. South Africa is very anxious to contribute whatever it can to the stability of the region – economically, politically and security-wise. The SADC is an important vehicle for achieving that goal.’22 Pretoria discovered quickly enough, however, that the other SADC members were afraid that their small economies would be swamped by South Africa’s large one and by 1998 the government was working on a comprehensive offer of market access for its SADC partners, which would assist the move towards a free trade agreement among the 14 SADC members. It was an irony for Pretoria that its SADC partners, in terms of their desire for access to its market, were in the same relationship to South Africa as it was to the EU and the same kind of protectionist arguments were likely to surface.
Meanwhile, South African business was looking eagerly for opportunities in Africa to the north that had been denied it during the apartheid era. In the year following the end of apartheid South African businesses made major investments in 19 African countries covering operations in aviation, breweries, electric power, hotels, mining, railways and ports, and telecommunications. In what one newspaper described as a new Great Trek, South African companies were taking over from American and European corporations, which had become disillusioned with working conditions in Africa. The television company, Multichoice, over two years became Africa’s biggest provider of pay TV channels broadcasting to 40 African countries up to and including Egypt. Other companies that rapidly extended their operations northwards were Standard Bank and South African Breweries. A major beneficiary of this outward investment was Mozambique, which had established a promotion agency for foreign investment in 1993. By 1997 US$346.2 million had been invested in 449 projects and the two lead countries providing this investment were Portugal and South Africa, ironically the two countries from whose economic clutches Mozambique had once aspired to break free. As optimists began to speak of South Africa as the springboard for investment in the whole continent, the former editor of the Rand Daily Mail, Allister Sparks, added a timely caution to the debate: ‘There is, too, a sensitivity towards the neighbouring countries. There is the sense of a debt owed to them because of the heavy price they paid for supporting the ANC during the apartheid years, but it is coupled with a reluctance to appear arrogant or domineering as the continent’s most powerful economy.’23
The many problems South Africa faced kept coming back to the relationship between black and white that remained central to the country’s history. Speaking for the benefit of whites whom many blacks felt had made no effort to transform and had retained all their former privileges, Thabo Mbeki said: ‘The white population I don’t think has quite understood the importance of this challenge… If you were speaking of national reconciliation based on the maintenance of the status quo because you do not want to move at a pace that frightens the whites, it means that you wouldn’t carry out the task of transformation.’24 During the latter part of Mandela’s presidency, Mbeki had already become effective day-to-day ruler. The first post-1994 elections were held on 2 June 1999 when 16 million of 18 million voters took part. These elections were seen as free and fair. The ANC obtained 266 seats out of 400, just one seat short of the two-thirds majority required to amend the constitution. The ANC had obtained 66.4 per cent of the vote. The NP, meanwhile, had become the New National Party under Martinus van Schalkwyk but it only obtained 28 seats while the Democratic Party obtained 38 seats to become the official opposition. The Inkatha Freedom Party o
btained 34 seats and remained in the coalition government with Buthelezi continuing as Minister of Home affairs. On 16 June Mbeki was sworn in as South Africa’s second black president. There was an immediate problem when Winnie Mandela contested the position of deputy president, but after securing only 127 of 3,500 votes stood down in favour of Jacob Zuma.
Mandela paid tribute to his successor but warned him to allow dissent. Mbeki, then aged 55, was closer to ANC tradition than had been Mandela. He was aware that the heroes of the struggle had passed; he had to get down to the hard political task of satisfying his supporters and keeping promises. In his new cabinet Mbeki kept two key white figures in place – Trevor Manuel as Finance Minister and Alec Erwin at Trade and Industry – which was taken as a sign that he intended to maintain Mandela’s economic strategy. He pressed on with the policy of privatization of state assets. Following Mandela’s earlier efforts, Mbeki worked hard to secure a peaceful settlement in the Democratic Republic of Congo (former Zaïre) and in 2000 was ready to commit South African troops as peacekeepers. He tried, with less success, to prevent arms passing to Savimbi’s UNITA in Angola. At the end of the century as the crisis in Zimbabwe worsened, Mbeki was urged to condemn the land seizures that were taking place there. He refused publicly to criticize Mugabe and took plenty of time before stating that land occupations would not be allowed in South Africa. He said he preferred to use ‘quiet diplomacy’ with Mugabe. He attempted to raise funds internally to pay for land seizures in Zimbabwe, a move that was interpreted as a sign that he might not stand firm on the rule of law in South Africa if something similar was attempted there. Land reform was moving very slowly and of 60,000 claims by blacks for land appropriated by whites only a few hundred had been settled by 2000. At the end of the century about 86 per cent of all rural land remained in the hands of 60,000 white commercial farmers while 14 million Africans tried to survive on 14 per cent of the land.