by Naomi Klein
Some commissioners felt that multinational corporations that had benefited from apartheid should be forced to pay reparations. In the end the Truth and Reconciliation Commission made the modest recommendation of a onetime 1 percent corporate tax to raise money for the victims, what it called “a solidarity tax.” Sooka expected support for this mild recommendation from the ANC; instead, the government, then headed by Mbeki, rejected any suggestion of corporate reparations or a solidarity tax, fearing that it would send an antibusiness message to the market. “The president decided not to hold business accountable,” Sooka told me. “It was that simple.” In the end, the government put forward a fraction of what had been requested, taking the money out of its own budget, as the commissioners had feared.
South Africa’s Truth and Reconciliation Commission is frequently held up as a model of successful “peace building,” exported to other conflict zones from Sri Lanka to Afghanistan. But many of those who were directly involved in the process are deeply ambivalent. When he unveiled the final report in March 2003, the commission’s chairman, Archbishop Desmond Tutu, confronted journalists with freedom’s unfinished business. “Can you explain how a black person wakes up in a squalid ghetto today, almost 10 years after freedom? Then he goes to work in town, which is still largely white, in palatial homes. And at the end of the day, he goes back home to squalor? I don’t know why those people don’t just say, ‘To hell with peace. To hell with Tutu and the truth commission.’”36
Sooka, who now heads South Africa’s Foundation for Human Rights, says that she feels that although the hearings dealt with what she described as “outward manifestations of apartheid such as torture, severe ill treatment and disappearances,” it left the economic system served by those abuses “completely untouched”—an echo of the concerns about the blindness of “human rights” expressed by Orlando Letelier three decades earlier. If she had the process to do over again, Sooka said, “I would do it completely differently. I would look at the systems of apartheid—I would look at the question of land, I would certainly look at the role of multinationals, I would look at the role of the mining industry very, very closely because I think that’s the real sickness of South Africa…. I would look at the systematic effects of the policies of apartheid, and I would devote only one hearing to torture because I think when you focus on torture and you don’t look at what it was serving, that’s when you start to do a revision of the real history.”
Reparations in Reverse
The fact that the ANC dismissed the Commission’s call for corporate reparations is particularly unfair, Sooka pointed out, because the government continues to pay the apartheid debt. In the first years after the handover, it cost the new government 30 billion rand annually (about $4.5 billion) in servicing—a sum that provides a stark contrast with the paltry total of $85 million that the government ultimately paid out to more than nineteen thousand victims of apartheid killings and torture and their families. Nelson Mandela has cited the debt burden as the single greatest obstacle to keeping the promises of the Freedom Charter. “That is 30 billion [rand] we did not have to build houses as we planned, before we came into government, to make sure that our children go to the best schools, that unemployment is properly addressed and that everybody has the dignity of having a job, a decent income, of being able to provide shelter to his beloved, to feed them…. We are limited by the debt that we inherited.”37
Despite Mandela’s acknowledgment that paying the apartheid bills has become a disfiguring burden, the party has opposed all suggestions that it default. The fear is that even though there is a strong legal case that the debts are “odious,” any move to default would make South Africa look dangerously radical in the eyes of investors, thus provoking another market shock. Dennis Brutus, a longtime ANC member and a former prisoner on Robben Island, ran directly into that wall of fear. In 1998, seeing the financial stress the new government was under, he and a group of South African activists decided that the best way they could support the ongoing struggle was to start a “debt jubilee” movement. “I must say, I was so naive,” Brutus, now in his seventies, told me. “I expected that the government would express appreciation to us, that the grass roots are taking up the issue of debt, you know, that it would reinforce the government taking up debt.” To his astonishment, “the government repudiated us and said, ‘No, we don’t accept your support.’”
What makes the ANC’s decision to keep paying the debt so infuriating to activists like Brutus is the tangible sacrifice made to meet each payment. For instance, between 1997 and 2004, the South African government sold eighteen state-owned firms, raising $4 billion, but almost half the money went to servicing the debt.38 In other words, not only did the ANC renege on Mandela’s original pledge of “the nationalisation of the mines, banks and monopoly industry” but because of the debt, it was doing the opposite—selling off national assets to make good on the debts of its oppressors.
Then there is the matter of where, precisely, the money is going. During the transition negotiations, F. W. de Klerk’s team demanded that all civil servants be guaranteed their jobs even after the handover; those who wanted to leave, they argued, should receive hefty lifelong pensions. This was an extraordinary demand in a country with no social safety net to speak of, yet it was one of several “technical” issues on which the ANC ceded ground.39 The concession meant that the new ANC government carried the cost of two governments—its own, and a shadow white government that was out of power. Forty percent of the government’s annual debt payments go to the country’s massive pension fund. The vast majority of the beneficiaries are former apartheid employees.*40
In the end, South Africa has wound up with a twisted case of reparations in reverse, with the white businesses that reaped enormous profits from black labor during the apartheid years paying not a cent in reparations, but the victims of apartheid continuing to send large paychecks to their former victimizers. And how do they raise the money for this generosity? By stripping the state of its assets through privatization—a modern form of the very looting that the ANC had been so intent on avoiding when it agreed to negotiations, hoping to prevent a repeat of Mozambique. Unlike what happened in Mozambique, however, where civil servants broke machinery, stuffed their pockets and then fled, in South Africa the dismantling of the state and the pillaging of its coffers continue to this day.
When I arrived in South Africa, the fiftieth anniversary of the signing of the Freedom Charter was approaching, and the ANC had decided to mark the event with a media spectacle. The plan was for Parliament to relocate for the day from its usual commanding home in Cape Town to the far more humble surroundings of Kliptown, where the charter was first ratified. The South African president, Thabo Mbeki, was going to take the occasion to rename Kliptown’s main intersection the Walter Sisulu Square of Dedication, after one of the ANC’s most revered leaders. Mbeki would also inaugurate a new Freedom Charter Monument, a brick tower in which the words of the Charter had been engraved on stone tablets, and light an eternal “flame of freedom.” Adjacent to this building, work was progressing on another monument, this one called the Freedom Towers, a pavilion of black and white concrete pillars designed to symbolize the charter’s famous clause that says, “South Africa belongs to all those who live in it, black and white.”41
The overall message of the event was hard to miss: fifty years ago, the party had promised to bring freedom to South Africa and now it had delivered—it was the ANC’s own “mission accomplished” moment.
Yet there was something strange about the event. Kliptown—an impoverished township with dilapidated shacks, raw sewage in the streets and an unemployment rate of 72 percent, far higher than under apartheid—seems more like a symbol of the Freedom Charter’s broken promises than an appropriate backdrop for such a slickly produced celebration.42 As it turned out, the anniversary events were staged and art-directed not by the ANC but by an odd entity called Blue IQ. Though officially an arm of the provincial governm
ent, Blue IQ “operates in a carefully constructed environment which makes it look and feel more like a private sector company than a government department,” according to its very glossy, and very blue, brochure. Its goal is to drum up new foreign investment in South Africa—part of the ANC program of “re-distribution through growth.”
Blue IQ had identified tourism as a major growth area for investment, and its market research showed that for tourists visiting South Africa, a large part of the attraction is the ANC’s global reputation for having triumphed over oppression. Hoping to build on this powerful draw, Blue IQ determined that there was no better symbol of the South African triumph-over-adversity narrative than the Freedom Charter. With that in mind, it launched a project to transform Kliptown into a Freedom Charter theme park, “a world-class tourist destination and heritage site offering local and international visitors a unique experience”—complete with museum, a freedom-themed shopping mall and a glass-and-steel Freedom Hotel. What is now a slum is set to be remade “into a desirous and prosperous” Johannesburg suburb, while many of its current residents will be relocated to slums in less historic locales.43
With its plans to rebrand Kliptown, Blue IQ is following the free-market playbook—providing incentives for business to invest, in the hope that it will create jobs down the road. What sets this particular project apart is that, in Kliptown, the foundation on which the entire trickle-down apparatus rests is a fifty-year-old piece of paper that called for a distinctly more direct road to poverty elimination. Redistribute the land so millions can sustain themselves from it, demanded the framers of the Freedom Charter, and take back the mines so the bounty can be used to build houses and infrastructure and create jobs in the process. In other words, cut out the middleman. Those ideas may sound like utopian populism to many ears, but after so many failed experiments in Chicago School orthodoxy, the real dreamers may be those who still believe that a scheme like the Freedom Charter theme park, which provided handouts to corporations while further disposessing the neediest people, will solve the pressing health and economic problems for the 22 million South Africans still living in poverty.44
After more than a decade since South Africa made its decisive turn toward Thatcherism, the results of its experiment in trickle-down justice are scandalous:
Since 1994, the year the ANC took power, the number of people living on less than $1 a day has doubled, from 2 million to 4 million in 2006.45
Between 1991 and 2002, the unemployment rate for black South Africans more than doubled, from 23 percent to 48 percent.46
Of South Africa’s 35 million black citizens, only five thousand earn more than $60,000 a year. The number of whites in that income bracket is twenty times higher, and many earn far more than that amount.47
The ANC government has built 1.8 million homes, but in the meantime 2 million people have lost their homes.48
Close to 1 million people have been evicted from farms in the first decade of democracy.49
Such evictions have meant that the number of shack dwellers has grown by 50 percent. In 2006, more than one in four South Africans lived in shacks located in informal shantytowns, many without running water or electricity.50
Perhaps the best measure of the betrayed promises of freedom is the way the Freedom Charter is now regarded in different parts of South African society. Not so long ago, the document represented the ultimate threat to white privilege in the country; today it is embraced in business lounges and gated communities as a statement of good intentions, at once flattering and totally unthreatening, on a par with a flowery corporate code of conduct. But in the townships where the document adopted in a field in Kliptown was once electric with possibility, its promises are almost too painful to contemplate. Many South Africans boycotted the government-sponsored anniversary celebrations completely. “What is in the Freedom Charter is very good,” S’bu Zikode, a leader of Durban’s burgeoning shack dwellers’ movement, told me. “But all I see is the betrayal.”
In the end, the most persuasive argument for abandoning the redistribution promises of the Freedom Charter was the least imaginative one: everyone is doing it. Vishnu Padayachee summed up for me the message that the ANC leadership was getting from the start from “Western governments, the IMF and the World Bank. They would say, ‘The world has changed; none of that left stuff means anything anymore; this is the only game in town.’” As Gumede writes, “It was an onslaught for which the ANC was wholly unprepared. Key economic leaders were regularly ferried to the head offices of international organizations such as the World Bank and IMF, and during 1992 and 1993 several ANC staffers, some of whom had no economic qualifications at all, took part in abbreviated executive training programs at foreign business schools, investment banks, economic policy think tanks and the World Bank, where they were ‘fed a steady diet of neo-liberal ideas.’ It was a dizzying experience. Never before had a government-in-waiting been so seduced by the international community.”51
Mandela received a particularly intense dose of this elite form of schoolyard peer pressure when he met with European leaders at the 1992 World Economic Forum in Davos. When he pointed out that South Africa wanted to do nothing more radical than what Western Europe had done under the Marshall Plan after the Second World War, the Dutch minister of finance dismissed the parallel. “That was what we understood then. But the economies of the world are interdependent. The process of globalization is taking root. No economy can develop separately from the economies of other countries.”52
As leaders like Mandela traveled the globalization circuit, it was pounded into them that even the most left-wing governments were embracing the Washington Consensus: the Communists in Vietnam and China were doing it, and so were the trade unionists in Poland and the social democrats in Chile, finally free from Pinochet. Even Russians had seen the neoliberal light—at the time the ANC was in its heaviest negotiations, Moscow was in the midst of a corporatist feeding frenzy, selling off its state assets to apparatchiks-turned-entrepreneurs as fast as it could. If Moscow had given in, how could a raggedy band of freedom fighters in South Africa resist such a forceful global tide?
That, at least, was the message being peddled by the lawyers, economists and social workers who made up the rapidly expanding “transition” industry—the teams of experts who hop from war-torn country to crisis-racked city, regaling overwhelmed new politicians with the latest best practice from Buenos Aires, the most inspiring success story from Warsaw, the most fearsome roar from the Asian Tigers. “Transitionologists” (as the NYU political scientist Stephen Cohen has called them) have a built-in advantage over the politicians they advise: they are a hypermobile class, while the leaders of liberation movements are inherently inward-looking.53 By their very nature, people spearheading intense national transformations are narrowly focused on their own narratives and power struggles, often unable to pay close attention to the world beyond their borders. That’s unfortunate, because if the ANC leadership had been able to cut through the transitionology spin and find out for itself what was really going on in Moscow, Warsaw, Buenos Aires and Seoul, it would have seen a very different picture.
CHAPTER 11
BONFIRE OF A YOUNG DEMOCRACY
RUSSIA CHOOSES “THE PINOCHET OPTION”
Pieces of a living city cannot be auctioned off without taking into consideration that there are indigenous traditions, even if they seem odd to foreigners…. But these are our traditions and our city. For a long time we lived under the dictatorship of the Communists, but now we have found out that life under the dictatorship of business people is no better. They couldn’t care less about what country they are in.
—Grigory Gorin, Russian writer, 19931
Spread the truth—the laws of economics are like the laws of engineering. One set of laws works everywhere.
—Lawrence Summers, chief economist of the World Bank, 19912
When Soviet president Mikhail Gorbachev flew to London to attend his first G7 Summit in July 1991, he ha
d every reason to expect a hero’s welcome. For the previous three years, he had seemed not so much to stride across the international stage as to float, charming the media, signing disarmament treaties and picking up peace prizes, including the Nobel in 1990.
He had even managed to do the previously unthinkable: win over the American public. The Russian leader so thoroughly challenged Evil Empire caricatures that the U.S. press had taken to calling him by a cuddly nickname, “Gorby,” and in 1987, Time magazine took the risky decision of making the Soviet president their Man of the Year. The editors explained that unlike his predecessors (“gargoyles in fur hats”), Gorbachev was Russia’s own Ronald Reagan—“a Kremlin version of the Great Communicator.” The Nobel Prize committee declared that thanks to his work, “It is our hope that we are now celebrating the end of the Cold War.”3
By the beginning of the nineties, with his twin policies of glasnost (openness) and perestroika (restructuring), Gorbachev had led the Soviet Union through a remarkable process of democratization: the press had been freed, Russia’s parliament, local councils, president and vice president had been elected, and the constitutional court was independent. As for the economy, Gorbachev was moving toward a mixture of a free market and a strong safety net, with key industries under public control—a process he predicted would take ten to fifteen years to be completed. His end goal was to build social democracy on the Scandinavian model, “a socialist beacon for all mankind.”4
At first it seemed that the West also wanted Gorbachev to succeed in loosening up the Soviet economy and transforming it into something close to Sweden’s. The Nobel Committee explicitly described the prize as a way of offering support to the transition—“a helping hand in an hour of need.” And on a visit to Prague, Gorbachev made it clear that he couldn’t do it all alone: “Like mountain climbers on one rope, the world’s nations can either climb together to the summit or fall together into the abyss,” he said.5