Globalization and South Africa

Neoliberal globalization (free trade, free markets, no regulations, tax cuts for the wealthy and privatization of everything public), also more recently termed neoconservatism, is in essence a war on the poor and working class.

Here in the U.S. the results of this war are grim; 22%+ real unemployment rate, 50,000 U.S. factories closed in the last 10 years, millions of families evicted from their homes, 30%+ drop in home values nationwide, 1/3 of home mortgages “underwater,” 37% of young families under the age of 30 in poverty, etc, etc, etc.

“We the people” are overwhelmed by the reality of these depressing statistics and our corporate controlled media does everything in its power to keep us diverted from what is really going on in the world. That makes many of us unaware of the effects of neoliberal/neoconservative globalization on the other people of the world. A natural assumption might be that since it hurts so badly here, it must be helping someone overseas.

What follows is a shortened version what happened to the people of South Africa from Naomi Klein’s book The Shock Doctrine. What happened in South Africa is not remarkable—terrible, but not remarkable. Ms Klein gives equally compelling renditions of neoliberal/neoconservative globalization impacting a host of other countries, including but not limited to, Chile, Argentina, Uruguay, Bolivia, Poland, Russia, Indonesia, Thailand, Malaysia, Philippines, South Korea and Japan.

The following is a condensed version of Ms Klein’s chapter on South Africa in The Shock Doctrine.

In 1990 South Africa was still under apartheid and Nelson Mandela wrote the following note to his supporters from jail.

“The nationalization of the mines, banks and monopoly industries is the policy of the ANC (African National Congress), and the change or modification of our views in this regard is inconceivable. Black economic empowerment is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable.”

The Freedom Charter

In the 1950s, the ANC dispatched 50,000 volunteers to the townships and countryside of South Africa to collect hand written “freedom demands” from the people. Leaders of the ANC synthesized the demands into a final document “The Freedom Charter” which was officially adopted on June 26, 1955 at Kliptown, South Africa by the ANC.

It begins “The People Shall Govern.”

The ANC was banned by South Africa’s apartheid government for more than three decades and many died from massacre after massacre, but the people had their Freedom Charter nailed on the walls of their shacks to give them hope for the future.

“The national wealth of our country, the heritage of South Africans, shall be restored to the people; the mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole; all other industry and trade shall be controlled to assist the well-being of the people.”

Apartheid was more than a political system, it was an economic system of enslavement. Changing the political system without changing the economic system, would solve nothing. The wealth of the land that had been confiscated by the European colonists must be redistributed to all the people or they would continue to be enslaved.

After spending 27 years in jail, Mandela was released two weeks after he wrote the note that began this piece. A mass international movement of boycotting South African corporations and the relentless commitment of the people through the ANC forced the South African government to allow the ANC into the electoral process. In 1994 the ANC was swept into office and Mandela was elected president.

In 1975 neighboring Mozambique’s independence movement ended Portugal’s colonial rule. When the Portuguese left, they destroyed everything they could on the way out the door. The ANC knew this and wanted to avoid a repeat in their country. Also, the National Party under F.W. de Klerk had the army, police force and military hardware while they negotiated the transfer of power. There was always the threat of armed force to be used against the people, as it had been so many times in the past. On the side of the National Party was the so called “Washington Consensus” policy of free trade, free markets, tax cuts for the wealthy, no regulations and privatization of public institutions. The International Monetary Fund (IMF), the World Bank and the General Agreement of Tariffs and Trade (GATT) now the World Trade Organization (WTO) were brought in to help seal the deal.

Political and Financial Negotiations

While the ANC was concentrating on Parliament and political power, they gave the economic store away to the National Party and the global capitalist trade organizations and banks. Outmaneuvered at the negotiating table, in part because the ANC negotiators thought they could use their political power when they took over the government to rectify what they thought were minor structural economic concessions, they allowed the central bank, the South African Reserve Bank, to become a private independent entity with total autonomy from the elected government. They also allowed the finance minister under apartheid to remain in office.

Upon taking the reins of power, the ANC found it impossible to redistribute land, because of a clause in their new constitution protecting all private property. This clause along with the Western free trade agreements made it impossible to nationalize the banks, mines etc. GATT, the forerunner of the WTO, treaties made it impossible to subsidize auto plants and textile mills, throwing millions out of work. They were unable to distribute free AIDS drugs in the poor townships because it violated an intellectual property rights commitment with GATT and the WTO. Spending on housing and electricity for the poor was not available because almost the whole budget was devoted to servicing the debt passed on by the apartheid government. They couldn’t print more money because the central bank, finance minister and World Bank wouldn’t let them. Provide free water for the people? Couldn’t do that because it would violate the privatization agreements with the Western neoliberal WTO, World Bank and IMF. Impose currency controls to prevent international speculation? Nope that would violate agreement with IMF that the apartheid government had signed on their way out the door. Raise the minimum wage? No they had promised wage restraints to the IMF.

Ignoring these agreements would lead to currency crashes, aid cuts and capital flights. Apartheid activist Rassool Snyman “They never freed us. They only took the chain from around our neck and put it on our ankles.” Naomi Klein “It was a process of infantilization that is common to so-called transitional countries—new governments are, in effect, given the keys to the house, but not the combination to the safe.”

Third generation ANC activist William Gumede, “Everyone was watching the political negotiations . . . if people felt it wasn’t going well there would be mass protests. But when the economic negotiators would report back, people though it was technical; no one was interested. We missed it! We missed the real story.”

Squeezed and squeezed by the Western capitalist bankers, the ANC was forced to accept the Washington trickle down theory and pursue foreign investment; privatize what little they had left. Whenever an ANC official quoted the Freedom Charter, the internationally controlled market responded by putting their currency in a free fall. “The very mobility of capital and the globalization of the capital and other markets, make it impossible for countries . . . to decide national economic policy without regard to the likely response of these markets.” Nelson Mandela

Attempting to please their international economic masters and thus alleviate the economic war being waged on their people, the ANC in 1996 unveiled a secretly developed program for even more privatization, government spending cutbacks, labor flexibility (wage cuts), free trade and currency speculation. The results were continued disaster for the people.

Forced to dance to the tune of transnational capital, Mandela rejected his and the ANC’s struggle for people centric economic justice, “In our economic policies . . . there is not a single reference to things like nationalization, and this is not accidental . . . There is not a single slogan that will connect us with any Marxist ideology.”

The Wall Street Journal then reported, “Mr. Mandela has in recent days sounded more like Margaret Thatcher than the socialist revolutionary he was once thought to be.” To reward his concessionary speech, the international markets dropped the value of the South African rand by 20% in a single month of 1996.

The Truth and Reconciliation Commission developed from a psychological desire of those in government trying to please their new international masters even more. Ashwin Desai who spent time in jail in the struggle explains, “The new convert is always more zealous at these things. They want to please even more, if you please the warden more, you get a better status. And that logic obviously transposed itself into some of the things that South African society did. They did want to somehow prove that they were much better prisoners. Much more disciplined prisoners than other countries, even.”

The ANC base was hoping for more than an apology for centuries of exploitation, but the leadership was conditioned sufficiently to reject the extremely modest Truth and Reconciliation Commission recommendation of a one-time corporate solidarity tax of 1% to raise money for victims of apartheid. Fearing that it would send an anti business message to the market, the government scrapped the tax and instead gave a very miniscule one-time payment from its own almost nonexistent funds. “The president (Thabo Mbeki) decided not to hold business accountable. It was that simple.” Commission Juror Yasmin Sooka

“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.” Commission Chairman Archbishop Desmond Tutu

The Truth and Reconciliation Commission hearings focused on torture and disappearances instead of the system fostered them. “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.” Commission Juror Yasmin Sooka

Odious Debt and a Debt Jubilee?

In 1998 a group of South African activists started a campaign to declare the debt of the previous government “odious” and renounce it with a “debt jubilee” movement. “I must say, I was so naive. 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. The government repudiated us and said, ‘No, we don’t accept your support.’”

Renounce the Freedom Charter

The South African government from 1997 to 2004 was forced to sell 18 state owned firms for $4 billion, but half of the money went to service the debt. The ANC, strangled by international capitalists and their previous colonial masters, had been forced to come full circle. They had not only renounced the principles of their cherished Freedom Charter, by refusing to nationalize the mines, banks and industries; they were in the process of selling off what national assets they had to service the debt incurred by their former colonial masters.

Victims Pay Reparations to Former Masters

It gets even worse. The transition negotiations guaranteed all civil servants their jobs after the handover. So the new government has been forced to pay ongoing hefty pensions to their former masters, including but certainly not limited to, the police, jailers and military members who directly implemented the master slave relationship of apartheid. “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.” Naomi Klein

Kliptown, South Africa where the Freedom Charter was unveiled in 1955 had an unemployment rate of 72% in 2007. I have no idea what it is now that we are in the midst of the Global Neoliberal Depression, but I would imagine it is higher. Naomi Klein tells in her book that there were plans to build a Freedom Charter theme park. One can only imagine a Disney World like setting in which international tourists could be treated to Amos and Andy like caricatures of life under apartheid. I looked online and can’t find any references to it now, so perhaps the endeavor never got off the ground. If the theme park was built, they would have had to force out many of the destitute unemployed people of Kliptown to another shantytown so tourists could come and see the “progress” made by the new South African democracy.

Better or Worse after Freedom?

Let’s compare the people of South Africa before freedom and after:

  • From 1994 to 2006 the number of people living on less than $1 per day has doubled from 2 million to 4 million.
  • Between 1991 and 2002, the unemployment rate for black South Africans more than doubled, from 23%to 48%.
  • Of South Africa’s 35 million black citizens, only 1 of every 7,000 earns more than $60,000/year.
  • The ANC government has built 1.8 million new homes, but 2 million people have lost their homes.
  • 1 million people have been evicted from farms in the first decade of democracy.
  • The number of shack dwellers has increased by 50%. In 2006 more than 1 in 4 South Africans lived in shacks located in informal shantytowns many without water or electricity. The Shock Doctrine

This account of “democracy” in South Africa is not meant as a critique of Nelson Mandela or the African National Congress. It is a critique of capitalism, globalization, imperialism and everything our country does to grease the wheels for globalized capitalists’ domination of the world.

The tragedy is that South Africa is not an isolated case. Every country dominated has a story to tell and they are all different, but share many commonalities. Ms Klein tells similar tragic tales in The Shock Doctrine of Chile, Argentina, Uruguay, Bolivia, Poland, Russia, Indonesia, Thailand, Malaysia, Philippines, South Korea and Japan.

Ms Klein has been kind enough to make the entire chapter on South Africa available online.

Nick Egnatz is a Vietnam veteran. He has been actively protesting our government’s crimes of empire in both person and print for some years now and was named “Citizen of the Year” for Northwest Indiana in 2006 for his peace activism by the National Association of Social Workers. Contact Nick at

Comments are closed.