Forum Post: Mandela Was Unable to Dismantle the White Oligarchy Keeping South Africa in Economic Chains

Mandela Was Unable to Dismantle the White Oligarchy Keeping South Africa in Economic Chains

Thursday, 02 January 2014 09:12 By Danny Schechter, Seven Stories Press | Book Excerpt

http://truth-out.org/progressivepicks/item/20974-mandela-was-unable-to-dismantle-the-white-oligarchy-keeping-south-africa-in-economic-chains

The late Nelson Mandela became an icon of a fearless leader on behalf of equality. He fought oppression, but in winning the battle of justice in South Africa, he did not pursue a path of vengeance. Instead, he sought reconciliation and compromise.

Seven Stories Press has just released a book by journalist Danny Schechter that provides a revealing contextual background to Nelson Mandela, the man and the leader.

In Schechter's new book, accessibly organized into alphabetical sections about Mandela's life, a passage on Mandela the negotiator exposes how much the majority population in South Africa had to give it to achieve a democracy.

The following excerpt from Madiba A to Z: The Many Faces of Nelson Mandela offers insight into how while the nation changed in terms of who politically ruled it, the economic power remained concentrated in white and western economic hands. It is from the section entitled, "Negotiator":

In their 2012 book, Who Rules South Africa?, journalists Martin Plaut and Paul Holden wrote that the ANC had little grasp on how to transform the economy. International investors opposed nationalization on principle. Nationalization was viewed as "socialistic" at a time that the socialist countries were collapsing.

When Mandela visited the World Economic Forum in 1991, and again a year later, he was advised - not just by capitalists but by leaders of socialist countries like Vietnam, as well, to promote a mixed economy. His original speech was promptly modified to appease that sentiment.

I [Danny Schechter] asked historian Verne Harris of the Mandela Centre of Memory about this. I expected he would dismiss it. He didn’t. Here’s part of our exchange:

"I think there’s an element of truth in that. . . . I think that under Madiba’s leadership the ANC embraced a neoliberal agenda with unseemly haste and we’re paying a terrible price for that now. . . . We’re only beginning to understand the nature of this phenomenon. From the late 1980s, a huge seduction was underway, of the liberation movement by capital and it’s playing out in all kinds of destructive ways now, from arms deals to corruption. We’re having it at all levels of our society."

In his biography of Mandela, Anthony Sampson acknowledged, "Mandela had no experience in economics, but he accepted the imperatives of the global marketplace." In furtherance of this market logic, he appointed Derek Keys, de Klerk’s pro-market finance minister as his own, and then,when he stepped down, replaced him with Chris Liebenberg, a banker. He kept Chris Stals, a conservative former member of the Broederbond, on the Reserve Bank. In essence, he said, "the old guard was running what to all the world looked like a new show."

Ronnie Kasrils, the MK commander turned government minister, looked back on this history and wondered whether compromises made then sealed the country’s fate, in effect blocking deeper social change. Twenty years later, in a new 2013 introduction to his autobiography, Armed and Dangerous, Kasrils wrote:

"What I call our Faustian moment came when we took an IMF loan on the eve of our first democratic election. That loan, with strings attached that precluded a radical economic agenda, was considered a necessary evil, as were concessions to keep negotiations on track and take delivery of the promised land for our people. Doubt had come to reign supreme: We believed, wrongly, there was no other option, that we had to be cautious, since by 1991 our once powerful ally, the Soviet Union, bankrupted by the arms race, had collapsed. Inexcusably, we had lost faith in the ability of our own revolutionary masses to overcome all obstacles. Whatever the threats to isolate a radicalizing South Africa, the world could not have done without our vast reserves of minerals.

To lose our nerve was not necessary or inevitable. The ANC leadership needed to remain determined, united and free of corruption - and, above all, to hold on to its revolutionary will. Instead, we chickened out. The ANC leadership needed to remain true to its commitment of serving the people. This would have given it the hegemony it required not only over the entrenched capitalist class but over emergent elitists, many of whom would seek wealth through black economic empowerment, corrupt practices and selling political influence."

Kasrils had hoped the West would commit to a "new Marshall Plan," - like the one that led to the reconstruction of Europe after World War II - to rebuild South Africa’s apartheid-ravaged economy, but the West did not respond.

Instead, Western financial agencies counseled more privatization and fewer jobs in the face of dramatic unemployment. South Africa’s needs and the hopes of its people were not persuasive to a self-interested US-dominated economic order, he said.

Later, in a conversation with Richard Stengel for his last book, Conversations with Myself, Mandela revealed thatAmerican businessmen put a lot of pressure on the ANC to drop its initial commitment to nationalization. Mandela recounted meeting many leaders at the World Economic Forum who advised against it and he admits, "We had to remove the fear of business that . . . the ir assets will be nationalized."

Jay Naidoo has agreed that many of South Africa’s current problems go back to what was resolved or not resolved in the negotiations, but he doesn’t blame Nelson Mandela:

"These were our decisions. The decision to replace the RDP with a macroeconomic program that just focused on the financial industries was our decision. No one made it for us. We have to hold ourselves accountable for that. And that document was drafted in secret. Not even the ANC office bearer saw it. Not even the national executive committee of the ANC saw it. We saw it on the day it was published. So there was a conspiracy in our own ranks which obviously had interacted with very powerful economic forces in the country, and felt that the RDP was too radical."

Naidoo’s conclusion is hard to argue with: "We have created a Molotov cocktail in this country. And all that we see today, the violence that we see, the anger that we see, is a consequence of those decisions that we made then. I don’t hold Mandela responsible for it. Sometimes I hold myself responsible. It’s my generation that has failed the country."

But these problems were not caused simply by personal failures. South Africa was never in the driver’s seat when it came to its economy. It was subject to decisions about trade and investment made elsewhere. Also, the ANC government never controlled the economic levers that were dominated domestically by a small number of banks and companies that may have praised Nelson Mandela as a leader, but didn’t necessarily listen to him in terms of his government’s priorities.

In interviews with key decisionmakers in the ANC and in the ANC-led government that took place over a period of years, scholar Padraig O’Malley kept asking local leaders about these issues. Often the responses were overly optimistic or indicated a lack of knowledge about who was calling the shots in economic terms.

Here is an interview from May 17, 1996, between O’Malley and Pallo Jordan:

Padraig: Unemployment. Stuck. No improvement being made at all. At the same time we pickup Business Day every other day and you see that corporate profits are soaring. Where are the corporate profits going? Are they being ploughed back into technology that eliminates jobs or are they being distributed to shareholders or are they being siphoned off into other investments that are essentially non-productive in terms of creating jobs?

Pallo: What I think we’re stuck with is limited growth, but growth without job creation. And perhaps we need much more rapid growth, to increase the growth rate to something like 6% to make that sort of impact. But of course one of the problems, I think, is that new technologies tend to be more capital - than labor-intensive. One is going to have to look much more at your public works programs for the immediate, for your job creation programs, and one is also going to have to look to your small- and medium-size enterprises and encouraging those as job creators.They tend to be much more effective job creators than your large corporations. Perhaps not sufficient attention has been paid to encouraging that sector because I think you will note also that even with your black economic empowerment programs lots of those are targeting the big corporate giants rather than seeing the emergence of small- and medium-size enterprises.

And around and around the discourse went but, perhaps because of the government’s pro-market neoliberal direction, as well as pressure from elites and fear of alienating local and global business, reforming the economy wasn’t given the attention it deserved. Politicians tended to rule over politics, while big business, in South Africa like elsewhere in the world, have mostly demanded a free hand to run the economy.

In 2013, I asked Thabo Mbeki for his perspective on what went wrong. He was Mandela’s deputy president before serving as president for nine years himself. His take: "I think that the fundamental problems of South Africa have remained unchanged since the transition in 1994. The fundamental problems of poverty, inequality ...

"One of the problems, one of the challenges that we have never been able to solve in all these years since our liberation, is the attitude of white capital. Even today, I promise you as we're talking now, there are large volumes of investable money that South African companies are holding in cash, and not investing in the economy."

Madiba A to Z: The Many Faces of Nelson Mandela by Danny Schechter was published on November 26, 2013 by Seven Stories Press.