With Moody’s expected to follow
ratings agencies S&P and Fitch in downgrading South Africa’s credit
rating within weeks, economic analyst Dr Iraj Abedian has warned that
the country could soon see the full impact of the change from a split
rating.
Addressing
business leaders at the NMMU Business School in Port Elizabeth on
Wednesday, where he is a visiting professor of economics, Abedian called
on the audience to make it their collective “national responsibility”
to avoid further ratings downgrades.
“This
is too important an issue to keep quiet about. Business, ordinary
citizens and students must talk about it and make their voices heard in a
non-violent way,” said Abedian.
In
a hard-hitting talk on the risks and opportunities for Africa in the
context of prevailing global uncertainty, Abedian said the South African
economy was afflicted by structural blockages and rising political and
policy uncertainty.
“Our
politicians have neglected the economy and failed to put clear and
coordinated policies, and the capacity to implement them, in place,” he
said.
Describing the ANC
government’s dominance as “constructive” during its first 15 years of
rule, Abedian said in-fighting had undermined its ideological
consistency and political unity and led to neglect of the economy and
the misallocation of resources.
“This
leads to a loss of confidence among the poor and among potential
investors, who will follow the ‘when in doubt, sit it out’ rule.”
Although
the rand is currently among the top four most volatile emerging market
currencies, he said, South Africa was just one of many countries dealing
with lacklustre growth and major structural imbalances against a
backdrop of global systemic instability and volatility.
Abedian
outlined what he called the top four “structural fault lines” in the
global system, including a lack of ethical leadership, unsustainably
high income inequality, rising indebtedness on a personal and global
level, and technological disruption causing a disconnect between the
skills base and the economy, leading to unemployment and unemployability
of the youth.
“Technological
change explains the deteriorating labour market prospects, while the
lifespan of listed business entities is decreasing to matter of years in
this era of ‘creative destruction’.”
However,
he said all was not gloom and doom and that, to succeed, business
leaders needed to adapt to this global systemic disorder and learn to
take a new approach to business within this transitional climate.
“In
Africa, there are massive opportunities for productive investment in
infrastructure, where we spend less than the global average of 3.5% of
GDP annually. By 2035, more Africans will live in cities than in rural
areas, so we need to meet this growing demand.”
Holding
60% of the world’s potentially available arable land, the continent was
well positioned to capitalise on agriculture, agro-processing and all
the related services, but needed to invest in globally competitive
production technologies, he said.
This article is a foundation essay. These are longer than usual and take a wider look at a key issue affecting society.
In the history of European cultures, the comparison of humans to apes and monkeys was disparaging from its very beginning.
When Plato – by quoting Heraclitus – declared apes ugly in relation to humans and men apish in relation to gods, this was cold comfort for the apes. It transcendentally disconnected them from their human co-primates. The Fathers of the Church went one step further: Saint Gregory of Nazianzus and Saint Isidore of Seville compared pagans to monkeys.
In the Middle Ages, Christian discourse recognised simians as devilish figures and representatives of lustful and sinful behaviour. As women were subject to an analogous defamation, things proceeded as one would expect. In the 11th century, Cardinal Peter Damian gave an account of a monkey that was the lover of a countess from Liguria. The jealous simian killed her husband and fathered her child.
Hotbed of monsters
Several centuries later in 1633, John Donne in his Metempsychosis even let one of Adam’s daughters be seduced by an ape in a sexual affair. She eagerly reciprocated and became helplessly hooked.
From then on, the sexist manifestation of simianisation was intimately intertwined with its racist dimension. Already Jean Bodin, doyen of the theory of sovereignty, had ascribed the sexual intercourse of animals and humans to Africa south of the Sahara. He characterised the region as a hotbed of monsters, arising from the sexual union of humans and animals.
The history of a narrative by Antonio de Torquemada shows how in this process Africans became demonised and the demons racialised. In the story’s first version (1570), a Portuguese woman was exiled to Africa where she was raped by an ape and had his babies.
A good century onwards the story had entered the realm of Europe’s great philosophical thought when John Locke in his 1689 essay Concerning Human Understanding, declared that “women have conceived by drills”. His intellectual contemporaries knew well that the stage for this transgressing love-and-rape-story was Africa because, according to the wisdom of the time, drills lived in Guinea.
In the following centuries, simianisation would enter into different sciences and humanities. Anthropology, archaeology, biology, ethnology, geology, medicine, philosophy, and, not least, theology were some of the fields.
King Kong’s reel racism
Literature, arts and everyday entertainment also seized on the issue. It popularised its repellent combination of sexist and racist representations. The climax was the hugely successful classic of Hollywood’s horror factory, King Kong.
At the time of King Kong’s production the public in the US was riveted by a rape trial. The Scottsboro Boys were nine black teenagers accused of having raped two young white women. In 1935 a picture story by the Japanese artist Lin Shi Khan and the lithographer Toni Perez was published. ‘Scottsboro Alabama’ carried a foreword by Michael Gold, editor of the communist journal New Masses.
One of the 56 images showed the group of the accused young men beside a newspaper with the headline “Guilty Rape”. The rest of the picture was filled with a monstrous black simian figure baring its teeth and dragging off a helpless white girl.
The artists fully understood the interplay of racist ideology, reactionary reporting and southern injustice. They recognised that the white public had been thoroughly conditioned by the dehumanising violence of animal comparisons and simianised representations, as in the reel racism of King Kong.
Labelled with disease
Animalisation and even bacterialisation are widespread elements of racist dehumanisation. They are closely related to the labelling of others with the language of contamination and disease. Images that put men on a level with rats carrying epidemic plagues were part of the ideological escort of anti-Jewish and anti-Chinese racism.
Africa is labelled as a contagious continent incubating pestilences of all sorts in hot muggy jungles, spread by reckless and sexually unrestrained people. AIDS in particular is said to have its origin in the careless dealings of Africans with simians, which they eat or whose blood they use as an aphrodisiac.
This is just the latest chapter in a long and ugly line of stereotypes directed against different people like the Irish or Japanese, and Africans and African Americans in particular. To throw bananas in front of black sportspeople is a common racist provocation even today.
Why are blacks abused?
What explains this disastrous association of black people defamed as simian? A combination of factors might be the cause:
the prevalence of a variety of great apes in Africa, closest in size to humans. The Asian great ape population is more limited, while in the Americas one finds monkeys, but no apes;
the extent of the aesthetic “distance” between whites and blacks, their greater degree from a white perspective of physical “otherness” (deviant not merely in skin colour and hair texture but facial features) as compared to other “nonwhite” races;
the higher esteem generally accorded by Europeans to Asian as against African civilisations; and
above all the psychic impact of hundreds of years of racial slavery in modernity, which stamped ‘Negroes’ as permanent sub-persons, natural slaves, in global consciousness.
Large scale chattel slavery required reducing people to objects. Precisely because of that it also required the most thorough and systematic kind of dehumanisation in the theorisation of that reality.
The origin of species
Long before post-Darwinian “scientific racism” begins to develop, then, one can find blacks being depicted as closer to apes on the Great Chain of Being. Take mid-19th century America in circles in which polygenesis (separate origins for the races) was taken seriously. Leading scientists of the day Josiah C. Nott and George R. Gliddon, in their 1854 Types of Mankind, documented what they saw as objective racial hierarchies with illustrations comparing blacks to chimpanzees, gorillas, and orangutans.
As Stephen Jay Gould comments, the book was not a fringe document, but the leading American text on racial differences.
Darwin did not discredit scientific racism with ‘On the Origin of Species’ – he just refined it. Shutterstock
Darwin’s revolutionary 1859 work, On the Origin of Species, did not discredit scientific racism but only its polygenetic variants. Social Darwinism, triumphantly monogenetic, would become the new racial orthodoxy. Global white domination was being taken as proof of the evolutionary superiority of the white race.
If it now had to be conceded that we were all related to the apes, it could nonetheless be insisted that blacks’ consanguinity was much closer – perhaps a straightforward identity.
Tarzan = white skin
Popular culture played a crucial role in disseminating these beliefs. The average American layperson would be unlikely to have been reading scientific journals. But they were certainly reading H. Rider Haggard (author of King Solomon’s Mines and She) and Edgar Rice Burroughs (creator of Tarzan). They were going weekly to the movies, including the genre of “jungle movies”. They were following daily comic strips like The Phantom – Africa’s white supercop, the Ghost-who-walks.
Africa and Africans occupied a special place in the white imaginary, marked by the most shameless misrepresentations. Burroughs would become one of the bestselling authors of the 20th century. Not just in his numerous books, but in the movies made of them and the various cartoon strip and comic spin-offs, of his most famous creation, Tarzan of the Apes.
Tarzan would embed in the Western mind the indelible image of a white man ruling a black continent. “Tar-zan” = “white skin” in Ape, the impressively polyglot Burroughs informs us. It is a world in which the black humans are bestial, simian, while the actual apes are near-human.
Burroughs’s work was unprecedented in the degree of its success, but not at all unusual for the period. Rather, it consolidated a Manichean iconography pervasive throughout the colonial Western world in the first half of the 20th century and lingering still today. In this conflict between light and dark, white European persons rule simian black under-persons.
Lumumba’s announcement
The Belgian cartoonist Hergé’s Tintin series, for example, includes the infamous Tintin au Congo book, which likewise depicts Africans as inferior apelike creatures.
Unsurprisingly, “macaques” (monkeys) was one of the racist terms used by whites in the Belgian Congo for blacks, as was “macacos” in Portuguese Africa. In his 1960 Independence Day speech, Congolese leader Patrice Lumumba blasted the oppressive legacy of Belgian colonialism (to the astonishment and outrage of the Belgian king and his coterie, who had expected grateful deference from the natives). He is reputed to have concluded:
The story seems to be apocryphal – no documentation has been found for it – but its widespread circulation testifies to the decolonial aspiration of millions of Africans. Alas, within less than a year, Lumumba would be dead, assassinated with the connivance of Western agencies, and the country turned over to neocolonial rule.
Racist cross-class alliances
The use of simianisation as a racist slur against black people is not yet over, as shown by the furor in South Africa sparked by Penny Sparrow, a white woman, complaining about black New Year’s revelers:
From now [on] I shall address the blacks of South Africa as monkeys as I see the cute little wild monkeys do the same, pick and drop litter.
Sparrow’s public outburst indicates the deep entrenchment of racial prejudices and stereotypes.
America’s First Couple, Barack and Michelle Obama, have been on the receiving end of simianisation. Reuters/Kevin Lamarque
This does not stop at class boundaries. The internet has overflowed with ape comparisons ever since Barack and Michelle Obama moved into the White House. Even a social-liberal newspaper, like the Belgian De Morgen, has deemed it kind of funny to simianise the First Couple.
Cross-class alliances against declassed others are a hallmark of racism.
Theodore W. Allen once defined it as “the social death of racial oppression”, that is:
… the reduction of all members of the oppressed group to one undifferentiated social status, beneath that of any member of the oppressor group.
Animalisation remains a malicious and effective instrument of such a form of desocialisation and dehumanisation. Simianisation is a version of this strategy, which historically manifested a lethal combination of sexism and racism.
Together with Silvia Sebastiani, Wulf D. Hund and Charles W. Mills just edited a volume of the Racism Analysis Yearbook on Simianization. Apes, Gender, Class, and Race. Zürich, Berlin, Wien, Münster: Lit 2015/16 (ISBN 978-3-643-90716-5).
South Africa’s opinion of its role in Africa is at odds with perceptions on the continent. Shutterstock
South Africa has variously styled itself as a “bridge” between the North, the global South and Africa as well as a “gateway” into the continent. It also sees itself as a spokesperson for Africa, given its membership of the alliance of Brazil, Russia, India, China and South Africa BRICS and the G20.
It has declared its commitment to the continent’s Africa agenda, the African Union’s ambitious development plans characterised as “Agenda 2063 - The Africa We Want”.
But how do Africans beyond South Africa’s borders view the country? What are the perceptions of the country’s role on the continent? Are these aligned with the way in which the country perceives its role and influence on the continent?
In a recent round of interviews with senior African Union officials and observers of continental politics in Addis Ababa, headquarters of the African Union, we asked people about their views on South Africa’s African policy and actions. The agreement was that the interviews would be dealt with as unattributed quotes. This enabled us to solicit a range of frank opinions and observations to inform a research project on the implementation of South Africa’s “African Agenda”.
We were struck by the fact that the interviewees all raised similar issues and concerns. What was also striking was the extent to which these perceptions were at odds with South Africa’s self-declared role on the continent, as well as the impact it believes it’s had in furthering development and raising the continent’s international profile.
There’s a marked difference between how South Africans as people and as a government see themselves and how the rest of the continent perceives them. Our discussions in Addis Ababa highlighted a number of recurring themes that shaped these views.
Failed expectations
Interviewees persistently raised the issue of xenophobia in South Africa. A sense of disbelief and continuing incredulity pervaded discussions.
A number noted that after the outbreak of violence in 2015 the South African government initially refused to recognise that the attacks were against foreigners. The problem was compounded when South African political leaders explained the xenophobic attacks as criminal acts when it was clear that they were targeted at non-South Africans.
It finally did respond, but only after the joint criticism of several African ambassadors in Pretoria and unprecedented protest action in several African countries.
Several interviewees mentioned that there have also been large-scale attacks on foreigners in 2008.
The views expressed were that attacks against foreigners proved that South Africans didn’t view themselves as part of the continent. And, as one of the interviewees commented, the government had not educated South Africans to understand how much the continent had contributed and sacrificed to end apartheid:
They (the South Africans) are not really African – they are their own Africa.
Double speak
A deeper problem articulated by those we talked to is of a growing lack of trust in South Africa’s bona fides. The country claims to represent the continent in BRICS and the G20. But there’s a sense that very little benefit accrues to the rest of the continent.
The dominant view is that South Africa does not use these platforms to create or promote opportunities for wider African involvement. Rather, its own economic interests always enjoy priority. This, despite South Africa’s rhetoric of ubuntu (human kindness) and the African Agenda.
According to some of those we interviewed the trend of promoting its own interests has become particularly obvious during the era of President Jacob Zuma.
Related to this was the perception that South Africa behaved in a contradictory way when it came to the African Union (AU) and the UN Security Council. Several interviewees pointed out that in 2011 South Africa was against intervention in Libya and supported an African solution to the crisis. Yet in the Security Council it voted for Resolution 1973 which authorised NATO intervention. This led to Muammar Gaddafi being toppled and the subsequent collapse of the Libyan state which unleashed an era of unrest and instability in the Sahel.
As one interviewee put it:
South Africa has two platforms for projecting power. One is the AU and one is the UN and at times these roles are contradictory.
Paternalism
A third issue mentioned by all the interviewees was South Africa’s conduct within the AU, and the extent to which it projected a kind of “big brother, big bully” approach.
There is still strong resentment about the way South Africa ran its campaign to get Nkosazana Dlamini-Zuma elected as chairperson of the AU. One interviewee explained how South Africa regularly berated other countries, particularly smaller Francophone states, for their “colonial mentality”, implying that their support for then presiding chairperson Jean Ping for a second term was tied up with their servility to France.
Of course, from a South African perspective, most of these allegations could be denied and explained through “hard facts and figures”. During its second term as an elected member of the Security Council from 2011 to 2012, South Africa prioritised African security issues.
The country has invested in promoting peace and stability in war-torn countries such as Burundi, South Sudan and the Democratic Republic of the Congo. It’s considered by some observers to contribute more than the UN-required 0.7 per cent of GDP annually to development aid on the continent.
But that’s not the point. In the diplomatic world perceptions matter as much as facts in the formulation of policy responses and the constraints on success.
The failure of policymakers to try and understand the perceptions of those at the receiving end of their policies can come at a cost. It can also frustrate well-intended policies and even lead to deep resentment and tension between countries.
It may do South Africans, whether ordinary citizens or foreign policy officials, well to ask themselves how others see them – and why. And the country’s policymakers would benefit from trying to understand how their actions are perceived by others.
South African Deputy President Cyril Ramaphosa’s apology for Marikana has ignited controversy. EWN/Dr Jack
South Africa’s Deputy President, Cyril Ramaphosa, has “apologised” for his actions in the run up the Marikana massacre when police killed 34 striking mineworkers on August 16, 2012. His supposed apology during a speech at Rhodes University on May 7, 2017 – reportedly followed advice by struggle stalwart Winnie Madikizela-Mandela that he make amends and visit Marikana.
But, was it a proper apology?
Ramaphosa only referred to “language” he used in emails to fellow Lonmin directors, which he said “may have been unfortunate” and “not appropriate”.
But, to the best of my knowledge, no one has ever requested an apology for “language”. The concern is about his actions and their relationship to the killings.
Ramaphosa added that it was never his intention to have 34 mineworkers killed, but this again skirts the issue. Nobody suggested he was responsible for the 34 deaths, which followed after police opened fire on protesting miners and employees of Lonmin Mine in Marikana.
The argument is that his intervention made bloodshed more likely and that he could probably have stopped the killings had he acted differently. His critics (me included) are very clear that his failure to insist on negotiations led to the deaths.
Some fact checking is in order.
What the Marikana Commission found
The evidence in the Marikana Commission of Inquiry showed that Ramaphosa interceded at two specific moments. We need to separate these if his culpability is to be accurately assessed. Of course he may have been involved on other occasions, but we don’t know about these.
The first intervention was on August 12 2012, when he contacted then minister of police, Nathi Mthethwa, successfully lobbying him to send more police officers to Marikana.
In his recent weekend apology, Ramaphosa claimed:
Ten workers had been killed and my role was to stop further deaths.
In fact, at the time he spoke with Mthethwa, only two workers, both security guards, had been killed. The commission felt that, in contacting the police minister, Ramaphosa had acted responsibly, and this is not an unreasonable conclusion.
The second intervention was on August 15, the day before the massacre. We know about this through the flurry of emails that Ramaphosa authored and received. These don’t contain any evidence that he was acting benevolently.
By now there were about 800 police on the ground at Marikana, so no need to lobby for more. The focus of his new role was to persuade Susan Shabangu, then minister of mineral resources, that the Marikana miners were not engaging in a labour dispute but “a dastardly criminal act”.
The significance of this is that if the conflict could be redefined, decisive police action could be justified. Ramaphosa was opposed to negotiations, which could have prevented further loss of blood. Instead, he supported the position of Lonmin and the South African Police Service, which would inevitably lead to deaths. Nobody planned for exactly 34 deaths, but deaths were anticipated, and Ramaphosa’s supposed apology is silent on this.
The case against Ramaphosa
We don’t know the full extent of Ramaphosa’s knowledge about the operation planned for August 16. But, given his position as a director of Lonmin and willingness to act in its interests, it’s unlikely he was unaware of “the plan” (which included use of lethal force).
Certainly two of Lonmin’s vice presidents, Barnard Mokwena and Mark Munroe, were in the loop before the operation got underway. Thus, in my view there’s a prima facie case for charging them with being accessories to murder.
Would they really have kept Ramaphosa in the dark? One reason we don’t know the answer is that Lonmin’s role was inadequately investigated by the commission. The company’s representatives, including Ramaphosa, also only spent short periods at the commission’s witness desk.
South African Deputy President Cyril Ramaphosa at the Farlam Commission, in 2014. Reuters/Siphiwe Sibeko
It’s possible that because he was pushing for a murder charge against Ramaphosa, Mpofu lacked the time to pursue this lesser crime. In one of his emails, Ramaphosa tells his Lonmin colleagues:
[d]iscussion with Minister Susan Shabangu –- I called her and told her that her silence and inaction about what is happening at Lonmin was bad for her and the government.
Given that, as acknowledged by the commission, Ramaphosa was a senior member of the governing ANC with enough weight to place pressure on the minister of police, the final words in the statement could be considered a threat. Whether or not Shabangu was influenced by Ramaphosa is not critical in terms of the law -– making the threat (just like offering a bribe) is illegal.
Elsewhere, Ramaphosa seeks to convey that he was a friend of the workers. But, as chairperson of Lonmin’s transformation committee he was responsible for the company’s failure to abide by its commitment to build 5,500 houses for employees, instead completing only three dwellings. Moreover, he benefited materially from the low wages that were the main grievance raised by the striking workers
Ramaphosa had been general secretary of the National Union of Mineworkers and, later, as secretary general of the African National Congress he had led his party in talks that brought an end to apartheid. He was a skilled negotiator perfectly positioned to bring a peaceful settlement to the dispute, but instead he aligned himself with Lonmin and the police in their attempt to crush the strike using lethal force.
What needs to happen
For an apology from Ramaphosa to have credibility, there should be full disclosure of everything he knows. This has not yet happened.
Furthermore, the following should happen:
Full compensation to be paid, without further delay, to miners who were injured or wrongfully arrested and to the families of workers who were killed;
Adequate funding for investigations by the Independent Police Investigative Directorate into which police officers should be prosecuted for the Marikana massacre deaths;
Charging the police whose case files are now with the National Prosecuting Authority; and
The immediate dismissal of Police Commissioner General Riah Phiyega, who was suspended after the commission found she lied during her testimony.
The Claassen Inquiry, appointed by President Jacob Zuma, recommended her sacking over six months ago, yet she continues to collect a large salary more than four years after a massacre in which she played a pivotal part.
Ramaphosa’s “apology” makes one wonder whether he’s in denial or just a desperate politician with presidential ambitions. But his expressed regret was dishonest and disingenuous, and will not remove the stain that Marikana placed on his reputation.
Peter Alexander is the author of various publications on Marikana, most recently an assessment of the Farlam Commission of Inquiry published in the Journal of Southern African Studies.
Many would like to consign the polarising debate about “white monopoly capitalism” (WMC) in South Africa to the margins. They argue that its proponents are nothing more than Marxist ideologues or mischievous political manipulators
But, even if we query the integrity of the term WMC, its introduction into South Africa’s contemporary discourse is indisputably good for the country’s politics.
Above all, it’s an urgent reminder that the inequalities of wealth, income and opportunity in this country are not only extreme but still highly racialised. It forces people to ask why, even under a black government, a white minority continues to dominate the most productive parts of the economy.
The extremes of racialised inequality in the country are not just an affront to social justice but are also politically explosive. Granted, the implementation of employment equity and Black Economic Empowerment (BEE) has somewhat ameliorated racialised patterns of wealth and ownership. But, no one should be surprised when black people at the bottom of the heap get angry. Neither should people be surprised that there are politicians who, for reasons good and ill, are willing to exploit that anger and mobilise around it.
For the last twenty years, mainstream politics has talked a lot about addressing the extremity of inequality, but has done little about it. The governing African National Congress (ANC) has indulged in much egalitarian rhetoric while the opposition Democratic Alliance (DA) has targeted “equality of opportunity”.
In practice, both have embraced the mantra that a rising tide in the economy will lift all boats. But, today the tide has long been out. The boats are stuck in the mud. And it’s taken the rise of the radical Economic Freedom Fighters (EFF) to shake the major parties out of their complacency by espousing a revolutionary assault upon WMC.
That’s a major plus for the country’s politics. A serious conversation about the continued racialisation of wealth, inequality and poverty is needed. Yet the problem for the EFF, and those who simplistically target WMC, is the dismal nature of their sociology.
Monopoly capital under apartheid
White monopoly capital was at its most cohesive and concentrated during the late phases of apartheid. In 1981, over 70% of the total assets of the top 138 companies were controlled by state corporations and eight privately owned conglomerate. These spanned mining, manufacturing, construction, transport, agriculture and finance.
Further concentration followed the mounting political crisis of the 1980s. Foreign companies disinvested and sold their assets locally. Unable to invest abroad during late apartheid, the conglomerates invested their excess capital by buying local assets that were often distant from their core business.
By 1990, just three conglomerates – Anglo-American, Sanlam and Old Mutual – controlled a whopping 75% of the total capitalisation of the Johannesburg Stock Exchange (JSE). Given the overwhelmingly domestic and white nature of the ownership of these companies, as well as the astoundingly high level of concentration of capital in a handful of conglomerates, we could fairly – even usefully – refer to “WMC”. But things have changed considerably since then.
Changing corporate landscape
The democratic era that started with the ascension to power of the ANC in 1994 has seen major changes in a corporate structure which had historically revolved around a minerals-energy-complex dominated by the major conglomerates.
The opening of the economy to the global market post-apartheid, led to major processes of “unbundling”, as conglomerates shed their “non-core” assets in search of “shareholder value”. By 2016, Anglo-American’s share of market capitalisation on the JSE had shrunk to as low as 15%.
In addition, foreign money poured in, some to purchase unbundled assets, some to invest in an expanding financial sector. Yet some simply sought to make short term returns from high interest rates. Correspondingly, the role of the banks and private investment institutions increased. By 2010, financial institutions (14%) – along with mining houses (37%) accounted for over half of market capitalisation of the JSE by 2010. The economy was now dominated by a minerals-energy-finance-complex.
Alongside the growing financialisation of the economy, there has been a shift in racial patterns of ownership. At the end of apartheid, companies listed on the JSE were almost wholly owned by white South African investors. But, by 2016, (if we accept the calculations done by Alternative Prosperity) white South African ownership was down to just 22%.
Julius Malema leads a protest by the Economic Freedom Fighters to the Johannesburg Stock Exchange. Reuters/Siphiwe Sibeko
Meanwhile, foreign ownership had leapt to 39%, black direct ownership (mainly through BEE schemes) to 10% and black indirect ownership (largely through pension funds) to 13%, with another 16% uncategorised.
Such statistics are always a matter of controversy. President Jacob Zuma recently insisted that black ownership of the JSE was as low as 3%. Yet the trend towards both greater foreign ownership and increased black ownership is indisputable. Three major issues follow.
Evolving ownership patterns
Large scale capital in South Africa is less monopolised and more diversified in its ownership than it was under apartheid (even if major corporates continue to dominate). It follows that the country needs to grasp how the nature of capitalism is changing. For a start, the growth in black pension funds reflects the strong upward movement of black people into the higher ranks of the public service since 1994.
Even if we continue to refer to “monopoly capitalism” in these circumstances, it makes far less sense to refer to it, uncritically, as “white”. Yes, it’s probable that the major stake of foreign investment is ultimately owned (largely indirectly via institutional investments) by foreigners who are white. But, does this suggest that we would prefer that they were yellow or brown? Surely that takes us on to very shaky territory? Should we categorise the Gupta empire – the politically-connected family at the centre of state captures – as “brown monopoly capitalism?”
Critics such as Prof Chris Malikane, the economic adviser to Finance Minister Malusi Gigaba, have objected that the growth of black investment on the JSE is not significant. That’s because, they argue, black pension funds are largely controlled by white asset managers. And black direct investments via BEE schemes are largely funded through debt owed to white capital. These are certainly very real issues. But, is the main issue here the racial patterns of ownership and control – or the growing power of financial institutions and their lack of accountability?
All this means that it’s simply too crude, too simplistic and too out of date to depict the economy in broad brush terms as under the domination of white monopoly capital. The reality is more complex. It follows that suggestions that the decolonisation of the economy demands the nationalisation of WMC is profoundly bad economics.
The troubled experiences of South Africa’s state-owned enterprises such as South African Airways, Eskom and PetroSA do nothing to inspire confidence. What the economy might gain in terms of direct state ownership would be confounded by flight of capital and know-how. Class rule by capitalists would be replaced by class rule by state managers who would be no more accountable to ordinary citizens than their predecessors.
Innovative solutions needed
South Africa needs to devise far more inventive solutions than nationalisation to tackle the brutally unequal nature of its economy. Citizens need to pose profound questions about how to make international capital more accountable. They must ask questions about how to make the country’s corporate elite more accountable and how state capital can work productively with private capital while remaining responsive to local communities. And, yes, about how present patterns of corporate ownership can be not only de-racialised but democratised.
Yes, it’s a nice idea to think of overthrowing “white monopoly capital”, but we need to think very carefully of what we might replace it with!
