Moeletsi Mbeki: Can new leaders change our fortunes?

South Africa’s mineral wealth makes it one of the most richly endowed countries in the world, yet it has proportionately the largest impoverished population in Africa.

Unemployment among 15- to 24-year-olds is 52%, compared with only 11% in the rest of sub-Saharan Africa. The rate of unemployment among the country’s economically active population is 26.7%. Add another 10% to this figure to include discouraged workers, and the real unemployment rate sits at about 37% of the working population.

Our massive levels of unemployment and poverty translate into high levels of lack of security for our general population. Our murder rate is one of the highest for a country that is not at war – 34 murders per 100 000 people, which is nearly six times the global average. A total of 19 016 people were murdered between April 2016 and March last year, while England and Wales recorded 723 homicides over the same period.

One of the results of the insecurity in the population has been the emergence of gated communities among the middle class. While these gated communities do, to some extent, insulate the middle class, they actually accentuate the problems of inequality in society by contributing to violent crimes.

High levels of unemployment, poverty and inequality are major drivers of insecurity and, to a significant extent, social instability. The country experiences a large number of public disturbances that are associated with unsatisfactory living conditions among the urban poor. These almost constant service delivery protests are about unreliable water supply, badly maintained roads, insufficient housing, the high cost of electricity, and the high levels of crime and unemployment.

To date, protests have manifested themselves as numerous localised protests, some of which turn violent. They have not, however, started to manifest themselves on a national scale, but it may just be a matter of time until they do. We have seen in north Africa how these kinds of local protests can transform into major national upheavals, as happened with the Arab Spring revolutionary wave of violent and nonviolent demonstrations, protests, riots, coups, foreign interventions and civil wars in north Africa and the Middle East.

South Africa already has many of the ingredients that triggered the Arab Spring in Tunisia, especially the high rate of unemployment among youngsters.

So why is the South African society so stressed?

The country has five social classes: the business elite; the political elite; the blue-collar workers; the underclass and unemployed; and the independent professionals operating in the for-profit and nonprofit sectors.

A most striking aspect of South Africa’s society is the conflict between the business elite, which controls the productive assets of the economy, and the political elite, which controls the state. It is this conflict that is mostly responsible for low investment in the economy and, therefore, for the country’s high levels of unemployment and poverty.

THE RISE OF THE BLACK MIDDLE CLASS

The most important achievement of the ANC government to date is it has transformed society from a racially divided society into a class divided society. This is a huge achievement, though, on the face of it, it does not sound like it. We can all do something to try to change our social class position, but we can’t change our race.

The ANC government has introduced social mobility irrespective of one’s race, which is very important for political stability. Class mobility has led to the emergence of a large black middle class over a relatively short period of time.

The rapid rise of the black middle class comes at a cost. The black middle class demands the same standard of living as the pre-existing white middle class. This requires the transfer of resources through the tax system from the production sector to consumption. The consequence of this transfer is low investment and low economic growth. It also entails the continued low labour absorption rate of the economy and, therefore, the continued high level of unemployment. This explains why the country suffers from the social instability that is driven by service delivery protests.

As a democratic country with a well-managed electoral system, South Africa has, however, a built-in stabilising mechanism. Hopefully, this will continue to be the case as electoral fraud has proven to be one of the most politically destabilising factors in Africa today.

PROSPECTS FOR PROSPERITY

One of the main reasons South Africa has the world’s highest unemployment rate is a legacy of how the British established the mining industry in the 19th century. They imposed poll taxes on all men in the peasant small-scale farming sector, which compelled the men to go to work in the diamond and gold mines so that they could pay these taxes.

This created a perpetual migrant labour system, where women, children and old people stayed in their rural villages while the men entered into an oscillating migration cycle. One of the consequences was that male labour was absent in the peasant agriculture sector in rural areas, thus creating a massive unemployed rural population.

For most of the 20th century prior to 1994, economic and political power was in the hands of domestic and foreign white capitalists. They were the ones who built up South Africa into what you see today, with its huge railway and highway networks, its airports and harbours, its modern industries and universities, and its eight large metropolitan cities.

In 1994, white capitalists lost political power, which was transferred to the black middle class and their allies in the struggle against apartheid – organised labour. As the black middle class and organised labour do not own productive assets such as land, banks and industries, they cannot use political power to build up businesses and make them more profitable, which was what white capitalists had to do. The middle class, therefore, used political power not to invest, but to drive up their private household consumption, and that of their allies and voters.

Prior to 1994, the country was a racial oligarchy and an emerging industrial society. After 1994, it became a democratic consumption-driven but deindustrialising society. For example, in 1981, manufacturing was 23.7% of gross domestic product, but, by 2015, manufacturing had shrunk to 13.2% of gross domestic product.

The prosperity of South Africans will ultimately depend on the social coalition that controls political power. As we have seen, the present coalition of the black middle class and sections of organised labour has led to the growth of consumption by members of this coalition. This has been to the detriment of the country’s industrial base, and is gradually leading to deindustrialisation and growing unemployment.

A redistribution of political power from one set of players to another invariably carries with it many risks. It remains to be seen whether a transition from a coalition of one set of partners to another can be achieved peacefully and, at the same time, lead to greater prosperity for the largest number of citizens.

Mbeki is deputy chairperson of the SA Institute of International Affairs. This is part two of two from an extract of a speech he delivered at the Nordic
Africa Institute in Sweden