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The rise and fall of South African industry: What has South Africa’s two nationalisms achieved? By Moeletsi Mbeki July 2009 Afrikaner nationalism: It’s main agenda was to ensure Afrikaner people caught up with English speaking white South Africans and to reduce the influence over South Africa of British Imperialism. • Educate Afrikaner population • Raise poor Whites from poverty to skilled worker status • Build transport and communication infrastructure to bring agricultural closer to its main markets in the cities • Promote Afrikaner entrepreneurs and state industrial enterprises so as to provide jobs for Afrikaner professionals and tackle sanctions • Attract other foreign investors besides the British especially into manufacturing sector • Compensate to high White labour costs by driving down Black labour costs. Black nationalism: The main agenda of Black nationalism was to achieve political equality between the races by restoring democracy that had been initiated by the British at the Cape Colony in the mid 19th century and to equalise the standard of living between Blacks and Whites while maintaining intact the inherited capitalist economic system. • Negotiate a democratic system that was acceptable to Whites in general and to owners and controllers of South Africa’ economic commanding heights. • Agree to sunset clause for the White civil service. • Follow neo-liberal economic policies to stabilise public finances and national currency. • Accept Black Economic Empowerment and Affirmative Action proposed by big business. • Drive income re-distribution to Black middle class and social welfare to Black masses. Economic Outcomes: 1909 to 1994 1. Afrikaner nationalism drove policies that led to the industrialisation of South Africa in order to provide employment for Afrikaners. 2. Over time Afrikaner nationalism constructed society which was living on borrowed time because of inherent instability became a race against time to reduce the Afrikaner people’s dependence on the state. Economic Outcomes: 1994 to 2009 1. Black nationalism’s main economic achievement became wealth re-distribution in order to promote Black household consumption. 2. The promotion of increased household consumption resulted in greater imports of consumer goods leading to the partial de-industrialisation of South Africa. Consumer spending as percentage of GDP Bric comparison % of GDP 75 SOUTH AFRICA 70 65 60 BRAZIL 55 INDIA 50 RUSSIA 45 CHINA 40 35 30 1990 1991 Source: OECD 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Manufacturing as percentage of GDP: 1980 to 2006 35 30 25 20 ZIM RSA 15 10 5 0 1980 South Africa - pink Zimbabwe - blue 1985 1990 2000 2006 Employment trends in South Africa and elsewhere, 1980-2006 150 Middle income countries 140 Ireland Netherlands 130 Netherlands South Africa 180 170 160 120 Ireland 150 140 110 European Union 130 120 100 110 South Africa 90 100 90 80 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 Source: World Development Indicators as reported in the WEFA data set 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1980 80 Source: Employment (1980=100) from International Labour Statistics (ILO) Consumer spending as percentage of GDP Developed Countries • . Compliments Financial Mail Production and Employment Trends in SA Footwear Industry Year Local Production Imports Employment 2006 20.35% 79.65% 10 100 2005 16.95% 83.05% 1995 47.91% 52.09% 1985 78% 22% Source: South African Footwear and Leather Industries Association 23 600 (1997) Breakdown of South Africa’s merchandise exports 100% per cent share 80% 60% 40% 20% 0% 1990 Minerals Source: 1991 Basic metals Quantec 1992 1993 1994 1995 1996 Basic chemicals & refinery products 1997 1998 1999 Pulp & paper 2000 2001 2002 Motor vehicles & parts 2003 2004 2005 Other goods exports China's exports to SA 8% 2% 4% 6% 40% 7% 9% 9% 15% Source: Emerging Market Focus (Pty) Ltd 2004 Machinery & car components Textiles Footwear Chemical products Agricultural produce Base metals or articles thereof Mineral products Building material Other manufactured products SA exports to China 6% 8% 3% Base metals & articles thereof (steel) Mineral products 5% 45% Chemical products Paper pulp 7% Basic raw materials Machinery, equipment, car & motor components Other 26% Source: Emerging Market Focus (Pty) Ltd 2004 Maths and science output of the SA schooling system What the ANC failed to do between 1994 and 2009 • Provide competent management to state owned enterprises such as SABC, SAA, Transnet and the Land Bank. • Address erratic service delivery to its primary Constituency in the black townships. • Create modern passenger and freight transport system. • Reorganise the commercial agricultural sector in order to restore food security and overcome the country’s dependence on food imports. What the ANC failed to do between 1994 and 2009 continued • Achieve effective management of the country’s borders to stop a flood into South Africa of illegal immigrants from neighbouring countries which led to the xenophobic riots. • Stop the de-industrialisation of the country in order to combat unemployment. • Review affirmative action programmes which are contributing to the country’s brain drain. • Address the HIV/AIDS pandemic which is leading to a sharp decline in the population’s life expectancy. What the ANC failed to do between 1994 and 2009 continued • Redesign the expensive education system that is unable to produce the skills required by employers. • Develop policies to overcome rampant crime as well as corruption. • Implement programmes that bring government closer to the people by implementing electoral reforms that increase the accountability of elected officials. • Manage the country’s urbanization process to eliminate formal settlements and bring work places closer to workers’ residential areas.