Returning To Nelson Mandela’s Dream By Robert Looney

While South Africa has made remarkable progress in dismantling the political and social remnants of apartheid, many of that era’s economic institutions, practices and mindsets remain largely intact

There was a time when news from South Africa regularly painted a refreshing picture of hope for the future. The 1994 fall of the racially segregated system of apartheid, combined with the establishment of democratic institutions anchored in one of the most progressive constitutions worldwide, gave hope that it was possible to move from a system of exclusion and inequality to one of inclusive participation and equality. And for a while, the country’s mineral-based economy provided respectable economic growth that – even if not spectacular by East Asian Tiger standards of 8-10 per cent per year — was still able to support rising standards of living for broad segments of the population.

Now the bloom is off.

The past year has seen a troubling rise in fighting and strike-related activities reminiscent of the violent clashes between miners and police during the apartheid era. In August 2012, labour unrest at the Marikana platinum mine left 34 protesters dead at the hands of police forces. For some, this incident represented a telling erosion of the 1994 ‘grand bargain’ between the (predominantly white) Nationalist party and the (predominantly black) liberation movements. For others, the subsequent labour strife has brought to light serious weaknesses in the economy that the African National Congress-led government seems powerless to confront.

Since then, labour unrest has spread from the platinum mines to gold, iron-ore, chrome, and coal producers. Farm workers and truck drivers have joined the protests. Mining strikes alone caused more than $1 billion in lost output, and by the first quarter of 2013 the economy had slowed to a 0.9 per cent rate of growth (sharply down from the 2.6-3.1 per cent rates achieved during 2010-12). With the country’s currency, the rand, falling to its lowest value since the early days of the global financial crisis, the economy appears to be spiralling downward and out of control. By mid-May, South Africa’s president, finance minister, and top central banker had each acknowledged the nation’s darkening economic prospects and urged workers and employers to end the vicious circle of unauthorised strikes and excessive pay-raise demands.