In his new book Freedom Next Time, John Pilger says the African National Congress sold its soul to corporate bosses over glasses of single malt whisky.
“It was as if the ANC aspired to be whiter than white in its relations with the rulers of the world,” Pilger writes.
“Low tariffs would entice foreign imports; low inflation would preside over low wages and high unemployment … and the rand would be subjected to the vagaries of the market.”
In a book that also has essays on the Israeli-Palestinian conflict and the war in Afghanistan, Pilger questions the morality of paying off South Africa’s apartheid-era debt and the wisdom of running budget deficits lower than those of many developed nations.
Even pro-business economists have questioned such fiscal austerity in the face of pressing social needs.
But the government says that wealth cannot be redistributed if it is not generated and that macro-economic stability is needed for growth, which in turn will create jobs and provide a tax base to expand social services.
That budget deficits have also been low is partly a result of unexpectedly large tax revenues.
The ANC also maintains that it has increased spending on the poor since it took power in 1994 and that past fiscal restraint means it can now loosen the purse strings.
Electricity and water services are
Joel Netshitenzhe, the head of the policy unit in the presidency, in a rebuttal to Pilger, said “expenditure on cash transfers in the forms of social grants increased from 10 billion rand in 1994 to 55 billion rand in 2005 and the number of beneficiaries grew from 2.6 million to 10.5 million”.
“The expanded public works programme is on course to reach its target of one million job opportunities in five years,” he wrote in the local Sunday Independent newspaper.
Pilger argues that the reality of life in black townships is that poverty has increased and income disparities have widened since the end of white rule in 1994.
He says social grants are too small to make much difference and many poor rural children do not qualify because they have no birth certificates.
He notes that while the government has been rolling out piped water and electricity to communities that previously lacked them, it has also been cutting off these services when poor households cannot pay for them.
Meanwhile a wealthy black elite has emerged through a process known as Black Economic Empowerment (BEE), an affirmative action programme which the government says is aimed at redressing the imbalances of apartheid.
“It was as if the ANC aspired to be whiter than white in its relations with the rulers of the world”
“What this means is the inclusion of a small group of blacks in the country’s white corporate masonry … This co-option has allowed white and foreign capital to fulfil its legal obligations under new corporate charters and, more important, to gain access to the ANC establishment,” Pilger writes.
Other analysts say the rise of a new black middle class is helping to drive economic growth.
But the middle class is small and the productive side of the economy lags the demand side.
Several independent studies back up Pilger’s assertions.
Income disparities among black South Africans are on the rise as a middle class emerges while the poor get left behind, according to a report by the South African Institute of Race Relations, a think-tank, published in April.
The ANC says it has increased
It said that levels of inequality using the Gini coefficient – a measure of income distribution – had increased for all races except whites since 1996.
Under it, 0 is perfect income equality while 1 refers to total inequality.
“The African population … saw levels of inequality rise by 21 per cent to 0.64,” the institute said.
The government points to other studies including one that says the number of people living in poverty fell to 15.4 million in 2004 from 18.5 million in 2000.
Several analysts say the economy shed hundreds of thousands of jobs in the first decade of democracy as it liberalised – though some studies suggest that jobs are now being created.
Economic growth was close to five per cent last year and the government says it is aiming for six per cent, but it is not clear what growth rate is needed for sustainable job creation.
Pilger also faults the government for the slow pace of land redistribution.
“Land could have been purchased and reclaimed for small-scale farming by the dispossessed, run in the co-operative spirit of African agriculture,” he writes.
Given the often poor results of peasant farming on a continent with frequent food shortages, this may not appeal – though Africa’s food woes have been exacerbated by a lack of government support and credit access for small farmers.
ANC policies have already been criticised by its union and leftist alliance partners and social protest groups.
Its reply is that the electorate has repeatedly endorsed its policies by returning it to power.