The causes of continuing poverty and persistent unemployment in South Africa are correctly diagnosed in diagnostics report, yet deliberately addressed by the group of smart men and women who wrote the National Development plan.
In this article I shall attempt to provide an analysis of the both the external and internal forces that keep South Africa poor and stagnant, specifically concentrating on the economy.
Mining and agriculture have historically been the two mainstays of the South African economy. South Africa is very mineral rich, with large deposits of gold, diamonds, uranium, platinum and coal amongst others. When the colonialists discovered gold and diamonds, they spearheaded industrial and capitalist economic development in South Africa. But the industrialisation was nothing but simply a tool in service of geographical spread of capitalism to South Africa.
The foreign direct investments (external force) that South Africa attracts gravitate towards production of exports in agriculture and mining to supply the manufacturing and agro-processing industries in the European Union, England and North America.
The surplus generated in agriculture and mining sectors of our economy leaves the borders of South Africa to the Western countries. It is not re-invested internally, where it could be used for financing industries that will produce light consumer goods and capital goods. This in turn diminishes a demand for mass consumption goods which would stimulate growth of the two mainstay industries. Thus, when economic growth declines in Europe and North America- South Africa is affected negatively.
The driving force for development in South Africa and all other Third World countries- is the need for monopoly capital to fight the declining rate of profit in the centre of capitalism( Europe and North America) by seeking profitable investments in the periphery of capitalism (Third world countries, including South Africa).
These comparatively greater profits are found in export-based agriculture and mining and occasionally in car manufacturing industry which in any case is owned by transnational monopolies, because the production costs for similar products are lower in South African than at the centre (Europe and North America) due to cheaper labour. Samir Amin, 1974 explains this phenomenon succinctly in the following passage:
This is therefore the framework for the essential theory of unequal exchange. The products exported by the periphery are important to the extent that-ceteris paribus, meaning equal productivity-the return to labour will be less than what it is at the centre. And it can be less to the extent that society will, by every means-economic and noneconomic, be made subject to this new function: provide cheap labour to the export sector.
The sad thing is that the low earnings of workers that are engaged in producing export commodities do not provide the purchasing power which could stimulate the growth of a mass consumption goods industry, let alone earn them a decent living.
However, at the same time the internal force (tenderpreneurs, petty-bourgeoisie and the political elite) strongly exert a demand for luxury goods. They perform an important function in this mode of development by ensuring the smooth flow of exports and by instituting measures which keep the wage rate at a low level.
Good examples of how this internal force maintains wages low are demonstrated by the following, the argument that is made by employer organisations and even the Democratic Alliance is that that the government should reduce or get rid-off minimum wage regulation, they claim those minimum wages that are set by government cannot be affordable to small medium enterprises. Recently the comprador bourgeoisie in the tripartite alliance has suggested that Cosatu should stop demanding high wages for the workers. The truth is that, such a measure (not setting minimum wage or setting it too low) will lead to a further increase in inequality and to impoverishment of the large majority of the working people.
We are also misled into believing that the army of the unemployed youth can be reduced if many young people enrol for artisan certificates in Further Education and Training (FET) colleges. It is already clear that artisans, who previously manufactured or repaired most of the articles needed by the marginalised poor people in our rural areas and townships, are driven out of business by the competition from imported goods or by locally established industries with a much greater capital investment than in the artisans' workshops.
Take for example the guys who use to repair cellphones down-town and the shoe maker, these guys are replaced by multiserv, pro-cell and the Nokia accredited GSM franchises. Instead of forming the nucleus for the growing manufacture of mass consumption goods, their skills cannot be utilised in the capital-intensive production methods, and they join the unemployed.
Who is betraying the poor and unemployed?
The attainment of political freedom in 1994 meant that the a fraction of political power was taken over by the country's emerging petty bourgeoisie, however state power remain a monopoly of the capitalists that dominate the finance, agriculture and mining sectors of our economy. We have all heard from the Marikana Commission of enquiry how Cyril Ramaphosa persuaded the police to deal with the striking mine-workers in Marikana.
The privileged class which Cyril Ramaphosa is part of is selfishly perpetuating and strengthening their relationship with the international bourgeoisie, even at the cost of killing their poor countrymen. This privileged class is thereby able to move into a position which allows it to enjoy a "European" pattern of consumption when the masses of our people are driven into acquiesces with the misery of their poverty.
In the economic sphere this minority (tenderpreneurs, petty-bourgeoisie and the political elite) now continues to carry out the transformation towards production for the market, the strengthening of the export sector, and the growth of luxury goods production. A recent example is the awarding of funds from National Empowerment Fund to Khanyi Dhlomo whose clothing store imports expensive clothes to sell locally-our tailors remain underutilised, and the failure of all BBBEE beneficiaries in the mining sector to invest in the downstream processing of our mineral resources.
There has been no significant shift of the economic structure away from a dependency relationship since colonisation, this is kept so by the political elite who seek imperialist rent and have no interest in confronting monopoly capital.
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