South Africas Consolidated Democracy Mandelas Cherished Ideal Business
South Africa’s Consolidated Democracy – Mandela’s “Cherished Ideal” Business as Force for Good: how industry can participate in creating conducive environment to enhance and create market access to emerging entrepreneurs … and drive the elimination of three challenges South Africa faces – unemployment, poverty and inequality Moeletsi Mbeki The Campus, Bryanston Wednesday 6 th November 2019
CENTRAL ROLE BUSINESS PLAYED IN CHANGING SOUTH AFRICA Business can drive social, political and economic change in South Africa. outstanding examples of business driving change were: The four most i. Founding of South Africa by the Dutch East Indian Company in the 17 th century – introduced slavery. ii. The Jameson Raid orchestrated by the British mining companies that culminated in the destruction of the Boer Republics by the British army, creation of the Union of South Africa and establishing the mining industry on a sound footing anchored on migrant labour. iii. Creation of the Urban Foundation in 1977 by Harry Oppenheimer and Anton Rupert and other interventions especially Gavin Reilly visit to Zambia in 1985 to meet with the ANC contributing eventually to the demise of apartheid and emergence of democracy. iv. Disinvestment by several Western companies – Pepsi Cola, Barclays Bank, Ford Motor Company etc to pressure for abolition of apartheid policies. 2
MAIN POLITICAL DYNAMIC IN SOUTH AFRICA TODAY v To understand the modern history of democracy in South Africa, it is important to understand that South African society is very different from the rest of sub-Saharan Africa. v South Africa is the only country in Africa that does not have a peasantry. A large peasantry leads to the emergence of a strong State in relation to a weakly organised Civil Society*. The best example of this are the large States in Asia, especially China, which has had a very strong State relative to its citizens for many centuries. v South Africa instead has a large productive and independent commercial private sector, although it also has a significant unemployed under class. v The main the political dynamic of South Africa today, is that the State is trying to increase its power relative to Civil Society. In other words it is Civil Society that has a vested interest in democracy in South Africa while the State is more interested in reducing the autonomy of Civil Society and instead in increasing the power of the State in relation to Civil Society. v Civil Society is that part of the population that earns its livelihood outside of government. This includes private business, religious and social organisations, academia, mass media etc. 3
MAIN POLITICAL DYNAMIC IN SOUTH AFRICA TODAY (continued) v By the 1970 s South Africa had a weakened State and strong Civil Society with private business included. This was why the National Party regime had to resort to the use of overwhelming force to try and maintain social peace and some acceptable levels of production. v This however proved unsustainable in the medium term as it paralysed investment and attracted international economic sanctions. The white regime which had lasted since the Peace of Vereeniging in 1902 therefore had to go. v The new post 1994 democratic regime initially kept the social peace by a “live and let live” approach towards Civil Society. This approach however made it impossible for the new Black political elite to make money and therefore acquire assets and thus become a real propertied middle class instead of mere employees of the State. v Result: South Africa during the past few years or so has entered a new struggle between the State and Civil Society which includes business. The State is trying to reduce the relative autonomy of Civil Society and thus free the new political elite to use State revenues to accumulate capital as private individuals. 4
THE ROAD AHEAD FOR DEMOCRACY IN SOUTH AFRICA – NEW CHALLENGES FOR BUSINESS SOCIAL STRUCTURE OF SOUTH AFRICA TODAY Social Group Main Strengths Business Elite Own productive assets and control skilled management Do not control government; dependence on state owned power and transport companies Asset seizures, onerous taxation, exposed to corruption by political elite; mismanagement of economy Control state and manage government revenues Dependence on vote of underclass; do not own productive assets; doubtful management skills Change of allegiance of underclass, political activism of economic elite, opposition from blue collar workers. Capital flight Own labour power and control independent trade unions Threat from large overhang of unemployed Mismanagement of economy, corruption; loss of influence with government, political intimidation by ruling party agents Large numbers and voting power Lack artisan skills; dependence on government welfare Economic meltdown and political manipulation Command many skills and extensive influence through religion and good works Fragmented and lack of cohesion; financial dependence on donors Donor unpredictability; intimidation by government agents; over - cautious banks Core Objectives Maximise profits and retain ownership of assets Political Elite Core Objectives Maximise consumption for black middle class and constituency and to retain monopoly of political power Blue Collar Workers Formal Sector Core Objectives Expand trade union membership and raise remuneration Underclass/Unemployed Informal Sector Core Objectives Survive and influence state Independent Professionals/Civil Society and New Entrepreneurs Core Objectives Freedom of association and speech and reduce state interference Source: Moeletsi Mbeki Key Weakness Vulnerability 5
SOCIAL STRUCTURE OF SOUTH AFRICA - 2014 Source: Stats. SA 6
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- Slides: 7