Analysis

What happened to transformation?

Colin Bundy

The ruling party failed to reshape the economy and govern effectively in our developmental state.

ANC supporters wait for Nelson Mandela outside Durban (above). But life has remained essentially unchanged for the country’s poor, writes Colin Bundy in his book (left). (Alexander Joe)

Once upon a time – 20 years ago, to be precise – South Africa was on the brink of transformation. The ANC said so, over and over again. President Nelson Mandela said so: "Our country is going through a profound transformation at all levels of government and society … This transformation will permeate every level of government, every department and every public institution." The Reconstruction and Development Programme said the RDP white paper provided "a vision for the fundamental transformation of South Africa".

The ANC contested the 1994 election on the ultimate promise of transformation: "A better life for all." The pledge of change hung like ripe fruit: government, economy and society would be transformed. A tireless agenda would transform housing, schooling, health and welfare; a transformative wand would be waved over police and army and civil service; a nation would change its beliefs and its behaviour, decked in rainbow hues.

The call for transformation promised too much – and too little. It promised too much, because many of those uttering the call knew perfectly well that the negotiated settlement imposed formidable limits on what the ANC could actually change, let alone change fundamentally or radically. They knew that the transition and the 1994 election did not herald fundamental shifts in the distribution of social or economic power; that the state had not been dismantled, but taken over more or less intact, under new management; and that as far as the economy went (as a key insider put it) "this was not a promising moment for the new government to attempt to implement new policies or programmes".

Invoking transformation also promised too little, because it did not specify exactly what would be changed, how, or when. Wielding transformation as a slogan drained it of meaning as a programme. As "transformation" became the indispensable concept of political discourse, it acquired new meanings. It became unthreatening and conventional, shorn of associations with struggle and resistance.

The limits to transformation –the extent to which expectations of more fundamental change have not been met – are complex and important. In part, the expectations of transformation in 1994 were unrealistic. In part, change was constrained by policy priorities and choices made by the ANC government.

Some of the changes that have taken place are hard to quantify but nonetheless real. These are in the realm of consciousness; they are to do with "dignity and agency": even within stunted social and economic transformation, millions of people have a new sense of self-worth and capacity. These are the subjective corollary to formal or constitutional inclusion.

The global context has shaped the ANC's capacity as government in several ways over the 20 years since it took power. First, the concessions made by the ANC during negotiations – in favour of capitalist continuity, away from redistribution – reflected an international balance of forces tilted strongly against left-wing elements in the developing world. Second, having committed in advance to balanced budgets, fiscal prudence and liberalising the economy, the ANC once in office could operate only within what Antonio Gramsci called "the limits of the possible".

Having relaxed capital controls, the ANC could not prevent capital flight as the largest corporations globalised their operations, listed on European stock exchanges and transferred vast amounts of wealth out of the country. Capital flowed out of the economy far faster than foreign investment trickled in. Having liberalised tariffs, the ANC had to watch the domestic textile industry being hammered by cheap imports as hundreds of thousands of jobs were shed in the manufacturing industries.

Third, many aspects of the South African economy simply mirrored those taking place in capitalist economies across the world: increased inequality, an accelerated casualisation of labour and rising unemployment.

In the boom years, domestic economies depend upon property and commodity bubbles, private indebtedness and the consumption of luxury items. South Africa since 1994 has replicated every one of these features. And South Africans who have benefited by these developments have tended (like their international counterparts) increasingly to regard them as normal, as "the way things are". And if this is the way things are, what benefit is there in resisting them or seeking an alternative? To lapse so easily into the circularity of "market forces common sense" is not only lazy, but it also closes off other ways of thinking about South Africa's challenges and solutions.

Fourth, this common sense – the ideological and intellectual context of the age – means that there is a stock of ready-made solutions, tried-and-tested options, for almost every area of policy. South African policy-makers, like their counterparts ­elsewhere, drew upon an imported conceptual toolkit. Community policing and crime prevention; outcomes-based education; managerialist techniques and precepts in universities; new public management; public–private partnerships; the doctrines of "cost recovery" and "user pays" in the delivery of public services; and calls for greater "flexibility" in the labour market – these are only a few examples of "solutions" engineered in the advanced capitalist economies.

The ANC has wrestled for years with how to define itself vis-à-vis the capitalist economic order in which it holds office. Since about 2004 it has sought to differentiate its approach from that of a neoliberal capitalist state by announcing that it would become a developmental state – more interventionist, more autonomous from capital.

Distancing himself from the earlier "fundamentalist" phase of Gear (Growth, Employment and Redistribution), Thabo Mbeki in his second term nudged policy towards what Adam Habib neatly captures as "neoliberalism with a human face". Jacob Zuma's administration has extended policy adjustments begun under Mbeki: attempts to revive industry, the expansion of the social welfare system, a public works programme funded in part by allowing budget deficits to rise. Habib suggests that it is "groping towards social democracy".

In 2009 the ANC election manifesto promised that "the developmental state will play a central and strategic role in the economy. We will ensure a more effective government". But the record of its second decade in office suggests that the ANC fails as a developmental state on both these counts – reshaping the economy and running an effective government.

Zuma's government remains impaled on the same contradiction that constrained Mbeki's: the commitment to macroeconomic stability remains the trump card. Treasury overrides spending departments; and (as in the National Development Plan) the ANC's current version of a "better life for all" rests ultimately on trickle-down economics, on growth before redistribution.

The ANC in government has not struck a new deal with big business, "coaxing or coercing private capital to invest" in domestic growth, but has instead aided capital flight and left the giant conglomerates free of responsibility for domestic accumulation.

Successful developmental states (including the original "East Asian Tigers" and contemporary "democratic developmental states") had the capacity to design, implement and administer their policies: they relied on well-functioning state departments staffed by meritocratic civil services.

"A development state requires an intellectual, cultural and philosophical shift that South Africa has not yet made," judges Professor Roger Southall. "In such a state, the state bureaucracy is composed of the nation's brightest and best, following administrative careers which are not subject to the whims of political fortune."

The South African departments of state and their civil servants, in many instances, fail this test. There are any number of accounts that suggest this failure is almost entirely to do with rushed and top-heavy affirmative action: that "representivity" has defeated efficiency. Such an explanation is intellectually lazy, and often racist in tone and assumptions.

Any considered account of the poor performance of the public service, at all levels of government, would factor in other causes. First, the post-apartheid bureaucracy had a far wider remit than its apartheid predecessor, which "existed primarily to provide services to its white constituency". The post-apartheid state in effect "increased its target group from four to 44-million. This in turn requires a far more capacitated public service. The public sector is struggling to adapt to this gargantuan challenge."

This challenge was accentuated, especially between 1996 and 2003, when the ANC's concern to control public spending meant failing to fill vacant posts in many departments. Further, Ivor Chipkin has argued convincingly that the rise of New Public Management in departments of state has compounded the skills deficit by a new emphasis on managerialism rather than administration, raising the bar of what is required from senior civil servants at precisely the same time as the drive to repopulate their ranks with more black members.

State capacity has been seriously eroded by the ANC's inability or unwillingness to rein in corruption and graft by its own members "deployed" to public service.

How successfully, then, has the ANC "groped towards social democracy?" In its own account, the ANC "leans towards the poor", "recognises the leading role of the working class in … social transformation", is "a disciplined force of the left" and "approximates, in many respects, the best elements of a developmental state and social democracy". This combines the movement's habitual and increasingly hollow left rhetoric with a rather wistful optimism: "approximates, in many respects".

In which respects, one has to wonder, does the ANC project not "approximate" a developmental state or social democracy? No amount of huffing and puffing about the disparity between a "first" and "second" economy should disguise the fact that it is precisely the workings of the capitalist economy, as currently structured, which help create poverty and joblessness for half the population.

Nor can any degree of leaning towards the poor (let alone recognising working-class leadership) disguise the fact that there is by now a sizeable component of the ANC political and business elite that would resist any efforts to alter the status quo meaningfully. Many senior ANC officials have significant business interests; and South African business leaders have a shared set of views about taxes, regulation and the labour market, "whatever their pigmentation".

This is an edited extract from Short-changed? South Africa since Apartheid, by Colin Bundy, a Jacana pocket guide

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