South Africa's new regime

The images were stark. Protesters in a South African township burned tyres and overturned cars and attacked government buildings. When the police arrived and tried to restore order, the protesters pelted them with debris. Shots rang out, and the heavy hand of the state on the backs of the poor was felt once more.

As the reporter pointed out, these could have been images from 1987, the highwater mark of the violent struggle against apartheid. But they weren't. This happened a few weeks ago, in Mpumalanga province, and the ire was directed not at apartheid, but at the African National Congress (ANC). Who would have imagined that the liberation of South Africa would end up like this?

Well, Moeletsi Mbeki, for one. The brother of the former president, Moeletsi is one of the country's leading public intellectuals and a dissident voice in the ANC family. An engaging man, for someone trained as an engineer, he is an astute observer of political and economic trends. And also, one might add, a highly successful entrepreneur.

Like so many entrepreneurs, Mbeki harbours a native suspicion of government activism. Accordingly, he has emerged as one of South Africa's leading critics of the country's Black Economic Empowerment programme, or BEE as it is commonly known. BEE, he told me one morning in his office, was not designed to create a black bourgeoisie. It was a reparations programme created to buy the support of a black political elite. Rather than encourage black entrepreneurs to create new businesses, it distributed a portion of the assets of existing firms to well-placed members of the ANC.

New entrepreneurs frustrated

This had a perverse effect. Whereas apartheid created a white business class, and marginalised blacks, post-apartheid co-opted a black elite, solidified the position of the traditional white capitalist class, and left poor blacks largely outside the new regime. Meanwhile, this cosy partnership between white business people and black policy elites has led to a situation in which new entrepreneurs are actually frustrated: after all, if they were to prosper, that would pose too much competition to this dominant class.

South Africa, I suggested to him, bore all the hallmarks of what I and Renée Bowen, in a forthcoming paper, call an anti-growth regime: an alliance among established business interests, a political elite, and a support base of clients of the public sector. The coalition holds on to power by distributing a scarce pool of benefits, rather than deepening the pool with new talent.

Stronger gridlock

Mbeki's eyes lit up at my suggestion. "Yes," he agreed, "and the gridlock is even stronger now than it was under the National Party (the ruling part of the apartheid era)". In apartheid, he went on, at least the ruling class had an interest in raising productivity. Today, it has an interest in minimising competition. The result is an economic growth rate which, if not a failure, is far from stellar - and certainly not enough to sustain the regime indefinitely. Already, South Africa's debt-to-GDP ratio is rising as the government borrows money to maintain its spending.

Mbeki reckons the ANC can buy enough stability to maintain the regime for a few more years. Although discontent swells up periodically, the government has been able to ride the commodity boom to generate enough revenue to expand the nation's welfare rolls dramatically - from two million people in 1995 to some 15 million today.

However, in a much-discussed article he published recently in the local press, Mbeki warned that South Africa would face its 'Tunisia Day' sometime around 2020. He reckons that the country can live off the mineral boom until then. But at that point, China estimates its mineral-intensive industrialisation phase will be completed. Commodity exporters like South Africa will then see a return to hard times. And without a dynamic business class, the returns needed to support the country's underclass will dry up.

If Mbeki is correct, in just a few more years, the sporadic protests we saw recently in Mpumalanga will become as common as they were in apartheid's dying days.

John Rapley is the Bradlow fellow at the South African Institute of International Affairs. Email feedback to columns@gleanerjm.com and rapley.john@gmail.com.