Our government has requested thinkers in universities, industry, and civil society in general to participate in the national debate on the current economic crisis, and to make suggestions on what must be done to solve the crisis. The crisis cuts across the entire spectrum of society. The National Planning Commission has highlighted four critical problems: high unemployment; the health crisis; crime; and the terrible failure of the Education system to effectively serve its purpose; some two decades ago, Fortune magazine pronounced: “The most important capital is intellectual capital.” Zwelinzima Vavi of Cosatu recently issued two warnings: the massive youth unemployment could trigger `another 1976 uprising’; and that the failure to solve the unemployment crisis could lead to similar uprisings which overthrew rulers in Tunisia and Egypt. A recently released report by HSRC and the African Strategic Research Corporation states: “Poverty in Eastern Cape is a national disaster.” The report also remarks about the “systematic destruction of the rural economy.” This deep national crisis has also brought about serious spiritual illness: mental-spiritual dismay, confusion, and aimlessness have descended upon most people. This crisis must be attended to most urgently, if we are to avoid uprisings, unmanageable social pathology, or a socio-political disintegration which may call for a ruthless dictator reminiscent of Hitler. In terms of major policies we are clearly on the wrong path. Where did we go wrong?
The first wrong committed is the assumption that South Africa is a developing society. South Africa is an underdeveloped society, with strong features and processes of a colonial society still visible and active. The biggest development problem of an underdeveloped society is the pathological relationship existing between the city and the countryside. During the colonial era, South Africa had the largest concentration of settler-Europeans, who were an embodiment of capitalist industrialization in Africa. These settler-Europeans were the extension of Western industrialization and modernization in the country. They became the face of South Africa in the world. However, this very thin layer of industrialization and modernization was resting, and still rests, on the economic, educational, technical, and social depression of the overwhelming majority of the population, Africans –hence the underdevelopment of the African population.
If South Africa were a normal developing society, the African population, as the vast majority of society, would be the basis, the springboard, of the development of the economy and society. This is not the case. There is in reality an incorrect relationship between the base of society, the African people, on one hand, and the industrialized, modernized sector of the economy and society above. That, of course, is the essence of underdevelopment. Guevara put it well: “A dwarf with an enormous head and a swollen chest is `underdeveloped,’ inasmuch as his weak legs or short arms do not match the rest of his anatomy. He is the product of an abnormal formation that distorted his development. That is really what we are –we, who are politely referred to as `underdeveloped’…” The colonial or semi-colonial economy has two sectors: the developed, and the underdeveloped. President Mbeki’s economic advisors revived the colonial concept of a dual economy. We were told that South Africa has two economies: the “1st” economy and the “2nd” economy. In actual fact, the “1st” economy is the white-controlled, industrialized, modernized sector of the colonial economy, closely linked to the capitalist system of international trade, international banking, international stock-markets, and international science. The “2nd” economy is the non-industrial sector, populated largely by Africans, with hardly any links to capitalist international trade, international banking, international stock-markets, and international science. This is the site of malnutrition, terrible diseases, and some of the highest death-rates in the world (adults and infant mortality). The statistics on the quality of life in South Africa seem terribly out of place, given the picture of the country as a developing nation we have in our minds. The Academy of Science of South Africa, in their published (2007) HIV/AIDS, TB and Nutrition has stated: “South Africa is in the grip of three concurrent epidermics: malnutrition…HIV/AIDS…and active TB…” We know that our nation tops the list as the most unequal society in the world. This is deepening underdevelopment.
The vast majority of people in the so-called “2nd” economy (Africans) are in rural areas. We must also base our development policies on the truth that South Africa is not an urban society. The majority of South Africans live in rural areas. The provinces of Limpompo, North West, Mpumalanga, Eastern Cape, and KwaZulu/Natal are all heavily rural. The underdevelopment of African rural areas is now the heavy drag that is pulling down the entire economy of the country. The economy of the entire country shall remain depressed, and shall not develop, as long as African rural areas are underdeveloped. The underdevelopment of rural areas has migrated to urban areas largely because of the misguided policies which neglect the development of rural areas. The development of rural areas should begin with initiating an agricultural revolution in the African village communities, tied with water provision, aimed at eliminating hunger and malnutrition, which shall eliminate the terrible diseases and high death rates. This shall save government hundreds of millions of rand in medical expenses: side by side with that should emerge the provision of electricity, good roads, government buildings, schools, housing, computers, community halls, and health facilities. It is astonishing and dismaying to hear politicians boasting about all sorts of development projects without mentioning the first need: the production of food by the African villages themselves.
We miss the point that the industrial revolution in the West was preceded by an agricultural revolution. South Africa also had her agricultural revolution; however, it was confined to white-controlled agriculture. This is white agri-business, which is linked to capitalist world trade, international banking, international stock-markets, and international science. Racism excluded the nation’s vast majority, rural Africans and rural Coloureds, from the agricultural revolution; racism only linked rural Whites to the world economy. The horrendous tragedy in our midst is that rural Africans and rural Coloureds are economically dispensable, according to the logic of the capitalist world economy; they only become politically indispensable to political parties during election time. Since politics is largely “concentrated economics”, it is not surprising that the development policies of South African governments have responded more to the dictates and needs of the capitalist world economy than to the economic needs of rural Africans and rural Coloureds –who are economically dispensable according to the logic of the world economy.
A market economy is sustained and developed, first and foremost, by the buying-power of the vast majority of the nation’s population. As the World Bank stated years ago, the Achilles’ heel of the South African economy is the smallness of the domestic market. It is small because the vast majority of the nation’s population, Africans, largely in rural areas, is not creative participant in the market economy. A vibrant domestic market, based on the economic production, income, and consumption of the vast majority of society’s people, is the powerful first gear in kick-starting the nation’s move towards wealth and employment, and towards full participation in the world economy. The massive road-block to economic growth, development, and full employment in South Africa is the poverty and underdevelopment of Africans and Coloureds. We must start by eliminating poverty, malnutrition, and underdevelopment in rural areas.
Africans and Coloureds, whose economic production, income, and consumption should be the spring-board of the nation’s economy, are in a deep Depression similar to the Depression of 1929 and early 1930s in the USA and Germany. The full military conquest of Africans by the English and Afrikaners in the late 19th and early 20th century, resulting in mass land dispossession; the Anglo-Boer War; the initiation of the capitalist agricultural revolution; and the 1929 Depression, also threw the masses of Whites and Africans in South Africa into a Depression. As the vast majority of the nation, Africans, were the conquered sector, suppressed by physical force and law, the politics and psychology of the white population was based on fear of the African –fear of the African which became rooted deep in the psyche of the White community. The State was the possession of Whites; it was used to protect Whites, the land, and other resources that had been seized from Africans. Electoral democracy was fully implemented embracing the entire white population. White politics then determined that only Whites should be lifted out of the Depression. The White State therefore invested heavily in developing its police-military capability up to nuclear arms; in initiating and supporting the agricultural revolution and modernization of white farms; in developing and sustaining jobs, corporations, and wealth for Whites; in facilitating the establishment and development of international science in white educational and health institutions; and in linking the white-controlled economy with the world economy. This economy and provisioning of services was only sustainable as long as the immediate aim was to sustain and develop only the white community, a small minority within the nation.
From 1994, there had to be a gigantic change in the relationship between the base of society, its body, and its head. During white supremacy, society had been standing on its head –the development dynamic was the white community, its brains, skills, languages and culture. Truly democratic South Africa must stand right side up: the development dynamic, base of society, must be the vast majority, the African community –its brains, skills, languages and culture; however, this is the base which has been underdeveloped for more than a century. This is the road-block to the development of modern South Africa. This is the state of emergency we face as a nation.
The most urgent task facing us is to spread development and industrialization to rural communities in which the majority of our citizens live, thus lessening the stress on urban areas, and increasing the welfare of everyone urban and rural. We must establish a `wall-to-wall’ industrial foundation for the total nation. Introducing the agricultural revolution into every African and Coloured village community, and eliminating malnutrition and nutrition-based diseases, shall be measures that will kick-start the development of the national economy. Rural industries should emerge in all provinces. By so doing, we shall end the lop-sided nature of our current economy.
We must vastly increase our domestic market by incorporating within the market the 60 percent of our population currently outside or marginal to the market. This shall achieve what any market economy needs –a vastly increased domestic market.
The kick-starting of our economy for growth and development cannot and shall not be through huge investments in cities and towns. It can only be through initial huge investments in rural areas where the majority of non-participants in the market economy are found. We should gain insight from the experience of China. The Post-Mao Great Reforms, which led to China becoming a huge power in the World Economy were first implemented in rural areas. To quote Chinese scholars: “Reform was first implemented in the rural areas, then gradually carried out in cities…” (Gao Shangquan, Liu Guoguang and Ma Junru, The Market Economy and China, 1999). Students of the Chinese economy have reported that almost half of the acceleration in the growth rate during the first reform phase (1978-83) came from improved agriculture and rural development. (China: The Next Decade, edited by Denis Dwyer, 1994, p. 13). We need to exhibit the same commitment to balanced development as shown by the leaders of China, who have re-directed hundreds of billions of the government budget towards developing rural China and the Western Region of the nation.
Only initial huge investments in rural development shall remove the barrier to growth and development of our economy and have the largest impact in reducing unemployment. Wall-to-wall industrialization and modernization of urban and rural areas shall also reverse the unsustainable, bloated urbanization of the country, and bring about a reasonable distribution of the population in the entire country. Our development strategy should start from the countryside to the cities. The proportion of development investments between urban and rural areas must change, with a large share going to rural areas, without suggesting that developing urban areas should be minimized. The people assisting government in developing and implementing such a strategy should possess real knowledge of the development history of the world, above all economic history; this task should not be given to bureaucrats, to mediocre minds, or to the experts who have received billions of rand as consultants since 1994 without much benefit to the country.
[Professor Vilakazi is a scholar on the development of societies.]