Dani Rodrik reports:
South Africa has undergone a remarkable transformation since its
democratic transition in 1994, but economic growth and employment
generation have been disappointing. Most worryingly, unemployment is
currently among the highest in the world. While the proximate cause of
high unemployment is that prevailing wages levels are too high, the
deeper cause lies elsewhere, and is intimately connected to the
inability of the South African to generate much growth momentum in the
past decade. High unemployment and low growth are both ultimately the
result of the shrinkage of the non-mineral tradable sector since the
early 1990s. The weakness in particular of export-oriented
manufacturing has deprived South Africa from growth opportunities as
well as from job creation at the relatively low end of the skill
distribution. Econometric analysis identifies the decline in the
relative profitability of manufacturing in the 1990s as the most
important contributor to the lack of vitality in that sector.
Here is a non-gated version of the paper. The bottom line is that South Africa is de-industrializing.
Is this just another example of the Dutch disease? High commodities prices prop up the rand, preventing it from falling to levels that would make South African labor competitive for manufacturing. Even without China, South Africa would have a comparative advantage for high-revenue, low-employment extractive industries.
South Africa’s apocalyptically high crime rates undoubtly contribute to its sluggish economic growth.
Education is another crippler – 30 years of apartheid education and an ANC-inspired boycott of the education system has produced an entire generation without the skills needed to compete.
It’s mostly ex-pat South Africans with an axe to grind that will spout nonsense like an ANC-inspired boycott caused the level of education and training to be so low in South Africa.
Try 50 years of deliberate Apartheid policy to prevent blacks from getting any education in the first place. To quote from Henrik Verwoerd, “What is the use of teaching the Bantu child mathematics which it cannot use in practice? There is no place for him above the level of certain forms of labour…We should not give the native an academic education….we should so conduct school that the native will know that he must be a labourer in this country.”
It is worth noting that this paper analyzes the economic condition
of South Africa in the 1990s – not in comparison with previous South African governments.
While the economic performance of South Africa relative to other countries
in the similar GDP per capita range is not impressive, the macroeconomic
situation in the 1990s is an improvement over the previous apartheid government.
It also shouldn’t be forgotten that SA is now home to anything up to 3m illegal immigrants from other parts of Africa, who have very little skills or education themselves. That’s more than 5% of the pop.
Many of the illegal immigrants have been fleeing the chaos in Zimbabwe. As Zimbabwe’s largest trading partner and the conduit for most of the rest of its foreign trade, South Africa could put substantial pressure on Robert Mugabe to ease up on the more dictatorial aspects of his rule. The fact that South Africa has not done much of the sort is in large part due to its sense of solidarity with Mugabe’s regime, dating back to the mutual struggles against apartheid and white rule. Ethnic ties between many South Africans and Mugabe’s own ethnic group are another complicating factor. South Africa’s hands-off policy translates into a bigger influx of Zimbabwean refugees.
In their defense, however, the South Africans also are well aware that strict sanctions against Zimbabwe will make life even more miserable for that country’s citizens and won’t necessarily get Mugabe out of power. South Africa’s military could easily get rid of Mugabe, assuming the solidarity and ethnic issues could be overcome, but the likely result would be a long, Iraq-style guerilla war in Zimbabwe – as oppressive as Mugabe has been, he still commands a non-trivial amount of support among segments of the Zimbabwean population.
Basically, Mugabe has put South Africa in a very tough situation.
South Africa expected to succeed by opening to trade at a time when it was not prepared to compete. As a result, industries like textiles disintigrated.
Neoliberal policies make people have to pay for education, when education would be the best possible investment over time.
With high unemployment crime is extreme. Practically every middle class home I saw had a guard outside.
Why hasn’t Zimbabwe done well? Why hasn’t Zambia done well? Why hasn’t Mozambique done well? Why hasn’t Tanzania done well? Why hasn’t Kenya done well? Why hasn’t Malawi done well? And so forth and so on, with Botswana and Namibia as the exceptions.
Occam’s Butterknife requires 38 separate and unique explanations for the 38 Sub-Saharan countries that haven’t done well.
Why hasn’t Zimbabwe done well? Why hasn’t Zambia done well? Why hasn’t Mozambique done well? Why hasn’t Tanzania done well? Why hasn’t Kenya done well? Why hasn’t Malawi done well? And so forth and so on, with Botswana and Namibia as the exceptions.
Right. These countries are poor because they are inhabitated by blacks. Everything thing else is just noise.
Why hasn’t black Africa done well? Probably because revolutionaries are usually lousy governors. And if they take over nations that have never functioned anyway they make even worse decisions. And end up ruling by whim.
Toss in the fact that the prestige of a successful revolution makes it almost impossible to toss out those poor leaders for decades. This is what has happened in most of black Africa.
But all that is situational – more of less inevitable after 1950. Why the area had little or no effecive government before colonization began is the more useful question. And what could improve things today is even more useful.
Why doesn’t Africa learn from the mistakes of the rest of Africa? Is it in the African’s blood to want to live in chaos?
There are too many examples of countries ruined by greed…..Mozambique was thriving when the Portugese were there; look at it now – only skeletons of the amazing infrastrusture remains. Zimbabwe….let’s take the white-owned farms, which provide the country with food and jobs, and give it to people who have no idea what to do with it.
Who’s next…? SA? The process is allready gaining momentum, and, without considering what this process caused in Zim and other countries.
Are Africans incapable of learning? Do they enjoy suffering, or can they by some miracle, realise that it just doesn’t work, and do things differently..? If not, go ahead and chase the whites away! Follow the path that has been proven, time and time again, to bare no fruit, and instead, create another African country with no hope of ever seeing its people happy and economy thriving.
This seems to be the inevitable end to the story of every African country. So, what do we do..? Take our bags and run….or stay and face the foreseeable future in the desperate hope of change?
The country is turning into the ghetto.
look at every inner city in america- its turned into crime infesteed ghettos where there was once gleaming prosperous cities.
do you see pattern here? In few years, SA will be another corrupt chaotic country run by warlords.
Emphasis for africans should be on education and learning skilled trades and for the irresponsible men to keep it in their pants so they can stop having 10 babies for every girl. how can you better yourself and country if you have kids everywhere. Only africans have this problem- not indians, asians, whites, etc
I am a South African living in the UK, I was one of the stupid people – to my regret – that voted ‘yes’ at the pre-election where the whites had to decide if the goverment should give the ANC -i.o.w the black the right to vote. All I can say is that many black today are worse of than under Apartheid, I use to work in the black area in the apartheid times, and even lived in townships – the blacks had education (although the often burned down the schools). Today Apartheid is so vilified it is beyond belief. The current government conveniently just blame everything they can’t handle on apartheid. It was ‘Apartheid’ meaning separation NOT slavery!! Get a gripp!!
Now they kill / chase away all the whites – many can easily say ‘ you got what you deserve’ but they don’t know what they are talking about, most whites have been good to most blacks. Especially the farmers that are being systematically killed of, the are good, honest, stable, love your neighbour, pay your workers type of people. All I can say is: Live is not fair- may the ANC reap what the sow.
We have the same problem in Europe. Look at France and the riots they recently had. The London bombing was by non whites.
The Economic ‘freedom’ index quoted above is published by the Heritage Foundation, an ultra-right think tank .They make their living advising America on how to take over the world basically, from pushing trade liberalization to militarizing space. Please don’t mistake their unshakable faith in neo-liberal ideology for reality. Last time I saw them in the news they were giving George Bush a standing ovation as he was telling them how happy the people of iraq are now that they are ‘free’. Brainpower is obviously not a factor in getting a job with those guys.
And as for all the sour grapes of ex South-African whites living in the UK or OZ, good riddance to bad rubbish. Most of the ones commenting on this page are obviously racist and incapable of seeing the world as anything besides privileged middle-class drones born with a silver spoon in their mouthes. Sorry, Africans don’t want to wipe your asses anymore, maybe you can get some East-European slaves to do it in London. Don’t come back, the defective privatized sewerage systems already stink up the place enough. Have a beer with Nick the American (above), another genius from the country that is so deregulated and free that it has no poverty at all.
I have just spent a fortnight in South Africa, a place that I have wanted to visit for the first 50 years of my life. My visit showed me a beautiful place, with a rich but troubled hisotry. As I depart for home tomorrow, I am deeply saddened as I expect that this country will deteriorate further as the educated and business owners leave. This country has been blessed with the gift of beauty and the bounty of resources like few others. It is catastrophic to see racial bigotry (on both sides) destroy the country from within. The best souvenirs of my visit will be the many photographs and videos that I have taken that I will share with my children and reminisce about the way it used to be. God spare this country from the anticipated anarchy that has been experienced in other parts of this continent!
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