This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
An international perspective on the "people-driven" character of the RDP
PATRICK BOND looks at the formidable challenges facing attempts to defend the progressive implications of the RDP. A version of this paper was presented to the RDP Council National Workshop in March 1996. Bond is a senior researcher at the National Institute for Economic Policy.
Even if the "people-driven" F character of the RDP is not challenged openly, it is by all accounts - being undermined by timid politicians, hostile bureaucrats and unreliable private sector partners. This is not unusual, if one scans the globe at present, progressive visions of development are badly blurred even in societies that have recently won hard-fought transitions to democracy. This paper attempts to place the RDP in an international context. The main ways to compare the RDP with international experiences are through
1) locating the ambitions of the Democratic Movement in the context of "globalisation" and "neo-liberalism";
2) considering past international approaches (theoretical and practical) to macroeconomic and national development strategies;
3) identifying the main currents that run through social policies across the world; and
4) relating all of the international issues raised back to the RDP itself. This exercise may prove useful both if it helps SACP and Mass Democratic Movement comrades revisit the "Great Economic Debate" and if we can explore two themes for reinforcing the transformative, people-driven character of the RDP: a) "decommodifying" basic goods and services; and b) ensuring that social and economic policies do not "stratify" South African society any further than is the case already.
The international neo-liberal context
"Never before have so many political movements of the progressive left been so close to taking power," Ruben Zamora, a leader of the Salvadoran democratic movement, recently remarked, "but never before has power seemed to he so strongly predetermined by external forces adverse to the interests of the majority." The disappointments are profuse, not just from the left but from other movements which had rallied under the banner of colonial, racial or ethnic liberation, human rights, anti-corruption, and other forms of the much-heralded "'transition to democracy."
Are the policies of neoliberalism - extremely high interest rates, shrinking government spending in relation to the entire economy, privatisation of state assets, lower taxes for business and higher VAT for consumers, export-led industrial policy, lifting of tariffs, deregulation of business, cost recovery on social services, and many others witnessed recently in South Africa - inevitable?
There is, by now, a sense amongst some MDM cadres that "There Is No Alternative": TINA, as Margaret Thatcher remonstrated. Nevertheless, if one listens closely to ordinary people both in South Africa and across the world, there are also resounding cries emerging: THEMBA! (Zulu, for hope),"There Must Be an Alternative!" Some policy-makers have picked up on these cries and tried to articulate alternatives to neo-liberalism. These can be found not only in much of the RDP, but in documents such as the African Alternative Framework to Structural Adjustment Programmes for Socio-Economic Recovery and Transformation, the African Charter for Popular Participation in Development and Transformation, and The Kampala Document: Towards a C'onf'erence on Security, Stability, Development and Cooperation in Africa.
The time is ripe for revisiting the larger questions. The "Washington Consensus" (as neoliberalism is sometimes termed) is fraying not because progressive alternatives are being taken seriously yet. Instead, neo-liberalism is beginning to self-destruct clue to major internal contradictions. As ruptures (such as the Mexico meltdown of 1994-95) appear, new counter-challenges to free market orthodoxy may be feasible.
Some leading theorists of global political economy argue that these will emerge not through trying to creatively manage the nation-state or national economies out of their crises. Instead, as Giovanni Arrighi, Terence Hopkins and Immanuel Wallerstein insist, the most serious challenge occurs when "popular movements join forces across borders (and continents) to have their respective state officials abrogate those relations of the interstate systern through which the pressure is conveyed."
The January 1, 1994 challenge by the Zapatista movement in Chiapas, Mexico to the North American Free Trade Agreement and all that it implied, is instructive. Even more so, in Haiti, the anti-privatisation campaign by the leading popular organisations begun in August 1995 implicitly encouraged by Aristide - rose to such heights as to drive out the neo-liberal prime minister by October and led to a substantial disruption of Haitian relations with the international financial agencies.
The other theory that has proven popular amongst social democratic parties is that glohalisation - the dramatic international expansion of trade, investment and financial relationships - must be embraced, and that the task of progressives is to ensure that their workforce and products are competitive in world trade (this is the position that many South African progressives have taken). Competitiveness often entails enormous sacrifice, however, and may not he successful even then. It is also potentially suicidal for other-wise progressive political parties to try to manage this process, as those in Australia and Spain recently learned.
Clearly, better global coordination of forces that oppose neo-liberalism is required, which compels us to consider the kinds of campaigning now emerging from progressive forces located in bothgovernments and civil societies. There remain distractions to such coordination, for some powerful international organisations remain concerned mainly with attaching a "human face" and "safety nets" to structural adjustment (these institutions include the UN Conference on Trade and Development, which is chaired by South Africa for the next four years).
But some coordination - especially building regional economic relationships - can still occur. At the level of inter-governmental relations, the "G-77" developing nations continue to revive parts of the 1970s call for a New International Economic Order, as well as to tackle new problems such as the chaos caused by unregulated international financial markets. There are also efforts, which South Africa's Department of Trade and Industry has endorsed, to establish South-South trading networks that enhance the power of the Third World in what is otherwise an extremely inhospitable World Trade Organisation.
Likewise in civil society, global challenges to neo-liberalism - including but not limited to demanding that governments break relations with the interstate system - are increasing daily. Two are worthy of mention. In late 1993, protests against the General Agreement on Tariffs and Trade shocked many countries in both the North and South, with many hundreds of thousands of people demonstrating for the resignations of leaders who signed the document (leading, indeed, to the firing of top officials in India and South Korea).
Second, in 1994, on the 50th anniversary of the International Monetary Fund and World Bank, a "50 Years Is Enough" campaign was launched by progressive international development organisations and social movements (with the formal support of many South African organisations) to fundamentally reform the two Bretton Woods Institutions. Today, a more radical proposal - defunding and actually shutting down the World Bank - is on the agenda (due in part to growing hostility and xenophobia amongst conservative American politicians, which make defunding a distinct possibility).
Many progressives are now deating whether it may be time to rethink the Bank reform strategy, since minor battles won by development NGOs, environmental organisations and churches - such as the inclusion of gender-sensitivity in more than a quarter of all projects and programmes, the recent rescission of funds for the Narmada and Arun dams in India and Nepal, full-blown programmes to incorporate NGOs and even CBOs and social movements in Bank projects, and the Bank's more open stance regarding public access to information - are still unsatisfactory. Such victories have not altered the Bank's insistence that countries adopt neo-liberal social and economic policies, and hence other critics are coming to the conclusion that the time for a campaign to shut down the Bank is now ripe. Vigorous work along these lines - for example, through anti-apartheid-style divestment (of Bank securities purchased by government, pension and university funds) in the North and popular boycotts in the South - is eminently feasible, and has already begun.
It remains to be seen whether in coming months and years, the 50 Years Is Enough network comprising Northern groups and dozens of excellent grassroots social movements which have fought and sometimes won concrete, people-driven development struggles against the Bank - from Haiti, India, Mexico, Nepal, Nicaragua, Papua New Guinea, the Philippines, Southern Africa, to name a few sites of intense recent activism - can come up with a consensus and cohere as an inter-national movement. If this does occur - if, in other words, those local and national social movements finally begin thinking globally, acting locally and acting globally - it will be because the many contradictions of global neo-liberalism include the globalisation of opposition to neo-liberalism.
Macroeconomic and national development debates
At least some of the opposition must be intellectual in character. And yet, as Canadian scholar David Moore puts it, oppositional analysis advanced by "counter-hegemonic movements" has been "too easily co-opted into the dominant discourse," to the extent that "new delineations of terms and new strategies are required." This is the case with respect to the full range of concepts - development, democracy, community, sustainability, equity, participation, empowerment, decentralisation, etc. - deployed within such movements, which are now bandied about just as earnestly by neo-liberal theorists aS by socialists. Indeed it is precisely the easy, populist appropriation of such terms that makes it all the more crucial to resurrect the development debate, especially in SA.
The inadequacies of existing development theories - ranging from modernisation and dependency theories internationally, to many of the race-class debates locally - need not detain us here. Is there another intellectual approach? I argue that the theory of "uneven development," though itself somewhat underdeveloped in SA, offers a much better approach to addressing the challenge of people-driven development.
To establish a baseline within the "absolute general law of capitalist accumulation," recall Marx's argument that uneven development is a necessary process of capitalism: "...that in the same relations in which wealth is produced, poverty is produced also; that in the same relations in which there is a development of the forces of production, there is also the development of a repressive force; that these relations produce bourgeois wealth, i.e. the wealth of the bourgeois class, only by continually annihilating the wealth of the individual members of this class and by producing an ever growing proletariat."
Not much intellectual work hasbeen done to take these insights further, although more than two decades ago, Arrighi and John Saul drew our attention to: "uneven development thrown up by capitalist penetration in Africa. For the underdevelopment of Africa as a whole relative to the industrial centres of the West has been accompanied and mediated by uneven development as between regions, states, tribes, and races within Africa itself, and this fact adds important dimensions to the class struggle in Africa and to the character of the resistance of progressive African forces to contemporary imperialism."
Using the theory of uneven development, Marxist analysts attempt to track flows of capital and resources across space, across sectors of the economy, across scales of economic policy determination (global, regional, national, sub-national, local), and across time. In doing so, we can unveil the material basis for an area suffering poverty - whether this is primarily the result of extraction of raw materials, changes in terms of trade, migrant labour systems, varying returns to investment, unsustainable flows of finance, geopolitical alliance formation and the like. The theory also hints at how a strong, progressive developmental state might intervene to address such uneven flows of resources, and hence overcome the sorts of macroeconomic and microeconomic "disarticulations" and "disproportionalities" that accompony uneven development.
What, though, is a developmental state? There are many divergent lessons to be drawn from the international development literature, usually depending upon ideological predilection. Contesting these lessons, even in passing, remains an important task.
Indeed, an important reason that neo-liberal compromises characterise so much of SA's transition is that there were so many selective justifications drawn from across the world. In most socio-economic sectors, ascendant policy-makers from the Democratic Movement have been inundated with "market-oriented" propaganda, often in the course of all-expenses paid tours funded by inter-national financial institutions and development agencies. The three words "international experience shows" the preferred preface in any number of didactic briefing sessions and reports sponsored by the major agencies were typically followed by glowing praise for federalist constitutional frame-works (referencing the USA and Germany), export-led growth (Taiwan, South Korea), invitations to foreign financial investment (pre-crash Mexico), privatisation (Britain), low wages (China), high real interest rates and an independent (i.e., oriented to commercial banks) central hank (Germany, the USA), tariff-reduction (India), market-oriented affirmative action (i.e., building a black petty bourgeoisie) (Malaysia), social contracts (Mexico), site-and-service schemes instead of housing (Chile), and more generally, the demise of statism/"socialism" (Eastern Europe, Africa).
If we consider simply the East Asian "Newly Industrialising Countries", debate continues to rage over whether (as neo-liberals insist) the lessons relate to a visionary export-led manufacturing model with rigid labour control and outright political repression in some cases, or whether (as progressives occasionally counter) NICs like South Korea teach us how to keep multinational corporations out of the country, how to nationalise the banks, how to direct credit into particular industries even if the rate of profit is lower, how to subsidise credit, how to control industrial policy and assist patriotic enterprises through a strong state, how to accomplish fairly widespread land reform, how to impose exchange controls, and so on. Clearly the lessons are in the eyes of the beholders.
There are also many lessons from societies whose rulers described the national project as "socialist," and it may be useful to mention specific strengths and weaknesses of development strategies in the East Bloc (characterised by rapid industrialisation and the satisfaction of most basic needs, but also by an excessively powerful military-industrial complex, low quality of consumer goods and political repression) and in Cuba and some other Third World revolutionary societies (sometimes characterised by participative, people-driven processes of meeting basic needs, but also often by a lack of both liberal freedoms and effective socialist planning).
Finally, there are the historical lessons of reconstructing Europe after World War II, and of the strategy of the US (and Nazi Germany) during the 1930s: Keynesianism. This approach is to engage in extremely high levels of deficit spending by which infrastructure, social services and productive activity are all heavily subsidised by the state. Along with these state spending activities (which were never particularly people-driven) came regulation of trade and finance.
The British economist John Maynard Keynes offered the following argument regarding trade, which may be relevant in view of South Africa's growing trade deficit (especially with regard to luxury goods and machinery, some of which could be produced locally with appropriate support): "I sympathize with those who would minimise, rather than with those who would maximise, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel - these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible and, above all, let finance be primarily national."
Keynes' point on capital flows has great relevance to SA in early1996, in the wake of massive capital flight, the dramatic crash of the currency, and amongst the highest interest rates in the world. Regrettably, the volatile currency fluctuation that is the logical result of the Reserve Bank's ongoing loosening of exchange and capital controls was analysed by South African commentators as a signal to engage in further liberalisation. In contrast, following the Mexico currency crash of 1994-95, even the International Monetary Fund drew the lesson that more rigorous capital controls should have been applied.
In SA today, the dominant ideologues of macroeconomic policy have little regard for (and perhaps inadequate awareness of) the importance of classical Keynesianism, the successes of the East Bloc, or even with the NIC model of a strong regulatory state. None of these development models are optimal or even desirable, of course. But the interesting aspects of their legacy are being evacuated by economic policy wonks infatuated with the idea that "There Is No Alternative."
However, though neo-liberal macroeconomic policy appears to be well-entrenched in SA, when we move to social policy we can identify two other currents, as well, which bear some international comparisons.
Three ways of organising a developmental state
In general terms, there are three philosophical approaches to the social policies that define a developmental state: neo-liberal, corporatist and progressive.
First, the neo-liberal approach typically stresses the market as the main organising principle and agent in the state's delivery of goods and services (the state must intervene only to facilitate the operation of the market).
Second, the corporatist approach is typically based upon large-scale social actors (big government, big business, big labour) agreeing upon systems that deliver goods and services, at least to their constituents if not to the society as a whole.
Third, the progressive approach typically aims to establish basic goods and services as entitlements, and to organise society in a manner that lowers inequality and em-powers the powerless.
The first approach is most often associated with Anglo-Saxon countries (the US, Britain, Canada, Australia and New Zealand); the second with middle-Europe(Germany, Austria, France and Italy); and the third with northern Europe and Scandinavia (Holland, Sweden, Denmark, Norway and Finland). The differences in these three approaches tend to reflect the balance of power between conservative and progressive political parties, which in turn reflects the balance between the relative mobilisation of the working-class and the coherence between working-class organisations (especially labour and other social movements). Of great importance, historically, was whether progressive mobilisation included an alliance of workers and farmers (the so-called "red-green" alliance in Sweden), or whether rural interests were represented by a conservative political party (as in Austria).
SA's legacy and present situation is mixed, with whites traditionally having access to state-supplied goods and services as entitlements, with corporatism on the agenda since the early 1990s, and with neo-liberal forces extremely powerful in the determination of many detailed policies. The RDP's social policies are largely entitlement-based. The central factors in future are probably whether or not the organisations of poor and working-class people can be strengthened again, and whether urban and rural, and "insider"-"outsider" interests can be fused, during the course of the development of the so-called corporatist institutions (NEDLAC). Much of the experience in post-independence Africa has been negative regarding both these components.
The RDP provides some mixed signals as to which of the three approaches becomes official policy, for it reflects the third approach in its detailed social policies, the second approach in some of its rhetoric (especially relating to "social contracts"), and the first approach in its macroeconomic policies. By looking at two additional features of social policy, and considering how these have been addressed in SA over the past two years, it should be possible to thematically assess social progress in the implementation of the RDP.
The two themes are "decommodification" and "stratification." As explained by the leading analyst of international social policy, Gosta Esping-Andersen: "Decommodification occurs when a service is rendered as a matter of right, and when a person can maintain a livelihood without reliance on the market" while stratification refers to "the relationship between citizenship and social class," especially whether or not a society provides universal access to basic social services not dependent upon class or other factors.
The argument is relatively simple. The neo-liberal model entails low levels of social benefits, and where there are benefits these are associated with social stigma, forcing people into the labour market even if they are physically or otherwise incapable of working. In order to split poor and working classpeople - and to ensure that popular perceptions of entitlements are kept to a minimum - neo-liheral social policy typically imposes "means tests" (income-related benefits) so as to prevent entitlements from becoming universally recognised.
To illustrate, in SA at present, means tests are applied to the following areas: housing, land re-form, legal aid, educational bursaries, and pensions and maintenance grants. The Department of Welfare's social grants were subject to a uniform means test from March 1996 (prior to which there was a racial bias). In the past, most homelands did not implement means tests. Moreover, provinces have not had any incentive to do so in their social spending, because the funds they receive from central government are not subject to affordability criteria. There is, hence, a proposal in government to review all means tests to ensure the poor are targeted.
The progressive approach, in contrast, is to continually expand the sphere of social rights and entitlements, so that means tests become less and less relevant to a society's social policies and so that poor and working-class (and even middle-class) people maintain a sense of unity of purpose in making social demands upon their government. Health services were recently decommodified, so that even the wealthy can get free primary public health care at state clinics. In addition, civil servants and academics often enjoy broader entitlements, and white-collar workers have come to accept that their employers will provide extensive health and pension benefits (although this practice tends to weaken the bargaining power of labour, since workers are now more dependent upon employers in the event that the government does not have a fall-back plan for health, pensions, maternity leave, educational leave and the like).
However, to adopt the progressive approach as a general principle for organising social policy requires us to compare societies' wealth (eg, per capita GDP) and level of industrial development, and to assess how the "social surplus" generated by this wealth and development is being shared. In Scandinavia, the distribution of wealth has been fairly equal over the past century, including the period when per capita GDP was what SA's is today (roughly US$2,500). This permitted a more generous, universal approach to social policy. In contrast, in the United States, distribution of wealth has always been more unequal, and that meant that when major social programmes were introduced during the 1930s for the first time, as well as during the 1960s, the elite fought the introduction of universal benefits and instead continued to push for market-oriented programmes. As a result, alone among advanced industrial societies, the US continues to lack a health insurance programme. But this is not because it is impossible for the US economy to afford such a programme, but rather because in practice the balance of social power that accompanies unequal distribution of wealth prevents the poor and workers from winning their social policy demands politically.
Equality is not the only factor. Absolute levels of wealth are just as important, and thus while the social benefits envisaged in the RDP may be appropriate and affordable to SA, they would not be for Mozambique. Indeed this brings us back to the currents within the RDP itself, and whether - in the present conjuncture - demands for universal, entitlement-oriented social policy can be launched from the base document.
What does this mean for a people-driven RDP?
Like all policy documents associated with SA's transition, the RDP contains internal contradictions, specifically an uneasy mix of the three approaches to both social and economic policies that have been reviewed above.
It should be clear that the conservative macroeconomic policies have been adopted nearly to the letter - even more so regarding foreign exchange liberalisation, Reserve Bank "independence" (insulation from democratic inputs), trade liberalisation and supply-side industrial policy - while the progressive components of the RDP have nearly all been ignored thus far. Meanwhile, the centrist, corporatist rhetoric remains as strong as ever - but at least that potentially leaves open the door for progressives to achieve some victories (or at minimum, greater access) in corporatist bargaining institutions.
If progressives are intent on strengthening the progressive currents in the RDP and on opening up debate within the corporatist and against the neo-liberal currents - while on the contrary, neo-liberals seem intent on ignoring the RDP's progressive components and instead implementing neo-liberal policies absolutely everywhere (and corporatists worry about their lack of real significance, particularly in NEDLAC) - then a strategy must be developed that is conscious of why the progressive RDP has not thus far been implement-ed. Is the primary challenge to the RDP's implementation one of government's failure to achieve "strategic coordination"? Is it the "bureaucratic, technocratic stifling of the RDP vision"? Is it finding "the right balance between our own specific sectoral/constituency concerns and the bigger South African (even Southern African) picture"? Is it the challenge of driving "a strategically coherent transformation programme through the host of multi-party participatory forums"?
The challenge may lie in resolving all of these specific problems, as the "Rebuilding the MDM" document argues. But I would argue that two other crucial challengesemerge from the discussion of international comparisons. First, the balance of forces must be assessed and the strengths and weaknesses of the Democratic Movement care-fully explored. I believe that this is a larger task than understanding the "logistical" limitations - redeployment of cadre into new positions, the decline of external funding support, and the need to shift from anti-apartheid to prodevelopment strategies and tactics - spelled out in the "Rebuilding the MDM" document.
While these logistical issues are critical, we are also long overdue in addressing the philosophical approaches to demands being made by Democratic Movement organisations. In particular, those demands must be evaluated in light of whether they interrelate and strengthen each other's universal, decommodifying and destratifying approach, or whether they contribute to the commodification of basic goods and services and to the fragmentation of poor and working people. In short, it boils clown to whether MDM policies are actively contesting (as opposed to contributing to) uneven development. Such debates occurred to some extent during the 1980s and early 1990s (for example, over whether accepting company-provided housing or health programmes would undermine the broader struggle for public housing and nationalised health care), but are not much in evidence toclay.
The second additional challenge is to more closely examine the approach behind detailed policy positions taken since May 1994. Those policy positions have largely been based on neo-liberal, market-oriented principles, not merely in the sphere of macroeconomics, but also regarding policies on housing (bank-centred, developer-driven, with an inadequate subsidy), urban infrastructure (based largely on cost recovery and substandard service provision, as designed by the World Bank), land reform (again, World Bank-designed, based on individual titles, and far short of RDP commitments), and so many others.
What continues to surprise me is that social policies expressed in Green and White Papers repeatedly ignore - and often outright contradict - the detailed provisions in the RDP, in large part because the official policies are increasingly geared to the commercialisation of state-provided goods and services that in the past were universal entitlements for whites. Partly this is a function of the factthat old-guard bureaucrats or yuppie consultants are being given exorbitant roles in policy drafting (and under the constraints of sectoral compromises that are often far too generous to the interests of capital). But partly it reflects the fact that progressive forces in civil society have provided only sporadic reminders - whether in the form of policy advocacy, demonstrations, best-practice pilot projects or political interventions - of deviations from the RDP.
Indeed, it is common these clays to find trade unionists, students, urban residents, landless peasants, development activists, primary health care advocates, environmentalists, international solidarity activists and many other sectors of the Democratic Movement increasingly alienated from the official government departments they are meant to interrelate with. Given the lack of access to policy-making, the destaffing problem, and the drainage of previously-available financial resources (leading to countless NGO funding crises), it is becoming evident that the progressive watchdog flank in civil society is waning.
Many powerful forces in government and business don't particularly care. Some relish the opportunity to explicitly break RDP promises that "consultation and joint policy formation must continue as the RDP is developed into an effective programme of government" (1.1.4); that "organisations within civil society that participated in the development of the RDP will be encouraged by an ANC government to be active in and responsible for the effective implementation of the RDP" (1.1.5); and that "social movements and CBOs...will require capacity-building assistance... [which] should be developed with democratic government facilitation" (5.13.2).
In sum, I think there are now two additions to the already demanding work progressive policy advocates face within the RDP Council: coordinating approaches more closely so that policies are more closely aligned (rather than continually treated sector-by-sector), and more actively watchdogging the progressive components of the RDP. In these respects, international development experience may be helpful to assess a) what it will take for progressives in South Africa to link up with progressives elsewhere to challenge the globalisation of neo-liberalism (which after all is ultimately the primary enemy of social progress);
b) what kinds of progressive macroeconomic and national development strategies South Africa will need to undergird growth, job creation and the redistribution of wealth, and how to get debates going and actually win these debates; and c) how to coordinate our approaches to social policy so that they emphasise universalism, decommodification and destratification.
While this paper may have laid out the argument in an abstract and somewhat academic manner, it should be clear to all concerned that it is of utmost practical importance that the Democratic Movement begins a process of political and policy alignment, just as government is doing through the NGDS, so that debates can begin in earnest. After all, the whole world is watching South Africa for inspiration and guidance, in moving from TINA to THEMBA in the next round of people-driven development struggles.