As the world economy spirals into crisis stage, with fully-fledged deglobalisation and a new round of financial turmoil, the South African context is just as foreboding.
Corporations and workers alike are ill prepared for the period ahead, especially if it entails another export-led drive through SEZs, particularly if the 4th Industrial Revolution plays a major role in maintaining links to otherwise-fraying global value chains. Historically, the main era in which worsening vulnerability to the world economy was witnessed began in the 1980s, once sanctions hit hard and the government of PW Botha defaulted on its $13 billion in foreign debt, in 1985. But after a re-engagement with global capital once sanctions were lifted, South Africa spent the 1990s deindustrialising during a decade of increasing volatility in the world economy. At that point, notwithstanding Nelson Mandela’s strong leadership in consolidating democracy, at least ten fateful decisions made South Africa even more subject to the volatility in world trade, finance and direct investment.
This history is worth reviewing, because in subsequent pages, the South African economy’s underlying problem of overaccumulated capital can then be put in political context. The overaccumulation drive on occasion resulted in severe crises, but with different forms. A falling corporate profit rate from levels amongst the world’s highest in the 1970s resulted in pressure on the economy that helped end apartheid, but under conditions of imposed (elite-pacted) neoliberal policy. Another very high profit ranking in the 2000s coincident with high commodity prices, but then led to financialisation (i.e., higher relative debt and share-portfolio ratios, as well as illicit financial flows), worsening uneven spatial development (within cities and between rural and urban livelihoods), and an amplification of environmentally-damaging minerals-extraction systems. To place renewed emphasis on SEZs as a means of solving the resulting socio-economic problems is unreasonably ambitious, this paper concludes.
Post-apartheid neoliberal economic policies accommodated, accentuated and displaced the crisis conditions noted above. Although great rhetorical effort is made to address social distress through fiscal policy (e.g. social grants and education), the reality is that policies in the monetary, financial and international spheres are amplifiers of inequality, and therefore make the potential for South African producers to sell them to the local market.
StatsSA’s estimate of the ‘Upper Bound Poverty Line’ (UBPL), including food plus survival essentials, was R779/month in 2011, or R26/day. The percentage of South Africans below the poverty line was then 53 percent. At the University of Cape Town SA Labour and Development Research Unit, Budlender et al (2015) argued that StatsSA was too conservative and the ratio of poor South Africans was actually closer to 63%. It would be much more appropriate to use what is increasingly considered a genuine poverty line among international political economists, which is $7.40/day, or roughly R110/day (Hickel 2019). That level would mean roughly 85% of South Africans survive under the poverty line.
The sustained poverty, inequality and unemployment that South Africa’s producers currently confront are reasons for pessimism about an economic recovery. But the most important constraint to the potential for prospering SEZs is a deeper problem than public policy typically admits: capital’s durable tendency to overaccumulation.
