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Blurring Mandela and Neo-Liberalism

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Posted on Dec 14, 2013
ben hanbury (CC BY 2.0)

By Danny Schechter

On the Monday after Nelson Mandela’s death, The New York Times’ specialist on deals, Andrew Ross Sorkin, dealt the truth a few blows by offering an incomplete and superficial story about Mandela’s infatuation with the “freedom of markets” and, by extension, in Timesspeak, a “Free Economy.”

Rather than frame the story as a case of how the power of global corporations and banks threatened and pressured the new Mandela government—even before it became a government—to embrace their notions of neo-liberalism, to ensure that those who wielded economic power in the past would continue to do so in the future, the paper of record built its story of an event that is on the record: Mandela’s “seeing the light” at a meeting of the World Economic Forum.

That was the tip of an iceberg.

Sorkin reports (or should I say distorts?) the event this way:

The story of Mr. Mandela’s evolving economic view is eye-opening: It happened in January 1992 during a trip to Davos, Switzerland, for the annual meeting of the World Economic Forum. Mr. Mandela was persuaded to support an economic framework for South Africa based on capitalism and globalization after a series of conversations with other world leaders.


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“They changed my views altogether,” Mr. Mandela told Anthony Sampson, his friend and the author of “Mandela: The Authorized Biography.” “I came home to say: ‘Chaps, we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment.’ ”

Think of that: He is saying, “we have to choose.” “Have to” implies Mandela perceived he had no choice. That’s not evolution, it’s extortion. Sorkin asks whether they were pressured, but his probe goes no further than talking with one man who supported the change, Tito Mbweni, a onetime labor leader who later became a functionary at the Reserve Bank, playing the role of business’ best friend in South Africa.

(I met Mbweni back then at the Labor Department in Washington, where he was being groomed for leadership like many South African economists and activists in the African National Congress who were given special courses in economics by Western governments, educational institutions and corporate consultants.)

The Times reports correctly that the ANC was advised by officials from socialist governments in Vietnam and China, who were then “modernizing” their economies (i.e., taking the capitalist road) not to antagonize the West.

One point to remember, biographer Sampson also wrote: “Mandela had no experience in economics, but he accepted the imperatives of the global marketplace.” In furtherance of this market logic, under pressure to please South African mine owners and bankers, he appointed Derek Keys, de Klerk’s pro-market finance minister as his own, and then, when he stepped down, replaced him with Chris Liebenberg, a banker. He kept Chris Stals, a conservative former member of the Broederbond, on the Reserve Bank. In essence, he said, “the old guard was running what to all the world looked like a new show.”

Ronnie Kasrils, the MK commander turned government minister, looked back on this history and wondered whether compromises made then sealed the country’s fate, in effect blocking deeper social change. This tension also divided many in the ANC even as it seems to have satisfied the small group of billionaires that dominate the economy.

Behind all of this was Mandela’s hope or belief that if South Africa pleased the West, manna would fall from heaven and wealthy Western governments would follow through on implied and in many cases actual promises to generate new jobs and make substantial investments.

For the most part, that didn’t happen, and, as the Times reports, the new post-Davos ANC policy shift from a Reconstruction and Development Programme to GEAR, a finance strategy approach favored by banks and corporations, failed.

Poverty and unemployment remain obscenely high in today’s South Africa. International businesses did not live up to their pledges, as they rarely do.

In my book, “Madiba A to Z: The Many Faces of Nelson Mandela,” I go back to less publicized earlier encounters between the ANC and the global economy, back to 1993 when top secret negotiations took place in nighttime sessions of the then-in-charge Transitional Economic Council, made up of equal numbers of members from the old government and the expected new one to come after the elections, just six months away.

It was there that the ANC discovered that South Africa was largely broke, bankrupted by excessive military spending and corruption by the Afrikaner government—there was little money in the till after big banks and others were given major so-called life boats, loans to tide them over in the transition.

According to Sampie Terreblanche, an economist at Stellenbosch University in South Africa and a former economic adviser to the apartheid government, the International Monetary Fund agreed to make a loan, but with severe conditions that both the ANC and members of the whites only National Party had to agree to unanimously.

He tells the whole story in his book, “Lost in Transformation” and he told me: “When they reached agreement, more or less, they decided that South Africa needed a loan of $850 million to solve some of our foreign exchange problems. The International Monetary Fund was prepared to give us the money on one condition: that all 16 members—half representing the ANC, half representing the government—had to sign a document. If one reads that document carefully, one sees that it is nothing but the Washington Consensus. South Africa had to commit itself to fiscal austerity, to liberalization, to privatization, to all these things. So some people called it a sellout.”

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