Cambridge, Massachusetts, USA — The end of apartheid, for many in Africa, seemed to promise a better economic future for the continent. For years, Africans north of the Limpopo had watched the apartheid regime build up an apparently thriving industrial economy (with the help of highly restrictive tariff barriers and exchange controls) while economies on the frontline against apartheid were held back and punished for supporting the liberation movements. Now, with the advent of democracy, it was argued, Africa had its own regional powerhouse, an economy with the resources to invest in and develop other economies on the continent.
There's no doubt that there has been a steep rise in South African investment further north, but with all its own problems, can South Africa be expected to be a dynamic force for development in an African Union? We asked Jabulani Sikhakhane, editor-at-large for the Financial Mail, South Africa's leading business magazine and currently a Nieman Fellow at Harvard University, about his country's capacity to fulfill the rest of the continent's hopes.
Is South Africa the economic giant on whose shoulders the rest of the African continent can stand?
I would argue that it ain't necessarily so. In fact, South Africa runs the risk of being driven into the ground by the rest of Africa clamouring to stand on its shoulders.
Most people who see South Africa as an economic giant are looking through a very distorted lens. As President Thabo Mbeki has correctly pointed out, SA is made up of two nations. One, that is poor and mostly underdeveloped - in matters like access to health, education and infrastructure such as roads, telephones and electricity; the other, a mostly developed economy with all the trappings of a good life.
Now most foreign visitors to SA see that part of the country with good infrastructure and shopping centres. Take banking. SA has a well-developed banking system, but it is a banking system that has yet to find a viable mechanism for fully integrating the mass of low-income blacks. Most blacks remain without access to credit, at the same time that SA banks are extending their tentacles to the rest of Africa.
Decades of racial discrimination and an inferior education system have left the majority of blacks without the skills necessary to partake in economic activity. It is the shortage of skills, made worse by the emigration of skilled whites, that threatens to hold back SA's economic development. The government's key problem is not the shortage of money but the lack of qualified and skilled people who can deploy that money. Many ministries have been rolling-over unspent millions because they lacked the capacity to spend them.
So how does a South Africa which faces such a shortage of skills and has a backyard that is in serious need of cleaning, become one of the pillars of the New Partnership for Africa's Development (Nepad) or the African Union?
Grand schemes like Nepad run the risk of distorting SA's economic development policies by shifting attention and resources towards those projects that have a regional or continental flavour. It is in the nature of politics (in both developed and developing countries) that cabinet ministers will tend to do or say things in line with the direction given by their leader. Speeches by SA cabinet ministers are incomplete without a reference to the African renaissance or the New Partnership for Africa's Development.
This obsession with the rest of Africa threatens to achieve the same prominence that globalization (opening up one's economy to international trade and investment) has achieved in recent years. Globalization has achieved such prominence at the risk of distorting economic development.
Most developing countries have now been forced to behave as if opening up their economies (and launching privatisation programmes) was all that was needed to achieve economic growth and development. But an open economy is no substitute for economic development policies. Nor is the African Union or Nepad. And experiences elsewhere suggest that economic development policies are country-specific. South Africa cannot clone South Korea's economic development. She must find her own model, attuned to her own conditions and circumstances.
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A few months ago, when the South African rand was being sold down by speculators, SA's political leaders were at pains to point out that SA was different from Zimbabwe. But projects like Nepad and the Africa Union tie SA's economic future even more tightly to the futures of other African countries.
If that is the price that South Africans must pay for the revival of the continent, how does it compare to the price that other African countries must pay to reap the benefits of Nepad and the African Union?
Membership of Nepad and the African Union is open to all African countries, irrespective of whether they practice democracy or fiscal responsibility; yet the burden may fall most heavily on those who do.[ADF3]
