A View from South Africa
[Contribution to the Reimagining Society Project hosted by ZCommunications]
EXPLANATORY NOTE: Some of these ideas were debated at the Gyeongsang University Institute for Social Studies (supported by the Korea Research Foundation’s grant KRF-2005-005-J00201). Thanks are also due to numerous collaborators in other institutions and justice movements, especially Dennis Brutus at the University of KwaZulu-Natal Centre for Civil Society. The words below are the concluding section of a longer analysis – published in the Swedish journal Development Dialogue (51, January 2009, www.dhf.uu.se) – regarding a myopic condition afflicting the centre-left in the immediate aftermath of Barack Obama’s election: imagining a postneoliberal framework to replace the Clinton neoliberal and Bush neoconservative eras. There is no need to reiterate the dangers of persistent neoliberal policies given how explicitly these have been articulated by staff of the International Monetary Fund in the South or by those politicians carrying out state budget cuts in Northern countries (the journal can be accessed online for the full argument). What, instead, may be useful, is the reimagining of antineoliberal social protest in a way that builds upon real, existing struggles. That is the point of the concluding section of the analysis: a search for ‘realistic’ – actually existing – ways that radical critics of neoliberalism are generating a postneoliberal project through decommodification and, geographically, the deglobalisation of capital.
A realistic postneoliberal project
If neoliberalism may have another breath of life, with mouth-to-mouth resuscitation applied from above by Barack Obama or the International Monetary Fund, much stronger pressure is needed from below to resist. Some forms have been well tested in social struggle, including three ‘pilot projects’ in genuine postneoliberalism: defending against financial degradation; restoring national power without the distraction of global governance; and re-establishing anti-imperialism so as to take advantage of unprecedented United States weakness. I focus here on some dimensions.
First, facing myriad forms of financial crisis, we might consider quite recent examples of community and citizens’ groups generating impressive defence against financial degradation. Consider two micro examples -- the 1990s housing ‘bonds boycotts’ in South Africa’s black townships and Mexico’s mid-1990s ‘El Barzon’ (the yoke) movement against banks – as well as a stronger form of IMF riot than is normal: the Argentine revolt against malgovernance and international debt/banking control in 2001-02 that led to a debt default of US$ 140 billion.
South Africa’s bond boycotts began in the wake of the 200,000 mortgages granted in townships during the late 1980s. The long 1989-93 recession left 500,000 freshly unemployed workers and their families unable to pay for housing. This in turn helped generate a collective refusal to repay housing bonds until certain conditions were met. The tactic moved from the site of the Uitenhage Volkswagen auto strike in the Eastern Cape to the Johannesburg area in 1990, as a consequence of two factors: shoddy housing construction (for which the homebuyers had no other means of recourse than boycotting the housing bond) and the rise in interest rates from 12.5 per cent (-6 per cent in real terms) in 1988 to 21 per cent (+7 per cent in real terms) in late 1989, which in most cases doubled monthly bond repayments.
As a result of the resistance, township housing foreclosures which could not be consummated due to refusal of the defaulting borrowers (supported by the community) to vacate their houses, and the leading financier’s US$ 700 million black housing bond exposure in September 1992 was the reason that its holding company (Nedcor) lost 20 per cent of its Johannesburg Stock Exchange share value (in excess of US$ 150 million lost) in a single week, following a threat of a national bond boycott from the national civic organisation. Locally, if a bank did bring in a sheriff to foreclose and evict defaulters, it was not uncommon for a street committee of activists to burn the house down before the new owners completed the purchase and moved in. Such power, in turn, allowed both the national and local civic associations to negotiate concessions from the banks.
Similarly, a much larger movement – probably 1 million formal members at its peak – joined ‘El Barzon’ in 1995-96. Mexican presidents Carlos Salina and Ernesto Zedillo maintained neoliberal economic policies which led to a crash in December 1994. By mid-1995, not long after Zedillo’s inauguration, 2 million workers had lost their jobs and much of Mexico’s middle class sank directly into poverty. The currency fell by 65 per cent, the stock market crashed, and interest rates soared from 14 per cent to more than 100 per cent. As 200,000 small businesses were declared bankrupt, a million Mexicans joined a bond boycott of consumer, farmer and petty-bourgeois debtors who collectively refused to honour loans that had become unrepayable. Their slogan was ‘I don’t deny I owe – but I’ll pay what is just!’ In many cases, the El Barzon strategy and solidarity foiled foreclosure proceedings, and generated major concessions from the creditors.
In Argentina, protests in 2001-02 by piqueteros against the government’s year-long freeze of bank accounts initially took the form of the cacerolazo (banging of pots and pans in the cities’ main squares) and then massive street demonstrations. During December 2001, one of the four presidents who lost their job due to the intensity of demonstrations, Rodríguez Saá, defaulted on US$ 132 billion in foreign debts. Although disputes remain about whether the subsequent government of Nestor Kirchner could have done more to press home the advantage (Jubilee South’s Argentina chapter remains furious about payment of illegitimate debt), in 2003, Kirchner at least showed Argentina’s capacity to operate in the world economy even after spurning Washington. According to a surprised Economist (2003) magazine, ‘After missing a $2.9 billion payment to the International Monetary Fund on September 9th, it distinguished itself with the single largest non-payment of a loan in the Fund’s history. The next day, it clinched a deal that may be the speediest and kindest the IMF has ever agreed to.’ Private creditors were forced to take a 70 per cent ‘haircut’ on Argentine bonds.
The same approach to unrepayable debt – national default – was advocated by then-leading UN economic adviser Jeffrey Sachs. He told heads of state at a July 2004 African Union meeting in Addis Ababa, ‘African countries should refuse to repay their foreign debts’ and instead use the funds to invest in health and education. (At the time, the IMF was controversially prohibiting expenditure of health funds donated to Africa, especially for HIV/AIDS mitigation, on grounds that civil service pay would rise to above 7 per cent of GDP.)
Also in 2004, a Cape Town meeting of Jubilee Africa members from Angola, Cameroon, Cote d’Ivoire, the Democratic Republic of Congo, Kenya, Mozambique, South Africa, Swaziland, Zambia, Tanzania and Zimbabwe, and partners from Brazil, Argentina and the Philippines working on a comprehensive Illegitimate Debt Audit demanded that their national governments pursue this postneoliberal agenda:
• full unconditional cancellation of Africa’s total debt;
• reparations for damage caused by debt devastation;
• immediate halt to the Highly Indebted Poor Country initiative and Poverty Reducation Strategy Papers and the disguised structural adjustment programme through the New Partnership for Africa’s Development and any other agreements that do not address the fundamental interests of the impoverished majority and the building of a sustainable and sovereign Africa; and
• a comprehensive audit to determine the full extent and real nature of Africa’s illegitimate debt, the total payments made to date and the amount owed to Africa.
Such national-scale challenges to global financial power are the only ways forward, given the adverse global-scale power relations. From a national power base, several other financial sector reforms can be pursued: imposition of exchange controls (such as were applied by Malaysia in 1998 and Venezuela in 2003), bank nationalisation (as many Northern countries are doing by way of bailouts), and fiscal stimulation (as national states are generally being encouraged to do at present, in order to avoid global depression).
The contemporary form of this approach takes shape in the deglobalisation and decommodification strategies for basic needs goods, as exemplified in South Africa by the national Treatment Action Campaign and Johannesburg Anti-Privatisation Forum which have won, respectively, antiretroviral medicines needed to fight AIDS and publicly-provided water (Bond 2006). The drugs are now made locally in Africa – in Johannesburg, Kampala, Harare, and so on – and on a generic not a branded basis, and generally provided free of charge, a great advance upon the US$ 15,000/patient/year cost of branded AIDS medicines a decade earlier (in South Africa, half a million people receive them). The water in Johannesburg is now produced and distributed by public agencies (Suez was sent back to Paris after its controversial 2001-06 protest-ridden management of municipal water); and in April 2008 a major constitutional lawsuit in the High Court resulted in a doubling of free water to 50 litres per person per day and the prohibition of pre-payment water meters (Bond and Dugard 2008).
Similarly, a deglobalised, decommodified alternative is needed to oft-feted micro-credit schemes financed by international financiers and foundations at the expense of local impoverished women who are expected to pay exorbitant interest rates. For anyone believing that micro-credit is a postneoliberal project, consider the extremist viewpoint of Grameen Bank’s Muhammad Yunus (1998, 214): ‘I believe that “government,” as we know it today, should pull out of most things except for law enforcement and justice, national defense and foreign policy, and let the private sector, a “Grameenised private sector,” a social-consciousness-driven private sector, take over their other functions’ (see Bond 2007 for a full critique).
In contrast, the Venezuelan government of Hugo Chavez has begun providing large grants to 3,500 ‘communal banks’ (Pearson 2008):
Communal banks are social organisations that administer the financial and non-financial resources of the communal councils, the organising mechanism of communities. Through the communal banks, organised communities can finance social projects, assist members in cases of emergency, and make social investments. In the 2009 budget, Chavez explained, US$ 1.6 billion has been assigned to the communal banks. Chavez noted the irony that while large, small and medium sized banks are collapsing around the world as a result of the financial crisis, Venezuela is ‘giving birth to thousands of banks that are banks of the people, the communal banks, the banks for popular power…and [this] popular power is vital for the future of the revolution…so this…can’t fail.’… Chavez is also encouraging the communal councils and the national government bodies to create networks of social distribution of the products that are made in the socialist companies and collectives. The idea of such a network would be to counteract the capitalist networks of production, which have been generating speculation in the price of products.
Without a leadership figure of Chavez’s capacity, the crucial ingredient for Africa is heightened pressure from below. This means the strengthening, coordination and increased militancy of two kinds of civil society: those forces devoted to the debt relief cause, which have often come from what might be termed an excessively polite, civilised society based in internationally-linked NGOs which rarely if ever used ‘tree-shaking’ in order to do ‘jam-making’; and those forces which react via short-term ‘IMF riots’ against the system, in a manner best understood as uncivilised society. The IMF riots that shook African countries during the 1980s and 1990s often, unfortunately, rose up in fury and even shook loose some governments’ hold on power. When these, however, contributed to the fall of Kenneth Kaunda in Zambia (one of many examples), the man who replaced him as president in 1991, former trade unionist Frederick Chiluba, imposed even more decisive IMF policies. Most anti-IMF protest simply could not be sustained (Seddon 2002).
In contrast, the former organisations are increasingly networked, especially in the wake of 2005 activities associated with the Global Call to Action Against Poverty (GCAP), which generated (failed) strategies to support the Millennium Developmental Goals partly through white-headband consciousness-raising, through appealing to national African elites and through joining a naïve appeal to the G8 Gleneagles meeting (Bond 2006). Since then, networks have tightened and become more substantive through two Nairobi events: the January 2007 World Social Forum and August 2008 launch of Jubilee South’s Africa network. Moreover, Jubilee Africa also added ecological debt to its agenda, insisting that the free environmental space that African rainforests provide the North for acting as a carbon sink be compensated in future financial and aid negotiations. Such calculations, as done for example by Joan Martinez-Alier (2002), would show that the North owes the South, not the other way around.
Regrettably, a necessary prerequisite to make all the above strategies more feasible is the re-delegitimisation of US power. Most obviously, a world addicted to the US dollar as the reserve currency will be at the mercy of the US state, as one example. The insane mutually-assured destructive system of US Treasury Bill purchases by East Asian investors – so as to ensure a market for their consumer goods – began running into the contradiction of huge declines in Chinese, Japanese, Taiwanese and Korean dollar reserves wealth, as the US currency fell substantially in recent years. A multi-currency exchange system is inevitable, and to the extent it is conjoined with national exchange controls and hence less extreme volatility in financial trading, will be advantageous for economic development, compared to the current currency anarchy. Ideally something like Keynes’ International Currency Union – which would penalise balance of trade surpluses – would be ideal, but given the neoliberal and neoconservative forces in multilateral institutions, is probably out of the question in our lifetimes.
The big problem remains the US state, because to counteract US economic and cultural decline, two strategies are now in play: political revitalisation via Barack Obama’s carefully-crafted image as a non-imperialist politician with roots in African-American, Kenyan and even Indonesian traditions; and the activism anticipated through his secretary of state, Hillary Clinton, a strong supporter of the US war against Iraq. Obama may not run as extreme a militarist regime as Bush/Cheney did or as McCain/Palin would have done. Yet as Jeremy Scahill points out, there is an awful precedent from Washington’s imperialist habits during Bill Clinton’s administration:
The prospect of Obama’s foreign policy being, at least in part, an extension of the Clinton Doctrine is real. Even more disturbing, several of the individuals at the center of Obama's transition and emerging foreign policy teams were top players in creating and implementing foreign policies that would pave the way for projects eventually carried out under the Bush/Cheney administration…
More importantly, even if Obama restores a degree of US credibility at the level of international politics, US military decline will continue to be hastened by failed Pentagon strategies against urban Islamist guerilla movements in Baghdad, rural Islamist fighters in Afghanistan and Pakistan, and the belligerent nuclear-toting state of North Korea. None of these forces represent social progress, of course, but they probably are responsible for such despondency in Washington that other targets of US imperial hostility, such as the governments of Cuba, Venezuela, Bolivia and Ecuador, remain safe from blatant overthrow in the near term.
In turn, those four Latin American countries have the best opportunity in the world, today, to build postneoliberal economic, social and environmental projects. The latter eco-socialist project is vitally important, because to counter the objectionable idea of ‘petro-socialism’, as practiced in Venezuela, there are some inspiring examples in Cuba’s post-carbon innovations, in Bolivia’s indigenous people’s power and in Ecuador’s official commitment – no matter how it wavers in practice – to a ‘keep the oil in the soil’ policy in the Yasuni National Park. The social and economic advances in postneoliberal Venezuela are important, as are Keynesian strategies being implemented in China (the world’s most expansive public works projects – with ecological disasters ) and Argentina, as key examples.
From South Africa, our window on this new world shows quite clear dangers of both Pretoria government officials and NGOs (for example, Civicus, headquartered in Johannesburg) being coopted into renewed neoliberal (and even neoconservative) US imperial projects, especially if Obama draws upon his African roots for socio-political power. Antidotes remain, of course, and are expressed through anti-imperialist sentiments emerging in both the centre-left political actors (the trade unions and SA Communist Party) and the independent left social movements (especially those acting in solidarity with Zimbabweans, Swazis, Palestinians and Burmese).
But the most powerful South African example is not the negation of neoliberalism and imperialism, but rather the grassroots activist initiatives – such as acquiring generic AIDS medicines and free public water supplies – against the forces of micro-commodification and macro-neoliberalism. These are indeed the most useful signals that another world – realistically postneoliberal – is not only possible, but is being constructed even now.
Bond, P. (2006), Looting Africa, London: Zed Books.
Bond, P. (2007), ‘Microcredit evangelism, health and social policy’, International Journal of Health Services, vol. 37, no. 2, pp. 229-249.
Bond, P. and Dugard, J. (2008), ‘The case of Johannesburg Water’, Law, Democracy and Development, vol. 12, no. 1.
The Economist (2003), ‘Nestor Kirchner’s nimble cookery’, 13 September.
Martinez-Alier, J. (2002), ‘External debt and ecological debt’, ftp://ftp.cordis.europa.eu/pub/improving/docs/g_ser_glob_martinezalier.pdf (accessed December 2008).
Pearson, T. (2008), ‘Communal banks of Venezuela receive big boost’, Venezuelanalysis.com, 15 November.
Seddon, D. (2002), ‘Popular protest and class struggle in Africa’, in Zeilig, L. (ed.) Class Struggle and Resistance in Africa, Bristol: New Clarion Press.
Yunus, M. (1998), Banker to the Poor, Dhaka: University of Bangladesh Press.