There’s no going back – but where are we going to?
By Jeremy Cronin
There is a growing agreement in South Africa that as we fight the coronavirus (Covid-19) pandemic we cannot simply return to the immediate pre-lockdown past. We cannot go back to the crisis before the crisis. President Cyril Ramaphosa articulated this well in his 21 April 2020 televised address to the country: ‘We are resolved not merely to return our economy to where it was before the coronavirus, but to forge a new economy in a new global reality.’
But what will this new economy and this new global reality look like?
In line with his social compacting and broad national unity approach, President Ramaphosa’s generalised indications of this new economy contained hints of some of this, and some of that.
‘Radical economic transformation’ is there. It is a call that the SACP has long made, but it is also a term terribly debased by the state-capture RET bunch. ‘Empowerment’ is mentioned – but interestingly and significantly without the preceding adjective ‘black’. ‘Inclusive growth’ is there which should please pretty much everyone – except for those environmental campaigners who argue, not without considerable plausibility, for global de-growth. Even DA ideologues might (admittedly at a push) find some solace in Ramaphosa’s reference to ‘opportunities’ (‘Our new economy must open new horizons and offer new opportunities’).
But it is in the president’s commitment to accelerating ‘structural reforms’ that the sharp differences within government and in the shaping of broader economic and social policy will play out. ‘Structural reforms’ will be understood in much of the mainstream media as the kind of neo-liberal, austerity measures persistently advocated by Moody’s and much of the local economic commentariat.
For a typical current example see Mills Soko and Mzukisi Qobo, ‘Covid-19 crisis is an opportunity to drive change’, Daily Maverick, 23 April 2020 ( https://www.dailymaverick.co.za/article/2020-04-23-covid-19-crisis-is-an-opportunity-to-drive-change/ ). The authors use the pandemic to urge Ramaphosa to play a strong hand. ‘Real leaders rise to the challenge of the moment, exercising authority and projecting a distinctive voice to calm the storms. Sham leaders, on the other hand, wilt in the face of storms and go with whatever the masses are demanding.’ Apart from the typically disparaging and elitist reference to ‘the masses’, we might agree with this characterisation of ‘real leadership’ – but what is the actual content of that leadership, and who are the ‘sham leaders’ Soko and Qobo are alluding to?
This soon becomes apparent. ‘Real leaders’ shamelessly apply neo-liberal shock-therapy. As for ‘sham leaders’ no prizes for guessing who our authors have in mind: ‘There has been opposition in some circles’, Soko and Qobo tell us, ‘to South Africa approaching the IMF and the World Bank for financial support.’
Opposition to the IMF (International Monetary Fund) and World Bank shouldn’t be based on mindless sloganeering. But any engagement with these multi-lateral entities should certainly be mindful of their recent history. (For a devastating expose of the role of the IMF in crippling Ecuador’s health system, a country with the highest per capita Covid-19 mortality rate in Latin America and the Caribbean, with bodies lying in plastic bags on the streets, see Kate Aronoff, ‘The World Order is Broken. The Coronavirus proves it’, The New Republic, April 22, 2020 - https://newrepublic.com/article/157328/world-order-broken-coronavirus-proves-it)
Soko and Qobo happily pass over this kind of very recent and ongoing history. Instead, they tell us: ‘even countries with economies stronger than that of South Africa have previously utilised the lending facilities of these multilateral bodies. One such country is China, which has sourced funds from multilateral development banks to finance its economic development.’
But, yes precisely, China does have a very much stronger economy than South Africa and that is a large part of the point. In particular, with its huge trade surplus with the US, China has a mountain of US dollar reserves (over $3-trillion). China clearly has no problem in meeting dollar-denominated repayments on the loans that the IMF and World Bank provide. One of South Africa’s still remaining relative strengths compared to the majority of our African neighbours is that our public debt is overwhelmingly Rand-denominated. As South Africans, resorting to an IMF Covid-loan, even at extremely low interest rates and with few conditionalities, we would still run the risk of major Rand depreciation against the US-dollar with the consequent dangers of a default. Failure to repay would then trigger the full blitzkrieg of IMF conditionalities.
We are not saying don’t explore IMF and World Bank possibilities in the midst of the Covid-19 crisis. But we are saying – do this with a great deal of caution, in short, using current jargon, we need to do this with full face-masks, protective gloves, and a risk-adjusted vigilance appropriate to a level 5 danger.
Returning to Ramaphosa’s televised address – a closer reading of what follows in his commitment to accelerating structural reforms leans somewhat away from what Soko, Qobo and the Moody’s of the world have in mind. What the president actually said was: ‘we will accelerate the structural reforms required to reduce the cost of doing business, to promote localisation and industrialisation, to overhaul state owned enterprises and to strengthen the informal sector.’
To be sure, ‘reducing the cost of doing business’ could mean further liberalisation, further reduction of capital controls, the loosening of environmental regulations (as currently in the US) – but it could also mean improving the efficiency and effectiveness of government regulatory measures. It could even mean dealing decisively with private and public-sector corruption and oligopolistic price fixing.
Overhauling state-owned enterprises can mean many things – from outright privatisation through to greatly improved capacity of the broad public sector to drive progressive transformation.
However, in at least some cases there is, happily, less space for ambiguity. The idea of ‘promoting localisation and industrialisation’ simply doesn’t exist in the IMF’s structural adjustment vocabulary.
President Ramaphosa’s immediate public health interventions have deliberately, and correctly, sought to achieve the maximum degree of broad South African unity through an ongoing process of consultation and engagement while at the same time providing decisive leadership on lockdown regulations. Real leadership. However, the road forward towards a ‘new economy’ that addresses the South African crisis (of unemployment, poverty, inequality and food insecurity) that existed before and has now been deepened by the Covid-19 crisis will not be achieved through ambiguity and a little bit of centre-centre-right and a little bit of centre-centre-left shuffling. In the midst of a pandemic and in the midst of the broader crises of unemployment, poverty, inequality and looming irreversible climate change, occupying a supposed centre might just turn out to be dead centre.
The same applies to the wider international reality. As Ramaphosa has correctly stated there is no returning to a pre-Covid-19 world. Already the global reality is reshaping dramatically. But will it be a better or worse world? With U.S. global hegemony slipping, the campaign to de-dollarise international multi-lateral financial institutions like the IMF (as originally intended by Keynes) needs to be intensified. And what about the for-profit pharmaceutical giants? Will a Covid-19 vaccine, hopefully developed within the next 18-months, be the collective ownership of humanity, or will it be the intellectual property of some major, private profits-first Pharma monopoly, pricing it out of reach to societies that most desperately need it?
Nothing is certain. What is certain is that popular mobilisation, effective left policy-development, a capacity to engage with and within our governments, forging solidarity links with and learning lessons from international struggles, and the ongoing critique of neo-liberal austerity are more decisive than ever.
Remember Helen Zille’s praise for Singapore? Remember how we were told about the ‘positive legacy’ bequeathed to it by colonialism? Living proof, Zille said, that colonialism ‘was not all bad’.
Let’s also not forget how, just three weeks ago, Singapore was being commended for its seemingly prompt and effective response to the pandemic.
Well, it is not just in South Africa that Covid-19 and its consequences have made dramatically transparent the persisting legacy of inequalities in our society.
Sadly, positive infections have now rebounded massively in Singapore amongst the port-city’s hitherto forgotten one-million migrant workers housed far away from the country’s glittering skyscrapers and world-class port facilities (https://www.theguardian.com/world/2020/apr/23/singapore-million-migrant-workers-suffer-as-covid-19-surges-back ) The overcrowded slum-like hostels and the daily cramped buses in which the migrants were transported to construction sites have now become vectors for a renewed explosion of the pandemic.
Everywhere, colonialism and its progeny, contemporary imperialism have laid down unsustainable patterns of development and gross underdevelopment. These are not separate realities. They are systemically connected, each the precondition for the other. Everywhere the pandemic is swinging back and forth between these poles of grotesque wealth and grinding poverty, once again underlining that capitalist modernisation and supposed neo-liberal, post-colonial miracles always have a deeply oppressive back-story.