His rapid prison release after the Berlin Wall fell suggests Nelson Mandela might have been freed, and his party unbanned, years earlier if they had renounced communism and their fealty to Moscow. The ANC’s current embrace of authoritarian regimes evidences its ongoing penchant for anti-developmental alignments.
The end of the last cold war chaperoned both SA’s political transition and the intense globalisation which supported the spectacular rise of Asia. While benefiting from the former, the ANC rejected the latter. Competing globally is incompatible with its patronage-anchored politics whereas exporting raw materials, particularly to a communist-styled authoritarian regime, is a good fit.
China’s phenomenally successful exploitation of globalisation fortified the ANC to the point that it could de-prioritise development. By boosting demand for commodities, China helped to create the impression that SA’s pre-1994 economic structure could be sustained - while the list of beneficiaries was redefined.
China’s becoming a full member of the WTO in 2001 triggered several years of quite strong GDP growth in SA. To complement the steep growth trajectory of its exporting, China splurged on infrastructure which triggered strong demand for commodities resulting in the rand soaring in value. This provoked much lower interest rates which fuelled a boom in our housing prices and personal consumption. None of this was sustainable.
As it was becoming the world’s top manufacturer and exporter of goods, China’s growth rate would have to slow as the potential to take market share shrank. Meanwhile, China's aggressive infrastructure buildout produced ever lower returns while its massive home building industry eventually overshot demographically limited demand. China is home to the world’s fastest ageing population - and its population is destined to rapidly shrink.
Raising China’s household consumption, which is quite low by international standards, has long been a top candidate for achieving more balanced and sustainable growth. This however is difficult as China’s high personal savings rate traces to most grandparents having one child and one grandchild. Prime working-aged family members are typically too few and insufficiently prosperous to support their parents - and in some cases, grandparents.
China’s all-powerful President Xi has steadfastly opposed aggressively expanding his nation’s still relatively meagre social safety nets despite the sharp drop in housing prices devastating family savings. More recently, youth unemployment has ratcheted up to over 20%.
Our comparable youth unemployment rate is three times China’s yet this understates our burgeoning jobs crisis. Of the sixteen million black adult South Africans who are young and not so young - those between 15 and 35 - most are unemployed with generally dreadful life prospects. Few of them will ever escape poverty and this massive bulge of younger would-be workers is on track to expand indefinitely. Grants are debated in lieu of pursuing solutions.
Rather than shifting China’s economic model toward greater reliance on domestic consumption, Xi’s signature project is his Belt and Roads Initiative. This was initially interpreted as supporting growth-enabling infrastructure development whereas now it is more frequently seen as China promoting authoritarianism to expand its influence.
As over three decades of intense globalisation have resulted in a huge fall in global poverty, soon the only remaining large clusters will be in resource endowed African nations. The core disconnect is that the interests of the average citizens of such nations and those of their ruling elites aren’t well aligned. Rather than transcend such anti-development divisions, the ANC embraces them.
Countries with meagre natural resources such as Japan are well-motivated to support their companies investing to increase the productive capacity of their employees. In the late 1970’s, China’s visionary leader, Deng Xiaoping, decided to copy Japan’s export-led model and this led to tremendous farm-to-factory migration which provoked a massive increase in China’s worker productivity.
Countries across Asia and beyond have copied this model. Post-1994 SA should have also focused on investing in workers to expand their productivity. Instead, a patronage-focused model placed high reliance on commodity exporting. Such models entrench poverty, as is demonstrated by SA having the world’s most severe youth unemployment crisis - with no end in sight.
Most of today’s worker productivity enhancements come from innovations being diffused within global supply chains. Our obscenely high youth unemployment alongside localisation policies devastates worker productivity. Instead of our commodity exports spurring “multiplier-effect” jobs, they support patronage and isolation.
What might go wrong
Our ruling party can’t expect to be electorally competitive in 2029 - nor can its leaders accept the consequence of being dispatched. By aligning with Beijing and Moscow, the ANC can more easily dismiss the western criticisms which will be inspired by the party unravelling the institutional protections necessary for legitimate elections. So, what might go wrong with the ANC’s embrace of authoritarian regimes?
Russia becoming a vassal state of China is fundamentally perilous. No one can know how or when President Putin’s rule will end. The war in Ukraine won’t result in Russia surrendering. Talk of war crimes will be subordinated to aligning Russia’s and Europe’s overlapping interests.
Putin’s health, and his popularity with Russian elites, are increasingly questioned and a weak Putin is an unattractive alignment partner. Nor will his replacement want to be beholden to Beijing. This restricts Putin's ability to escalate aggressively as some of his alignment partners would publicly criticise him - and that would dilute the ability of the BRICS and other Global South groupings to influence global debates.
As the West needs to play Moscow off against Beijing, Putin can negotiate attractive cease fire terms even if his forces lose considerable territory in Ukraine. Economic incentives are amplified by Russia possessing ultra-advanced military technologies.
Peak China or?
Have we witnessed peak China or will they up their game by prioritising key sectors? The country’s competitiveness is a massive advantage but they weaponised it indiscreetly while failing to meaningfully recalibrate an economic model which is at least a decade out of date. Yet they might slog along and then win big from betting on AI, quantum computing and synthetic biology - or through authoritarian alignments coupled with bullying near and distant rivals. If so, would they still seek the public relations support of flailing African regimes?
Does France’s withdrawal of troops from the Sahel signal Europe’s abandonment of much of the region to the Russians and Chinese? Or does it signal how foolhardy old-style imperial ambitions have become in today’s ultra high tech global economy?
The US seems politically enfeebled but its economy, while not being bulletproof, enjoys formidable advantages. Meanwhile, Africa’s relevance to the US has dipped to where perhaps, for now, even the Pacific Island region has become more strategic to Washington. Europe’s economy is going through a vulnerable phase and its focus on Africa is currently dominated by an influx of immigrants.
Underutilised young workers
Africa’s potential doesn’t trace to its purchasing power, which is very modest, or even its commodity wealth - much of which is losing favour or is tightly clustered. The continent’s long-term relevance, like Asia of two generations ago, traces to its having the most underutilised young workers. If they must migrate to succeed, this will suit the authoritarian leaders of resource exporters while entrenching much poverty.
Through alignments like BRICS and China’s Global Security Initiative, Xi seeks to lead the Global South by displacing western influence with aligned authoritarianism. Xi cajoles Chinese workers to accept less and, like our ANC leaders, he expects Africans to remain poor while exporting commodities.
The ANC skirted the economic opportunities which made the post Cold War period an era of extraordinary global upliftment. The party now seems equally determined to have SA miss out on the opportunities arising during this cold war - which other countries are seizing upon.
@shawnhagedorn
