New Agenda is published in partnership with the Institute for Social Development, University of the Western Cape. PRINT ISSN: 1607-2820 In Search of theIn Search of the Developmental StateDevelopmental State Economics and Labour in the Global South: Special IssueEconomics and Labour in the Global South: Special Issue ALSO INSIDE:  China’s era of “reform and opening up”: Lessons for South Africa  Reconstructing the economic order in Africa: A fair and just future  Fifty years on and still fighting: Remember the ‘73 Durban strikes NEW AGENDA 2 0 2 4 - F i r s t Q u a r t e r - I s s u e 9 2 S O U T H A F R I C A N J O U R N A L O F S O C I A L A N D E C O N O M I C P O L I C Y w w w. i f a a z . o r g http://www.ifaaz.org Credits Credits BOARD OF DIRECTORS HON MR KGALEMA MOTLANTHE (Chairperson), former President and former Deputy President of South Africa PROF ARI SITAS Acting Director, IFAA, Emeritus Professor and former head of Department of Sociology, University of Cape Town, writer, dramatist and poet MR TONY EHRENREICH COSATU Deputy Parliamentary Officer MR PALLO JORDAN Former Cabinet Minister and former member of the National Executive Com- mittee of the ANC PROF EVANCE KALULA Emeritus Professor of Law, University of Cape Town, Chair, ILO Committee of Freedom of Association PROF STEVEN ROBINS Professor in the Department of Sociology and Social Anthropology, University of Stellenbosch MS BUYELWA SONJICA Former Minister of Minerals and Energy PROF VIVIENE TAYLOR Emeritus Professor and former Head of Department of Social Development, University of Cape Town New Agenda is a publication of the Institute for African Alternatives (IFAA). It is produced in partnership with the Institute for Social Development (ISD), University of the Western Cape (UWC) and funded by the Rosa Luxemburg Foundation. CONTACT US Email: admin@ifaaza.org Website: www.ifaaza.org Facebook: www.facebook.com/newagenda- online Twitter: @IFAACT or @NEWAGENDAZA Instagram: @newagenda_ifaa Tel: +27 21 461 2340 Address: Community House, 41 Salt River Road, Salt River Cape Town 7925 IFAA STAFF Acting Director Prof Ari Sitas Editor Martin Nicol Production Editor Moira Levy Project Manager Christine Leibach Research and Events Bruce Kadalie Administration and Finance Shamielah Booley Research Services Manager Rachael Nyirongo Project/Research Assistant Jason Hartzenberg Publishers Institute for African Alternatives (IFAA) Institute for Social Development (ISD), University of the Western Cape Layout Capitil Press S O U T H A F R I C A N J O U R N A L O F S O C I A L A N D E C O N O M I C P O L I C Y Cover photo: Growth in Africa: flourishing small-scale farming could be key to development Credit: Kiran Panday, CEIDS mailto:admin@ifaaza.org http://www.ifaaza.org http://www.facebook.com/newagendaonline http://www.facebook.com/newagendaonline Credits EDITORIAL BOARD DR JUAN MANUEL ARBONA (Universidad Mayor de San Andres, La Paz, Bolivia) PROF RÉMI BAZILLIER (Université Paris 1 Panthéon-Sorbonne) PROF AMIENA BAYAT (University of the Western Cape, South Africa) EMERITUS PROF ANTHONY BLACK (University of Cape Town, South Africa) PROF RISIKAT DAUDA (University of Lagos, Nigeria) PROF MULUGETA DINBABO (University of the Western Cape, South Africa) PROF MONDLI HLATSHWAYO (University of Johannesburg, South Africa) PROF RAZACK KARRIEM (University of the Western Cape, South Africa) PROF JULIAN MAY (University of the Western Cape, South Africa) DR SUDESHNA MITRA (Indian Institute for Human Settlements, India) DR PHIONA MPANGA (Makerere University, Uganda) PROF DAFE OTOBO (University of Lagos, Nigeria) PROF STEVEN ROBINS (Stellenbosch University, South Africa) MR MIKE NASSEN SMITH (University of Cape Town, South Africa) DR TZEHAINESH TEKLE (University of Ferrara, Italy) Thanks are due to the Rosa Luxemburg Foundation Southern Africa who commissioned and funded this Special Issue on Economics and Labour. IFAA thanks the guest editors of the Labour section, Debby Bonnin, Department of Sociology, University of Pretoria and uMbuso weNkosi, Department of Sociology, University of Johannesburg for their contributions. New Agenda is funded by the Rosa Luxemburg Stiftung with funds from the Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany, and the University of the Western Cape (UWC). New Agenda is accredited with the Department of Higher Education and Training. ISSN: 1607-2820 © The Institute for African Alternatives (IFAA), Community House, 41 Salt River Rd, Salt River 7925 and the University of the Western Cape, Robert Sobukwe Rd, Bellville, Cape Town, 7535. The publishers are not responsible for unsolicited material. New Agenda is published quarterly by IFAA and ISD, UWC. The opinions expressed are not necessarily those of IFAA and/or ISD, UWC. All advertisements, advertorials and promotions have been paid for and therefore do not carry any endorsement by IFAA and/or ISD, UWC. New Agenda is an Open Access journal that is published in accordance with Creative Commons License CC-BY-4.0. Contributors retain the copyright to their articles. Credits Issue 92 – NEW AGENDA | 3 EditorialContents Contents – Issue 92 Editorial 3 In search of a ‘developmental state’ – By Martin Nicol Section 1: Economic development in the Global South 4 Degrowth in an African periphery Recentring decoloniality around circular ontologies – By Roland Ngam 17 Where is the development in SA’s developmental state? And where is the road to sustainable job creation? – By John Matisonn 31 Lessons for South Africa China during the era of ‘reform and opening up’ – By Douglas Ian Scott 41 South Africa’s migration policy mess Where did it come from, and can it be fixed? – By Alan Hirsch 52 Farming support must switch to black smallholders Focus on urban elite amounts to rural State Capture – By John Matisonn Section 2: Celebrating decades of worker militancy 64 Cosatu’s mute response Waves of social movement unionism in South Africa and its crisis during Covid – By uMbuso weNkosi 77 40 years of shop floor resistance Racial ordering and history of militant culture – By Sithembiso Bhengu 87 Making sense of today’s labour movement as we confront the burden of the future – By Monique Marks News from the continent 94 Dateline Africa Book review 96 A Practical Guide to Levitation: Stories José Eduardo Agualusa Translated from the Portuguese by Daniel Hahn Credits Issue 92 – NEW AGENDA | 3 Editorial In search of a ‘developmental state’ – By Martin Nicol This Special Issue on Economics and Labour is divided into two sections. Contributions on current economic development are followed by three articles presented at a conference marking 50 years since the Durban Strikes of 1973. That said, all of the authors reflect widely on history and on immediate challenges, both for South Africa and the continent at large. Roland Ngam cites examples of colonial era companies of the North who planned the exploitation of Africa to feed their own economic prosperity. He reveals the hollowness and dishonesty of present Northern calls for Africa to reduce its emissions of harmful greenhouse gases. The uniting theme of the articles by Alan Hirsch, John Matisonn and Douglas Scott is the role of the state in economic development. This covers the specific issue of South Africa’s troubled migration policy and debates on intervention frameworks for industry and agriculture. Comparisons are drawn with other African countries (with more fortunate growth paths) and set against the extraordinary economic progress of China. In preparing for this issue, the Institute for African Alternatives drew from its bookshelves a volume edited by our founder Ben Turok, who assembled papers under the title “Wealth Doesn’t Trickle Down – The Case For a Developmental State in South Africa”. The content came from a seminar hosted by a senior government minister at the time, Sydney Mufamadi, and was attended by top leaders and officials of the state, State Owned Enterprises and academic institutions. This was in October 2007, a very different time – before the global economic crisis, Zuma, state capture and Covid. Although the seminar “produced a consensus of what needs to be done to move decisively to a developmental state that serves the people,” it found “little evidence of a comprehensive development strategy directing the state and all its institutions.” Ben Turok’s optimistic hope was for a national mindset change and a “grand agreement” to pursue a common agenda. “While we have managed what we have inherited reasonably well,” he wrote in the conclusion, “our society needs a transformational approach”. Monique Marks’ reflection on “the Durban moment” is used to draw us into considering the roles of youth and labour in social and political movements – and the intense challenges we face today in urban centres without jobs. Mbuso Nkosi and Sithembiso Bhengu look at worker organising both historically and into the present. As usual, we feature a highly selective, but wide ranging, diary of African events in the last quarter – and a review of a book of stories by the remarkable Angolan author, José Eduardo Agualusa, translated from Portuguese by Daniel Hahn. New Agenda 92 marked an editorial team effort to use the Open Journal Systems management software. After determined struggle, and with publication deadlines approaching, we had to take the final stages of the production process offline. But we have learned valuable lessons. Three months was not long enough to work through the too generous time limits we set for peer review. We will try again for issue 93. NA92 Editorial Economic development in the Global South Issue 92 – NEW AGENDA | 54| NEW AGENDA – Issue 92 Colonialism and the Just Transition Economic development in the Global South Issue 92 – NEW AGENDA | 5 Recentring decoloniality around circular ontologies – By Roland Ngam Dr Roland Ngam is programme manager for climate justice and socioecological transformation at the Rosa Luxemburg Foundation Southern Africa, where he coordinates the climate blog ClimateJusticeCentral. Before that, he was a postdoctoral research fellow in the Emancipatory Futures Studies Programme at the University of the Witwatersrand. In this article ROLAND NGAM focuses on Africa and the disarticulated colonial model on which it is built and argues that in order to build a fairer system that works for the majority, the world needs to quickly shift to an ecocentric degrowth ontology that leverages Africa’s rich cultural heritage for the wellbeing of all people. Degrowth in an African periphery Where is the ‘justice’ in the ‘just transition’? Source: Midia NINJA Economic development in the Global South Issue 92 – NEW AGENDA | 5 Economic development in the Global South Issue 92 – NEW AGENDA | 5 There is a train that comes from Namibia and Malawi. There is a train that comes from Zambia and Zimbabwe. There is a train that comes from Angola and Mozambique, From Lesotho, from Botswana, from Swaziland, From all the hinterland of Southern and Central Africa. This train carries young and old, African men Who are conscripted to come and work on contract, In the golden mineral mines of Johannesburg And its surrounding metropolis, sixteen hours or more a day For almost no pay. Deep, deep, deep down in the belly of the earth When they are digging and drilling that shiny mighty evasive stone, Or when they dish that mishmash mush food into their iron plates with the iron shank. Or when they sit in their stinking, funky, filthy, Flea-ridden barracks and hostels. They think about the loved ones they may never see again Because they might have already been forcibly removed From where they last left them, Or wantonly murdered in the dead of night By roving, marauding gangs of no particular origin, We are told. They think about their lands, their herds That were taken away from them With the gun, and the bomb, and the teargas, the Gatling and the cannon. And when they hear that Choo-Choo train They always curse, curse the coal train, The coal train that brought them to Johannesburg. Hugh Masekela – Stimela - 1973 Colonialism and the Just Transition Economic development in the Global South 6| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 7 Introduction There is no doubt about it: the origins of the world’s numerous economic inequality challenges lie in the current iteration of the colonial capitalist system that shifted the frontier of capital accumulation from Europe to the Global South. Colonialism, the neoliberal economic order and the austerity policies that came with the Structural Adjustment Programs (SAPs) in the late eighties have left many African people and communities without infrastructure, education or jobs. Through no fault of theirs, Africans are barely eking out a living on the ruins of what used to be beautiful, idyllic communities where their ancestors lived – mostly well – on their lands and on their own terms, without the kind of mental stress they are constantly under today. Worse still, the environment on which they still depend for their food and sustenance seems to be irretrievably damaged and they will be worst affected by the unfairness of the immanent green colonialism on which the just energy transition project is built. Many Africans are governed by political systems that they barely understand and, needless to say, this is a ticking time bomb. Sooner or later, the world is going to witness an African Spring, much bigger and probably more violent than the Arab Spring. On a broader level, the modern economy is built on a paradigm of exploitation, constant growth, and unfair wealth distribution. Although major advances in medicine, technology and governance have brought significant improvements to the lives of people everywhere over the last 100 years, unfair economic models have also dealt devastating blows to the financial and physical health of many – in fact, billions – of people as well as the planet’s finite resources during the same period. Over time, a shrinking group of people and interests has been appropriating most of the surpluses that millions of workers produce every day. The unfairness in wealth distribution has a face, and it has consequences. The closer you get to the core of global politics and business, the better off you find that people are. The farther away you move from the centre to the outer rings of this circle, the more difficult and dreary existence is for billions of people. The world’s growing inequality and climate challenges require urgent litigation of the neoliberal economic order and if we do a proper job of this, then it can only lead to one conclusion: the hegemonic capitalism model has failed dismally. The invention of Africa Africa, under its current political iteration within the Westphalian state system, is the product of plantation capitalism. You can go through a list of countries and it is clear exactly why they were created: Nigeria (palm oil, groundnut oil), Senegal (cotton, groundnut oil), Cameroon (cocoa, coffee, bananas, rubber), Democratic Republic of … the world is going to witness an African Spring, much bigger and probably more violent than the Arab Spring. Economic development in the Global South Issue 92 – NEW AGENDA | 7 Congo (DRC) (rubber, cocoa, timber), Kenya (coffee, tea), South Africa (gold, diamonds), Liberia (rubber), etc. Plantation capitalism worked in an insidious way to integrate African territories into the global system, albeit with no rights to dictate commodity choices, terms of trade or even what they could get for their labour. It proletarianised Africans and almost eliminated the notion of a peasantry. Depeasantisation was enabled and accelerated by taxation and forced labour regimes that required Africans to either contribute money or labour to empire-building activities. Although the global centre laid claim to colonies and presented them as their property, the wealth from colonies did not necessarily accrue to all citizens of the Global North equally. Rather, slavery and then colonialism was underpinned by trading companies with a large investor base. Surpluses were extracted through an elaborate network of companies owned by banks, royals, wealthy families and shareholders. Here are just a few examples of the concessions that operated in Africa: • Nigeria – the Royal Niger Company; • South Africa – The Dutch East India Company, the British South Africa Company; • Ubangi-Shari (now Congo Brazzaville and Central African Republic) – Compagnie des Sultanats du Haut-Oubangui, Société commerciale, industrielle et agricole du Haut-Ogooué, la Société du Haut-Ogooué, Compagnie Miniére de l’Ogoué; Compagnie Française du Haut & Bas-Congo • French West Africa (Senegal, Mali, Burkina Faso, Niger) – Compagnie française de l’Afrique occidentale (CFAO); • DRC – King Leopold, Compagnie Francaise du Bas Congo, Anglo-Belgian India Rubber Company (ABIR), Société Anversoise, Katanga Trust, Kasai Trust; and • Liberia – Goodrich, Firestone. Once they were constituted, colonial projects became the single most important economic units in the polities. They became the focus of all labour, transportation, administration and socioeconomic life of the colony. It is therefore not surprising that the vast majority of Africa’s major cities today developed around the colonial nucleus in which they were constituted. South Africa is an exemplar of the colonial appropriation systems. At the height of the colonial experience, hundreds of thousands of able-bodied young men were shipped into the country to work in the mines. They came from the entire Southern African region. The nature of their work was such that only men were brought in to do it. They were housed in hostels and spent months at a time deep in the bowels of cities like Johannesburg and Kimberley. When their months-long work was done, they were not even allowed to stay in the cities that their sweat helped build. The riches and good life that accrued from mining were for the enjoyment of whites only. Colonial-era trade yielded investors profits beyond their wildest imagination and this spurred an unprecedented scramble for a piece of the pie. When the scramble turned into a stampede, King Leopold II of Belgium encouraged German Chancellor Otto von Bismarck to convene a conference where spheres of influence would be carved out and shared equally among the rivals. Fighting was bad for business. The money generated through colonialism built the highly-industrialised countries. It built their banks, the skyscrapers, the highways and neat lawns, the gated communities and the cultural wealth of core empire. Colonialism and the Just Transition Economic development in the Global South 8| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 9 Source: Rawpixels Economic development in the Global South Issue 92 – NEW AGENDA | 9 While colonialism made the Global North rich, it left ugly legacies in the Global South. In many areas, large holes still stand where mines used to be. The mineral wealth from these gaping holes now rests on the English King’s crown and in other homes across the globe – everywhere except in the homes of the young men who broke their backs for hours every day deep in the bowels of the African underbelly. Food systems changed forever, and as Africa urbanised, it consumed mostly the type of food that it did not produce. It also changed the socioeconomic realities within communities. Before the colonial experience, the responsibility for producing food was shared equally between men and women. However, with the arrival of concessions, men were progressively drawn into cash crop production and growing food crops became a woman’s responsibility. Men quickly understood that if they married more wives and produced more children, they could produce more commodities and pocket the proceeds. Polygyny thus became even more common across Africa (Jacoby, 1995). When colonialism ended, the commodities that had defined the various colonies continued to be their biggest revenue generator. Agricultural commodities often represented up to 80% of some countries’ GDPs. Nkwame Nkhrumah notes in Neo-Colonialism, the Last Stage of Imperialism (1965) that the general modus operandi of neo-colonialism is to use foreign capital as a tool for the exploitation rather than the development of less developed parts of the world. Many African countries attempted to diversify their economies through import substitution industrialisation policies. However, they soon ran into structural and liquidity challenges. In many countries, the public sector bill was ballooning and expensive projects (dams, sugar mills, aluminium plants, etc.) were not yielding enough revenue and loans were needed to stabilise countries. The reaction of development finance institutions was to put African countries under some of the toughest austerity measures that the world has ever seen. Energy colonialism within the just transition Thirty percent of the world’s mineral resources are found in Africa. The continent has a critical role to play in the just energy transition as well as the global ambition to cap warming at 1.5° relative to preindustrial levels. Although – judging by current global trends – it is clear that the world is not going to cut CO2 emissions by 40% before 2030, there is nevertheless major movement in key industries (auto, energy) to produce cleaner technologies. The US’ Inflation Reduction Act (IRA) has turbocharged transportation electrification in that country. Thanks to the IRA’s $7,500 subsidy, sales of electric vehicles topped one million in 2023. There is also a big jump in the demand for clean energy. Between 2020 and 2023, South African households installed over 4,000MW of rooftop photovoltaic (PV) systems. The big jump in the demand for clean technologies worldwide means that we require large volumes of energy transition minerals (rare earths, graphite, copper, lithium, cobalt, manganese, etc.) as well as water and the land that Africa has in abundance. The World Bank has predicted in its Minerals for Climate Action report (2020) that mining of transition minerals has to increase by at least 500% (3 billion tonnes of mineral sand metals) to meet the world’s demand for clean energy technologies. This reality is already causing a new scramble for Africa. China has a head start on the major Global North economies because it signed a raft of contracts with countries from Madagascar to Niger at the height of the commodity boom of the 2000s. In 2007, it Colonialism and the Just Transition Economic development in the Global South 10| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 11 signed a nine billion dollar transition minerals for infrastructure contract dubbed “the Deal of the Century” with the DRC which gave it control over some of that country’s largest copper and cobalt deposits in Kolwezi worth over $100 billion. The rest of the world is catching up though. Electric car manufacturer Tesla has signed a contract with mining giant Glencore to acquire minerals from DRC. The Russian Wagner Group has been in operation in the Central African Republic in a minerals-for-security arrangement for almost 10 years. The interest in transition minerals is big but there is much bigger interest in fossil fuels like oil and gas following the Russian invasion of Ukraine. Since 2021, over $500 billion dollars have been invested in various fossil fuel projects across Africa. In Mozambique, Total’s gas project worth $20 billion, i.e. bigger than the host country’s entire GDP, has caused civil unrest and terrorist activity to escalate in Cabo Delgado. The violence has already claimed over 4,000 lives and displaced half the population of Cabo Delgado province. In Senegal, DRC and Uganda, oil and gas projects have caused green grabbing, i.e. the taking over of prime forests and wetlands for fossil fuel projects and presenting them as good for the just energy transition. The Uganda-Tanzania heated oil pipeline will run through the Murchison Falls, the Bugoma forest and the Lake Victoria Basin. In the DRC, the government has approved exploration concessions in the middle of the Congo Basin Rainforest, the world’s most effective natural carbon capture resource. In Senegal, the Sangomar offshore oil project has been set up in the middle of a Unesco-recognised world heritage reserve. These projects claim that they will help reduce dependency on biomass or coal, and say they are therefore good for the just energy transition. Energy colonialism projects replicate asymmetric colonial relationships between core and periphery states. While the core states are decarbonising their economies, cleaning up their air, waterways and streets, they are doing so to the detriment of countries in the Global South that supply the mineral resources and sometimes labour required for these transitions. Once again, the large corporations that produce commodities in Africa for use in the Global North are externalising their pollution and exploitative work conditions to Africa. No land is too sacred to be dug open and its biodiversity ripped apart if it has deposits of the resources they are looking for. Protests by indigenous communities do not matter either. Multinational corporations work with the comprador elite to clear any land they want of its inhabitants. Wherever these projects are rolled out, from Mozambique to Cameroon, Uganda and Senegal, environmental requirements have been … unfair economic models have also dealt devastating blows to the financial and physical health of billions of people as well as the planet’s finite resources. Economic development in the Global South Issue 92 – NEW AGENDA | 11 hastily modified to ensure their approval. From Cameroon to Sierra Leone, French-based company, Bolloré, with its interest in international logistics to Africa, has worked with African governments to push entire villages off their lands to make way for oil palm plantations. The palm oil they produce is used to make ethanol for major brands like Shell and Total. Calculations show that the highly industrialised nations have emitted at least 1.6 trillion tonnes of CO2equivalent since the beginning of the industrial revolution. To cap global warming at say 2°, we have to stay within a budget of one trillion tonnes of CO2e Colonialism and the Just Transition Economic development in the Global South 12| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 13 emissions.1 Unfortunately, once again, that entire budget is being burned up by the rich nations. Research for the World Inequality Report shows that the average individual in North America used up about 20 tonnes of CO2e in 2019 compared to only 1.6 tonnes for sub-Saharan Africans (Chancel, 2021:2). The reckless behaviour of highly industrialised countries creates a problem that shall be shared equally among the earth’s inhabitants, in some cases placing unjustified stress on poor countries like Mali, Niger, Malawi, Madagascar that they cannot handle. Although Africa bears almost no responsibility for global greenhouse gas emissions, it is already witnessing an increase in the frequency and intensity of extreme weather events. Madagascar suffered the world’s first famine caused by anthropogenic climate change. The event pushed over two million people into acute vulnerability and required significant efforts by the international community and the World Food Programme to be brought under control. The Horn of Africa and Southern Africa have also suffered major famine episodes in the late 2010s that affected over one million people. Countries like Uganda and Kenya are already witnessing significant challenges as their coffee trees come under more pressure from heat episodes and parasites like coffee borer disease. The Sahel region which has witnessed many episodes of drought over the last half a century has experienced a significant increase in drought and in crop failures since 2010. These events are partly to blame for the instability in the region. Youth in countries like Senegal, Mali, Burkina Faso, Nigeria and Niger have been migrating from villages and small towns to large cities as attacks from armed insurgents and the effects of climate change especially begin to bite. Favourable weather saw over 120,000 youth from the Sahel arrive on the Italian island of Lampedusa in September 2023. If efforts are not made to bolster Sahel towns and cities, this trend will continue to grow. The case for degrowth In 1972, a group of experts assessed development trends and compared them to the stock of resources that the earth had left. Their assessment led them to the following conclusion: By now it should be clear that all of these trades-offs arise from one simple fact – the earth is finite. The closer any human activity comes to the limit of the earth’s ability to support that activity, the more apparent and unresolvable the trade- offs become. ( Meadows et al., 1972: 86) They argued that some of the earth’s resource challenges could be resolved through techno-fixes, i.e. improvements in technology and its ability to develop more efficient processes. However, there were other problems that the world could not deal with quickly. For example, when toxic chemicals and pollutants were dumped into water bodies, the earth required a very long time to metabolise them. This called for a more cautious approach to utilisation of resources. The stark reminder by the Meadows report that we live in a world of finite resources led Andre Amar (Duverger, 2009) to say that “La décroissance, au moins sous certaines formes, apparaît aujourd’hui comme necessaire” (today, degrowth appears to be a necessity, at least in some areas). The Meadows report was not a stark enough warning to people like Ronald Reagan and Margaret Thatcher who championed neoliberal policies that have created a system of footloose capital and greatly dispersed value chains. Once again, there was great pushback against these policies. This is symbolised in José Bové’s resistance against the McDonaldisation of France, the Zapatista resistance against the North American Free Trade Area in the 1990s and, more recently, the Gilets Jaunes uprising in France. Economic development in the Global South Issue 92 – NEW AGENDA | 13 For a long time, people were unhappy with the hegemonic system, but there was not very strong mobilisation against the system. Now, people are fed up. Too many people live from pay check to pay check. It is in this context that degrowth has become an urgent necessity. Degrowth is a paradigm, a philosophy if you will, that calls for an end to the kind of annual growth that is typically represented through Gross Domestic Product (GDP) numbers and for the prioritisation of a fairer and more balanced type of improvement that works for all human beings as well as the planet. Writing in Leur Ecologie et la Notre, André Gorz (2010) says that the world needs a socio-economic and cultural revolution that is going to abolish the pillars of capitalism under its current form and introduce a new relationship between individuals and 1) their community; 2) environment; and 3) nature. That is what degrowth is. It is neither an economic theory nor an already clearly codified set of laws. For his part, Latouche (2010) defines degrowth as: “En effet, il peut s’entendre en un sens littéral, celui d’une inversion de la courbe de croissance du produit intérieur brut (PIB), cet indice statistique fétiche censé mesurer la richesse ; ou en un sens symbolique : décroître, c’est sortir de l’idéologie de la croissance, c’est-à-dire du productivisme” (“in fact, it can be defined from a literal point of view, that is inverting the GDP growth curve, or from a symbolic standpoint, that is getting out of the productivism mindset”). Although degrowth proponents have posited that it is not just an economic theory but rather a complete questioning of the utility of the ’homo economicus’ ontology, some experts still insist on looking at it completely and only as economic theory. This leads them to offer preconceived rebuttals that deliberately leave out what degrowthers seek to achieve. Of course, abandoning all growth and progress would immediately be labelled heretical by many people, especially in the Global South. Which growth do you want them to abandon? This is what one often hears in Africa. In fact, some academics in the Global South believe that they should not concern themselves with concepts like degrowth (Rodriguez-Labajos et al., 2019). They believe that Global North experts pontificating to people who are still poor is patronising at best, or even an insult, considering that they bear no responsibility for causing global warming or rising inequalities. However, this position ignores a number of key facts. To not participate in the degrowth debate is to cede correction of mistakes of the past to the same parties that created the problem and are even now still kicking the can down the road. The global economy is so integrated now that one simply cannot sit in their corner and say: “you deal with the mess that you created. I will just sit here and do my own thing”. The UK government has announced a decision to postpone a ban on sales of new fossil-fuel powered cars from 2030 to 2035. Across Western Europe conservative parties are pushing the narrative that the climate agenda is not a priority right now. Those decisions have a big impact on Africa that is already dealing with the consequences of climate change. While colonialism made the Global North rich, it left ugly legacies in the Global South. Colonialism and the Just Transition Economic development in the Global South 14| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 15 As Latouche (2010) and Foster (2023) have pointed out, degrowth cannot be rolled out in the same way in all parts of the world. The Global South certainly cannot approach the degrowth debate from the same position as the countries of the Global North. They cannot stand on the same principles and demand the same or similar changes. Africa has a population of two billion people, 60% of whom still live in poverty. Although the continent is urbanising rapidly, it is only growing at about 1.1% per year, and services in many urban areas are either in a piteous state or non-existent. The entire African continent produces less than 400 gigawatts of electricity and over 600 million people have no access to electricity at all. The Global North will focus on certain things (e.g. demilitarisation, decarbonising the transport sector, phasing out coal, offering farmers a living wage, class action lawsuits against rogue corporations, etc.) and the Global South will have to do different things (decolonising how we build, educate ourselves, travel, etc.; reconnecting with circular ontologies; abandoning austerity measures; ending reliance on food imports, etc.). The deep levels of deregulation engineered by the Post Washington Consensus have created value chains that bring together dozens of countries to manufacture a single item. It sometimes takes up to more than 20 countries to produce one product. This is certainly the case for mobile phones where the rare earths may come from the DRC and China, the chip from Taiwan, the design from the US, the assembly from China and so on. South Africa for example is a major manufacturing site for Mercedez-Benz, BMW, Volkswagen, Ford and other car brands. It is also a major supplier of fruit to supermarkets all over the world. This value chain model often offshores the dirtier and labour-intensive processes to the Global South. While the shareholders of Tesla and Apple get to pocket large profits year after year, countries like the DRC inherit contaminated waterways, endemic poverty, disembowelled landscapes and artisanal mines with thousands of workers who can cause social unrest or even switch to militias at any moment. Bringing large corporations to account will require everybody working together. The citizens of the Netherlands need to know how Shell behaves in Nigeria. The citizens of the US need to know how the cheap meat on their supermarket shelves is produced in the Amazon. Those who call for electric cars need to know how transition minerals are mined in the DRC. Degrowth and then what? From a Global South perspective, it is very clear: the savings from degrowth must go towards building a better world, and in large part this means repairing some of the damage that the Global North has done to Africa. We must understand what has caused the emaciated children with flies all over their bodies whose images NGOs use to appeal for donations in many Global North media: it is precisely the genocidal activities of empire and their corporations that led to the arrested or maldevelopment in these countries. Many parts of Africa are poor because their wealth is being transported to the Global North every day, and it has to stop. Savings do not have to flow to Africa in the form of cash. For every dollar saved by reforming the financial sector or rogue behaviour from large corporations, we can provide universal basic infrastructure in Africa. Different mechanisms can be put in place for country-to-country as well as city-to-city relationships that provide roads, internet, schools, hospitals and mass transit systems in Africa. It is very important Economic development in the Global South Issue 92 – NEW AGENDA | 15 to provide a lot of direct support to communities rather than relying on African governments to do that work. Many Global North countries are well aware that many African leaders were not put there by their citizens. Elections in Africa have become a process of manufacturing credibility before the international community. The West knows very well that every time aid is given to Africa, there is a massive spike in money transfers from Africa to Europe or America. We have to ask ourselves what would happen if degrowth policies are not rolled out to repair some of the damage that colonialism and bad corporate behaviour has done to Africa. For example, we have seen an increase in Mediterranean crossings to Europe by migrants from Africa in the last decade. A lot of that is due to dishonest relationships between European Union (EU) countries and corporations working in tandem with illegitimate African leaders. Climate change is obviously a problem, but what little resources many communities have has a way of vanishing into foreign bank accounts. If EU corporations do not stop stealing uranium from Niger, gold from Burkina Faso and so on, the so-called illegal migrations will get worse. Another example: Africa has a lot of fossil fuel deposits – South Africa has enough coal to last 200 years; Nigeria has enough oil and gas to last a century. The carbon credit that we have left has to be better managed to cap warming below 1.5-2°. That will only happen if we phase out fossil fuels. The expectation that African countries should just move away from these fuel sources to green ones without adequate support is unrealistic. African countries must be given the resources that they need to operationalise a just energy transition. That support should not happen in the form Refugees risk a perilous journey Source: NDLA Colonialism and the Just Transition Economic development in the Global South 16| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 17Issue 92 – NEW AGENDA | 17 Economic development in the Global South of concessional loans. It cannot happen as loans. African nations deserve no-strings- attached grants and massive transfers of technology to end energy poverty on the continent. That is only fair. NA92 This is an abridged version of a paper that was presented at the “Summer School of Political Ecology 2022-23” held in Ljubljana, Slovenia in 2023. The extended text may be consulted in “Overcoming the Inequalities of Green Transition, proceedings from the Summer School of Political Ecology 2022-23”, pp 77 to 104. Edited by Dr Andrej A. Lukšič, Sultana Jovanovska, Boštjan Remic. Ljubljana, 2024. Available at https://www.politicalecology-ljubljana.si/2023p/ View the presentation by Dr Ngam at https://www.politicalecology-ljubljana.si/2023p/ REFERENCES Foster, J. B. 2023. Planned degrowth: ecosocialism and sustainable human development, Monthly Review: An Independent Socialist Magazine, 75(3), pp.1-29. Gorz, A. 2010. Leur écologie et la nôtre. Available at https://www.monde-diplomatique.fr/2010/04/GORZ/19027 (accessed 5 September 2023). Jacoby, H. G. 1995. The Economics of Polygyny in Sub-Saharan Africa: Female Productivity and the Demand for Wives in Côte d’Ivoire, Journal of Political Economy, 103(5), pp.938–971. Available at http://www.jstor.org/stable/2138751 Latouche, S. 2010. Degrowth, Journal of Cleaner Production, 18, pp.519-522. Available at http://dx.doi.org/10.1016/j.jclepro.2010.02.003 Latouche, S. 2022. La décroissance. Paris: Presses Universitaires de France. Available at https://doi.org/10.3917/puf.latou.2022.01 Meadows, D. H., Meadows, D.L., Randers, J. & Behrens III, W.W. 1972. The Limits to Growth – A Report for the Club of Rome’s Project on the Predicament of Mankind. Washington, DC: Potomac Associates books. Nkrumah, K. 1965. Neo-colonialism: The last stage of imperialism. London: Thomas Nelson & Sons, Ltd. Rodríguez-Labajos, B., Yánez, I., Bond, P., Greyl, L., Munguti, S., Ojo, G.U. & Overbeek, W. 2019. Not So Natural an Alliance? Degrowth and Environmental Justice Movements in the Global South, Ecological Economics, Elsevier, vol. 157(C), pp.175-184. World Bank. 2020. Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. Available at https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining- minerals-for-climate-action ENDNOTES 1 CO2e or “carbon dioxide equivalent” is a measurement of the total greenhouse gases emitted, expressed in terms of the equivalent measurement of carbon dioxide. https://www.politicalecology-ljubljana.si/2023p/ https://www.politicalecology-ljubljana.si/2023p/ https://www.monde-diplomatique.fr/2010/04/GORZ/19027 http://www.jstor.org/stable/2138751 http://dx.doi.org/10.1016/j.jclepro.2010.02.003 https://doi.org/10.3917/puf.latou.2022.01 https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining-minerals-for-climate-action https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining-minerals-for-climate-action Economic development in the Global South Issue 92 – NEW AGENDA | 17Issue 92 – NEW AGENDA | 17 Economic development in the Global South And where is the road to sustainable job creation? – By John Matisonn Journalist and author Matisonn began political reporting in 1974. He was foreign correspondent in Washington for the Rand Daily Mail and reported for National Public Radio in the US. He has been published in the New York Times, Financial Times, Washington Post, The Observer and many others. After four years as a broadcast regulator in the Mandela administration, he became the UN’s Chairperson of the Electoral Media Commission in Afghanistan. He has published two books on South Africa’s political transition process. The ruling party defines South Africa as a ‘developmental state’, but with its rising job losses, growth that is lower than most of its African neighbours and rising inequality can that really apply? What’s missing, asks JOHN MATISONN? Where is the development in SA’s developmental state? Models from Africa Economic development in the Global South 18| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 19 The term “developmental state” was first used by the US political scientist, Chalmers Johnson, in his seminal book, MITI and the Japanese Miracle (1982) to describe a state that leads the drive to industrialise, decrease inequality and protect its people from the negative consequences of foreign corporate exploitation. Since then, China has become the best example of a successful developmental state,1 followed by Thailand, Taiwan, Malaysia and South Korea. If South Africa could come close to matching the achievements of any of these states it would be well on the way to tackling its desperately serious unemployment crisis as well as the threats of poverty and inequality. Why has this not happened, given that it is ANC policy that South Africa, too, is a “developmental state”? Instead, not only has unemployment risen steadily from the teens to 42.1% on the expanded definition, but South Africa’s Gini coefficient, the measure of inequality, is the worst in the world on record and has risen from 59.3 in 1994 to 63 by 2023. It fell to its lowest point by the end of the Mandela years, 57.8 in 2000, after which it rose to a peak of 64.8 in 2005. Since then it has stabilised at around 63. On many indices, South Africa is doing worse than most of its neighbours and most of Africa in terms of unemployment and economic growth. While we can legitimately question the accuracy of data in other states, our comparative record cannot be characterised as adequate. There are three main excuses given by both academics and politicians to explain why comparisons to Asian developmental states are inapplicable. Coming from both left and right, these critiques are: • Japan and the other Asian states are homogenous – their populations are not as diverse as ours is in education levels, cultures or economic expertise and their development cannot be replicated in Africa. • South Africa cannot follow the Asian route of cheap manufacturing of clothing, textiles and electronic goods because South Africa’s strong unions and their alliance with the ruling party has made its wages too high to compete with Asian workers who have fewer rights. • Asian countries are more authoritarian and less democratic than ours and can impose their will in a way a democratic state can’t. This article aims to show that these responses fail to examine the true nature and lessons of the developmental state and to delve deeply enough into the specifics of the South African economy to ascertain the missed opportunities best suited to grow and provide jobs in the current global environment. In fact, the tools of developmental states have been applied successfully in countries outside Asia, including Africa. More On many indices, South Africa is doing worse than most of its neighbours and most of Africa in terms of unemployment and economic growth. https://en.wikipedia.org/wiki/Thailand https://en.wikipedia.org/wiki/Taiwan https://en.wikipedia.org/wiki/Malaysia https://en.wikipedia.org/wiki/South_Korea Economic development in the Global South Issue 92 – NEW AGENDA | 19 important, these responses misunderstand the nature of successful developmental states and what they can teach South Africa. Since our comparative position is worse than other countries operating in the same global conditions, our exceptionally poor performance for 15 years cannot be explained by global trends in politics and trade, or the impact of the Covid lockdown. State Capture and electricity failure are two major causes. Yet it is likely that even without those two massive failures, job creation would remain tepid. The greatest economic reformer in history, Deng Xiaoping, leader of the Chinese Communist Party throughout the period of China’s rapid transformation that brought an astonishing 800 million people out of poverty, tried to pass on the lessons he learnt to his African counterparts. From what he said to them it is evident that he did not believe the lesson was to follow China’s specific path starting with cheap manufacturing of clothing and electronics, which happened to be the path chosen by China based on then prevailing domestic and global conditions. Deng never held office as the head of state or government, but was the de facto leader of the People’s Republic of China from 1978 to the early 1990s. He formally retired in 1992 but was referred to in the Chinese press as the paramount leader and remained influential until his death in 1997. Deng met with a number of African leaders to pass on what he had learnt and gave each the same advice about the lessons from China’s rapid job-creating development. To Ghana’s President Jerry Rawlings, he said: “We have found our own way … Don’t just copy China’s model. You have to walk your own path. If there is any relevant Chinese experience for you, I’m afraid it’s only one thing: ‘seek truth from facts.’ “You must formulate your own policies and plans according to the actual situation of your own country. During the process, you must learn the lessons in a highly timely fashion – to keep the good things and correct the wrong ones. This perhaps is the most relevant experience for you.” He made the same case to Zimbabwean President Robert Mugabe: Seek truth from facts. Don’t be stuck in dogma. The problem to be solved is creating jobs and lifting people out of poverty. The reform path must be driven by the economic realities on the ground, not ideology. Deng spent a considerable amount of time with Mugabe recounting the lessons China learnt from the effects of rigid state control and the destabilisation brought about by the Great Leap Forward and the Cultural Revolution. “We were punished for these mistakes,” Deng told Mugabe (Zang, 2014; Matisonn, 2015). He was making the case for two key things: political and security stability, and constant learning and error correction. Without stability, China’s modernisation would have been impossible. According to Deng’s interpreter, Prof Zang Weiwei, Mugabe responded by scolding Deng for deviating from the policies of Mao Zedong. “We friends in the third world still hope China will uphold the socialist path,” Mugabe said. Deng was irritated that his proven success and historic achievements were summarily dismissed. It is clear from these anecdotes that Deng was not suggesting other states mimic the Chinese path, which started with large-scale production of clothing and textiles, moving into simple manufacturing and steadily up the value chain of more sophisticated goods. In essence, what Deng appears to have focused on, and what was adopted successfully by others, was that the key to success lies in understanding the details of https://simple.wikipedia.org/wiki/Head_of_state https://simple.wikipedia.org/wiki/De_facto https://simple.wikipedia.org/wiki/People%27s_Republic_of_China Models from Africa Economic development in the Global South 20| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 21 your existing economic capabilities and potential, and matching them to the global trends most appropriate to be harnessed to your benefit: “Seek truth from facts.” We now have examples in Africa that show it can work on our continent. Stefan Dercon, an Oxford development economist and former chief economist at the UK government aid agency, the Department for International Development (DFID), who has done extensive field research in Africa, has pointed to exceptional successes in African countries that are not rich in resources that disprove the argument that rapid job-creating growth cannot be achieved on our continent (Dercon, 2022). He highlights three preconditions for driving economic development. They overlap strongly with Deng’s: as precise as possible a grasp of your own state’s specific capabilities, real time error correction and a stable polity. “The challenge for Africans is therefore to use the Chinese model as a benchmark to develop their own model,” Zimbabwean political economist Heather Chingono notes, blaming lack of capacity and innovation as among the causes of African countries’ failure to grow sufficiently (Chingono, 2018). Industrialisation, bringing the economy steadily up the manufacturing value chain, is key to the developmental state. Yet South Africa is far down a 40-year slide that former Trade and Industry (DTI) Minister Rob Davies described as “premature deindustrialisation” (Matisonn, 2019:183). On these grounds alone, South African government policy would not classify as that of a developmental state. Quite the contrary, South Africa is losing ground every year. This is despite the long-running Industrial Policy Action Plan (IPAP) of the DTI.2 The IPAP has not ‘worked’ – but it is there as a developmental plan. The same is true of mining. The volume of South Africa’s mining output has also been sliding downwards for 40 years. To a degree, the severity of the slide has been masked by high commodity prices. Mining companies continued to make profits, even though they produced less tonnes of minerals and employed fewer workers each year. Dercon’s third precondition for rapid job-creating growth is a stable polity, by which he meant stable government and a level of corruption that is sufficiently contained not to constrain development. South Africa has remained relatively stable, but there are warning signs that corruption has not been contained and law and order are under growing threat from petty as well as organised crime. Other African governments have applied developmental state principles successfully to produce rapid growth, for example in Ethiopia, Rwanda and Kenya. These countries offer lessons relevant to South Africa because they result from government decisions, not from unearned windfalls from oil or gold discoveries that may have little to do with government initiatives. Eskom’s failure to meet the country’s demand for electricity as well as State Capture are the obvious culprits. Economic development in the Global South Issue 92 – NEW AGENDA | 21 From 2009 to 2019, an African country notched up the fastest growth in the world, beating China in the middle of China’s big surge. That country was Ethiopia, a country that could not look less like China by any measure. Yet Ethiopia consciously set out to learn from east Asian success. What is clear from both the Asian and African examples is that choosing the sectors to fast track is critical, and will vary from country to country depending on a combination of relative sectoral domestic strength and global trends best suited to create large-scale employment. Ethiopia’s record as the world’s fastest growing economy ended only when a new civil war broke out in 2020. Ethiopia adopted the simple principle of analysing the state of its economy and identifying the biggest opportunities for growth given its resources and its levels of expertise, and the global trends it could capitalise on. This track record is so remarkable that South Africans should study it and the politicians who implemented it. Dr Arkebe Oqubay, a former mayor of Addis Ababa who became Senior Minister and Special Adviser to his country’s Prime Minister, has explained how Ethiopia applied the lessons of east Asia. He understood those lessons to be to selectively focus on specific Coffee farming is Ethiopia’s largest foreign exchange earner Models from Africa Economic development in the Global South 22| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 23 industrial sectors to shape structural change in line with a broader vision and strategy (Oqubay, 2017). For Ethiopia, the starting point was obviously totally different from China’s or South Africa’s. Ethiopia had large agricultural potential and little industry. The government realised there were great gains to be made in improving and supporting agriculture. In 1994 the policy led with agricultural development. From that start support grew steadily into floriculture, which turned out to be a massive growth sector, adding value and jobs. Growth and profits from flowers helped facilitate government’s infrastructure build and its other industrial policies. The government’s industrial strategy kicked in from 2003. A handful of key commitments, driven purposefully by government officials working with the private sector, were responsible for the country’s runaway success. Besides steadily improving the volume and sophistication of agricultural production, its growing need to expand infrastructure led to the decision to replace cement imports with local production. Here again success was substantial. Then came industrial parks and enhancing relevant technical knowledge. Exports in a few areas had other spinoffs, driving increasing technical sophistication, the discipline of keeping quality and prices at international standards, leading to productivity gains and increased foreign earnings that could pay for additional national strategies. State-owned enterprises were managed differently from South Africa, leading to spectacular success with Ethiopian Airways, which has long surpassed South Africa’s endlessly troubled SAA and taken over some of its routes. The Ethiopian government adopted a policy of non-interference in the airline’s affairs, and offered no bailout funding if it failed. Airline experts were free to run it as they pleased, but if they failed, the company would go under. It was a winning formula because managers were correctly incentivised. The government did support the airline when the expansion of floriculture into a major export – flown to Europe and elsewhere by plane – provided a springboard to expand its cargo capacity. After Ethiopia, Rwanda is the next most successful African country in growth and rapid job creation. What can South Africa learn from the faster growing Rwandan economy? Rwanda also carefully chose a handful of sectors based on a keen understanding of their potential and global trends, then pursued them with dedication. As in Ethiopia, Rwanda looked to what already existed as starting points for what it could build. Rwanda already produced coffee and tea. Its National Coffee Strategy increased job-creating value add by increasing the share of high value-added coffee – beans that are “fully washed” – from less than 1% in 2002 to 54% by 2017. If there is any relevant Chinese experience for you, I’m afraid it’s only one thing: ‘seek truth from facts.’ – Deng Xiaoping Economic development in the Global South Issue 92 – NEW AGENDA | 23 Agriculture diversified into higher paying crops like avocados, and like Ethiopia, Rwanda greatly increased its production of flowers for export. In 2015 it launched its Made in Rwanda policy, and by 2018 it exported 20 million roses to Europe. Like Ethiopia, it saw cement as an obvious place to increase volumes and efficiency, and began light clothing manufacture. Rwanda has built a track record of increasing the range and volume of its exports, and its tourism opportunities led to a growth in various travel sector services. It improved recovery rates on its mines. For 15 years up to 2018, it has averaged 20% growth in goods exported and 25% in services. Growth has rarely fallen below 7% since 2005 (Nimusima et al., 2018). One cannot mention Rwanda without referring to its dark side – both the authoritarianism of its President Paul Kagame, and questions about its economic data, since it was puffed up by looting from the Democratic Republic of Congo (DRC), “vacuuming up Congo’s diamonds, gold, cobalt, columbo-tantalite (coltan), cassiterite, and iron,” according to journalist and author Michaela Wrong (2021:328). Non-mining products also crossed the border for export abroad “miraculously rebranded as Rwandan”. But even Wrong concluded that Rwanda’s officials involved in the looting were using most of it to advance Rwanda as well as financing the DRC war. Plunder is a source for Rwandan success. Kenya’s example has particular relevance for South Africa. After a period of State Capture, in 2002 a reform process began which led to rapid economic improvement. Kenya adopted a developmental state approach, and in June 2008 it published its programme, Vision 2030, a roadmap to build a rapidly industrialising middle-income country by 2030. It met that goal in 2015 – 15 years early. Its key areas were communications, including rail, road and internet, increasing electricity supply and agriculture. Its greatest successes have been in infrastructure including renewable electricity, agriculture and fintech. There is lively debate among Kenyan academics about its success, but also criticism that its building projects have been monopolised by large Chinese companies at the expense of local ones. Kenya outperformed regional average growth for eight consecutive years, with GDP growth above 5%. Peter Kagwanja, an academic and CEO of the Africa Policy Institute (API), who was involved in the genesis of this development strategy underlines the multiple indicators of economic growth as follows: Kenya’s economy has expanded from GDP of Sh 1.3 trillion in 2002 to Sh 7.8 trillion in 2017, with its GDP per capita expanding from Sh 27,000 to Sh 166,000. Its paved road network has expanded from 8,938 kilometres to 11,796. (…) The country’s electric power has grown from 1,142 MW to 2,264 MW, increasing its capacity to power industrialisation and enabling to connect 5.9 million households to the national electricity grid, up from 0.48 million in 2002. Large-scale infrastructure projects completed include the high-speed train between Mombasa and Nairobi; the modernisation of the port of Mombasa, which has tripled its cargo handling capacity in ten years; a new deep-water port is under construction in Lamu; and the expansion of airports allows twice as many passengers as in 2002 (Maupeu, 2021:45). Models from Africa Economic development in the Global South 24| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 25 Does South Africa have a developmental state? What went wrong in South Africa? Eskom’s failure to meet the country’s demand for electricity as well as State Capture are the obvious culprits. But developmental states deal with corruption too. Corruption exists in most states, including China and other high-growth states, but even corrupt officials feel compelled to ensure that economic growth remains robust. When it is time for promotions, China’s Communist Party incentivises mayors to increase economic growth in their towns. The South African government’s 2011 New Growth Path aimed to create five million new jobs between 2010 and 2020. The 2012 National Development Plan (NDP) set the goal of “faster and more inclusive economic growth”. The NDP’s target was to reduce the unemployment rate from 24.9% in June 2012 to 14% by 2020 and to 6% by 2030, requiring an additional 11 million jobs, total employment rising from 13 million to 24 million and for GDP to increase by an average annual GDP growth of 5.4%. The reality could not have turned out more differently. South Africa added less than two million jobs in the period, rising from 14.7 million in 2012 to peak at 16.5 million in 2018, nothing near any of the targets set. Instead of unemployment falling to 14% by 2020, it rose to 32.6%. Meanwhile, GDP growth peaked at 3.1% in 2011, before the NDP was published, falling below 1% within two years. But officials’ careers do not depend on their success in delivering growth. And anyway, state officials and government politicians have never displayed a sense of urgency about development actually including the poor. The African Development Bank (AfDB) said the continued underperformance by southern Africa compared to other African regions was primarily because it was dragged down by South Africa. According to the AfDB, southern Africa had the worst economic performance of African regional economies in 2022, growing only 2.7% and projected to decelerate by 1.1 percentage points in 2023. Growth in Africa was projected to stabilise at 4.1% in 2023-24. Unemployment is rocketing in South Africa Source: Flickr Economic development in the Global South Issue 92 – NEW AGENDA | 25 The projected sharp decline in 2023 largely reflects continued growth weakness in South Africa, the region’s largest economy and trading partner, from 2% in 2022 to an estimated 0.2% in 2023, as the country grapples with the impact of high interest rates and persistent power outages affecting economic activity. The economic outlook report shows South Africa’s economic growth is projected to average 0.8% in 2023 and 2024 — the second lowest in the whole region — while Nigeria’s growth is estimated to average 3.3% in the same period. Economic growth for Egypt and Kenya is expected to average 4.8% and 5.8% respectively. Nor is South Africa experiencing “jobless growth.” Since economic growth is smaller than population growth, South Africa is falling behind in real terms. Free State University economist Phillipe Burger once described South Africa as a “social investment state” rather than a developmental state, with its emphasis on investment in human development and enabling people to participate in skilled and thus better-paying jobs (Burger, 2013). The government’s real focus on assisting the jobless has been on programmes that can be categorised as welfare. It’s most effective policy here is the social grant, which now reaches about 19 million poor South Africans. Two other important social programmes, National Health Insurance (NHI) and the universal basic income grant, which would be a monthly grant to all citizens, are under discussion. The social grant has been extremely important to its beneficiaries, and there is a good case to be made for the NHI and a universal basic income grant, but all three are primarily welfare programmes. They are not part of most developmental states’ core policies, though – if the fiscal constraints can be overcome – they have some developmental impact by contributing to the health and welfare of citizens, who put their grant money into the economy, and improved health is developmentally beneficial. The importance of these programmes has increased to combat the “triple threats” of poverty, unemployment and inequality as the economy has failed to deliver jobs. But expanding welfare payments in a stagnant economy will eventually prove unsustainable. Job-creating growth is needed, not only to provide hope for the future but also to sustain grant funding in an increasingly inflationary environment. South Africa’s practices and outcomes do not look like those of a developmental state. The Promise: What a successful SA developmental state would look like Since Africa’s peer countries and neighbours performed significantly better than South Africa in the same global environment, the reasons must be found in South Africa. To blame global conditions is passing the buck. The NDP’s 484 pages are replete with recommendations covering almost every government department, from education to foreign policy to energy and finance. Government departments were realigned to link outcomes to NDP goals on paper, but this generally failed to produce the reforms envisaged. Recommendations across the board, to cut the size of the foreign service, to realign the energy mix or make educational reforms have not materialised. South Africa has extraordinary advantages over other African countries, in industrial, mining, financial and infrastructure terms. It has strong universities, and advanced agriculture. Its youthful population provides potential workers not available in more mature economies. Surely if Ethiopia, Rwanda and Kenya can apply these tools successfully, South Africa can? Models from Africa Economic development in the Global South 26| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 27 Economic development in the Global South Issue 92 – NEW AGENDA | 27 The potential for job-creating growth in South Africa is enormous. But it requires that the lessons of developmental states be examined and implemented, constantly checking outcomes and correcting errors. In developmental states, the role of the state is not usually to run businesses, but to support businesses in chosen sectors as part of a long-term strategy to exploit current opportunities to build steadily greater industrial complexity. The NDP is full of wide-ranging recommendations for multiple ministries. ANC policy documents also embody bold recommendations. But the clear lesson from high-growth countries in Africa and Asia is that a developmental state requires that government first narrow down its laundry list to prioritise carefully chosen economic sectors in the public interest. Drawing on published research and the NDP and Treasury documents, the focus should be on just three drivers of substantial growth, producing hundreds of thousands of sustainable new jobs each. These are the information economy (not to be confused with the ‘Fourth Industrial Revolution’), mining and the green economy (Matisonn, 2019). A fourth, agriculture, offers similar employment rewards. There are strong reasons why these three sectors stand out for the opportunities missed. These were the three great global economic trends of the 30 years of our democracy, and South Africa botched its opportunities in all three. The information boom of the 1990s provided the opportunity to create hundreds of thousands of jobs, most of which would have suited young graduates or school leavers. The government was required to ensure that internet access was cheap, fast and as widely available as possible. A Treasury study anticipated an increase of 0.6% in GDP just from this sector, and private researchers expected far more. A series of government failures has dogged this sector since the mid-1990s. The government set up a blue ribbon panel of international information economy experts, but they gradually stopped attending meetings because they felt their advice was being ignored (Matisonn, 2015). Poor decisions damaged the chance of creating a more competitive market for Telkom and bringing down prices. The two main new telecommunications companies set up during this time were Neotel and Cell C, neither of which has met expectations to create competition for Telkom, Vodacom and MTN, all set up prior to 1994. The next opportunity to repair the damage came with digital migration. By moving SABC and eTV television stations from analogue to digital, valuable frequency spectrum would be freed up and made available for broadband, increasing speed and decreasing cost of access to the internet. Almost every country in the world has done this. The government missed its first migration deadline in 2008, then missed the International Telecommunications Union’s cut-off date in 2015. The Department of Communications lacked the commitment to ensure this valuable process was completed The potential for job-creating growth in South Africa is not just possible – it is enormous. Models from Africa Economic development in the Global South 28| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 29 on time. The process still was incomplete in 2023. More recent reasons for the failure included a dispute over encrypting the signal when Hlaudi Motsoeneng was Chief Operations Officer. Private manufacturers planning to manufacture set-top boxes needed by households with TVs were disappointed when deadlines were not met. The process is still under way, marred by a shortage of set-top boxes that has left many household without TV access. As government stalled, new methods of accessing the internet emerged, and have proved the job creation potential was there. Though migration would speed things up, by 2020 jobs created by the information economy in global business services hit 250,000 – more than double the automotive industry. Of these, 50,000 serviced overseas companies, growing at the phenomenal rate of 24% a year. That should have happened more than a decade earlier. Though decades have been lost, if digital migration is completed competently, those gains can still increase exponentially. A true developmental state would not have allowed this endless fiasco. The communications ministry has been a revolving door. On average, ministers are rotated every 14 months. There were six communications ministers in Jacob Zuma’s nine years; Ramaphosa has had four in his five years. Zuma split the department into two, telecommunications and broadcasting, against the advice of sector experts. As president, Ramaphosa correctly reunited them. The essence of the information economy is that it is the consequence of the convergence of telecommunications, broadcasting and IT. Splitting it up took the country back to the pre-information economy era. Though mining raises increasingly important climate change issues, the steady long- term decline of South African mining output has largely been caused by government missteps rather than concern for global warming. Many think jobs declined naturally because our mines are old. That’s not true. The missing factor is exploration. Exploration using new methods has found new deposits on every continent, but exploration has slowed down markedly in South Africa. Former South African mining houses join the global players to establish new mines elsewhere. Exploration contracted because South Africa is considered increasingly unattractive to investors compared to other mining countries. The Fraser Institute measures investors’ perception of South Africa as a mining investment destination. By 2019, Namibia and Botswana ranked in the top two in Africa while South Africa was 12th out of 15. For the last two years South Africa ranked in the bottom ten global mining jurisdictions, at 57 out of 62 in the Investment Attractiveness Index in 2022. The year before it was 75th out of 84 jurisdictions. Even allowing for environmental concerns, mining will be important to the third great global trend South Africa has been woefully slow at responding to – the green economy. Government handling of the green economy potential has been tragic. After promising a renewable energy programme, foreign and domestic firms established factories to make components to produce solar and wind electricity. The programme to commission green electricity began and was widely praised. Then in 2015 Eskom took the decision to stop approving new renewable electricity projects. Germany’s SMA Solar, the world’s biggest manufacturer of solar power inverters, a critical component in solar power systems, had opened a multimillion-rand manufacturing facility in Cape Town in 2014. The facility included a production line and quality test centre for SMA’s Sunny Central inverters, warehousing, as well as the Economic development in the Global South Issue 92 – NEW AGENDA | 29 African branch of the SMA Solar Academy training centre. After Eskom froze new renewable electricity projects, SMA closed shop in South Africa, citing government’s lack of commitment to renewable energy. Matla, a 7,500m2 factory project opened after Energy Minister Dipuo Peters declared that South Africa should aim to install one million solar water-heating units by 2014, closed after two years. Well-known former journalist and businessperson, the late Zwelakhe Sisulu, a former Matla director, said Eskom’s new quota arrangement for low-pressure heating systems had made the manufacturing operation uneconomical. There is no shortage of investment funds available for these sectors. The programme attracted R194 billion in investments in six years, with over R53 billion (27%) coming from foreign investors. Yet it is obvious why decision-makers in these industries feel unable to invest. Something bigger even than State Capture has gone wrong, and we will not fix it till we face it. The fact that growth and employment went backwards, and that State Capture was able to do so much damage, point to the weaknesses of the government’s commitment to a developmental state, which is evident by the: • Lack of unity of the cabinet and state-owned enterprises to achieve these objectives. • Rapid change of ministers. Ministers serving for little more than a year barely have time to develop a plan before they are moved. • Many of the targets were too broad and vague. • There is little evidence that these goals were top of ministers’ or their departments’ priority lists. • Perhaps most important of all, the government has not focused systematically on its failures and engaged with the best advice to reverse each failure, one by one. For all the references to prioritising, there is little evidence of it in practice. The government has proposed a grand social compact across business, labour, government and other stakeholders as the key to unlock development. Failure to develop successful agreements with business was, in part, because the focus was national instead of sectoral. If members of the government contradict each other as described above, the business community feels burned. The 2015 Eskom decision to block renewables and the missed digital migration deadlines since 2008 have left scars. The world can’t wait. Neither can South Africa’s unemployed. Prioritising three or four sectors, reaching agreements with stakeholders in which every member of the government is required to be in lockstep will move South Africa many steps forward towards a developmental state. This seems to be exactly what Deng Xiaoping had in mind when he said: “Reform is China’s second revolution.” NA92 Something bigger even than State Capture has gone wrong, and we will not fix it till we face it. Models from Africa Economic development in the Global South 30| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 31 Economic development in the Global South Issue 92 – NEW AGENDA | 31 REFERENCES African Development Bank. 2023. African Economic Outlook. African Development Bank. 2023. South Africa: Country Diagnostic Note. African Development Bank. 2022. African Economic Outlook. Burger, Phillipe. 2013. Facing the Conundrum: How Useful Is the ‘Developmental State’ Concept in South Africa? South African Journal of Economics, 2014 Vol 82 Issue 2. https://doi.org/10.1111/saje.12030 Johnson, Chalmers. 1982. MITI and the Japanese Miracle, Stanford University Press. Chingono, Heather. 2018. Looking east: Implications and lessons for Africa: A critical analysis of Africa-China relations, in Prah, Kwesi DSL and Gumede, Vusi, (eds.), Africa-China partnerships and relations. London: Africa World Press. Dercon, Stefan. 2022. Gambling on Development: Why some countries win and others lose. London: Hurst Publishers. Johnson, Chalmers. 1982. MITI and the Japanese Miracle: The growth of industrial policy, 1925-1975. San Francisco: Stanford University Press. Matisonn, John. 2019. Cyril’s Choices, An Agenda for Reform. Cape Town: Missing Ink. Matisonn, John. 2015. God, Spies and Lies, Finding South Africa’s future through its past. Cape Town: Missing Ink. Maupeu, Herve. 2021. Kenya in Motion 2000-2020. Nairobi: Open Edition Books. Nimusima, Pereez, Karuhanga, Nathan & Mukarutesi, Dative. 2018. An Evaluation of Rwanda Vision 2020’s Achievements. East Africa Research Papers in Economics and Finance EARP-EF No. 2018:17 Jonkoping, Sweden: Jonköping International Business School (JIBS). Available at https://ju.se/en/about-us/jonkoping-international-business-school/collaborate-with-jibs/ gamla-undersidor/jibs-in-africa/program-outcome/working-papers-series/east-africa- research-papers-in-economics-and-finance-earp-ef.html National Planning Commission. 2012. Our future – make it work: National Development Plan 2030. Pretoria: Government of South Africa. OECD. 2012. China in Focus: Lessons and Challenges., Paris: OECD. Oqubay, Arkebe. 2017. Ethiopia: Lessons from an experiment, How they did it (HDI) Vol. 1, Issue 2, African Development Bank. Available at: https://www.afdb.org/en/knowledge/publications/policy-briefs/ Oqubay, Arkebe. 2015. Made in Africa: Industrial policy in Ethiopia. Oxford: Oxford University Press. Republic of Rwanda. 2000. Rwanda Vision 2020. Wrong, Michaela. 2021. Do not disturb: The story of a political murder and an African regime gone bad. London: 4th Estate. Zang, Weiwei. 2014. My personal memories as Deng’s interpreter. Huffington Post. ENDNOTES 1 On all these measures excluding social inequality, which has grown enormously. 2 See https://www.gov.za/faq/documents/where-can-i-find-latest-industrial-development-action-plan https://doi.org/10.1111/saje.12030 https://ju.se/en/about-us/jonkoping-international-business-school/collaborate-with-jibs/gamla-undersidor/jibs-in-africa/program-outcome/working-papers-series/east-africa-research-papers-in-economics-and-finance-earp-ef.html https://ju.se/en/about-us/jonkoping-international-business-school/collaborate-with-jibs/gamla-undersidor/jibs-in-africa/program-outcome/working-papers-series/east-africa-research-papers-in-economics-and-finance-earp-ef.html https://ju.se/en/about-us/jonkoping-international-business-school/collaborate-with-jibs/gamla-undersidor/jibs-in-africa/program-outcome/working-papers-series/east-africa-research-papers-in-economics-and-finance-earp-ef.html https://www.afdb.org/en/knowledge/publications/policy-briefs/ https://www.gov.za/faq/documents/where-can-i-find-latest-industrial-development-action-plan Economic development in the Global South Issue 92 – NEW AGENDA | 31 Economic development in the Global South Issue 92 – NEW AGENDA | 31 China during the era of ‘reform and opening up’ – By Douglas Ian Scott Scott, a South African policy analyst and social scientist, is the director of policy at Wikimedia South Africa, a non-profit that advocates for free access to knowledge and supports the growth of Wikipedia (the free online encyclopaedia). Between 2012 and 2022 Douglas was a criminologist, technologist and policy analyst focusing on the social and statistical study of violent crime in South Africa. He has a Master’s degree in International Development and Public Administration from Tsinghua University in Beijing, China. China’s four decades of spectacular economic growth may now be slowing down, but the lessons for South Africa – with its own development challenges – remain important. DOUGLAS IAN SCOTT argues South Africa should re-orientate its relationship with China so as to learn from, and recreate, the successes of China’s “reform and opening up” era. Lessons for South Africa A poster of Deng Xiaoping in Shenzhen, Guangdong, one of the first Special Economic Zones approved by Deng in 1979 that played an important role in China’s economic miracle Source: Wikimedia Commons China’s development Economic development in the Global South 32| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 33 Introduction China’s economic rise may now be slowing down, but the lessons for South Africa, grappling with its own stubborn development challenges, remain important. While Beijing currently navigates potential stagnation after four decades of breakneck speed economic development, its “reform and opening up” era offers valuable insights for Pretoria. This article argues that South Africa should re-orientate its relationship with China so as to better learn from, and recreate, the successes of China’s development experience. To do this requires appreciating what those successes are and where, as well as which lessons are not worth repeating on South Africa’s own development path. Currently South Africa seems to be learning many of the wrong lessons from China. Political training missions from South Africa to Beijing are intended by China to normalise China’s one-party-dominant political system in the rest of the world, rather than meet South Africa’s primary needs (Sun, 2016). This spreads the ideologically rigid message of Xi Jinping (and formerly Maoist) China, not the lessons of the “reform and opening up” period (1979-2017)1 that propelled China forward. South Africa already has a well-developed, vibrant and dynamic democratic system; we don’t need to be taught things that run counter to those hard won gains. It is worth noting that the current South African focus on centralising power in national government contrasts with the reality of the decentralised and semi- autonomous provincial power structures that have long existed in China; a decentralised system of government, born of historical and geographic necessity, that has allowed for local innovation and local accountability. Focusing on setting up Special Economic Zones, whilst a powerful tool of development, ignores the broader reforms that were implemented and the unique situation of Hong Kong as a gateway to the rest of the world. No South African equivalent to Hong Kong exists. Finally, the creation of State Owned Enterprises (SOEs) to drive development policy ignores the reality that the SOEs have always been a significant drag on China’s economy, one that the reforms usually sought to address and minimise. So what are the lessons that South Africa can learn from China’s “reform and opening up” period? To answer that question we need to examine how China did it. Background In 1978, Deng Xiaoping and his coterie of pragmatic modernisers replaced almost 30 years of rigid Maoist dogma, which in turn replaced “100 years of shame” and domestic turmoil, overturning and replacing Mao Zedong’s strict ideological purity with a practical, open-minded and flexible focus on economic development (Naughton, 2006, Part III). They looked to Japanese, Korean and Hong Kong economic development policies and history (which in turn were largely based on German economic history and the writings of Friedrich List) for inspiration. This created a broad intellectual bedrock on which to build and inspire new development policies that were tailor made for China’s needs. Reopening trade and scientific exchange with the West, particularly the US, gave them access to a vast and wealthy market to drive export-led economic growth. It also allowed for the importation of productivity-enhancing technology that would enable this export-led growth model. A pivotal move marked by China’s entry into the World Trade Organization (WTO) in 2001 accelerated growth further. Despite its entry into the WTO, China maintained various policy tools that effectively protected its own industries Economic development in the Global South Issue 92 – NEW AGENDA | 33 against foreign competition through subsidies and maintaining the low value of its currency. High levels of domestic savings provided the capital to acquire the technology and capital goods necessary (Wang, 2018). This, along with the policy approach expanded on in this article, drove 40 years of powerful economic growth (averaging 9% a year) that lifted more than 800 million people out of poverty and resurrected one of the world’s great historical powers. China’s strategic initiative, “Made in China 2025,” implemented in 2015, aimed to leverage its economic growth, propel a new era of reforms and policy objectives, and elevate the nation to developed nation status. The intention was to steer clear of the middle-income trap that currently challenges South Africa. Made in China 2025 sought to do this by encouraging investments in 10 key high productivity, high technology industrial sectors. These are: information technology; robotics and semiconductors; renewable energy and electric vehicles; aerospace; blue economy; railway equipment; power equipment; agricultural technology; medicine and new materials. Made in China 2025 triggered alarm in Washington and Brussels, alienating China from its most important export markets and sources of technology imports. It fostered concern that China might be able to shed its technological dependency on the US in particular and the West in general. In this way, China failed to continue heeding Deng’s advice to “hide its strength, bide its time” under Xi’s now partially abandoned wolf warrior diplomacy. A notable element of Made in China 2025 that caused considerable consternation in Washington was its focus on establishing import independence on microchip design and production, of which China imported hundreds of billions of dollars’ worth annually to fuel its vast electronics industry in the Pearl River Delta region. The policy prompted the Trump administration to adopt a more hostile economic and trade posture towards the country after the policy was declared a “threat to U.S. technological leadership” by the Council on Foreign Relations (Council on Foreign Relations, 2018). It, along with the later election of President Biden, also catalysed the development of new American industrial policy in the form of the CHIPS Act to fortify American dominance in this sector. Despite pouring hundreds of billions of dollars into Made in China 2025 priority industries, the policy has produced mixed results, far from the levels of its 40-year rapid growth era. China’s dominance in renewable energy and electric vehicles has been successfully secured for the foreseeable future. However, its investments in aerospace have yet to produce a satisfactory, domestically designed and built commercial aircraft industry. A viable independent domestic aeronautics industry remains elusive. The policy’s impact on semiconductor production has been mixed – working at the tiny scale required for the most advanced micro-chips is difficult. Whilst the hundreds of billions of dollars China has invested in developing its domestic semiconductor industry has produced some notable advances, such as the seven nanometres (nm) domestically produced Kirin 9000S chip, it has not yet been successful in establishing the strongly desired semiconductor independence or production capability at the bleeding edge 3nm level.2 American pressure on Dutch and Japanese suppliers of the extreme ultraviolet (EUV) photolithography machines, the super high-tech hearts of the multi-billion dollar foundries that produce cutting and bleeding edge microchips, has contributed to this outcome. It also illustrated the difficulty, enormous complexity and extreme cost needed to establish a competitive foothold in the rapidly evolving semiconductor industry. China’s development Economic development in the Global South 34| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 35 Although this era of aggressive reform and opening up might be over now, in Xi Jinping’s China, instead of returning to the older obsession with ideological purity and state control, the lessons and legacy from this opening up period remain. The lessons for South Africa from Deng’s reforms can be broadly described as: be pragmatic; incentivise good accountable governance and innovative local government; develop a high functioning and professional bureaucracy; and ensure there is sufficient political will to successfully follow through in implementing economic development policies unhindered by unrelated policies. Pragmatic governance – practicality ahead of ideology No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat. – Deng Xiaoping This quote, mentioned in a number of Deng’s speeches, encapsulates this spirit of pragmatism when pursuing the goal of economic development. So much so that it evolved into an often touted slogan and a political theory of its own, one that can be summarised as “whether it is a planned economy or market economy, it is only a means of resource allocation and has nothing to do with the political system; capitalism can have a plan, and socialism can also have a market” (Ke, 2013). This slogan acknowledged the political backdrop of Chinese Communist Party politics and the existing economic landscape, largely controlled by inefficient SOEs. Simultaneously, it acknowledged the tangible impact of privately-led capitalism, guided by government policy, in propelling economic development. All economic policy is driven by a desire to move up the industrial value chain through beneficiation, achieve economies of scale and adopt productivity-enhancing technology. A pragmatic, government-guided approach adopted during Japan’s industrialisation, was inspired by German and American industrial policy of the 19th century, which in turn was inspired by early English industrial policy adopted during the reign of Henry VIII (1509-1547). Unlocking the success of this type of industrial policy necessitates a practical approach that requires getting the basics right. Total factor productivity,3 the ratio of aggregate output to aggregate inputs, needs to be maximised to make beneficiated goods competitive on international markets. To achieve this, productivity needs to be increased, the domestic costs of inputs decreased, economies of scale established and transaction costs minimised. • Productivity was increased through the adoption of new technologies and investments in high-end capital goods, all underwritten with government subsidies and incentives. • Input costs were similarly reduced domestically through a mix of government incentives and subsidies. This also required ensuring a reliable and cheap supply of electricity which, despite occasional brownouts due to rapidly increasing demand, has largely been achieved through long-term planning and the successful rollout of new power plants. This is an area where South Africa, plagued by ever-worsening loadshedding since 2007, has notably failed. • Economies of scale were established through government policies and encouraging the formation of business clusters. A good example of this is the Chinese cities that specialise in specific economic services such as Yiwu’s dominance in small commodities or Hangzhou’s 1980s era economic cluster in sock production. This is Economic development in the Global South Issue 92 – NEW AGENDA | 35 already present to a limited extent in South Africa with cities such as Gqeberha with its automotive assembly, but greater potential exists to expand this phenomenon. • The minimisation of transaction costs required trade agreements to reduce export tariffs (which is why the WTO accession was so important to China) whilst improving and streamlining the country’s logistical capacity. This required large and ongoing investments in rail, road and port infrastructure whilst ensuring strong and effective management that is well maintained and run. The effective management, investment and operation of ports and rail infrastructure is another area where South Africa requires urgent attention (Naughton, 2006). An often celebrated model to come out of this practical approach has been the establishment of Special Economic Zones at easy access points to international markets. These are areas where normal laws and taxation policies are relaxed or otherwise modified to encourage international investment and export. South Africa already has an established policy encouraging this phenomenon with a number of Industrial Development Zones (IDZs) already in the country. A good example of this is the Freeport of Saldanha IDZ, which seeks to specialise in marine engineering. However, total factor productivity still needs to be improved to enhance the international competitiveness of these IDZs. Innovative local government “The mountains are high and the emperor is far away,” is a popular old Chinese saying that highlights the challenges of ruling a large country. China’s approach to solving this problem has been to decentralise decision-making and give greater autonomy to local authorities. This empowers the government to formulate policies that are more attuned to local needs and expedite their implementation. The persistent challenge lies in overcoming the corruption and mismanagement that may accompany decentralised decision- making. Much of China’s governmental history is marked by endeavours of central government officials to monitor and address these issues. However, considering both China’s geographical vastness and the enhancement of local governance, this emerges as a more viable approach, one that South Africa could potentially learn from. Indeed, certain detrimental policy debacles, such as the Great Leap Forward, stemmed from centrally imposed decisions that disregarded local realities. The Great Leap forward was Mao’s attempt to rapidly industrialise China from 1958 to 1962. It was one of the most famous failed industrialisation efforts in history resulting in the deaths of between 15 million and 55 million Chinese. An aggressive industrial plan that focused on heavy industry and agriculture, it was implemented in a ham-fisted top-down manner that operated independently of local realities, resulting in gross distortions on the ground (Naughton, 2006). It was during this period that Deng first started advocating for less ideologically driven policies. This advocacy work would result in his temporary banishment from Chinese politics. Following Deng’s rise to power much of China’s growth and poverty alleviation has been driven by local governments doing practical things village by village and city by city. To do this they needed a political mandate and bureaucratic flexibility to implement and experiment with policies and projects. Special Economic Zones, most notably Shenzhen which was able to develop a symbiotic economic relationship with neighbouring Hong Kong, served as laboratories for experimentation. China’s development Economic development in the Global South 36| NEW AGENDA – Issue 92 Issue 92 – NEW AGENDA | 37 Local autonomy, in conjunction with the lessons outlined in this article, not only provided local governments with the flexibility to leverage regional conditions but also enabled them to experiment with fostering specialised business clusters and identifying the unique economic strengths of their respective areas. To support these initiatives, the local government established networks facilitating the exchange of outcomes and insights from local development experiments and showcasing model projects and policies to inspire and motivate others. Local governments are free to set up business development support offices that offer practical advice and services to local businesses. This can range from encouraging local businesses to take advantage of government business development programmes to helping them access international markets to support the export of their goods. In 2008, the author visited one such support office in a rural district of Hebei province which was known for exporting peaches and being one of the largest producers of violins in the world, an achievement that would not have been possible without