Posted on 26th November 2001

IMFising South Africa
By Naomi Klein

On Saturday night, I found myself at a party honouring Nelson Mandela and
raising money for his children's fund. It was a lovely affair and only a
very rude person would have pointed out that the party was packed with many
of the banking and mining executives who refused to pull their investments
out of apartheid-run South
Africa for decades.

Similarly, only someone with no sense of timing would have mentioned that,
as the Liberals were making Mr. Mandela an honorary Canadian citizen, they
were also trying to ram through an anti-terrorism bill that would have
sabotaged the anti-apartheid movement on several fronts had it been in
place at the time. The Canadian anti-apartheid movement raised money for
the African National Congress, which would easily have fit Bill C-36's
sloppy definition of a terrorist organization. Furthermore, anti-apartheid
activists deliberately caused "serious disruption" to companies that
invested in South Africa, eventually forcing many to pull out. These
disruptions would also have been illegal under C-36.

Only someone with absolutely no sense of propriety would have muttered,
amidst all the self-congratulation last weekend, that many in South Africa
insist that apartheid still exists, and requires a new resistance movement.
But two weeks ago, I met Trevor Ngwane, a former ANC municipal council
member, who says just that. "Apartheid based on race has been replaced with
apartheid based on class." Confronted with a country where eight million
people are homeless and nearly five million are HIV positive, some try to
paint deep inequality as a sad but unavoidable legacy of racial apartheid.
Mr. Ngwane says it is the direct result of a specific economic
"restructuring" program, embraced by the current government and nurtured by
the World Bank and the International Monetary Fund.

When Mr. Mandela was freed from prison, his vision was of a South Africa
that offered economic, as well as democratic, freedom. Basic needs for
housing, water and electricity would be met through massive public works
programs. But as power came into the ANC's reach, writes South African
professor Patrick Bond in his new book Against Global Apartheid,enormous
pressure was put on the party to prove it could govern with "sound
macroeconomic policies." It became clear that, if Mr. Mandela tried genuine
redistribution of wealth, the international markets would punish South
Africa. Many within the party understandably feared that an economic
meltdown would be used as an indictment not just of the ANC, but of black
rule itself.

So, instead of its policy of "growth through redistribution," the ANC,
particularly under President Thabo Mbeki, adopted the cookie-cutter program
of trying to "grow" the economy by pleasing foreign investors: mass
privatizations, layoffs and wage cuts in the public sector, corporate tax
cuts, and the like. The results have been devastating. Half a million jobs
have been lost since 1993. Wages for the poorest 40 per cent have dropped
by 21 per cent. Poor areas have seen their water costs go up by 55 per
cent, electricity by as much as 400 per cent. Many have resorted to
drinking polluted water, leading to a cholera outbreak that infected
100,000 people. In Soweto, 20,000 homes have their electricity cut off each
month. And the investment? They're still waiting.

This is the type of track record that has turned the World Bank and the IMF
into international pariahs, drawing thousands to the streets of Ottawa last
weekend, with a "solidarity protest" in Johannesburg. The Washington Post
recently told the heart-breaking story of one Soweto resident, Agnes
Mohapi. The reporter observed, "For all its wretchedness, apartheid never
did this: It did not lay her off from her job, jack up her utility bill,
then disconnect her service when she inevitably could not pay.
'Privatization did
that,' [Ms. Mohapi] said."

In the face of this system of "economic apartheid," a new resistance
movement is inevitable. There was a three-day general strike against
privatization in August. (Workers held up signs that read, "ANC We Love You
But Not Privatizations.") In Soweto, unemployed workers reconnect their
neighbours' cutoff water, and the Soweto Electricity Crisis Committee has
illegally reconnected power in thousands of homes. Why don't the police
arrest them? "Because," Mr. Ngwane says, "when the police officers'
electricity is disconnected, we reconnect them, too."

It looks as if the Bay Street executives, so eager to have their pictures
taken with Nelson Mandela last weekend, have a second chance to fight
apartheid -- this time while it's still going on. They can do it not only
through good-hearted charity, but by questioning the economic logic that is
failing so many around the world.

Which side will they be on this time?