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The ANCYL's two-day "March for Economic Freedom" commenced in the city of Johannesburg and ended in at the Union Buildings in Pretoria. Picture: Dumisani Sibeko.

On the eve of his inauguration as the first democratic president of South Africa, Nelson Mandela said: “I stand before you filled with pride. You have shown a calm and patient determination to reclaim this country as your own. It is with joy that you can proclaim from the rooftops, “Free at last”.

With these momentous words, Mandela ushered in the hopes of millions in the “new South Africa”.

But the euphoria of transition happened at a contradictory moment in the history of global capitalism.

The average voter casting his or her first democratic ballot harboured the expectation that freedom would signal development, and access to education and infrastructure, denied under apartheid. But the freedom of the historic moment was effectively hampered by constraints and economic imperatives imposed from outside.

The Reconstruction and Development Programme (RDP) introduced in 1994, conceived through wide-spread consultation between labour and civil society, was aimed at simultaneously addressing issues of legitimacy, economic growth, stability, redistribution and the inequality gap.

The RDP projected a set of ambitious quantitative objectives that included both the social and infrastructure domains.

The RDP was an attempt at inventing the “great society”, a society described by Patti Waldermeir and Michael Holman as a “brave new non-racial world where the main institutions of society – the civil service, the security forces, the business community, the universities, the media, the stock exchange, the banks – are no longer dominated by whites.”

This imagined economic utopia was never welcomed by many in big business. South Africa experienced capital outflow of R17 billion in the nine months to May 1994. International markets required South Africa’s complete reintegration into the global economy. The era was also marked by great promise followed by great disappointment.

Ten months after President Nelson Mandela invited foreign investors into South Africa investments had not materialised, prompting a rather disheartening comment on the state of the economy by Bill Keller in the New York Times in which he describes our economy as “neither fish nor fowl; it does not fit the profile of other emerging economies, but neither does it have the skills and industrial technology base to compete with developed countries”.

Stephen Gelb argues that the reason for the unspectacular performance in the first post-apartheid decade is the “implicit bargain” between big business and the ANC, “involving the ANC committing to macro-economic stability and international openness and business agreeing to participate in ‘capital reform’ to modify the racial structure of asset ownership”.

A minister without portfolio was appointed and a special fund was established to spearhead the implementation of the RDP in 1994. Only two years later the RDP ministry was abolished. Some argue that the policy itself had become a misfit in the globalist orthodoxy, and was abandoned in favour of a new macroeconomic strategy – the Growth, Employment and Redistribution Strategy (Gear).

Others assert that Gear was a necessary macroeconomic stabilisation tool to enable the implementation of thoroughgoing reconstruction and development once stability had been attained.

Whatever the case may be, there was a new global orthodoxy abroad, and the South African government had to conform. The embrace of Gear has a history of its own, starting in the deliberations with big-business. Gear was introduced into an atmosphere of crisis. Its introductory statement issued by the Treasury says it was introduced ostensibly to restore investor credibility.

Cognisant of the power of market reaction it underlined the importance of neo-liberal tenets of “consistent monetary policy to prevent a resurgence of inflation… (a nominal) exchange rate policy to keep the real effective rate stable at a competitive level… (and) a further step in the gradual relaxation of exchange controls”.

Where the RDP had involved consultative inputs from key stakeholders in labour and civil society, the introduction of Gear signalled a move towards technocratic decision-making.

Policy development had shifted to the bureaucracy, with the discreet help of outsiders, international economists and policy advisers.

Labelled as being part of the “Washington consensus”, the process in the main excluded internal advisers, labour and civil society.

Yet, despite its fiscal stringency, Gear was greeted with a sense of Afro-pessimism on the part of big business. This policy shift reflected the maxim of the new liberals: from “growth through redistribution” to “redistribution through growth”.

Gear did not differ at all from standard International Monetary Fund and World Bank structural adjustment programmes.

Analysts concluded that the country’s macro-economic policy had, intentionally or not, privileged financial concerns over structural impediments in the real economy.

The expectation of inflows of foreign direct investment did not materialise. Neither did the expectations for growth.

In addition, the post-apartheid economy also witnessed a marked diminution of stock market capitalisation, thanks in part to the drop in prices of raw materials and the fact that a few major conglomerates moved their main listing to the London Stock Exchange.

It was expected that Gear’s emphasis on macro-economic fundamentals would produce growth and economic expansion sufficient to meet the challenges of South Africa’s economic backlogs and absorb the unemployed. But again, the expected export-led growth did not materialise. Gear also faltered on meeting the developmental goals on unemployment and povertyalleviation.

Its debt reduction strategy instead resulted in poverty alleviation deferment. Spending on services and delivery assumed secondary prioritisation to fiscal austerity.

Another phenomenon that appeared to follow the prevalent global paradigm was that of South African corporate greed.

South Africa’s top executives notched up pay increases more than double the rate of inflation, thereby significantly widening the gap between themselves and skilled and semi-skilled workers.

Aside from Gear, the government’s Black Economic Empowerment policy focused on the promotion of black ownership and aspirant control of an economy which was effectively in the hands of a dominant white private sector buttressed by state-owned enterprises.

The envisaged 6 percent rate of growth and 400 000 jobs a year of Gear appear now as an embarrassing memory. And was it correct, anyway, for a macroeconomic stabilisation policy to pretend to deal with complex microeconomic issues? Some progress was registered in the high-growth years between 2003 and 2008.

But the recent Diagnostic Overview of the National Planning Commission (NPC) reveals that “only 41 percent of the working population is working, well below the average of similar countries”.

Its findings emphasise that two- thirds of all the unemployed are below the age of 35.

To underline the significance of these figures, the NPC report says that “almost all of the job losses in 2009/10 were experienced by those under the age of 30, and with less than a Grade 12 education”.

As the historic, socio-economic and structural challenges brought to bear on the economy since 1994 converge in 2011, the most pressing question remains: can the transitional centre hold?

The carefully cultivated notions of fast-forwarding economic reconciliation between white big-business and the emerging “black bourgeoisie” have not yielded any meaningful transformation of the economy.

Neither the predominantly white big business nor the emergent black economic elite have been able to articulate a new, cohesive approach to the crisis of reforming the inherited apartheid economic structure.

In the face of widespread service delivery protests, the deindustrialisation of the economy, the failure of structural economic reforms and unabating unemployment, the business elites appear to have no vision to remedy the crisis.

The “March for Economic Freedom” should not be cynically dismissed. We may argue about the detailed proposals of some of the young people. But the stark socio-economic realities are there for all to see.

- Dr Leonard Martin, PhD, is head of the humanities faculty at Mistra.