South Africa - 25 years after Soweto - in the grip of imperialism, AIDS and poverty

May/Jun 2001

The irony of the recent events held in Britain, to celebrate "Freedom Day", the anniversary of the first multiracial election, could hardly have been missed by those who fought to overthrow apartheid. With its emphasis on the good relations South Africa has with British imperialism and Britain's "helping hand", it exposed the South African's regime's reluctance to acknowledge the role of the social upheavals that brought it to power. No wonder it has turned a far more significant anniversary of the fight against apartheid - that of the Soweto uprising on the 16th of June 1976 - into a more neutral-sounding "Youth Day".

Yet it was this event, 25 years ago, which marked the real turning point in the struggle of the black poor masses against the apartheid regime. Thousands of school students in the biggest township in the country, Soweto, stood their ground against armed police and fought back, thus sparking a wave of revolt which spread throughout the country. It was during this mass uprising that the black working class came into its own, initiating the struggles which eventually resulted in the process which brought about the dismantling of apartheid in 1990. But those who fought those long years against oppression and poverty would certainly not identify, in the country as it is today, that future which they aspired to and for which many gave their lives.

They would be angered by the way in which the ANC-led government alliance, after having proclaimed itself the champions of the emancipation of the black masses in the years following their uprising, has today allowed itself to become the vehicle of the further imperialist looting of South Africa's resources. They would be exasperated by how little progress has been made in reducing poverty for the overwhelming majority of the population. And they would be incensed by the social segregation which has now replaced yesterday's racial segregation, but whose dividing lines are often unchanged.

Indeed, since it came to power in 1994, the government coalition made up of the African National Congress (ANC), the South African Communist party (SACP) and the trade union confederation COSATU, has implemented policies which, fundamentally, are hardly different from those implemented by Britain's governments under the Tories and then under Blair - only in this case these policies are being implemented in what amounts to a Third World country, despite the considerable wealth of its tiny capitalist class. The coalition's policy has been entirely aimed at attracting foreign investment into the country. And since imperialist capital can only be attracted by high incentives and low labour costs, the limited resources of the state have been used to entice multinationals to come in, rather than to improve the conditions of the poor masses, while the screw was being turned on the working class's jobs and conditions.

However, this policy has been marked by all sorts of contradictions. The ruling coalition has had to contend, time and again, with the resistance of a working class among whose ranks the memories of the great battles of the 1980s were still vivid. And in order to keep the lid on social unrest, the government has had to make gestures which, although largely token, have antagonised imperialist multinationals.

In addition, the ruling coalition has found itself caught between the demands of imperialism and the ambitions of the black middle class which formed the ANC's social base. Of course, the former clandestine nationalist organisations had already demonstrated their loyalty to the capitalist order. First, by helping the old apartheid state machinery to retain control against the poor masses, while apartheid was being dismantled and then by joining their former prison wardens and torturers to form the post- apartheid state. But all along, the aim of these organisations was to ensure that next to the old white capitalist class, a new layer of capitalists would emerge out of the ranks of the black petty bourgeoisie of the apartheid era. And the interests of the emerging black capitalists have sometimes turned out to be at odds with the imperialist looting.

A "victory" against the drug multinationals?

A graphic illustration of these contradictions was provided by the recent legal stand-off between president Mbeki's government and 39 pharmaceutical multinationals over the provision of affordable treatment for the HIV virus and its consequence, AIDS.

But first something must be said about the devastating effect of HIV among the South African poor over the past 10 years.

In 1991, 0.8% of women attending antenatal clinics were found to be HIV positive. By 1994, when the new government took power, this figure was 7.6% - an almost 10-fold increase in just 3 years. But now this figure has more than trebled. A survey of HIV prevalence, published in March this year, found 24.5% of women attending antenatal clinics to have the virus. Today, going by these statistics, South Africa is one of the worst affected countries in the world. It is reckoned that at least 4.7m people have HIV - over 10% of the 43 million population. For a rich country this would be a disaster. For South Africa it is a catastrophe - AIDS is now killing 100,000 people every year.

The areas with the highest incidence are the poorest. Antenatal tests showed infection rates of 36.2% in KwaZulu-Natal and around 30% for Mpumalanga and Gauteng, the sprawling urban region around Johannesburg. These three areas of the country also have the highest population densities, with square mile upon square mile of slums and squatter camps, both urban and rural.

According to epidemiologists, this rapid spread of HIV during the last decade is linked to social deprivation and the increased mobility of the poor - who, since apartheid restrictions were lifted, flocked to urban areas from the isolated and mostly desolate rural "homelands" to seek work and a better life. But they now find themselves living in overcrowded urban slums, with all the hazards that accompany this life, including disease, and particularly sexually transmitted disease, which increases their susceptibility to HIV. And the persistence of the old apartheid labour practices means that urban workers, many of whom still stay in "temporary", predominantly male hostels or mining compounds, can act as inadvertent carriers of the virus back to the rural areas where their homes and families remain. So while this infection is already catastrophic for the population, the situation may get even worse before the capacity for the virus to spread further begins to tail off. Without a huge treatment programme, it could decimate, in particular, the small pool of skilled workers in industry. This is no doubt why, among the sponsors of epidemiological research, one finds the name of a mining giant like Anglo-American, hardly noted for its "generosity" towards the working class.

Today there is no vaccine against HIV infection. The only possibility of staving off the virus at present is to take a cocktail of "anti-retroviral" drugs - which can now offer the possibility of a longer, active life.

However, these drugs still come under international patent laws overseen by the World Trade organisation. Such patents make "new" drugs the exclusive property of the drug companies which market them, allowing them to set the prices they want for up to 20 years. These terms preclude the implementation of effective drug treatment programmes for AIDS in Third World countries, since the prices are set according to the maximum that individuals and health services in the "rich" countries are prepared to pay.

In 1997, however, the South African government passed a law which would allow it to obtain medicines at more affordable prices. Its "Clause 15c" provided for the implementation of two practices allowed under WTO rules in countries facing "a state of national emergency". One, compulsory licensing, allows local companies to manufacture copies of the products in question, provided an agreed royalty is paid to the patent owner. The second, parallel importing, allows drugs to be imported from countries where they are already being manufactured more cheaply under similar license.

Without these emergency provisions, the anti-HIV triple drug cocktail would cost over £400/month per patient, which is obviously out of the question in South Africa, where the average wage is less than £140/month and where unemployment is (officially) between 20-30%, but probably a lot higher. But the use of such provisions could cut the expense of drug treatment by as much as 90%.

Predictably, the world's drug giants retaliated. If an exception to patent laws was to be allowed, even if it was within existing WTO rules, these companies certainly did not want this to be imposed on them, which would have been an intolerable precedent in their view, and least of all by the "richest" country in Africa, the continent which is most affected by HIV/AIDS.

All sorts of pressured were applied on the South African government to give up its legal stand - including the threat of economic sanctions by the US government. Seeing that the South African government was not budging, 39 pharmaceutical companies, among them US-led Pharma and Bristol-Myers Squibb, the British giants SmithKline Beecham and Glaxo, Germany's Bayer, Switzerland's Roche and France's Rhone-Poulenc, via the Pharmaceutical Manufacturers of South Africa (PMA) took out a lawsuit against the South African government.

After much delay, the case was eventually heard on 19 April this year. Having had very negative media exposure and facing an energetic campaign by AIDS activists, the PMA made the grand public gesture of withdrawing its legal action, so that in the end, "victory" could be proclaimed by the South African government. But what does this victory actually amount to?

As the resulting "Joint Statement of Understanding" between the two parties explains, "The parties share a commitment to work together to implement the government's health care objectives and strategies each contributing resources and expertise as appropriate." It continues: "the Ministry of Health shall invite a working party from the pharmaceutical industry, and also request members of the public, to consult with the government in relation to the regulations currently in development and other measures as may be necessary that will implement and give effect to the Medicines and Related Substance Control Amendment Act..."

In other words, the drug companies are not actually agreeing to Clause 15c as if it was a fait accompli. Instead, Mbeki has to submit his health policy to their scrutiny and "goodwill" - which is just what these imperialist drug barons wanted. The ANC's separate statement welcomes this as a new "partnership" between the government and the drug companies, but it is a foregone conclusion which "partner" will pull the strings. Moreover, the government has also now "reiterated" its commitment to "honour" the intellectual property rights of the drug giants, who will now have a say in the extent to which the South African law can be used to obtain substitutes for their patented drugs.

One can only assume that this lawsuit was a bargaining ploy designed to put pressure on Mbeki in order to get him to enter into just this kind of agreement. At the same time the drug giants will have ensured that no African government will have succeeded so far in by-passing them.

Politicking with AIDS

As for AIDS sufferers, this "victory" will have no immediate consequences. Just after the hearing, the health minister, Manto Tshabalala-Misimang, emphasised that the ruling of the court, in allowing Clause 15c to be enacted, did not mean that there would be widespread distribution of anti-retro viral drugs. She "reminded" the press that the case was not about access to AIDS drugs but of access to a broad range of medicines, like antibiotics, antimalarials and other drugs which deal with infections associated with AIDS.

Of course, this should come as no surprise. For the past three years, despite its apparent "challenge" to the imperialist drug giants, the South African government did not mount an active defiance campaign against them, for instance, by beginning the systematic importation of cheap anti-AIDS drugs from India and Thailand where they were on offer. Nor did it try to get local companies to produce cheap copies, as implementation of Clause 15c proposed.

Faced with ever-growing demands that his regime should address the epidemic by importing large quantities of anti-retroviral drugs and instituting full treatment programmes, which it admittedly could not afford, Mbeki's response was to resort to demagogy and play for time. On the one hand he (quite rightly) pointed at poverty and inequality as the main co-factors in the cause of the HIV epidemic. On the other he tried to excuse the government's policy of not using anti-retrovirals for treatment on the grounds that they were "unproven", had toxic side-effects and that anyway, pharmaceutical researchers only use African populations as guinea pigs for their drug trials.

For Mbeki, these arguments were designed to cover his reluctance to go all the way against the drug companies, as well as to cover the failure of his regime to address the epidemic. He was caught in the contradiction of not wanting to be seen to cave in to the drug giants and not wanting to be treated as a "renegade" by the imperialist institutions. As it happened, his complicated politicking backfired. Not only was he accused of denying that AIDS was caused by HIV - which he may have inferred but never explicitly said - but he was also accused, both at home and abroad, of "inaction" over the AIDS crisis, which, from western countries, was pure hypocrisy!

In any case, Mbeki left it to NGOs and campaigns such as the Treatment Action Campaign (TAC) to defy the drug giants (by importing cheap drugs from Thailand themselves) and to show that treatment can be effective, even in the context of dire social conditions. They have long argued that it would be within the government's resources to at least fund a full-scale treatment programme to prevent mother-to-child transmission of HIV. But so far (just before the drugs case came to court) the government's only move has been to announce a limited Nevirapine pilot scheme which would cover around 6% of women affected. Whether this will be extended now, remains to be seen.

The only way to obtain anti-AIDS drugs at present is via such NGOs or the private medical sector. And since most private medical aid schemes cap AIDS treatment expenditure at £1,500- £2,500 per year, this does not allow effective therapy. Anyway most AIDS sufferers have no medical aid. It is possible that certain large companies like Anglo American may resort to providing treatment programmes for infected workers. They could afford to, but so far their intervention has been confined to supporting or setting up their own monitoring bodies in order to assess how far the effects of this disease will affect their own workers and therefore undermine their future productivity and profits.

As to the regime's failure to protect the population's health, it goes much beyond the HIV/AIDS epidemic. Rather than resist imperialist pressure to cut social expenditure, both Mbeki and his predecessor, Mandela, have chosen to go out of their way to co- operate. As a result, expenditure on health today cannot even cover the "normal" conditions which have always been rife in South Africa, - such as malnutrition and diarrhoea, which is still a prime killer of under-fives. Malaria, which has been on the increase both due to drug resistance and the floods in the north- east and resistant tuberculosis, are also becoming more and more difficult to control, independently of their exacerbation due to HIV. This goes some way towards explaining the stance of the Minister for Health when she said the supply of anti-retroviral drugs will still not be the government's priority. But it also means that AIDS and the causes of AIDS will continue to decimate the South African poor.

A golden noose

HIV is not the only issue over which the ANC-led regime comes up against the pressure of imperialist multinationals. But in so far as it chooses not upset its relationship with imperialism, its general resistance has been rather weak so far.

Mining, for instance, is another area of tension. Despite the fact that the country has a large production of other minerals (platinum, chrome, manganese, diamonds, coal, etc..), gold is still the country's main export resource and therefore source of foreign currency. It represents 20% of the world's gold production and makes up 40% of South Africa's exports directly and another 10% indirectly through its by-products.

However, with the prolonged fall in the price of gold on the world market - by 67% between 1980 and 1999 - companies stopped producing in an increasing number of sites, because of low profitability rather than exhaustion of the ore. Around 300,000 miners consequently lost their jobs, leaving total employment in gold mining at 220,000. Gold mining and related industries as a whole employ half-a-million people and provide primary income to an estimated 5 million people in total, mostly in poor rural areas.

Because of the low gold price, companies have not invested in new prospection, so not only has gold production decreased but foreign currency inflows have decreased as well. The value of gold exports halved between 1997 and 1998 and has remained stagnant ever since.

As a result mining resources are underused. Moreover the transformation of the country's two largest mining empires - Anglo-American and Billiton - into London-based multinationals means that the state has no control whatsoever on their investment (in fact, far from investing in South Africa, since 1994, Anglo-American has been investing mainly in America and Billiton in Australia) and gets a reduced share of their turnover in taxes.

To counter the under-utilisation of natural resources and shortfall of state income, Mbeki's government produced a new draft bill on mining rights.

The problem the government has been sitting with is the consequence of legislation passed in 1991, by the old regime, but which it continued to respect up until now. In 1991, the state monopoly over the granting of mining rights was abandoned. Mining companies were granted indefinite rights over the fields they had claims on, while the state still retained rights on any, so far, unclaimed land.

The aim of the new bill is to put pressure on companies either to operate the mines they hold or to prospect the fields over which they retain rights. If they do not comply they would be obliged to hand back their claims to the state. This is the so-called "use it or lose it" policy, though compensation would be considered. If the bill is passed, mining rights would thenceforth be conceded for (possibly renewable) periods of 25 years or less. Mines which are handed back because of their low productivity would be transferred to small operators - something that the government has dressed up as part of "black empowerment" as it would allow black entrepreneurs to have access to new businesses. But the main aim of the bill is to loosen the grip of the two gold empires over the country's gold resources, albeit rather gently.

There is nothing very radical in this bill, as it would merely bring South Africa in line with countries such as Canada and Australia. Nevertheless it has triggered outrage among the mining companies and the government has agreed to another consultation exercise involving them, before its enactment, with a final test in court. Not that this has calmed reaction, judging by a headline in the South African equivalent of the Financial Times , the newspaper, Business Day which claimed "contentious bill is little more than theft".

So whether Mbeki ends up confronting the mining giants or not remains to be seen. But he is certainly under a lot of pressure to do so from the aspiring black middle-class which would like to have its own share of the gold cake.

The privatisation saga

In fact the regime's "black empowerment" policy has not delivered the goods expected by this aspiring black middle class. For instance the number of black-owned companies listed in Johannesburg has fallen to 26 from a peak of 43. Black companies' share of stock market capitalisation has dropped from 6% last August to 4.8% in February this year - out of which 3% are accounted by just one black-owned media and telecommunications group, Johnnic. After the first wave of "black empowerment" deals like the sale of the mining company JCI by Anglo American to the African Mining Group, very little has happened. So other assets are now targeted for "empowering" the black middle-class: state assets. And in April this year, the Black Economic Empowerment Commission recommended heavy state intervention, proposing that 30% of all stakes in privatisations of state assets be reserved for black business.

Under such pressures, the ANC-led coalition's privatisation measures become an even hotter potato than they were up until now, showing in this case again, how it has to face the resistance of the working class on the one hand and, on the other, how it is pulled in two directions in trying to satisfy the greed of imperialism as well as the ambitions of its own aspiring bourgeoisie.

The legacy of the apartheid regime was a huge public sector, and therefore plenty of scope for large scale auctions of public assets. The apartheid state, at the end of its tenure, employed 1.2 million people; owned all public utilities, telecommunications, buses, trains and airways, nuclear reactors, the huge Sasol complex which converted coal into oil and related products, all forests and in addition owned sophisticated chemical and explosives and military hardware plants.

However the privatisation process has been very slow to take off. Since 1994, the government has only managed to raise £1.8bn through selling state assets.

There are a number of reasons for this. No matter how much the black middle-class would like to get its share of the state's assets, it just does not have the capital. So foreign investors have to be found. However imperialist companies have proved reluctant to risk their capital in South Africa which, although no longer considered a political risk since 1994, has been considered a financial risk since the South-East Asian crisis of 1997.

Besides, western investors have found the strings attached by the South African regime unacceptable - whether in terms of sharing the cake with local investors or, in the case of public services, preserving a minimal level of services. For a private western utility, the idea that electricity or water may have to be provided to hundreds of thousands of people who cannot and will not pay their bills, simply because disconnecting them would be a recipe for riots, is intolerable!

In addition, the government has been faced with the resistance of the working class. Right from the word go, COSATU, the main trade union federation which is part of the tripartite government, has been caught in a forked stick over this. The leadership which occupies government seats, itself quite willing to go along with some degree of privatisation in the name of "black empowerment", has been under pressure from its membership to oppose these sell-offs because of the huge job and wage cuts which are their inevitable consequence.

In 1997, Telkom - the telephone monopoly - was one of the few companies that found a foreign investor. 30% was sold to Telkom Malaysia and the American SBC communications, with the state retaining 70%. Now the government has put another 20- 30% up for sale which it hopes will raise around £1.2bn. And lo and behold, the government plans to use this to reduce its public debt once more - which in fact is low by Third World standards, at 2.5% of GDP -around £2.3bn. Already, since 1994, 12,000 jobs have been cut in Telkom. A further 21,000 are now earmarked for the axe.

The 2000/2001 budget anticipates at least £1.8bn revenue from privatisation sell-offs over the coming year. Other possible sales will be the government's interest in M-Cell, which is a listed mobile phone company, and the South African Special Risks Association, a political riot risk insurer from the apartheid days. Denel, the state-owned arms manufacturer may also be sold - its aerospace division to the British BAE Systems and Denel Airmotive to France's Snecma.

Things are not going too smoothly however when it comes to plans for the giant state transport monopoly - 22 companies under the umbrella of Transnet - including rail (Spoornet), ports (Portnet), airways (SAA), pipelines, etc.. - which employs 100,000 workers.

The sell-off of rail passenger services as well as "non- core" companies is planned, together with radical streamlining which it is predicted will eventually reduce the total Transnet workforce to half its size - 50,000 workers. Jeff Radebe, minister for the Department of Public Enterprises, announced the sale of Spoornet, the national railway network, in August 2000. He explained how it would take place along the lines of the privatisation of British Rail, by breaking it up into five divisions and franchising them to private operators. Although, so far, Spoornet has been able to run without state subsidy, it has been unable to invest in new infrastructure and rolling stock and has a chronic shortage of drivers. Despite this, Spoornet shed 6,000 jobs in 1999 (out of 45,000 employees) and has placed a freeze on recruitment of new workers. The consequences of such a privatisation are not difficult to imagine given Britain's experience!

Not surprisingly Spoornet privatisation has caused some uproar amongst workers. But far from preparing them for the coming confrontation, the unions have set out an "alternative plan", under the auspices of COSATU and the rail union SATAWU. It proposes public ownership with a joint union- management partnership to improve efficiency, quality and volume. But while it includes a 3-year moratorium on job cuts, it still rests largely on the argument that the railways can be run at a profit, which will inevitably mean massive job cuts for the workforce and reduction of services for passengers. So far there has been no response to this plan from the government. In the meantime, in October last year, SATAWU already signed up to a "social plan" which makes provision for procedures and payments for redundancies, which amounts to accepting them in advance - and probably means that the workforce should not expect its union leaders to lead any real fight against the privatisation threat.

As far as South African Airways is concerned, it has been"for sale" for six years. Up until now only 20% has been taken up - by SwissAir - but by 2002 another share is meant to be floated on the JSE despite some resistance from politicians. As to Eskom, the state electricity generating and distribution enterprise (supplying 98% of the country's electricity) it will be split into two (following the British model) by May this year, and 30% of the generating business will be put out to tender.

The privatisation of local services such as water and sewage systems had been going on for some time with much greater "success". The latest so called "Igoli 2002 plan" (Igoli being a nickname used for Johannesburg) entails the sale of Rand Airport, Metro Gas and the Johannesburg Stadium and the turning into "independent" entities" of such services as: water and sanitation, electricity and management contracts, waste management, roads and storm water agencies, the Civic Theatre, the Zoo, the Metro Bus Service and Fresh Produce Market. This is really shadow privatisation in advance of the actual auction. What is more, these plans entail the loss of 13,000 jobs out of a total workforce of 27,000! The municipal workers' union SAMWU, while opposing these plans, has also pointed out that Johannesburg is being used as a testing ground for what is to become general policy across the country.

Indeed, despite SAMWU's efforts to prevent it, Johannesburg Municipality went ahead and granted the 5-year "partnership" management contract for its water supply to the French multinational company Suez-Lyonnaise in a deal which went through on 1 April this year. It gives Suez a 20% stake, while Suez's British subsidiary, Northumbrian Water, gets a 51% stake, and Northumbrian Water's subsidiary, Water and Sanitation Services, gets the rest. In other words in actual fact it is Suez which holds this contract in its entirety. And it is just privatisation cloaked in exactly the same rhetoric as "Public Private Partnership" is in Britain. The 2,500 workers involved will still nominally be employed by Johannesburg Metro with the same conditions, except that they will no longer have any protection from being made redundant.

As to the consequences for the poorest areas of the towns, they are difficult to gauge. Except that under Suez-Lyonnaise's control, with the company's long record of imposing punitive water rates in the Third World capitals where it took over water supply, the poorest areas are unlikely to get the cheap clean water supply they were promised as recently as last December, during the local election campaign.

In fact this whole water privatisation business verges on fraud. Indeed existing government legislation forbids water from being considered as a commodity, which makes the fast-track regulations being enacted by government at present a breach of its own law. But the minister for Water Affairs and Forestry and old stalwart of the South African Communist Party, Ronnie Kasrils, had this to say about the situation: "Public-Private partnership has given rise to much heated debate(..) I have had to set aside views from a former millennium and attempt to look objectively at the situation(..) If we are to make headway against the enormous backlog of people without water, we must use the resource available to us - available in the private sector." He added that this policy is required by the need to "earn profitable returns on investment". However the 40 to 60% of the rural population without water on tap will never be able to pay for it.

Paying foreign investors for jobs

Since 1994, half a million jobs have officially been lost in the South African economy, though some commentators say this is more like one million. So-called "labour productivity" has more than doubled since the mid-1990s and is three times what it was in the early 1980s. But half of this increase has been due to direct job cuts - one in eight workplaces in the formal sector has disappeared in the last five years.

Unemployment, as has been mentioned before, is therefore probably much more than the official figure - which itself is hardly precise - at 20-30% out of an estimated workforce of 14.4m. And 300,000 new workers are reckoned to come on to the labour market every year.

Since 1994, the regime's policy to reduce unemployment has relied almost exclusively on the inflow of foreign investment. However, not only have the foreign multinationals already operating in South Africa failed to make new investment in the country, but in fact they have embarked on massive job-cutting programmes to boost profit. As to new foreign investment it has proved elusive, declining steadily from 1996 onwards. Between 1999 and 2000 it shrunk by 50% to £600m. And even then this investment does not create any jobs as most of it goes into buying shares. On the other hand, the outflow of capital is increasing rapidly through the payment of dividends to foreign shareholders - this payment trebled between 1999 and 2000. As a result it was estimated last year that for every dollar that was invested in South Africa in 2000, $24 flowed out!

The government's attempts to encourage investors have been stepped up year on year in desperation: the domestic market was opened widely to foreign goods, exchange controls were partly lifted and generous tax incentives were offered to foreign investors. And the government's budget for the coming year continues and expands on this policy. So that, for instance, company tax, which was 48% in the apartheid days, has now been reduced to 30%. More importantly, the finance minister has announced the creation of a special fund to provide incentives for foreign companies investing in projects targeted by the government. This would include a tax allowance equivalent to 50- 100% of investment costs over three years. Ironically, on the other hand, some of the measures taken to relax exchange controls on financial products had to be withdrawn: while being designed to encourage foreign companies to buy South African shares, they actually resulted in offering South African companies a means to buy shares abroad, thereby leading to a larger outflow of foreign currency.

The regime has gone much further still, however, in its quest for foreign investors to bring jobs and production facilities to South Africa. In 1999, Mbeki's government entered into a preposterous arms procurement deal with a number of European companies, which promised, according to ministers' claims at the time, investment and 64,000 new jobs. This deal was meant to cost £2.1bn over 8 years with a further optional £850m package over the following 4 years. It covered the purchase of 3 submarines, 4 corvettes and 19 Gripen fighters from Germany, 30 light utility helicopters from Italy's Agusta, 24 Hawk fighters from Britain and 9 advanced light aircraft from Sweden. A real bonanza for European companies! Just one month after the deal was brokered, it turned out that it was really going to cost more than double the amount - £4.3bn! This from a government which is too cash-strapped to provide even a minimum quantity of clean water to all the country's poor!

But such revelations were just the tip of the iceberg in what has turned into an outrageous comedy of errors - and likely corruption - on the part of government officials. Firstly the purchases were supposed to generate £11bn worth of "inward investment" into South Africa. For instance, the purchase of the three submarines from Germany was meant to result in the building of a stainless steel production plant by Thyssen at the new deep-water harbour of Coega. But it turned out that Thyssen was not prepared to deliver these facilities. Similar problems emerged with the British and Swedish parts of this deal, meant to bring in £5.5bn of investment in return for the purchase of a number of aircraft. It turned out that the investment promised has shrunk to only 25% of the original figure. And now auditors have discovered, after the deal has been signed and sealed, that the government has paid exactly twice the "market" price for the Gripen planes it purchased from Germany!

The latest "revelation" to blight this embarrassing exercise in being "had" is that government officials were discovered to have been given Mercedes limousines by the companies involved, though they initially flatly denied it. However they got support from South Africa's Business Day, which, in an editorial entitled "Corruption may not be bad for economic growth" asked: "if a few extravagant gifts accompany foreign exchange flows of R110.6bn and more than 64,000 jobs, why not?" Which says something about the cynicism of financial journalists who know only too well that this "investment" is a dead duck which will cost more to the government than it ever gets out of it.

And to top it all, in order to pay for all this "essential" hardware, finance minister Trevor Manuel has signed loan agreements with four financial syndicates, led by Barclays, Commerzbank, Société Générale and Medio Credito Centrale, all of which have a long history of funding apartheid. But the government has now locked itself into repayments over 20 years - when it is these banks which should be paying back the apartheid blood money they owe.

As to the wonderful 64,000 jobs promised to the South African unemployed, most will remain in cloud cuckoo-land.

The balance-sheet of nationalism

The past six years have not brought "freedom" to the black poor masses. At least not the kind of "freedom" that the Soweto youth were fighting for in 1976 - freedom from social segregation and poverty. Instead these six years have seen increasing inequality, along with increasing poverty and unemployment for the many, while even the "new" tiny black middle class has begun to flounder.

In 1990, South Africa was ranked as the second most "unequal" country in the world. By the year 2000 it had moved into first place in this league.

The regime's programme of building of individual "pondoks in the veld" - tiny square, tin-roofed houses which are no different from those constructed in the townships during the apartheid era, except that now the residents have the privilege of having to pay for a mortgage - only makes this inequality even more obvious. And all the more so when compared to the palatial, "renaissance" style shopping and business centres, and security-walled luxury flats, which are still being built in the affluent (still predominantly white) suburbs of the large cities. Worse, many of the new "black" housing schemes are located in what used to be the "homelands" under apartheid - segregated, isolated, dry and desolate and still without the infrastructure which is needed to sustain any kind of decent community life. Shanty towns are still providing shelter for millions, not to mention the thousands of farm labourers still living in primitive huts on white-owned farms.

Of course, all this only exposes the fact that the ANC's nationalist policy is - and always was - a dead-end. There was no possibility that the government could achieve its aim of integrating the South African economy into the world market without the local bourgeoisie becoming the instrument of renewed exploitation of the poor masses by imperialism. A section of this bourgeoisie is certainly even more affluent than ever as a result. But the price for the majority is increasingly devastating, and tragically amplified by the AIDS epidemic.

As to the poor masses of South Africa, there was never any possibility of their emancipation without getting rid of all forms of capitalist exploitation whether it is exploitation by imperialism, the white apartheid capitalists or the aspiring black bourgeoisie. And to achieve this, they would have needed to join ranks with the poor masses of the rest of Africa, in solidarity with the international proletariat. This did not happen in the days when the South African working class fought apartheid and succeeded in forcing its eventual downfall. That was a missed opportunity. But the militant traditions and the experience of the South African working class have not disappeared. It is never too late.

6 May 2001