What has the South African government delivered in 20 years? A massive welfare state with 16 million grant recipients (nearly a third of the population); 95% of the people served with clean water access; a rising rate of matriculation by 12th graders; a dramatic reduction in poverty? These are some of the claims made during the last few weeks as South Africa’s May 7 vote neared. But the devil’s in the details and they are vital to unpack, partly because the emergence of budget surpluses that followed the economy’s recovery from the 1998 emerging markets crisis generated a certain overconfidence among policymakers in Pretoria, which lasted throughout the 2000s.
To illustrate, the leading researcher in the South African presidency at the time, Alan Hirsch, argued in what may be the most substantive, book-length defence of post-apartheid policies, A Season of Hope: ‘[A]t the centre is a social democratic approach to social reform – it is the state’s job to underwrite the improvement in the quality of life of the poor and to reduce inequalities, but with a firmly entrenched fear of the risks of personal dependency on the state and of the emergence of entitlement attitudes… The ANC’s approach is sometimes summarised as elements of a northern European approach to social development combined with elements of Asian approaches to economic growth, within conservative macroeconomic parameters. This remains the intellectual paradigm within which the ANC operates.’
For Stanford University anthropologist James Ferguson, the ANC’s fear of ‘dependency’ and other alleged anti- social behavioral incentives caused by welfare are not simply a ‘lamentable manifestation of a reactionary and retrograde yearning for paternalism and inequality,’ they are instead ‘an entirely contemporary response to the historically novel emergence of a social world where people, long understood (under both pre-capitalist and early capitalist social systems) as scarce and valuable, have instead become seen as lacking value, and in surplus.’ Under this logic, in which all policy is oriented to the economy’s needs instead of the society’s, there is no rationale for welfare programmes – aside from a brief six-month period of unemployment insurance – for the 35%–40% of the working-age population who cannot find either formal work nor even engage in informal entrepreneurial activity at any given time.
In this context, social grant provision remains a logical component of a neoliberal state’s policy repertoire, as Susan Booysen argues, because it is a part of the ruling party’s ‘political regeneration… the ANC-in-government is the dispenser, the patron that ensures social grants and other benefits. This is recognised as the “ANC doing good”.’ An extreme version was articulated during the April 2014 campaigning by KwaZulu-Natal provincial agriculture minister Meshack Radebe, who remarked in front of the president: ‘[Jacob]Zuma has increased grants, but there are people who are stealing them by voting for opposition parties. If you are in the opposition, you are like a person who comes to my house, eats my food and then insults me,’ and you should ‘stay away from the grants’. (Zuma did not correct him.)
But more than patronage, the grants offer the political importance of appearing to be a generous social welfare state, especially when tokenistic expansion of social policies stands in contrast to the deeper, genuinely northern European approach based on the strategies of decommodfication and destratification that Hirsch so erroneously claims. In reality, Ohio State sociologist Franco Barchiesi concludes in one of the most extensive studies yet undertaken, South African social policy ‘is characterised by a high degree of commodification, intended as the dependence of social provisions and living standards on individual labour market positions and waged employment, rather than on subsidization from either employers or the state.’ Stratification is also amplified through means tests for ‘indigency.’ Welfare delivery is also being privatised. Describing ‘the art of neoliberalism’ in South Africa, Wits economists Nicolas Pons-Vignon and Aurelia Segatti agree that ‘direct transfers can alleviate poverty, but they do little to address inequality; furthermore, they act to entrench neoliberalism if they are associated, as has been the case in South Africa, with encouraging private provision of services to the poor.’ Such private provision regularly results in scandals, including an apparently corrupt $1 billion outsourcing of benefits payments. As Rhodes media studies professor Jane Duncan observes: ‘The very act of placing public functions in private hands means that social security inevitably becomes debased by the profit motive. South Africa›s social security- dependent poor are a massive captive market for profit-seeking companies. In the name of efficiency, the SA Social Security Agency (SASSA) has entrusted the administration of millions of South Africans› livelihoods to a private sector that appears to be more concerned about lining its own pockets than serving the poor and vulnerable.’
With this extent of prevailing neoliberal pressures, not even the former Minister of Water Affairs and Forestry, Ronnie Kasrils, could fulfill could fulfill his (heartfelt) commitment to finally implement a free basic water (FBW) policy. The right to water ended up either being sabotaged or delivered in a tokenistic way, free for merely the first 6 kiloliters/ household/month (kl/hh/m).
To illustrate, in Durban – the main site of the FBW pilot exploration that started in 1998 – the overall cost of water ended up doubling for poor households because of a huge price increase in the second block (the city soon had the second-highest price among its South African peers for 6-10 kl/hh/m). For poor people, this led to consumption cuts by a third in the subsequent six years, from 22 to 15 kl/hh/m. Matters were even worse in rural areas, where extremely serious problems arose in the community water supply projects, and the main reasons for unsustainability of a water system invariably included genuine affordability constraints.
By February 2014, in his State of the Nation Address, Zuma was confident to claim 95%of the population had ‘access to water coverage’ but the day after the speech a government official admitted that only 65%contained ‘flowing water.’ That figure included not only pre-payment meters, which often resulted in self- disconnection, but also countless shack settlements where a dozen taps (or fewer) serve thousands of residents; where a tap exists within 200 metres of households, that qualifies as ‘access’ even though the 1994 Reconstruction and Development Programme mandate was clear: ‘In the medium term, the RDP aims to provide an on-site supply of 50 to 60 litres per person per day of clean water and improved on- site sanitation.’
As a result, South Africa’s oft-heralded household water supply is a good example of a tokenistic social policy which satisfies those with power, wealth and strong status quo orientations (no matter their declared ideology). The possibilities for countering the inadequate water supply with a genuine right to water were limited by a 2000 Constitutional Court judgment, in which the court’s author, Judge Kate O’Regan, turned down Soweto plaintiffs’ arguments for a doubling of the FBW supply and the banning of pre-payment meters because of their discriminatory and health-threatening impacts.
Likewise, while electricity wires were installed in millions of housing units for the first time, Eskom’s pre-payment metres and soaring prices (up more than 150% from 2000 to 2014) forced poor people back to dirtier household energy such as wood, coal and paraffin. Post- apartheid progress was fleeting, therefore, for women cooking over fires, and for anyone with respiratory diseases, which can quickly take people from being HIV+ to having full-blown Aids. As for housing, there was never a proper audit of the new RDP units – which, in contrast to the RDP mandate, were typically three quarters or even just half as big as apartheid matchboxes, located in race/class-segregated ghettoes even further from jobs and amenities, and built with tissue paper and spit, not bricks and mortar as in the old days.
In the run-up to the 2014 elections, claims of progress were made with wild abandon. From Zuma’s State of the Nation 2014 speech: ‘The matric pass rate has gone up from around 61% in 2009 to 78% last year.’ Nowhere did he concede that the culling of high school students before matric had broached 50% in 2012, up from 22% in 2007.
A similar concern applied to the Treasury’s apparent abandonment of National Health Insurance policy, which was approved by the ANC after initial promises in 2007 and in-principle approval in 2010, but the programme was essentially unfunded in subsequent budgets. In short, too many of the social policies and state services were tokenistic, not genuine.
Artificial fiscal discipline remained the overarching constraint to expanding social policy. Pretoria’s capacity to serve its citizenry shrunk steadily in comparison to the size of the economy, for across the terrain of social and public policy, government’s ‘general services’ role in GDP rose from 16.2.% in 1994 to 127.3% in 1998, but fell back to 15.8% by 2002 and 13.7% in 2012. Reflecting the cost-recovery approach to service delivery, and hence the inability of the state to properly roll out and maintain these functions, the category of GDP components termed ‘electricity, gas and water’ fell steadily from 3.5%, to 2.4%, and then to 1.8% of GDP in 1994, 2002 and 2012. The cutbacks were not due to the elimination of fraud and waste; instead, the state was underspending in general, compared to its peers.
The 2010 internal gross public debt of South Africa was less than 40% of GDP, well below high-performance countries like Malaysia, Brazil, Argentina and Thailand, according to Barclays Capital. And in a rating of 40 rich countries and emerging markets, the OECD found that South Africa was among the five least generous countries in terms of public spending as a ratio of GDP, with only India, China, Mexico and South Korea being more stingy. France provided four times as much public social spending per unit of GDP, in contrast.
The South African welfare state’s expansion entailed a fiscal commitment that was actually quite limited, with state social spending never exceeding a 3% increase in GDP beyond 1994 levels. As the Financial and Fiscal Commission reported, even dating to 1983, social transfers rose from just 1.8%–4.5% of GDP through 2007.
The largest grant, the Older Persons Grant (OPG), was a direct continuation of the apartheid system, but with lower inflation-adjusted payouts than in 1994, lower coverage rates, and lower tax progressivity. Its expansion was not substantive, not nearly what one would expect from a genuine, non-racial welfare state after 1994. One reason was the ability of the SASSA to shrink the OPG coverage rate, from 72.2% of the target population in 1995 to a low of 66.5% in 2007 before a slight uptick resumed.
One reason for diminishing services to those ostensibly covered by the OPG was the persistence of means testing dating to the scheme’s origins during apartheid, in contrast to most other systems being developed at the time as universal. Another feature of the South African OPG is its ‘non-contributory’ character, which puts more of the burden on present (than past) taxpayers: it doesn’t matter how long, or whether a recipient formally worked. In contrast, in many countries, the opportunity to tax workers on a contributory basis is also the basis for more redistribution when higher-paid workers carry a higher tax rate, in some settings (e.g. 20 out of 28 wealthy and middle-income countries surveyed during the 2000s).
South Africa’s overall tax progressivity declined substantially just before and after the end of apartheid, thanks mainly to deep corporate tax cuts and growing loopholes, as well as fast-rising Value Added Tax. During the period of most intense neoliberalism and economic crisis, from 1997 to 2000, there were steep declines of progressivity within the personal income tax too, and although these were slightly reversed in the 2000s as tax reform was applied – and once corporate profits (and hence taxes) recovered strongly in the 1999 to 2008 mini-boom – the personal income tax was still less progressive in 2009 than in 1997. In 2008, StatsSA remarked, including taxation in a revised Gini coefficient, ‘reveals no statistically significant impact on inequality’; in other words, South African tax progressivity was, in reality, tokenistic.
In sum, South Africa’s welfare state is by no stretch of the imagination social democratic’ or, as Cape Town sociologist Jeremy Seekings has claimed, ‘exceptionally generous’. Seekings and Nicoli Nattrass advocate a reality check: ‘The best that a labour surplus economy such as South Africa can aspire to is an American-style welfare state regime with a very inegalitarian labour market, where the state provides minimal and stringently means-tested public welfare.’
But this would be not best; it would be terribly unsatisfactory, given the society’s wealth, world-leading inequality and record of social mobilisation against injustice. According to Barchiesi, the way the neoliberal ANC government arranged social grants should be understood ‘as a specific biopolitical intervention. Taken individually, they are in fact so meagre that even receiving more than one in a single household is no guarantee of a life out of poverty.’
Some of the problems we have reviewed could ostensibly be fixed: means testing was utilised with the inevitable stigmatisation that comes with a state demanding proof of poor people’s income; cost-recovery strategies were still being imposed, by stealth, on recipients of state services; the state’s potentially vast job-creating capacity was never utilised aside from a few short-term public works activities; and land and housing were not delivered at appropriate rates.
But with a relatively conservative ANC government and a bellicose liberal (essentially right-wing) capitalist class intent on drawing the limits on social policy, moving from tokenism to genuine social policy is not likely, unless a powerful leftist force emerges in the political realm that compels much more generosity from the neoliberal state.