South Africa’s state failure sparks self-reliance trend – Katzenellenbogen

In South Africa, signs of accelerating state failure are becoming increasingly evident, from crumbling infrastructure and unaddressed crime to unreliable public services. The ruling ANC’s reliance on patronage and vested interests makes it unlikely that they can reverse this decline. As a result, communities and individuals are taking matters into their own hands, installing rooftop solar panels, private security, and even exploring greater autonomy from the state. The weakening state has created opportunities for private sector innovation and civil society resilience, but it also raises questions about the future of the country, with some envisioning a shift towards a neo-liberal state characterised by privatisation and reduced public services. The battle of ideas is unfolding as South Africa grapples with the consequences of state collapse, leaving the fate of the nation uncertain.

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The Detrimental State and the Counter-Revolution

By Jonathan Katzenellenbogen*

The signs of accelerating state failure are pretty much everywhere: from the potholes, the urban decay, crimes that are not prosecuted, the lack of security, the implosion of state enterprises, to the power cuts and water supply interruptions.

There is little chance that an ANC in need of the power of patronage to give jobs to cadres and beholden to vested interests can turn the state around.

Installing rooftop solar panels, back-up batteries, and bore holes to ensure a continuous electricity and water supply are but one aspect of the search to state-proof ourselves.  For years the middle classes have relied on private security rather than the police. Private security firms employ more than four times those in the police service. In response to the decline of public education, an increasing number of parents have scrimped and saved to send their children to private schools.

The trend goes well beyond solar panels and will see more communities taking action to ensure greater self-reliance. On these pages, Martin van Staden has pointed to the “successful private voluntarist initiatives” based on selfdoen – doing it ourselves  ̶  by Solidarity, a mammoth, largely Afrikaans, movement and its associated body, AfriForum, a civil rights group. Solidarity includes a trade union, a cultural federation, a charity, an investment company, a private technical university, and much else.

Greater autonomy

With state failure, it is likely that communities, towns, and provinces will demand greater autonomy and even independence. Cape Town is buying power produced by rooftop solar installations and wants to take over the running of the commuter rail from the state.

Part of the wider movement away from the state takes the form of refusal to pay for services. Non-payment of TV licenses is now so prevalent that the government may soon drop these as a means to fund the SABC. A refusal to pay forced the Gauteng government to abandon its e-tolls on highways. Residents’ Associations in many towns are looking into ways of legally withholding rates because of municipal neglect.

There is no option in the face of state failure but to make a plan, and that will be of ongoing great importance for what happens in the country.

In a recent speech on “The weakening of the detrimental state,” the CEO of the South African Institute of Race Relations, John Endres, spoke of the “receding power of the state” due to its “loss of authority and credibility, its inability to translate plans into action.”

State failure, he said, is a massive opportunity for an “innovative and resilient private sector and civil society, which are solving problems in the growing absence of the state.”

This, he said, was a force that will shape South Africa’s outcomes over the medium-term.

“In political science, this is characterized as counter-revolution,” said former President Thabo Mbeki.

The prediction by Endres, said Mbeki in a speech last week, was that the country is “drifting towards reconstitution as a neo-liberal State.”

That, he said, is defined by the Canadian author and activist, Naomi Klein as, “the elimination of the public sphere, total liberation of corporations and skeletal social spending.”

Large corporations and wealthy politicians

Klein takes the view that this involves “Chicago School free market dogmas” and it leads to an alliance of large corporations and wealthy politicians, with huge transfers of public wealth to private hands, with the vast majority left outside the bubble. And with that, warns Klein, there is a surveillance state and shrinking civil liberties.

A battle of ideas has begun over what will happen with state collapse.

The search for a state-proof future in South Africa shows that Endres and other liberals are correct in pointing to the overall direction of travel. But even with the weakening of the detrimental state and advances in the “counter-revolution”, the ANC will risk sinking the country to hold on to what it has. After all, privatising state-owned enterprises and scrapping government departments and many regulations would mean a vast reduction of the ruling party’s power.

The ANC has plans to create a new government holding company to oversee state-owned enterprises, and a National Health Insurance scheme which would effectively close down private medicine. It also still to be seen what it does with its power for expropriation without compensation. And the draft Intelligence Bill would make it easier for surveillance of non-governmental organisations with the possible intention of curbing these groups. 

The economy will still be subject to the inefficiency of the detrimental state.

Much delay

After much delay, the state is now allowing the private sector to produce power and run certain rail tracks. But that is because the government is now fully aware of the disastrous consequences of power shortages and bottlenecks on rail lines and at ports. The state is also allowing big business to come in and help with a range of problems. None of this points to big structural reforms or will stop the counter-revolution.

Alternatives will emerge in many areas, allowing the counter-revolution to advance. Blockchain technology, which is behind crypto currencies, could be used to register properties, companies, and supervise deceased and solvent estates, as a backup to the state and protection against insider fraud. But a competent state is still needed to issue ID documents, provide grants, and run a defence force.

Are we to believe Naomi Klein that a Neo-Liberal state will result in only those in the bubble becoming wealthy? Perversely, it is the South African state that really bears a resemblance to the neo-liberal state of Klein’s imagination. This has allowed the tenderpreneurs, the big empowerment beneficiaries, and some politicians to get enormously wealthy.  

The poor are not well served by a collapsing state that provides inadequate health and education services, and last week could not even pay out grants on time due to a glitch. The middle class can better afford to sidestep the state than the poor. The poor do have options and can refuse to pay for services, but they suffer most from the collapsing state.

Promote growth

A pared-back and efficient state is better able to promote growth and run efficiently. If growth is fast enough for long enough, the international experience is that poverty rates are greatly lowered. Our state is a drag on growth.  A lower deficit, and an end to bailouts for Eskom and other state-owned enterprises would allow more to be spent on health, education and grants, and provide a better investment story. That would lead to a far better chance of more jobs: the best way out of poverty.

After years under a largely failing state, there is mounting popular pressure on the government to ensure delivery of growth and jobs. To most, it does not matter whether that is done by the state or the private sector.  After our years under a failing state, that just might mean more popular support than ever imagined for a counter-revolution.

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This article was first published by Daily Friend and has been republished with permission

*Jonathan Katzenellenbogen is a Johannesburg-based freelance financial journalist. His articles have appeared on DefenceWeb, Politicsweb, as well as in a number of overseas publications. Jonathan has also worked on Business Day and as a TV and radio reporter and newsreader.