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Mandela: Shock Doctrine on how the African Revolution was hijacked by bankers

Nelson Mandela is dead and, despite his immense charisma, intellect, capability and courage, Africa remains poor, divided, overpopulated and spectacularly unhealthy. In her monumental book, The Shock Doctrine, Penguin, 2007, Naomi Klein told how economists got control of the details of the revolution during handover negotiations, blinded revolutionaries with their sophistry, and tied it up in red tape. They actually returned the management of the central bank to its apartheid boss. This article is an excerpt from pp200-204 of the chapter in The Shock Doctrine entitled, 'Democracy born in chains.' The greatest loss to the African Revolution was that by the time Mandela rose to power, his government no longer had the right to redistribute land - which is the essence of revolutionary government.


"[...] the de Klerk government had a twofold strategy. First, drawing on the ascendant Washington consensus that there was now only one way to run an economy, it portrayed key sectors of economic decision making - such as trade policy and the central bank - as 'technical' or 'administrative.' Then it used a wide range of new policy tools - international trade agreements, innovations in constitutional law and structural adjustment programs - to hand control of those power centers to supposedly impartial experts, economists and officials from the IMF, the World Bank, the General Agreement on Tariffs and Trade (GATT) and the National Party - anyone except the liberation fighters from the ANC. It was a strategy of balkanization, not of the country's geography (as de Klerk had originally attempted) but of its economy.

This plan was successfully executed under the noses of ANC leaders, who were naturally preoccupied with winning the battle to control Parliament. In the process, the ANC failed to protect itself against a far more insidious strategy - in essence, an elaborate insurance plan against the economic clauses in the Freedom Charter every becoming law in South Africa. "The people shall govern!" would soon become a reality, but the sphere over which they would govern was shrinking fast.

While these tense negotiations between adversaries were unfolding, the ANC was also busily preparing within its own ranks for the day when it would take office. Teams of ANC economists and lawyers formed working groups charged with figuring out exactly how to turn the general promises of the Freedom Charter - for housing amenities and health care - into practical policies. The most ambitious of these plans was Make Democracy Work, an economic blueprint for South Africa's post apartheid future, written while the high-level negotiations were taking place. What the party loyalists didn't know at the time was that while they were hatching their ambitious plans, the negotiating team was accepting concessions at the bargaining table that would make their implementation a practical impossibility. "It was dead before it was even launched," the economist Vishnu Padayachee told me of Make Democracy Work. By the time the draft was complete, "there was a new ball game."

[...]

"We were caught completely off guard," recalled Padayachee, now in his early fifties. He had done his graduate studies at Johns Hopkins University in Baltimore. He knew that at the time, even among free-market economists in the U.S., central bank independence was considered a fringe idea, a pet policy of a handful of Chicago School ideologues who believed that central banks should be run as sovereign republics within states, out of reach of the meddling hands of elected lawmakers. For Padayachee and his colleagues, who strongly believed that monetary policy needed to serve the new government's 'big goals of growth, employment and redistribution,' the ANC's position was a no-brainer: "There was not going to be an independent central bank in South Africa."

Padayachee and a colleague stayed up all night writing a paper that gave the negotiating team the arguments it needed to resist this curveball from the national Party. If the central bank (in South Africa called the Reserve Bank) was run separately from the rest of the government, it could restrict the ANC's ability to keep the promises in the Freedom Charter. Besides, if the central bank was not accountable to the ANC government, to whom, exactly, would it be accountable? The IMF? The Johannesburg Stock Exchange? Obviously, the National Party was trying to find a backdoor way to hold on to power even after it lost the elections - a strategy that needed to be resisted at all costs. "They were locking in as much as possible," Padayachee recalled. "That was a clear part of the agenda."

Padayachee faxed the paper in the morning and didn't hear back for weeks. "Then, when we asked what happened, we were told, "Well, we gave that one up'." Not only would the central bank be run as an autonomous entity within the South African state, with its independence enshrined in the new constitution, but it would be headed by the same man who ran it under apartheid, Chris Stals. It wasn't just the central bank that the ANC had given up: in another major concession, Derek Keyes, the white finance minister under apartheid, would also remain in his post - much as the finance ministers and central bank heads from Argentina's dictatorship somehow managed to get their jobs back under democracy. The New York Times praised Keyes as "the country ranking apostle of low-spending business-friendly government."

Until that point, Padayachee said, "we were still buoyant, because, my God, this was a revolutionary struggle; at least there' be something to come out of it." When he learned that the central bank and the treasury would be run by their old apartheid bosses, it meant "everything would be lost in terms of economic transformation." When I asked him whether he thought the negotiators realised how much they had lost, after some hesitation, he replied, "Frankly, no." It was simple horse-trading: "In the negotiations, something had to be given, and our side gave those things - I’ll give you this, you give me that."

From Padayachee's point of view, none of this happened because of some grand betrayal on the part of ANC leaders but simply because they were out-maneuvered on a series of issues that seemed less than crucial at the time - but turned out to hold South Africa's lasting liberation in the balance.

What happened in those negotiations is that the ANC found itself caught in a new kind of web, one made of arcane rules and regulations, all designed to confine and constrain the power of elected leaders. As the web descended on the country, only a few people even noticed it was there, but when the new government came to power and tried to move freely, to give its voters the tangible benefits of liberation they expected and thought they had voted for, the strands of the web tightened and the administration discovered that its powers were tightly bound. Patrick Bond, who worked as an economic adviser in Mandela's office during the first years of ANC rule, recalls that the in-house quip was "Hey, we've got the state, where's the power?" As the new government attempted to make tangible the dreams of the Freedom Charter, it discovered that power was elsewhere.

Want to redistribute land? Impossible - at the last minute, the negotiators agreed to add a clause to the new constitution that protects all private property, making land reform virtually impossible. Want to create jobs for millions of unemployed workers? Can't - hundreds of factories were actually about to lose because the ANC had signed on to the GATT, the precursor to the World Trade Organisation, which made it illegal to subsidise the auto plants and textile factories. Want to get free AIDS drugs to the townships, where the disease is spreading with terrifying speed? That violates an intellectual property rights commitment under the WTO, which the ANC joined with no public debate as a continuation of the GATT. Need money to build more and larger houses for the poor and to bring free electricity to the townships? Sorry - the budget is being eaten up servicing the massive debt, passed on quietly by the apartheid government. Print more money? Tell that to the apartheid-era head of the central bank. Free water for all? Not likely. The World Bank, with its large in-country contingent of economists, researchers and trainers (a self-proclaimed "Knowledge Bank"), is making private-sector partnerships the service norm. Want to impose currency controls to guard against wild speculation? That would violate the $850 million IMF deal, signed, conveniently enough right before the elections. Raise the minimum wage to close the apartheid income gap? Nope. The IMF deal promises 'wage restraint.' And don't even think about ignoring these commitments - any change will be regarded as evidence of dangerous national untrustworthiness, a lack of commitment to 'reform' an absence of a 'rules-based system.' All of which will lead to currency crashes, aid cuts and capital flight. The bottom line was that South Africa was free but simultaneously captured; each one of these arcane acronyms represented a different thread in the web that pinned down the limbs of the new government.

A long time antiapartheid activist, Rassool Snyman, described the trap to me in stark terms. "They never freed us. They only took the chain from around our neck and put it on our ankles." Yasmin Sooka, a prominent South African human rights activist, told me that the transition 'was business saying, 'We'll keep everything and you [the ANC] will rule in name ... You can have political power, you can have the facade of governing, but the real governance will take place somewhere else. It was a process of infantilization that is common to so-called transitional countries - new governments are, in effect, given keys to the house but not the combination to the safe."

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The Telegraph article Tony Blair asked me to 'help invade Zimbabwe', says Thabo Mbeki, linked to from a Twitter post of 7 Dec 2013, shows Thabo Mbeki, who succeeded Nelson Mandela to become President of South Africa from 1999 until 2008, in a far more favourable light than the odious then British 'Labour' Prime Minister Tony Blair :

When Zimbabwe began sinking into economic collapse and political repression in 2000 ... Mr Mbeki favoured a negotiated settlement; Mr Blair wanted Mr Mugabe to go, by force if necessary.

Tony Blair ... was saying to the chief of the British armed forces, 'you must work out a military plan so we that can physically remove Robert Mugabe'." ...

...

Mr Mbeki explained that the idea was rejected on principle because Britain had no right to decide who leads African countries. ... "So we said 'no, let Zimbabweans sit down, let them talk'."

The fact that Robert Mugabe has been re-elected President in the elections of 31 July 2013 shows that Zimbabweans themselves didn't accept Tony Blair's claim that Zimbabwe was facing economic crisis or if it was, that Robert Mugabe was the cause.

In contrast to the seemingly principled stand taken by President Thabo Mbeki against military interference in Zimbabwe, Naomi Klein has shown that, far from liberating black South Africans, he as well as the former President, Nelson Mandela (1918-2013), who, since his recent death, has been haloed by the international mainstream media1, in fact, betrayed their own black supporters by imposing economic neoliberal disaster capitalism similar to what is described in the rest of Klein's book:

So, rather than calling for the nationalisation of the mines, Mandela and Mbeki began meeting with Harry Oppenheimer, former chairman of the mining giants Anglo-American and De Beers, the economic symbols of apartheid rule. Shortly after the 1994 election, they even submitted the ANC's economic program to Oppenheimer for approval and made several key revisions to address his concerns as well as those of other top industrialists.28 Hoping to avoid getting another shock from the market, Mandela, in his first post-election interview as president, carefully distanced himself from his previous statements favouring nationalisation. "In our economic policies ... there is not a single reference to things like nationalisation, and this is not accidental," he said. "There is not a single slogan that will connect us with any Marxist ideology."29 The financial press offered steady encouragement for this conversion; "Though the ANC still has a powerful leftist wing," The Wall Street Journal observed, "Mr Mandela has in recent days sounded more like Margaret Thatcher than the socialist revolutionary he was once thought to be."30

...

In June 1996, Mbeki unveiled the results: it was a neoliberal shock therapy for South Africa, calling for more privatisation, cutbacks to government spending, labor "flexibility," freer trade and even looser controls on money flows. According to Gelb, its overriding aim "was to signal to potential investors the government's (and specifically the ANC's) commitment to the prevailing orthodoxy."34 To make sure the message was loud and clear to traders in New York and London, at the public launch of the plan, Mbeki quipped, "Just call me a Thatcherite."35

- - from The Shock Doctrine - The rise of Disaster Capitalism (Penguin, 2007) by Naomi Klein, pp208-210 (most emphasis added).

Footnote[s]

1 Even the otherwise invaluably informative Syrian Arab News Agency (SANA - English translation) promotes the myths about the late Nelson Mandela, for example in its article Mandela, South Africa's anti-apartheid icon dies in Johannesburg of 6 Dec 2013 :
...
Nelson Rolihlahla Mandela was born in July 1918. He was the icon of South Africa's anti-apartheid struggle. Mandela served as South Africa's president from 1994 until 1999. He was elected in multiracial elections in 1994 to become South Africa's first black president.
His government had focused on dismantling the apartheid system through confronting institutional racism, poverty, inequality and on promoting the ethnic reconciliation.
Mandela's government also worked on promoting agrarian reform, fighting poverty and expanding health care services.
...

Jonathon Cook writes in The Legacy of Nelson Mandela: A Dissenting Opinion on Global Research on 6 Dec 2013 :

There was a price to be paid for [Nelson Mandela's] long walk to freedom, and the end of South Africa’s system of racial apartheid. Mandela was rehabilitated into an “elder statesman” in return for South Africa being rapidly transformed into an outpost of neoliberalism, prioritising the kind of economic apartheid most of us in the west are getting a strong dose of now. In my view, Mandela suffered a double tragedy in his post-prison years. First, he was reinvented as a bloodless icon, one that other leaders could appropriate to legitimise their own claims, as the figureheads of the “democratic west”, to integrity and moral superiority. After finally being allowed to join the western “club”, he could be regularly paraded as proof of the club’s democratic credentials and its ethical sensibility.

...

... He was forced to become a kind of Princess Diana, someone we could be allowed to love because he rarely said anything too threatening to the interests of the corporate elite who run the planet. ...

...

Our willingness to suspend our anger this week, to listen respectfully to those watery-eyed leaders who forced Mandela to reform from a fighter into a notable, keeps us in our slumber.

Next week there will be another reason not to struggle for our rights and our grandchildren’s rights to a decent life and a sustainable planet. There will always be a reason to worship at the feet of those who have no real power but are there to distract us from what truly matters. No one, not even a Mandela, can change things by him or herself. There are no Messiahs on their way, but there are many false gods designed to keep us pacified, divided and weak.

Wow. Strong words, excellent evocation of our predicament.
Thank you for posting.

Sheila N