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Current Report November 20, 2012
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Booming Africa
Is an East Asia-style boom under way?
By Jason McLure

Once considered hopeless, much of sub-Saharan Africa is booming. Seven of the world's 10 fastest-growing economies currently are in Africa. High prices for the continent's oil and mineral exports have. . . .

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The Issues


Debate
Is Africa poised for an East Asia-style economic boom?

Pro Pro
 G. Pascal Zachary
G. Pascal Zachary
Professor of Journalism, Arizona State University; Author, Hotel Africa: The Politics of Escape . Written for CQ Global Researcher, November 2012
 Omotunde E. G. Johnson
Omotunde E. G. Johnson
Sierra Leone Country Director, International Growth Centre, London. Written for CQ Global Researcher, November 2012


Spotlight
Vast gulf between rich and poor bedevils the economy.

Even now, exactly how the trouble started in a dusty, brush-strewn field in Marikana, South Africa, on Aug. 16 isn't entirely clear. In the end, though, the clash between about 3,000 South African police and a similar number of striking platinum miners left 44 people dead, including 34 miners.

Video of the confrontation showed police opening fire with automatic rifles after tear gas failed to disperse the crowd, some of whom were armed with clubs and spears. Police said they came under fire first and initially charged 270 strikers with murder.Footnote 1

The charges were dropped after a public outcry, and the government has opened an official inquiry into the incident. Whatever the outcome, the clash exposed deep divisions in South Africa and frustration with a democracy that has allowed wide disparities in income to persist 18 years after the end of the country's hated apartheid government.

“Nothing, nothing, nothing has changed,” a Marikana man told the BBC after the bloodshed. “Democracy is just a word like a bird flying up in the sky.”

South Africa is the largest economy in sub-Saharan Africa but has one of the most unequal distributions of income anywhere in the world. The top 10 percent of the population accounts for 58 percent of income, while the bottom 50 percent earns just 8 percent.

The legacy of apartheid is seen as a major reason for the inequity, because blacks were largely denied the opportunity to gain education, land and capital. Economic growth has averaged 3.2 percent annually since 1995, a modest rate for a middle-income country.Footnote 2 And it has not been rapid enough to resolve inequalities or quell discontent among a growing population, where unemployment stands at 25.2 percent.

The strike, which ended after the mine operator, U.K.-based Lonmin, agreed to raise wages by up to 22 percent, has served as a catalyst for other labor actions. By early October an estimated 70,000 miners were on strike around the country, nearly a quarter of the total and a figure that included iron, gold and coal miners. An additional 28,000 truck drivers also went on strike seeking better pay and conditions.Footnote 3

“Down with monkey salaries — down,” said Buti Manamela, president of the Young Communist League, during a march near the offices of global mining giant AngloGold Ashanti in Orkney. “Divided we fall, united we stand…. We can never achieve Nelson Mandela's rainbow nation if we are unequal in terms of wages.”Footnote 4

The actions have led some mining companies to threaten to close mines and lay off workers, dampening the outlook for an economy hit by the eurozone crisis and slowing growth in China.Footnote 5 In late September, the Moody's credit rating agency downgraded South African debt, citing the government's “reduced capacity to handle the current political and economic situation and to implement effective strategies that could place the economy on a path to faster and more inclusive growth.”Footnote 6

The move reflects doubts about President Jacob Zuma's leadership and that of his ruling African National Congress (ANC), which has run the country since its transition to democracy in 1994 under President Mandela. The country's major unions have long been key allies of the ANC, but this year's strikes have largely been wildcat labor actions undertaken without the support of union leadership — and reflect the popular perception that ANC leaders are more focused on their own enrichment than improving the lives of the poor.

That perception has been buttressed by reports that the government is paying for $27 million in improvements to Zuma's private home, ostensibly to improve security. “In 1994 there were massive problems, but there was also a massive amount of hope,” William Gumede, a political analyst, told The New York Times. Footnote 7 “Now people feel hopeless. People have lost confidence in all of these institutions they trusted will make a difference, like the unions and the ANC. The new institutions of democracy — Parliament, the courts — people have also lost confidence that those can protect them and help them.”

— Jason McLure

[1] “South Africa's Lonmin Marikana Mine Clashes Killed 34,” BBC News, Aug. 17, 2012, www.bbc.co.uk/news/world-africa-19292909. See also, Faith Karimi and Nkepile Mabusi, “South African Commission Probing Miners' Deaths Starts Proceedings,” CNN, Oct. 1, 2012, www.cnn.com/2012/10/01/world/africa/southafrica-mine-unrest/index.html.

Footnote:
1. “South Africa's Lonmin Marikana Mine Clashes Killed 34,” BBC News, Aug. 17, 2012, www.bbc.co.uk/news/world-africa-19292909. See also, Faith Karimi and Nkepile Mabusi, “South African Commission Probing Miners' Deaths Starts Proceedings,” CNN, Oct. 1, 2012, www.cnn.com/2012/10/01/world/africa/southafrica-mine-unrest/index.html.

[2] “South Africa Economic Update: Focus on Inequality of Opportunity,” World Bank, July 2012, p. vii, http://documents.worldbank.org/curated/en/2012/01/16561374/south-africa-economic-update-focus-inequality-opportunity.

Footnote:
2. “South Africa Economic Update: Focus on Inequality of Opportunity,” World Bank, July 2012, p. vii, http://documents.worldbank.org/curated/en/2012/01/16561374/south-africa-economic-update-focus-inequality-opportunity.

[3] Devon Maylie, “South Africa's Labor Woes Worsen,” The Wall Street Journal, Oct. 3, 2012, http://online.wsj.com/article/SB10000872396390443768804578034271819419406.html.

Footnote:
3. Devon Maylie, “South Africa's Labor Woes Worsen,” The Wall Street Journal, Oct. 3, 2012, http://online.wsj.com/article/SB10000872396390443768804578034271819419406.html.

[4] Rodney Muhumuza, “Facing Pressure to End Strikes, South African Miners Find Strength in Numbers, Tough Words,” The Associated Press, Oct. 4, 2012, Calgary Herald, www.calgaryherald.com/business/facing+pressure+strikes+SAfrican+miners+find+strength+crowd+numbers/7344234/story.html.

Footnote:
4. Rodney Muhumuza, “Facing Pressure to End Strikes, South African Miners Find Strength in Numbers, Tough Words,” The Associated Press, Oct. 4, 2012, Calgary Herald, www.calgaryherald.com/business/facing+pressure+strikes+SAfrican+miners+find+strength+crowd+numbers/7344234/story.html.

[5] For background, see Christopher Hack, “Euro Crisis,” CQ Researcher, Oct. 5, 2012, pp. 841–864.

Footnote:
5. For background, see Christopher Hack, “Euro Crisis,” CQ Researcher, Oct. 5, 2012, pp. 841–864.

[6] “Moody's Downgrades South Africa's Government Bond Rating to Baa1; Outlook Remains Negative,” Moody's Investors Service, Sept. 27, 2012, www.moodys.com/research/Moodys-downgrades-South-Africas-government-bond-rating-to-Baa1-outlook--PR_256159.

Footnote:
6. “Moody's Downgrades South Africa's Government Bond Rating to Baa1; Outlook Remains Negative,” Moody's Investors Service, Sept. 27, 2012, www.moodys.com/research/Moodys-downgrades-South-Africas-government-bond-rating-to-Baa1-outlook--PR_256159.

[7] Lydia Polgreen, “Upheaval Grips South Africa as Hopes for Its Workers Fade,” The New York Times, Oct. 13, 2012, www.nytimes.com/2012/10/14/world/africa/unfulfilled-promises-are-replacing-prospects-of-a-better-life-in-south-africa.html?pagewanted=all.

Footnote:
7. Lydia Polgreen, “Upheaval Grips South Africa as Hopes for Its Workers Fade,” The New York Times, Oct. 13, 2012, www.nytimes.com/2012/10/14/world/africa/unfulfilled-promises-are-replacing-prospects-of-a-better-life-in-south-africa.html?pagewanted=all.



Document Citation
McLure, J. (2012, November 20). Booming Africa. CQ Global Researcher, 6, 521-548. Retrieved from http://library.cqpress.com/globalresearcher/
Document ID: cqrglobal2012112000
Document URL: http://library.cqpress.com/globalresearcher/cqrglobal2012112000