The mounting global order is not merely driven and characterized by vast economic growth and worldwide expansion and penetration, designated as globalization, but it is also facilitated and advanced by liberalization. The two are interdependent and mutually inclusive. Globalization is the integrated process of economic and technological expansion aimed at the opening up and integration of the entire world into and under one economic system. Liberalization provides the policy lubricants and neo-liberalism the theoretical formulations to streamline the implementation of the process. Throughout the developing world, the most explicit stakeholders driving this process are the Bretton Woods Institutions (BWIs) - the International Monetary Fund (IMF), the World Bank (WB) and related institutions. The BWIs not only play the role of providing some of the financial 'oils' but also most of the policy prescriptions such as Structural Adjustment Programmes (SAPs), programme supervision, performance surveillance and theoretical frameworks of the new liberalized global order. As is well documented in the literature, the result of radical privatizations and the deliberate reduction of the economic, social and even security functions of the State, SAP's have severely undermined the resources, capacities, utility - and the very legitimacy of the State (Keet, 1999) [1].

Since 1994 there has been growing dissatisfaction with service delivery and employment creation as embedded in the RDP - the policy framework within which the ANC contested and won the first democratic elections in South Africa (SA). Presently in SA there is a huge backlog in providing access to basic services as defined in the RDP, the Constitution and other applicable legislation. There is a legacy of the inequitable distribution of resources as well as corrupt and inefficient practices in some areas. Furthermore, President Mbeki has stressed several times recently that the challenge of his government is to improve the delivery of social services to the poor in SA. The primary instrument of delivery will be a transformed Public Service. SA has poured most resources into maintaining fiscal discipline with relative success. It has not been nearly as successful in allocating resources in line with strategic priorities. Yet the President is now aiming to shift attention to improving the effectiveness and efficiency of delivery before achieving allocative efficiency.

In addition, the 1998 White Paper on Local Government was initiated "...against the backdrop of globalization and the redefinition of the nation state as well as a new emphasis on decentralization." (GNU, 1998: 4). The design of this White Paper followed the government's acknowledgement of serious policy implementation shortcomings on social service delivery issues. This and the consequent closure of the RDP Office at central level during 1996, together with the recent (1999) unceremonious closure of the RDP Portfolio Committee at national level (RDP Development Monitor, 1999: 2) was arguably to de-politicize (the lack of) service delivery. In the wake of the enormous backlog, the responsibility to implement and expedite social service delivery was devolved to line departments, provincial governments and also placed firmly on the shoulders of local government. This raises doubt on whether the government is committed to social service delivery, or whether the State is merely shedding its social responsibility by means of an unfunded mandate to the sub-national level: the devolution of functions without the required financial and administrative capacity. However, after the 1999 national election, President Mbeki firmly placed the RDP budget control in the President's Office (Business Day, 6/7/99). The RDP Development Monitor (1999: 2) aptly comments on this issue: "The mood is one of centrally coordinated efficiency, less the era of compromise, adaptation and experimentation. But whatever efficiency gains are made may not always compensate for decentralized creativity and close interaction with the communities served."

Johnson (Sowetan, 25/10/96) claims that with the ANC's victory in the 1994 national elections, it was transparent that both the SACP and the trade unions: "... saw its triumph as a stepping stone to full-blown socialism." The crucial mechanism towards this transformation was to be the RDP which represents, as Johnson notes: "... a massive exercise in state welfare and redistribution that was at the heart of the ANC's 1994 election campaign." Rather, as it turned out, the Government of National Unity (GNU) did not follow socialism as an ideology for development, but seemingly opted for a completely opposing ideology of 'full-blown liberal capitalism', particularly with the adoption of its new WB/IMF style macro-economic strategy (GEAR) during 1996.

With the government's macro-economic strategy tabled in Parliament on 14 June 1996, titled - Growth, Employment and Redistribution: A Macro-Economic Strategy (often referred to as GEAR) (GNU, 1996c), a radical change took place within the ANC. Lehulere (1997: 73) argues that: "It became clear that the lack of service delivery by the ANC was not just a product of sabotage by those who had supported apartheid in the past. The lack of service delivery was a result of the policies adopted by the ANC, in particular GEAR." With the release of GEAR, Deputy President Mbeki greeted the media by saying, "Call me a Thatcherite", whilst Finance Minister Manual warned that the GEAR document is "non-negotiable" (Sunday Times - Business Times , 16/6/96). These statements are clearly indicative of government's rather dogmatic endorsement of neo-liberalism.

The response to GEAR has been diverse within the wider democratic and workers' movements. Some groupings agree that GEAR is a radical shift to the right but should be seen within the context that GEAR "... is a product of the constraints facing the ANC." In agreement with this view, Andrew Prior (Business Day , 19/8/97) argues that the ANC's paradigm shift was not fundamentally a political decision, but that: "... globalization of the world's economies has removed the ANC's room to maneuver ... Defiance of world economic trends is now immediately penalized by investment withdrawal, currency weakness, more costly loans and capital outflow." According to this view, it would not be a correct response to 'label' the policy as neo-liberal as some in the democratic movement are doing. "What was needed was an 'engagement' with the ANC so as to strengthen the positive elements of GEAR" (Lehulere, 1997: 73). Conversely, Michel Chossudowski (Mail & Guardian , 14/2-20/2/97), author of The Globalization of Poverty , emphatically questions the assertion that economic sovereignty is inevitably subject to globalization: "Governments can say no [to the forces of globalization]. Are governments more concerned to serve their creditors than to serve the people?" Furthermore, some criticized GEAR explicitly as a neo-liberal program and a home-grown structural adjustment program, with the ANC capitulating to IMF and WB externalities (Lehulere, 1997; Adelzadeh, 1996).

In this regard Lehulere (1997: 73-78) strongly suggests that GEAR was not singular in the ANC's fall into neo-liberalism: "... but was the aggregate of drifts into neo-liberalism in various areas of social, economic and political policy." Nonetheless, the dogmatic gravitation towards neo-liberalism in SA's transformational economic policy pronouncements and action by the ANC certainly display a fundamental paradigm shift in terms of the ANC's original economic policy. How did this happen?

The essence of GEAR

GEAR provides the GNU's macro-economic blueprint which emphasizes privatization, growth and employment. The strategy envisaged an economic growth rate of 6 percent per annum and job creation of 833,000 by the year 2000 by fostering a socio-economic environment conducive to foreign investment. The principle objectives and fiscal elements of GEAR include:

. Economic development in SA must be led by the private sector;
. the State must play a smaller role in the economy;
. privatization of state owned assets;
. deep cuts in government spending (the aim of which is in part to repay the debt that was accumulated by the apartheid government);
. a need for international competitiveness and an export orientated economy (such tariffs and duties which had protected industries in the past will be removed);
. relaxation of exchange controls;
. the reprioritization of social service delivery budgets and municipal infrastructure programmes in order to address the claims of the poor to a fair package of basic needs. Concurrently, those social services that cannot be provided to all, or could be undertaken more effectively by the private sector, are to be eliminated or scaled down. It has to be pointed out here that although the re-emphasis on education, public works and socio-economic infrastructure development is most welcome, the need to cut the government budget deficit to 3 percent of GDP by 2000 implies that the scope for increased public spending on social services is likely to be severely limited: this in spite of the government's rhetoric on the centrality of social and sectoral policies;
. government spending cuts on social and community services entail a real aggregate increase of only 3 percent per annum which cannot even cover 15 percent of current medium-term departmental expansion plans; and
. another disturbing element is that the central government would unilaterally set policy priorities and funds to be committed to social and sectoral policies (Chikulo and Meyer, 1996: 5-10; Lehulere, 1997: 74-75).

Relationship between RDP and GEAR

In terms of policy rhetoric, RDP (ANC: 1994) is still a top priority and it has been strongly emphasized that the macro-economic strategy is not a substitute for the RDP, but in essence reiterates the principles, goals and objectives of the RDP as set out in the base document and White Paper. Indeed, speaking in Parliament on 16^th June 1996, Deputy President Thabo Mbeki emphasized that the macro-economic strategy is: "an elaboration of the reconstruction and development programme, not its substitute". However, certain fiscal policy measures adopted in order to achieve the ambitious deficit targets have had some negative impact on RDP programs and projects, viz :

. In order to meet the new ambitious fiscal targets outlined in the macro-economic strategy in the 1997/98 budget, budgetary cuts were made in the RDP allocations;
. the medium-term departmental expansion plans were severely constrained by budget cuts, reducing the scope for funding RDP projects;
. the Presidential Lead Projects programme has been discontinued; and
. very few new jobs (if any) were created.

This leads to the conclusion that within this context, coupled with the fact that the RDP fund does not appear as a separate and prominent item in the 1997/1998 budget, a policy decision has been taken to downsize the RDP. A closer reading of the macro-economic strategy document reveals that the central government is playing WB/IMF rules and that the government is effectively implementing a SAP on the South African economy. As the WB representative in SA, Judith Edstrom (Business Day , 20/8/97) confirmed: "South Africa [is] in effect implementing a World Bank economic reform programme [SAP] without having to borrow [from the WB]." Similarly, the IMF endorsed GEAR, calling for " ... stronger and deeper ..." implementation of trade liberalization and privatization (Business Day, 13/3/00).

The roots of GEAR

In discourse around GEAR, various ideologues confirm GEAR as a neo-liberal policy (Lehulere, 1997; Adelzadeh, 1996; Padayachee, 1996; Bond, 1999a). I shall therefore look briefly at the concept of neo-liberalism. It is an economic philosophy, the roots of which stem from the free-market ideals of Adam Smith and popularized by John Keynes during the late 1930s (Martinez and Garcia, 1999: 1). The main policies include, wage restraint, deregulation of labour markets, lowering of tariffs, introduction of constraints to weaken trade union collective bargaining powers, and privatization. Furthermore, an important element of neo-liberalism focuses on the role of the State, wherein the State must not operate at a loss - it must not have a substantial budget deficit - which implies, inter alia, extensive cuts on social expenditure. As Lehulere (1997: 76) notes: "The main aim of neo-liberalism, therefore, is to increase profits of the bosses. In many countries it has led to rising profits for the bosses, and falling wages, less social services, less job security and joblessness for the workers and their communities."

Similar elements of neo-liberalism have certainly manifested in SA today - which creates an environment of strong opposition and contestation. Such opposition is in general publicly articulated by the Council of South African Trade Unions (COSATU) and the SACP - the ANC's present social partners.

Considering the notion that the RDP has failed to meet its socio-economic targets and substantially marginalized by the WB/IMF style GEAR, it is worth-while to contrast GEAR and WB/IMF induced SAPs. The resemblance between the policy instruments embedded in GEAR and SAPs is alarmingly explicit. This is of importance, particularly in the light of SAPs having failed dismally to improve the socio-economic development conditions where it was introduced. The following most prominent non-negotiable aspects of GEAR, vis-à-vis SAPs, are noteworthy:

. Reduction of the role of government in the economy;
. gradual removal of exchange controls;
. drastic budget cuts (from 6percent of the GDP to 3percent by 1998 in SA);
. removal of subsidies on goods, services and activities such as agriculture, education and health;
. export promotion in favour of import substitution;
. trade liberalization, especially the removal of controls on imports;
. 'rightsizing' of the public sector in order to decrease the government deficit;
. retrenchment of public servants without redeployment;
. privatization of some State Owned Enterprises (SOEs) with a social-welfare component, e.g., the envisaged privatization of the Electricity Supply Commission (ESKOM); and
. privatization proceeds to be used for debt service.

The contentious nature of neo-liberalism in South Africa

To illustrate the contentious nature of GEAR as a neo-liberal policy framework, I will focus attention on what is arguably its most controversial element; i.e., privatization - the cornerstone of GEAR. This will be done by examining the previous attempts by the apartheid regime to privatize state owned enterprises (SOEs) and the recent attempts by the ANC to embark on full-scale privatization.

Privatization in South Africa under the apartheid regime

Prior to 1985, a strong historical trend of state interventionism in the economy existed. However, after this period the government shifted its policy orientation towards the privatization of SOEs . Lewis (Supplement to the Weekly Mail, 3/3-4/4/90: 8) and Fine (1995: 7) point out that by 1985, the government began to change its stance on the role of State ownership, interventionism and privatization; a change affirmed in the 1985 White Paper on Industrial Development Strategy in the Republic of South Africa (SA Government, 1985) and reaffirmed in the 1987 White Paper on Privatisation and Deregulation in the Republic of South Africa (SA Government, 1987). The SA government's privatization initiatives during the late 1980's, should indeed be seen as a radical break with the past, certainly in terms of the anti-statist policy proposals.

This paradigm shift was partly based on the belief that for some privatization of SOEs was necessarily due, not only in SA, but within the context of a global Western anti-statist and privatization phenomenon (SA Government, 1987: par. 1.3). Besides strong emphasis being placed on external and economic factors as the primary rationale for privatization (SA Government, 1987: par. 2.2.2), critics claim that the issue of privatization simply did not arise within the context of a neutral policy choice between private and public ownership. It was also a product of, as well as a response to, a situation created by the ideological will of government to secure and fund the apartheid regime. As an economic measure, privatization was primarily driven by a need to raise funds to increase the government's declining revenue base, service the increasing external debt, strengthen the position of corporate capital and boost the weakening economy (McGregor, 1987: 9; Moolla, 1993: 11; Mahadea, 1988: 149; Fine, 1995: 7-9).

Effects of, and reaction to the 1987 privatization initiative

The most visible impact of the government's 1987 privatization drive was the radical resistance against neo-liberalism by the ANC, trade unions and other leftist political groupings. This polarized SA society further and was followed by enormous job losses and increased unemployment because of the commercialization of SOEs during the late 1980s and early 1990s. According to former President de Klerk, commercialization was: "... undertaken to prepare State corporations for privatization ..." (Saturday Star , 25/5/96). However, it is argued that commercialization of SOEs had a disastrous effect in terms of employment loss in the public sector during the 1989-1993 recession (Nkosi, 1991: 112; The African Communist, 1995: 1). In this regard, Jeppe (The Star, 2/1/96) points out that the severe recession of 1989 to 1993, was due, in part, to the commercialization program. Jeppe (The Star, 2/1/96) further states that the recession was aggravated by a total net job loss of 350 000 workers between 1989-1993, of which 20 percent were lost through the commercialization of parastatals; viz ., the railway Transport Network (TRANSNET), Telecommunications (TELKOM), the Post Office and ESKOM. Jeppe (The Star, 2/1/96) concludes that during 1993, these companies employed fewer people than they had in 1960. Similarly, WB economists Fallon and Pereira de Silva (1994: 1) describe the 1988-1993 recession in SA as due partly to a "... considerable decline in investments by parastatals in 1985."

Both political and socio-economic deficiencies acted as major impediments to the development process in SA. With the exclusion of the commercialization process, which continued, privatization of SOEs lost momentum during the early 1990s. However, after the political transformation process in SA during 1994, restructuring and privatization of SOEs resurfaced.

The Government of National Unity's privatization initiative

Restructuring of the public sector and privatization of SOEs has resurfaced and assumed centre stage since 1995. According to GNU, this has been necessitated by the need to redress the distortions brought about by apartheid, and the resulting new socio-economic policy (RDP) of the GNU (GNU, 1994). Consequently, a number of public enterprises are currently being urged to conform to processes of reform and restructuring and some earmarked for full or partial privatisation (GNU, 1995).

On 29 October 1994, former Deputy President Mbeki, announced that: "... government will consider full and partial privatization of state assets and SOEs , where appropriate.", to release funds for the reduction of debt and to boost the RDP Fund. Privatization, which he added: "... could also facilitate empowerment of disadvantaged sectors." (The African Communist, 1995: 1). However, since the April 1994 elections, the intentions and policy rhetoric of the ANC-led GNU on privatization have not always been clear. Conflicting signals, often exaggerated by the commercial media, emerged from different official quarters.

Be it as it may, the overriding motive for privatization is to fund the RDP, service State debt, reduce the escalating deficit and attract foreign donors and investors through a 'liberal' pro-privatization drive (GNU, 1996a: 14). Ironically, to a large extent, these motives are based on principles of fiscal relief and ideological variables quite similar to that of the National Party's (NP's) privatization initiative. With history repeating itself, a number of SOEs are currently being urged to conform to processes of restructuring and are in the process of partial and full privatization.

Reaction to the Government of National Unity's privatization initiatives

Again, the recent drive by government to restructure and privatize has been met with outrage, notably from the COSATU/SACP alliance and leftist political groupings. However, history teaches us that trade unions' resistance to privatization is located in the apartheid legacy. During the liberation struggle in SA, unions not only involved themselves in industrial related issues but also became highly politicized and militant. Consequently, unions oppose restructuring and privatization from various assumptions and ideological perspectives. Similar to the rest of Sub-Saharan Africa's (SSA's) creed against privatization, resistance in SA is rather severe. Generally, union opposition to privatization in SA includes:

. concern about the socio-economic impact of restructuring and privatization, since it might lead to enormous retrenchments and job losses (The Star, 23/5/96). Mdlalose, President of the National Council of Trade Unions (NACTU), warned that the restructuring and privatization process would have a serious impact on the already high level of unemployment: "Thousands of workers, who may eventually run into millions, will lose their jobs, and this will add to the level of crime ..." (City Press, 10/12/95);
. fear of the loss of social security benefits, such as pension/providence, medical aid and other related benefits as part of any workplace restructuring/privatization programme (Madlala, 1995: 12);
. the government's commitment to Black economic empowerment is considered merely a myth since the goals of the RDP will be defeated - privatization will at most benefit merely a new Black elite, while the delivery of essential services will be fundamentally undermined (City Press, 10/12/95; Business Day, 5/1/96; Sunday Times, 5/5/96). Further, Sam Shilowa, former Secretary General of COSATU, unambiguously reiterated: "In the name of black economic empowerment, they [Black entrepreneurs] wish to steal public resources and put them in the hands of a few black individuals" (Financial Mail, 22/12/95: 11);
. in like vein, fears expressed by the National Education, Health and Allied Workers' Union (NEHAWU), among others, were that privatization will create a powerful Black elite that will oppose communism and socialism (The Star, 2/1/96);
. the view of privatization as a tactic of government to shed its social responsibility role. NEHAWU has shown concern that privatization will shift the cost of the provision of services away from government to the consumer and consequently, create a marketplace where essential services will be profit-driven. The net result would be that the poor would be deprived of subsidized services (The Star, 2/1/96). In this regard COSATU (The Star - Business Report, 24/5/96) reiterated that:
We think privatization will not assist significantly in achieving a better life for all ... If the state's welfare and service functions are privatized, the government's programmes for water, electricity and health delivery will inevitably fail. Only the wealthy will be able to afford basic services and this will undoubtedly spell disaster for our future;

. the perception that restructuring and privatization are to weaken the collective bargaining power of trade unions, diminish their authority in the public sector (Business Day, 1/4/96), and invite foreign companies, who are known "union bashers", to buy privatized companies (Madlala, 1995: 12);
. COSATU's argument that privatization will result in domination by multi-national corporations (MNCs) and the weakening of small and medium-size enterprises in SA. Shilowa (Business Day, 5/3/96) supports the view that globally, a small group of MNCs is doing the work previously done by the public sector. He remarked that:

... big businesses' support for restructuring is based on buying into the global community, where a group of multinationals had set themselves up as providing the guidelines on how economies should be run.;


. the proposition put by COSATU that the privatization initiative by government is the result of WB and IMF interference in SA (New Nation, 19-25/6/92; The Star, 2/1/96). This view is based on the WB and IMF's inclination for privatization and pressure at every level of decision-making in the promotion of capitalist ideologies (Madlala, 1995: 12). Furthermore, COSATU (City Press, 20/10/96) views the IMF and WB as: "... the enemy of the people, which had consorted with the previous apartheid government" [2] ; and
. COSATU's reiteration that restructuring and privatization efforts by the government are "doomed", since it is not a people-driven process. COSATU argues that restructuring and privatization efforts are based on technical processes rather than people: "Re-engineering and downsizing is about change, and change is about people... success [of restructuring and privatization] could only be assured if people are prepared for change." (Sowetan, 30/1/96) Similarly, Coleman, COSATU spokesperson (Business Day, 5/1/96), argues that:

Unfortunately, up to now, it has been the same old elites who have been driving the agenda, largely for reasons of self interest. Who, in reality, have been the change-drivers in the restructuring debate? Firstly, the old managements of the parastatals, who continue to restructure these companies at will, resulting in destruction of services and job loss, particularly in the poorest areas.

Leftist political groupings in SA also show major concern on the possible negative socio-economic development effects of privatization. The reaction of Malatsi, Pan Africanist Congress (PAC) Secretary for Economic Affairs and Development (City Press, 10/12/95) to privatization was that:

The privatization process is not sufficiently justified from an economic and development consideration. The rich will continue to become richer, and the poor poorer because of their economic exclusion.

Mohlalo, Azanian Peoples Organization (AZAPO) spokesperson (City Press, 10/12/95), relates the GNU's restructuring and privatization plans with the demands of the IMF and WB. He asserts that:

The [previous] Mandela/De Klerk dispensation is beginning to show its true colours - of being an uncaring and inconsiderate authority that is [at the] behest of [the] IMF ... They [GNU] owe it to the oppressed of this land to show that they owe no allegiance to the hair-brained schemes of capitalist overlords and their masters, the IMF and the World Bank. Working people should not be victims of structural adjustment plans that were put in place in order to prop up a moribund regime.

Generally the SACP aligns its views on restructuring and privatization with that of COSATU. Similar to COSATU's and also AZAPO's resistance to the IMF, the SACP (City Press, 20/10/96) interrogates the IMF's bona fide, asserting that: "In the 1980's, it [IMF] broke the international campaign to isolate the apartheid regime, providing them with its biggest loan - R4.5 billion." In addition, Cronin (Business Day, 24/4/96), SACP Deputy General Secretary, claims that privatization measures will, inter alia : "... strip government of any effective strategic role in the economy."

Political groupings at the centre and to the right of the SA political continuum, such as the Democratic Party (DP), Inkatha Freedom Party (IFP) and the NP, are sturdily pro-privatization. The DP's initial stance on restructuring focused on privatization and commercialization of SOEs , emphasizing tough recommendations on constitutional amendments to ensure fiscal discipline and a drive to use privatization proceeds to balance the budget deficit (Financial Mail, 18/8/95: 48). Further, in defence of privatization, the DP urged the government to liquidate: "... the huge debt bequeathed [SOEs ] by the last [NP] government" (The Sunday Independent, 26/5/96). In a press release (The Sunday Independent, 26/5/96), the IFP backed the GNU's privatization drive, announcing:

That the ANC has finally realized that governments do not create wealth, but actually consume wealth, is a significant shift in their philosophy [on privatization]. The IFP welcomes the ANC to the free market system.

De Klerk, former leader of the NP, stated that his (the previous) government had carefully prepared State corporations for privatization. He further asserts (Saturday Star, 25/5/96) that:

If ever there was a situation in a country where privatization could be easily implemented, it was in South Africa... South Africa was ready, to my mind, already two years ago [1994] to move very fast on privatization.

Both the IFP and the NP strongly criticized the GNU for dragging its feet on implementing privatization of SOEs . Most, the NP blamed the labour unions as the biggest stumbling block in the way of privatization (Saturday Star, 25/5/96) and criticized the ANC for: "... toning down its commitment [to privatization] after an outcry from labour" (The Sunday Independent, 26/5/96).

Organized business appears to be in general agreement with the GNU's privatization drive (SA Foundation, 1996) and therefore, not surprisingly, disagrees vehemently with union privatization interests. Generally, business leaders in SA are of the opinion that privatization will stimulate investor confidence which is: "... badly dented by the high crime rate and the Rand's recent sharp fall" (Sunday Times - Business Times, 23/6/96). In a press statement (Business Day, 16/9/96), the South African Chamber of Business (SACOB) reiterated its pro-privatization stance, prompting government to: "... get on with privatization." The Afrikaanse Handelsinstituut (AHI) [3] also supports the government's privatization drive. The AHI (The Star- Business Report, 26/3/96) asserts that:

... privatization must form part of an integrated and coherent strategy to put the South African economy on the road to robust and coherent economic growth as soon as possible...

At the request of government, the AHI detailed its views on privatization and the advantages thereof. The response included, inter alia:

. Decision-making independent of political approval, which would encourage better performance of privatized SOEs ;
. improvement in the efficiency and profitability of the enterprises concerned, stimulating economic growth, increasing State revenue directly through their sale, and indirectly through tax revenue;
. broader ownership in the SA economy;
. the more productive use of State funding through privatization would no longer be necessary to subsidies unprofitable undertakings (SOEs ): and
. income generated from privatization should be used to repay State debt or expand infrastructure [4] (The Star - Business Report, 26/3/96).

It appears that pro-privatization exponents in SA view privatization in terms of the role it can play in reducing government debt and cutting the budget deficit. Conversely, the fears and concerns of anti-privatization proponents in SA can be deduced to a broadly perceived conception that the government is attempting to shed its social responsibility role as envisaged in the RDP. It is therefore important to note the significant consequential relationship between restructuring and privatization on the one hand and the wider issue of social cost, socio-economic development and human development implications. Many aspects of transformation will affect the performance of the RDP, either directly by altering the aims of the RDP itself (e.g., a lack of resources for implementation), or indirectly through the effect restructuring, privatization and retrenchments might have on employment creation and other development needs.

COSATU's concerns in this regard are linked primarily to the apprehension and suspicion that privatization of SOEs will not conform to the present and envisaged role played by SOEs in the provision of utility services to the consumer at affordable rates and the present and envisaged development orientation of SOEs to realize its objectives and the active role it can play to increase the RDP service delivery capacity (COSATU, 1996).

Impressions of GEAR and sustainable development: 1996-1998

Since its inception, the impact of GEAR has already shown the negative socio-economic effects generally associated with neo-liberalism. As Bond (1999a) notes:

After five years of the ANC government's most aggressive efforts, the chosen 'neoliberal' (free-market) approach to economic development policy has failed convincingly. Virtually all targets in the national GEAR strategy - except budget cutting and bringing inflation down which are always the two highest priorities of bankers - are very far from being met.

Looking at the three-year period 1996, 1997 and 1998, Bond (1999b) and Adelzadeh (1999) highlight the miserable failure of GEAR:

. Annual GDP growth fell from 3.2 to 1.7 to 0.1 percent in 1996, 1997 and 1998, instead of the strategy's projection of 3.5, 2.9 and 3.8 percent growth. (In view of steady population growth, the per capita wealth of SA actually fell by 2.5 percent);
. Formal sector (non-agricultural) job losses were 71,000, 126,000 and 186,000, instead of GEAR's anticipated employment gains of 126,000, 252,000 and 246,000;
. The rate of increase in private sector investment fell from 6.1 to 3.1 to a negative 0.7 percent in 1996, 1997 and 1998 (instead of rising 9.3, 9.1 and 9.3 percent, respectively);
. Of private investment, virtually all foreign direct investment was related to the purchase of existing assets through privatization and merger/acquisition deals (particularly the 30 percent sale of TELKOM) as opposed to new plant and equipment, and SA's outflows of foreign direct investment ($2.3 billion in 1997) were far higher than what came in ($1.7 billion that year);
. Savings also fell (notwithstanding the rise in the real interest rates from 1996-98) from 18 percent of GDP in 1996 to 15 percent in 1997 and 14 percent in 1998; private savings fell from 20 percent in 1996 to 17 percent in 1998 (instead of rising to 21 percent, as GEAR forecast);
. The current account deficit worsened from -1.3 percent in 1996 to -2.1 percent in 1998 (instead of remaining stable, as GEAR predicted);
. Exports of SA products (other than gold) rose slowly in 1997-98 (5.3 and 2.1 percent, respectively), confounding GEAR projections (of 8 and 7 percent, although 1996 export growth was better than predicted);
. The real interest rate remained in double digits from 1996-98 (instead of falling from 7 to 5 to 4 percent, as GEAR hoped); and
. The value of the Rand collapsed from 3.5 to the dollar in mid-1996 to 6 (at one point, 6.7) in 1998, confounding projections that it would stay relatively stable.

Adelzadeh (1999: 1) comments elsewhere that:

... GEAR's success cannot be judged by whether a deficit target is achieved or exchange controls are removed at the anticipated pace, or tariff reductions match a specific time-table. What matters is whether its policy features indeed are leading to the achievement of its stated targets: lowering the unemployment rate, stimulating sustained economic growth, poverty reduction and so forth".

Furthermore, other aspects of concern relating to GEAR and its stated targets are:

. Although retrenchment is aimed at reducing a bloated bureaucracy in the public sector, it is usually massive, sudden and without the necessary safety nets. This is the case in SA. According to one estimate, the government envisage the need to shed a total of 300 000 jobs in the public sector to get the 'right size' (Marais, 1996: 40). However, little or no provision is made for the redeployment of these workers. Furthermore, it often takes several months or years before the affected workers can claim their gratuities or pensions (e.g., retrenched teachers and health workers - see The Star, 28/6/96; The Star - Business Report, 20/7/96);
. GEAR emphasizes that social infrastructure is to be expanded, while "only wasteful public spending" should be drastically cut (GNU, 1996b). Whilst teachers and health workers are being retrenched, the 1997/1998 national budget provides for further marginalisation of social services, such as extensive departmental budget cuts, in real terms, particularly in the health (54.2 percent ) and education (7.9 percent ) votes. This is a glaring contradiction, particularly in the light of the GNU's policy rhetoric on its RDP commitment;
. Generally, the aim of privatization is to reduce the flow of funds to inefficient SOEs (Onimode, 1994: 147). In SA, besides the government's previous reluctance to privatize SOEs with an explicit role in the delivery of basic services (GNU, 1996a: 13), current privatization initiatives tend to affect most SOEs ; these include recent moves to privatize profitable ones with an important 'social dimension' in terms of the RDP, such as ESKOM (Business Day, 12/4/97). While, for example, it has taken Britain approximately 12 years to privatize 17 percent of its SOEs (Onimode, 1994: 147), it appears that the SA government intends to rid itself of most SOEs within as little as the next three years (Business Day, 22/4/97); and
. SAPs indiscriminate promotion of traditional exports through price incentives offered only to 'tradable' goods, led to the undermining of food production and self-sufficiency in SSA. A similar scenario appears to unfold in SA. Adelzadeh (Mail & Guardian, 9/5/97-15/5/97) argues that GEAR marginalizes the traditional agricultural sector that will undermine food production and self-sufficiency: "An accelerated approach to reductions in tariffs, subsidies, quotas and exchange controls [as embedded in GEAR] will certainly have serious implications for a sector that historically was well protected and was focused on local markets and national self-sufficiency."

Deepening divisions

Indeed neo-liberalism, in the disguise of GEAR, has not only undermined RDP service delivery, employment creation and poverty alleviation, but has also become a significant force to divide and alter both political and economic alliances in SA.

With the intense pressure on the GNU by COSATU to abandon its neo-liberal policies during 1996, President Mandela intractably remarked that:

Privatisation is the fundamental policy of the ANC, and it is going to be implemented ... Just because we [government and COSATU] have a working relationship, and they [COSATU] helped put us in power, does not mean that we are happy with everything they say... We cannot afford the luxury of endless to-ing and fro-ing while the country demands urgent change. (Sunday Times, 26/5/96)

These statements underline speculation in various press reports on a potential end to the tripartite alliance which both government and labour denied as being premature at the time (The Citizen, 12/2/96; Sunday Times, 21/7/96; The Star - Business Report, 23/7/96; The Star - Business Report, 7/8/96).

More recently, during 1999, disagreement and divisions on the future economic transformation process in SA appear to be deepening to a level of frustration and intolerance, especially from the side of the ANC. Addressing a COSATU Special Congress, Terror Lekota, ANC Chairperson, rebuked COSATU for publicly airing its grievances with government labour and economic policies in the following headstrong manner:

The recent trend, on part of some highly placed comrades, of ascending platforms or by other ways criticising or agitating against policies and actions of the movement, inside and outside of Government, smacks of a lack of revolutionary discipline... This undisciplined approach has a number of negative consequences: It confuses the mass based support of our movement; it lends itself to exploitation by our opponents and opposition parties; it creates a climate in which agents provocateur can thrive and advance their counter-revolutionary agendas. (COSATU, 1999: 3)

This statement certainly sparked strong reaction from COSATU. However, the question remains - what is the ANC scared of - the truth? The truth that neo-liberal policies are failing the masses and the poorest of the poor who have realized how very little say they have over their own destiny in a world of globalization, regardless of political pluralism and deepening democratic sentiment.

Conclusion

This paper illustrates how the ANC has embraced neo-liberalism and how the government's approach to economic development has failed dismally; in addition, how this failure is lurking to explode in a head-on collision and confrontation between government and those bearing the brunt of the effects of neo-liberalism. Government appears to shy away from its failed policies and social responsibilities: its meager consolation, that the pains of neo-liberalism and its immediate negative socio-economic side effects are but merely transitional and short-term. The reality is that for the poorest of the poor who live a survivalist lifestyle, the need for relief is now. One cannot eat economics - one cannot eat politics! As Bond (1999a) so aptly states: "There Must Be an Alternative! - THEMBA ("hope")."

Notes

[1] For a detailed review and analysis on the negative impact of SAPs and privatization on the social, political and economic fabric in Sub-Saharan Africa, see, inter alia : Adam, C., Cavendish, W., Mistry, P. Adjusting Privatization: Case Studies from Developing Countries. London James Currey, 1992; Balogun, M.J. 'Public Sector and Economic Development: Lessons from Africa's Experience'. Turok, B., Maganya, E., Coetzee, S.F, Beukes, eds. South Africa: Perspectives on Development. Johannesburg: IFAA and AISA, 1994; Banugire, F. R. 'Employment, Incomes, Basic Needs and Structural Adjustment Policy in Uganda: 1980-1987'. Onimode, B. ed. The IMF, the World Bank and the African Debt: The Social and Political Impact. London: Zed Books, 1991; Buthelezi, S. 'IMF and World Bank in Africa: Curing the Disease by Killing the Patient'. Work in Progress 77, 1991, pp. 32-34; Cowan, L.G. Privatization in the Developing World. New York: Praeger Publishers, 1990; Mosley, P., Subasat, T., Weeks, J. 'Assessing Adjustment in Africa'. World Development 23 (9), 1995, pp. 1459-1473; Onimode, B. ed. A Future for Africa: Beyond the Politics of Adjustment. London: Earthscan, 1992; Rendewohld, R. 'Deregulating the Public Sector: Privatisation and Commercialisation in Nigeria'. Annals of Public Cooperatives and Economics 64 (4), 1993, pp. 501-604; Schatz, S.P. 'Structural Adjustment in Africa: A failing Grade So Far'. The Journal of Modern African Studies 32 (4), 1994, pp. 679-692.

[2] Possible reference is made to the NP's previous dealings with the WB. However, Padayachee (1996: 367) points out that SA had very little financial assistance since the mid-1960s. Nonetheless, over the period 1946-1976, SA received 11 loans for a total amount of $241.8 million. The last loan was received during June 1967 and all loans were settled during 1976. However, a report in the City Press (20/10/96) points out that SA was provided with a loan by the IMF of 4.5 billion Rands during the 1980s.

[3] A predominantly White Afrikaner national business interest group.

[4] In the case of the recent partial privatization of TELKOM, the GNU announced that from the proceeds amounting to US$1.26 billion, TELKOM will get US$1 billion and the rest will go to central government to retire debt (Business Day, 9/4/97).

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Newspaper and Weekly Reports

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Business Day. Report of 5/3/96.

Business Day. Report of 1/4/96.

Business Day. Report of 24/4/96.

Business Day. Report of 16/9/96.

Business Day. Report of 9/4/97.

Business Day. Report of 12/4/97.

Business Day. Report of 22/4/97.

Business Day. Report of 19/8/97.

Business Day. Report of 20/8/97.

Business Day. Report of 6/7/99.

Business Day, Report of 13/3/00.

The Citizen. Report of 12/2/96.

City Press. Report of 10/12/95.

City Press. Report of 20/10/96.

Financial Mail. Report of 18/8/95.

Financial Mail. Report of 22/12/95.

Mail & Guardian. Report of 14/2 - 20/2/97.

Mail & Guardian. Report of 9/5 - 15/5/97.

New Nation. Report of 19-25/6/92.

Saturday Star. Report of 25/5/96.

Sowetan. Report of 30/1/96.

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The Star - Business Report. Report of 26/3/96.

The Star - Business Report. Report of 24/5/96.

The Star - Business Report. Report of 20/7/96.

The Star - Business Report. Report of 23/7/96.

The Star. Report of 2/1/96.

The Star. Report of 23/5/96.

The Star. Report of 28/6/96.

The Sunday Independent. Report of 26/5/96.

The Sunday Independent. Report of 4/5/97.

Sunday Times. Report of 26/5/96

Sunday Times. Report of 21/7/96.

Sunday Times - Business Times. Report of 16/6/96.

Sunday Times - Business Times. Report of 23/6/96.

Sunday Times. Report of 5/5/96.

Supplement to The Weekly Mail. Report of 3/3-4/4/90.

Paper presented at the African Studies Association of Australasia & the Pacific 22nd Annual & International Conference (Perth, 1999) New African Perspectives: Africa, Australasia, & the Wider World at the end of the twentieth century

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