Author: Khadija Sharife

Apr 28, 2009

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South Africa: Political Liberation, Economic Capitulation

Its that time of year again: shiny posters pasted to lampposts (beckoning people toward the light?); politicians pole dancing for votes, faces (and hands) scrubbed clean of deception; the largely uninformed and inactive flesh-and-blood electorate prying open ‘magic-voting-button’ boxes to retrieve dusty, moth bitten cloaks of idealism, stapled with old newspaper cuttings and dented dreams (its a little banged up, but now is your time!).

But the duct tape is coming loose; the dream, unraveling – and this, far from the madding crowd – those swept up in the heady sensationalised narrative of the Mbeki-Zuma drama, fatally reducing the inherited and endorsed economic legacy of apartheid (and often contradictory internal dynamics) to a leadership clash between two pack leaders vying for the alpha or first male’s throne (seated atop the same system, so does it really make a difference?).

Yet, if the alpha male is prepared to banish or eliminate any serious contender, it would more correct to say that Mbeki – who refused to directly challenge the decision to oust him,  did not fit the profile, attempting instead to protect the ANC-led government from Zuma’s alleged threats of disclosure: that the deliberately bankrupted ANC-national-movement turned political-party’ allegedly accepted payments from the rigged arms deal as a collective, in order to finance the reality of a political liberation, as well as the 1999 elections. That same year saw the government breaking under the weight of apartheid-era debts that had ballooned to more than R376 billion, despite having auctioned dozens of state-owned firms to service part of the debt.

This debt, along with corporate blanket amnesty, symbolises the economic capitulation that facilitated our political liberation. Of course, it all goes back to the secret preconditions (or ‘historic compromises’ in Mbeki’s own words) that defined the nature and limitations of our emancipation, and the role of our government whose economic policies were described by the UNDP described as ‘no different’ from that of apartheid….

In 1988, Sanlam’s Fred Du Plessis, one of Botha’s top corporate economic advisors, advocated for economic reform to stave off the revolution via the creation of a divisive political buffer: a black middle class. This was an underlying objective taken one step further via Black Economic Empowerment (BEE) move to carve out a small owning elite. ‘I will speak only to the question of the challenge of the formation of a black capitalist class,’ said Mbeki. ‘This is and must be an important part of the deracialisation of the ownership of productive property in our country.’

This type of selective deracialisation feeds into the broader system of the global apartheid, deliberately suppressing the socio-economic reality of the ‘free market’ through a small manufactured and preserved class of kneepad-people – a token economic tribe conveniently  used to batter calls for development, useful too for absorbing and reducing the impact of shocks each time the body takes a hit. (Initiatives such as NEPAD are there for instruction after all).

But apartheid was reduced to a state of pigmentocracy, and the illusion of liberation depends on the perceived legitimacy of black authoritative power – preferably political, preferably limited.

This may be because the same corporate heavyweights that were instrumental in defining the contours of apartheids such as Anglo-American’s Harry Oppenheimer were the first in line to alter and adjust the ANC’s Reconstruction and Development Programme (RDP); Oppenheimer’s Brenthurst Group fingered Trevor Manuel for the OK as finance minister in March 1996. In late 1995, plans were made to dump the latter in favor of the Growth, Employment and Redistribution (GEAR) programme, formulated by a team of economists who worked under the watchful eye of the World Bank and IMF. GEAR was characterised by its similarity to the Washington Consensus, ranging from trade liberalisation to financial deregulation, mass privatisation, reprioritizing state expenditure related to education, water and waste sanitation, electrification and other crucial areas.  Despite the fact that South Africa lost over R70 billion in tax cuts during the first decade, the burden of corporate tax has been shifted to bracket the middle and low-income groups.

The new liberation government also agreed to follow in the footsteps of the apartheid regime by ratifying the GATT-sledgehammer (later WTO) and accepting the IMF’s Christmas gift (December 1993) – an $850 million loan, preconditioned by the prevailing structural adjustment orthodoxy.
GEAR was unveiled in mid-June 1996; at the launch Mbeki would whisper ‘just call me a Thatcherite’ directly into the ear of the market. Mandela stated, ‘I confess that even the ANC learned of GEAR far too late, when it was already complete.’  Madiba magic was a crucial factor in legitimising these policies to the nation; he would later describe the feeling of retirement as similar to that of leaving prison a second time.

The walls of these negotiated prisons were constructed as early as 1985, when the stock market crashed and the South African government imposed a standstill on $13 of the $23.5 billion in outstanding foreign debt. The South African economy had been on the decline since the 1970s.

Though foreign banking corporations did their utmost to sustain (and resuscitate) the economy (e.g. in 1985, 260 banks rescheduled outstanding loans on easy terms, in addition to the 400% increase in loans, and would continue doing so as late as 1990) the Rand Lords were getting jittery. Foreign corporations did not support the apartheid regime because they were racist. Their reasoning – business as usual – has been successfully applied to regimes from Burma, Angola, Sudan and Nigeria.
Mbeki – an economist trained in Thatcher’s own land – may or may not have believed in the religion of neoliberal market fundamentalism (read: protectionism for ‘first worlds’ combined with the structural exploitation of ‘third worlds’), but he seized the opportunity to directly negotiate with the kings of capital – much to Botha’s dismay. The only foreign power willing to extend a lifeline to the national movement – the Soviet Union, agreed to withhold arms and financial support ‘to foment a revolution in South Africa’ according to the terms of the 1986 Reykjavik Summit negotiated by Gorbachev and Reagan. The former, it may be said, supported the ANC as a means of legitimising their Soviet expansionist brand in third world countries, while the latter, the architect of ‘constructive engagement’, was a pillar bolstering the apartheid regime’s power.

Perhaps Mbeki caught wind of the Soviet Union’s adultery prior to the September 1985 meeting – (often called corporate safaris) hosted by Zambian President Kenneth Kaunda at the Mfuwe Game Lodge, attended by then-Anglo American Chairman Gavin Relly as well as several business magazines. The home of Anglo’s Zambian manager would serve as the neutral base for further meetings between Mbeki and the corporations. Anglo’s support was vital to the success of this approach; during the late 1980s the company employed more than 250 000 miners and was renowned as a central pillar of apartheid. By 1994, Anglo was one of five companies controlling more than 85% of the JSE. Prime Minister Verwoerd described Anglo’s power by saying, ‘With all that monetary power, and with his powerful machine which is spread all over the country, he can – if he so chooses, exercise an enormous influence against the government and the state.’

Oliver Tambo, the rudder of the ANC, backed Mbeki’s approach and would testify in 1986 on behalf of the ANC, before the Foreign Affairs Committee in London that they did not intend to destroy the economic system, but merely to reform it. . Tambo’s stroke would see Mbeki rise within the movement as the new controlling agent.

His support was crucial to the legitimacy of Mbeki’s stance (a pact with the devil Sir, but one that won our political freedom at great cost). The reductionism of the ANC from a national movement (still experienced via the ANC culture so intimately intertwined with our fabric of our society), to an almost unilaterally designed pro-trickle down political party in the early 1990s is not a situation many of us ANC supporters understood in time. 

Sadly, South Africa’s socio-economic condition is not unique, and remains one more local snapshot of the global economy….

The bizarre concept of measuring economic ‘growth’  – delinked from development, through specialised tools such as GDP – the scorecard for overall economic activity marginalizes the most pressing and crucial needs of ‘third world’ economies – development.

Though Mbeki recognised that the ‘automatic so-called trickle down effect’ was a myth, he proceeded to devise a structural disconnect between cause and effect stating, ‘The task we face is to …implement a strategy to intervene in the ‘third world economy’ and not assume that the interventions we make with regard to the ‘first world economy’ are necessarily relevant to the former.’

But neither economy exists in isolation: rather, government intervention related to the ‘first world economy directly undermines the rights-based system negating the concept of an active democracy, save for the corporate electorate.

Despite obsolete specialised tools such as GDP informing us of a growing economy, the reality of the trickle-down system appears to have been designed (forgive my rudeness) for urinals only (drip drip drip) from a sickly body with a cosmetically enhanced face. GDP is extremely useful for its specific purpose – quantitative economic weight. But it does not inform us to where, when and how wealth is being made and distributed, the quality of such wealth, externalized factors and the long and short term repercussions.

One solution swirling around the dysfunctional brown pile in my head is that the role of government must be redefined, moving away from the false premise of government as ‘owners’ of natural resources, toward government as the managers via democratised public-asset portfolios (as opposed to privatised or nationalized portfolios).

The free market, dissociated from its source – the ecology, operates in a fantasy-land; corporations plunder finite resources, and exhausting potentially sustainable resources. The health of the ecology is entirely divorced from the health of the ‘economy’ – despite the latter being a ‘reality’ that is totally dependent on the former.

This could change if the value of natural ‘capital’ was recognised as a primary source of wealth, and integrated with traditional forms of capital (financial, produced, intangible). However, if we do not simultaneously recognise the legal innate rights of the ecology to health and restorative justice, the consequence of integrating natural capital will result in commoditizing natural resources, and marginalising the value of intact ecosystem services – discarded as of no real economic worth (e.g. the intact value of a hectare of mangrove in Thailand is $1000, in contrast to the $200 when converted into aquaculture or cash crops).

It has been well documented that the revenues derived from corporate exploitation of finite resources, constitute a pittance of real wealth when compared to the costs of pollution, the loss of ecosystem services and sustainable exploitation. Growth must thus be contextualized – secondary to development – and the concept of wealth redefined.

The only other option available to us is the golden stream of ‘number one’ grazing our bald spots, with politicians telling is to thank god that ‘number two’ – best symbolised by flying plastic toilets in other parts of Africa, is not our fate.

Polls reveal that the Zuma-led ANC has won elections by close to two-thirds majority of an estimated 15 million voters. The Democratic Alliance – the official ‘opposition’ – raked in 16% of the vote while the new-born Congress of the People (COPE) held 7.5%. DA leader Helen Zille spent the final days jetting around the country waging an almost hysterical ‘Stop Zuma’ campaign, alleging that Zuma is a ‘one-man constitution-wrecking machine’.

Yet at the end of the day, it makes little difference which captain steers the ANC vehicle if the policies of the now global economic apartheid regime constitute the bricks (spray painted in all the beautiful colors of the rainbow nation)

It is the system that needs to be interrogated by the media, not the personality.
 

Apr 07, 2009

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The nuclear chain of command: South Africa and the Bomb

In his essay, ‘You and the Atom Bomb’, a direct reference to the nuclear arms of the ‘Cold War’ – the conflict between the Soviet Union and the Western powers, George Orwell writes,’ Unable to conquer one another, they are likely to continue ruling the world between them.’

What role did apartheid South Africa play in this ideological end-game?

South Africa’s uranium deposits, described in a report authored by geologist RA Cooper in 1923, and later researchers employed by the US’s Manhattan Project, revealed that the Witwatersrand gold mines possessed, at that time, possibly the largest low grade deposits in the world. Uranium was mined by SA for the US and UK, raking in a revenue of R1 billion from 1952-1960, at least one component underpinning the support of the US in the context of the Cold War.

Uranium – a highly strategic resource, effectively prevented three-fifths of the Security Council (France, US and UK) from instituting a mandatory oil embargo on the apartheid regime, a move that would have crushed the energy and oil-starved government. Though it was claimed that enrichment was for energy purposes only, by 1989, there were six weapons of mass destruction, containing 55 kgs of 90% enriched uranium – weapon’s grade, with a seventh on the way. The apartheid regime’s nuclear programme, designed to blow enemies – including the recently emancipated, ‘unfriendly’ regimes of Angola and Mozambique, off the face of the earth.

The crash of the Berlin Wall – stripping the apartheid government of the primary pretext sustaining apartheid – and implicit US support, would see Prime Minister de Klerk dismantling the regime’s nuclear programme, employing Dr Wynand Mouton, then-rector of the University of the Free State and retired nuclear physicist, to destroy the body of evidence related to the nuclear programme.

No amnesty was required for the estimated 1000 specialists involved in the industry.

The Nuclear 1000

Come freedom in 1994, Trevor Manuel, head of the ANC’s Economic Department would vow never again to ‘issues as critical as the nuclear programme…confined to experts in dark, smoke filled rooms.’ Never again, he promised, would the militarised culture of secrecy informing both the apartheid regime and the global nuclear industry be subject to closed door negotiations. Yet the mandate of the Truth and Reconciliation Committee never included the ‘nuclear 1000’, nor were they asked to seek amnesty.

According to Dr David Fig, author of Uranium Road, just a few months shy of Manuel’s never again statement, a group composed of the apartheid-era’s nuclear scientists, formed a company called IST, proposing a design now known as the Pebble Bed Modular Reactor (PBMR), capable of generating 165 MW per unit. Though pebble bed technology has already failed in Germany (the patent holders), and is not on the agenda of ‘developed’ countries, the South African government has heavily invested public funds. The technology was aggressively backed by high level persons such as former Minister of Public Enterprises Alec Erwin.

The initial budget estimated at R365 million, has now increased to an incredible R20 billion allocated to the project. ‘This cost is only for erecting the pilot (demonstration) plant and does include operating, commercialising or decommissioning it. Cost overruns are normal for the nuclear industry; the true cost is often the multiple value of the original,’ said Fig.

Already, R2 billion has been spent on research and development with no transparent accounting of how public money was spent, nor any set date for the completion of the pilot plant, though experts have put a date ranging from 2011 – 2016. National energy provider Eskom has signed a letter of intent agreeing to purchase 24 units, therefore making production viable.

Energy too cheap to meter?

Jaco Kriek, CEO of the PBMR Company, when asked by Carte Blanche as to whether purchasers had signed the dotted line, he responded, ‘No, we haven’t signed, purely because we cannot actually get into discussions with too many customers. So the two customers we are looking at the moment are Eskom and the US department of energy.’

However, Eskom’s various preconditions render such a possibility as unlikely.

‘If Eskom’s wants to wriggle out of it, they can. The letter of understanding is not binding, but is instead hedged by many preconditions including one which states that the reactors must be the cheapest technology at the time. The nuclear industry will not be supplying much energy – maybe 5% or double that, and it seems that pebble beds have been downgraded as they are running into credit problems, amongst others,’ said Fig.

Presently, two nuclear reactors at Koeberg (Dutch for ‘Cow Mountain’) opened for business in 1984-1985 provides some 38% of energy in the Western Cape and 5% of national energy; each unit produces 900 MW (1MW is 1 million kilowatts kW). Both reactors are midlife and will have to be decommissioned within the next two decades. The PBMR Company lists Westinghouse, a US nuclear energy corporation (and an Obama backer – coinciding with Obama’s recent push toward nuclear), the Industrial Development Corporation (IDC), Eskom and the SA government as backer and shareholders. Westinghouse holds 15% of the shares only.

A spokesperson for the PBMR Company stated to The Times, ‘(It) gives us the capacity to go from a Third World to First World country, in that we are leading the way in nuclear technology.’

Since Chernobyl, developed countries in such as Germany and the Netherlands have scrapped nuclear reactor development; no developed country entertains the pebble bed model.

Koeberg’s reactors – relying on highly specialised personnel, has experienced several ‘accidents’ including misplaced bolts that had to be purchased from France with a lull of several months while the businesses, households and industry in the Western Cape experienced prolonged blackouts.

‘Aside from the fact that no solution has been found concerning radioactive waste which lasts for hundreds of thousands of years, in South Africa, we simply lack the skill to maintain the technology, let alone handle the situation if anything goes wrong.’

The technology renders us dependent on foreign corporations and skills, with mass pollution and little in the way of ‘cheap’ energy, job creation, and decentralization. In 2007, the Department of Minerals and Energy’s nuclear policy document advocated the creation of a specialised nuclear police force, similar to that of the apartheid-era’s culture of secrecy.

The DME has largely marginalised stakeholder participation and the concerns of civil society, workers and communities, regarding radioactivity, cost, potential risks and the closed door negotiations taking place at cabinet level only. Cumulatively, there 53 highly contaminated radioactive sites in SA.

The push toward nuclear energy has been rationalized by alleged lack of carbon emissions, – South Africa maintains a higher per capita emissions rate than the US, and recent energy shortages causing rolling blackouts nation-wide, at a time when SA continued selling energy to foreign corporations.

But though nuclear power stations do not emit carbon, the carbon intensive process including milling, mining, reprocessing, construction, and disposal of lethal carcinogenic radioactive waste generated from the core of the reactor including plutonium, with extensive half-lives, many of them over 100 000 years.

According to environmental consultant Muna Lakhani, ‘For the externalities relating to the PBMR, one must add fuel enrichment (an energy-intensive process), emissions–not only daily nuclear radiation, but also daily emissions such as strontium and cesium.

‘Decommissioning must also be accounted for (often more than the original cost-the UK decommissioning bill has rocketed to $116bn) and the very real problem of how to contain radiation for hundreds of thousands of years–no safe solution has been found.’

In 2004, British nuclear expert Professor Steve Thomas, one of 15 nuclear specialists retained by the government to author a 2002 report on the feasibility of PBMR’s stated that the government should immediately pull out as the design had never been built successfully, is ten times the original, ten years behind schedule, with little in the way of electrification.

Dark, smoke filled rooms

According to Fig, ‘The head of the National Nuclear Regulator is a revolving door guy – he previously worked for the PBMR Company; he has yet to come out with a strong public statement about the incident. The NNR is terribly weak and under budgeted.’

In light of this, is nuclear energy democratic, subject to public influence or confined to the dark rooms Manuel spoke of?

‘The drafting of both the Nuclear Energy Act and National Nuclear Regulation Act was formulated by officials in the DME, who primarily consulted only cabinet and the Chamber of Mines.

Has the government endorsed the inherited nuclear legacy?

‘Globally, the industry operates in a culture of secrecy. The PBMR’s will use 10% or less enriched uranium, not weapons-grade. But we are now moving back to the way in which issues like nuclear were handled in the apartheid. It is anti-democratic.

”Were (the atomic bomb) cheap to manufacture…like a bicycle, it might, on the other hand, have meant the end of national sovereignty and of the highly-centralised police state,’ said Orwell.’

The Party Line

Where do various parties stand on PBMR technology?

Democratic Alliance: The DA would not disqualify any energy generating source from long-term integrated energy planning. Having said that we have grown increasingly sceptical of a new nuclear build in South Africa and do not believe it is desirable for the foreseeable future. Our primary focus is on improving energy efficiency and promoting a massive uptake of renewable energy.The DA does not support further state support for the PBMR – PBMR Pty Ltd must find private investors to cover any further investment.

Independent Democrats: The ID is opposed to Eskom’s current proposal to expand the use of nuclear energy in South Africa. We believe that nuclear energy is not an appropriate choice for South Africa for a number of reasons. Firstly it is too expensive and will end up increasing South Africa’s foreign debt and its balance of payments deficit.

The major beneficiaries will be foreign companies like Areva or Westinghouse and very few local jobs will be created as a result. In terms of the PBMR, the ID has been the only party that has consistently been objecting to the billions of rands that have continued to pour into this highly suspect project.

The ID firmly believes that this money could have been more effectively utilized in building a Concentrated Solar Power plant which would have already been up and running now as opposed to the PBMR which is constantly being delayed and subjected to redesigns.

Inkatha Freedom Party: The development of the PBMR has lacked transparency, been handled with incompetence and huge waste of money way beyond expected or budgeted costs. While the IFP has accepted the possibility of nuclear energy as an alternative to polluting coal fired power, we are concerned at the absence of safe methods for disposing of nuclear waste from the PBMR.

Prognostic costing has revealed that the cost of developing nuclear power coal power and concentrate solar thermal power stations, on megawatt parity, will be much the same by the year 2015. Therefore the IFP strongly supports investment in CSTP since our county has one of the ideal climates for such technology and with a reasonable REFIT (renewable energy feed in tariff) could be one of the foremost developers of the technology in the future.

A version of this article appeared in Muslim Views (April).