the sociopolitical structure of accumulation and social policy in southern africa

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7The Sociopolitical Structure ofAccumulation and Social Policy in Southern AfricaPatrick Bond

7.1 Introduction

This chapter seeks to clarify, as Huck-ju Kwon (2002: 1) puts it, how the‘socio-political structure of accumulation’ in Southern Africa emergedbased upon ‘the agendas of social actors and the development trajector-ies of countries’. This analysis permits a further explanation of water andhealth policies in three countries: South Africa, Zimbabwe and Botswana.These are the most industrially developed economies in the region (notincluding the island nation of Mauritius), with extensive upper-class,middle-class and working-class populations, and large numbers of ruraland urban unemployed.

The chapter begins with a brief survey of methods often used to dis-sect economic structure, social policy and related political influences onthe social wage. It then provides contextual information about the threecountries’ recent development trajectories and about emblematic aspectsof water and health policies that reflect the sociopolitical structure ofthe society. As Jimi Adesina (2002: 1–3) describes it, the problem is tounpack processes of ‘considerable unevenness: the shift in the under-standing of and nature of macroeconomic and social policy thrusts, thenature and the role of the state, and the primary source and nature ofincentives’.

In this context, a series of leading questions may help point to coreaspects of social policies, especially water and health care. Manuel Riesco(2003: 5–6) asks, ‘what kind of relationship . . . [exists] between socialpolicy, economic development and the underlying social structures?What is the relationship between state-led industrialization . . . and wel-fare state development? What kind of societies did these welfare statesdevelop in?’

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To answer requires assessing social policy from a structuralist stand-point. The problems associated with socioeconomic crisis, and with water/sanitation and health policies in Southern Africa, have become soextreme that we can consider the specifically political-economic fea-tures of neoliberalism and its sponsors as the basis for our primary focus.However, first we turn to a review of historical and more recent political-economic dynamics associated with the socio-political structure of accumulation.

7.2 Historical features of the sociopoliticalstructure of accumulation

For a study concerning the relationship of capital accumulation and socialpolicy formulation in the three most industrialized Southern Africansocieties, the starting point is necessarily the way settler-colonialismrelied upon migrant-labour control systems. An abundance of SouthAfrican and Zimbabwean historiography concerning these topics con-trasts with the very limited record of Botswanan urbanization andindustrialization prior to independence and the development of the diamond industry, although some literature on the latter case is pre-sented in the next section. Because the work on Zimbabwe’s sociopoliti-cal structure of accumulation has drawn on largely empiricist (althoughextremely rich) arguments, we might simply cite these works in passing1

and focus more on the relationship between sociopolitical developmentand accumulation processes in South Africa.

The Apartheid and pre-Apartheid migrant labour system, after all, wasnot only the model for that used in Zimbabwe and, to some extent,Botswana. In addition, the ‘minerals–energy complex’ at the heart of theSouth African economy includes companies that have either been dom-inant players in the region directly (DeBeers in Botswana and Anglo inZimbabwe) or indirectly via the extension of broader non-mining acqui-sitions and financial power (Anglo in Zimbabwe). Hence it is importantto correctly specify the sociopolitical structure of accumulation. SouthernAfrica’s most debilitating socioeconomic problems are best consideredas deep-rooted manifestations of a semi-peripheral economy manipu-lated at will by imperial powers dating to the mid-nineteenth century,accompanied by the rise of complicit local ruling elites.

Three sets of closely related problems can be identified:

• First, colonialism’s artificial borders, racism and ideological control,ethnic ‘divide-and-rule’ strategies, land acquisition, labour control,

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200 Social Policy in Sub-Saharan African Context

suppression of competition from indigenous sources, military conflict(independence struggles) and replacement by African nationalismtogether guaranteed a future of distorted economics and failed states.

• secondly, for women, pre-colonial patrilineal systems evolved into colo-nial forms of inequality (e.g., minority status and legal guardianship)which often persisted and evolved as post-colonial forms of structuredoppression (e.g., market-related brideprice), in part because colonial-ism’s migrant labour systems required ultra-inexpensive workers whowomen would subsidize through childrearing, home-based medical careand retirement (in lieu of the standard set of business-financed schools,medical plans and pensions offered to workers elsewhere); and

• thirdly, political continuities from past to present include unreformedstate structures, international political and cultural relations with colo-nial powers, and especially class alliances involving compradorism(local elites working in league with international oppressors).

Of greatest interest for understanding social policy was the fate ofindigenous black African people under the compulsion of new wage-labour disciplines. Once the colonial spoils were divided at the 1885Berlin Conference, the British government mandated the Cape PrimeMinister Cecil John Rhodes and his British South Africa Company (BSAC)to seize a vast area stretching north from Lesotho. The British militarybeat back resistance from the region’s Africans (most decisively in SouthernRhodesia during the 1890s) and from Afrikaners (in the South African-Anglo-Boer War of 1899–1902). British settlers thereby gave birth to thesociopolitical construct of Southern Africa. Using traditional techniquesto strip land from indigenous peoples – ‘hut taxes’, debt peonage sys-tems and fees for cattle-dipping and grazing, as well as other more directforms of compulsion – the settlers drew African men from the fields,into the mines and emerging factories.

But it took more than geopolitical influence and investment to form aregional working class. Racialized capitalism throughout SouthernAfrica also came to depend heavily upon extraordinarily ‘cheap’ migrantlabour and various forms of extra-economic coercion.

The Johannesburg mining houses soon organized a Chamber of Mines inorder to establish recruitment offices in far-flung parts of the region. Thesystem’s profitability and durability relied initially upon a social subsidy –from household production by the migrant workers’ families back homeon the land – that allowed wages to be set well below the cost of reproduc-tion of labour power. In short, white capital and white-ruled states in theregion spent next to nothing on black education in rural areas, on black

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workers’ and their families’ health care, or on black workers’ pensions.The subsidy came partly from exhausting the ecology of the bantustan(homeland) labour reserves, where land and water were degraded overtime due to overpopulation pressure (millions of people having beenforcibly removed from ‘white’ parts of South Africa and Zimbabwe).

Moreover, it is not widely acknowledged, but the system of racial oppres-sion was also, primarily, a system of gender-based super-exploitationthat made possible migrant labour throughout the Southern Africanregion. South Africa’s urban managers designed a subsidy from the ruralareas so as to lower the cost of workers in the mines and factories. Themigrant workers did not, when they were young, require companies topay their parents enough to cover school fees, or pay taxes for govern-ment schools to teach workers’ children. When sick or disabled, thoseworkers were often shipped back to their rural homes until ready towork again. When the worker was ready to retire, the employer typicallyleft him a pittance, such as a cheap watch, not a pension that allowedthe elderly to survive in dignity. From youth through to illness to old age,capitalists were let off the hook. The subsidy covering child-rearing, recu-peration and old age was provided by rural African women. The central les-son from this crucial aspect of apartheid was that capitalism systematicallyoverexploited the bantustan areas, especially women, which suppliedsuch a large proportion of workers (Wolpe 1972, 1980; O’Meara 1996).

Resistance was sporadic. On the one hand, uneven formal working-class organization existed in many parts of the subcontinent, resultingperiodically in strikes, especially in the mining and railway industries.But at the point of production, the forces of law and order were invari-ably stronger and treacherous. The most virulent symptoms of socialmorbidity typically occurred just prior to independence, as settlers heldon to privileges with sophisticated state repressive capacity, much of whichcarried over into the post-colonial state. (Botswana was spared much ofthis turmoil, since so little wealth was perceived at stake in the early1960s.) Then the post-colonial state was quickly harnessed for neocolo-nial duty. This allowed, in turn, the region to continue expandingexports notwithstanding extremely unfair terms of trade (the differencebetween prices paid for exports in relation to prices paid for imports).The peak of demand for Africa’s raw materials, before synthetic substi-tutes were invented, was during the Second World War. From the mid-1970s, the terms of trade worsened dramatically, in part because ofexport-oriented policies which most African countries, includingZimbabwe during the 1980s (and, to a lesser extent, South Africa in the1990s), were compelled to adopt once they experienced debt crisis.

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To explain this sociopolitical character of accumulation, there were avariety of additional intellectual exercises set broadly within structural-ist theory.2 Drawing on critical (mainly class-based) analysis of the con-tinuities associated with the sociopolitical structure of accumulation, amajor body of literature emerged in the post-apartheid era to clarifySouth Africa’s worsening processes of exploitation.3 So too in Botswanaand Zimbabwe, the contemporary period of neoliberalism – roughly atwo-decade experience (though somewhat shorter in Zimbabwe and mit-igated by the reinvestment of mineral resource revenues in Botswana) –provides explicit evidence of accumulation patterns that, in turn, set thestage for neoliberal water and health policies.

7.3 Recent political economic dynamics

Both short and longer-term features of the contemporary sociopoliticalcharacter of accumulation must be considered. We can start with theregion’s economic powerhouse, South Africa, but the core processes arenot dissimilar in Zimbabwe and Botswana (even if the latter continuesto record impressive gross domestic product (GDP) increases).

South Africa

The long-term (1970s–present) structural ‘crisis’ in the contemporarySouth African economy – ultimately rooted in tendencies towards what istermed the overaccumulation of capital – is perhaps most baldly reflected,at surface level, in persistent overcapacity and overproduction of luxurymanufactured goods for the (mainly white) consumer market, side-by-side with growing surpluses of unemployed black workers. There arefour levels of the economy to consider as crucial to the sociopoliticalstructure of accumulation.

First, the minerals–energy complex remains South Africa’s economicbase. Secondly, machinery and other intermediate capital goods remainunderdeveloped. Thirdly, luxury goods are produced locally at close toworld standards (if not prices), thanks to extremely high relative levels of(traditionally white) consumer demand, decades of protective tariffs andthe presence of major multinational corporate branch plants. Fourthly,South Africa suffers extremely sparse basic needs industries, witnessed byproduction of low-cost housing far below optimal capacity, dangerous andrelatively costly transport, and the underproduction of cheap, simple appli-ances and clothing (which are increasingly imported), at the same timesocial services and the social wage have been – and remain – inadequate


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as survival support for the country’s majority. For most of the twentiethcentury, Zimbabwe had nearly identical problems, compounded by struc-tural adjustment during the 1990s and extreme economic mismanage-ment since the late 1990s. Botswana’s growth thanks to diamonds andcattle hides structural features of a similar nature.

These features left South Africa and its neighbours highly vulnerable topost-apartheid processes of trade and financial liberalization, investmentderegulation and monetarist central bank policy. Reacting to periodiccurrency crashes, extremely high interest rates in South Africa translatedinto lower growth, and the driving forces behind South African GDPwere decreasingly based in real ‘productive’ activity, and increasingly infinancial/speculative functions that are potentially unsustainable and evenparasitical (Heintz 2003; UNDP 2004; Bond 2005).

Finally, of greatest relevance to social policy, soaring unemploymentwas the government’s biggest single failure, by all accounts. Falling tariffson imported industrial machinery allowed automation to kill hundredsof thousands of jobs, while many more tens of thousands in vulnerableindustries were eliminated thanks to imported consumer goods from EastAsia. During the 1990s, large employment declines occurred in mining(47 per cent), manufacturing (20 per cent), and even the public sector (10per cent). Casualization of once-formal labour – for example, in construc-tion and farms – was also a major factor, though it apparently has notbeen measured seriously by the state. All told, the country’s unemploy-ment rate rose from 16 per cent in 1995 to 31.2 per cent in 2003. Addingto that figure the category of ‘frustrated job-seekers’ (that is, those whohave given up looking for employment) brings the percentage of unem-ployed people to 42 per cent (Altman 2003; Nattrass 2003).

Women were especially serious victims of post-apartheid economicrestructuring, with unemployment broadly defined at 46 per cent (com-pared to 35 per cent for men), and a massive late 1990s decline in rela-tive pay – from 78 per cent of male wages in 1995 to just 66 per cent in1999 (UNDP 2004). Women are also the main caregivers in the home,and this entails bearing the highest burden associated with degradedhealth. With the public healthcare services in decline due to underfund-ing and the increasing penetration of private providers, infectious dis-eases such as tuberculosis, cholera, malaria and AIDS are rife, all farhigher than during apartheid. Diarrhoea kills 43,000 children a year,mainly as a result of inadequate potable water provision. Most SouthAfricans with HIV have little prospect of receiving anti-retroviral medi-cines to extend their lives, thanks to ‘denialist’ policies of Mbeki and hishealth minister, as discussed below.

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In contrast, the forces in South African society which gained mostfrom the country’s post-Apartheid economic management were wealthywhite households and export-oriented businesses and financial corpor-ations. These people and firms moved their capital out of the countryfrom 1995, when exchange controls were first relaxed, to 2000, by whenmost of South Africa’s largest companies had relocated their financialheadquarters to London. The pre-tax profit share soared during the late1990s, back to 1960s-era levels associated with Apartheid’s heyday. Froma low of 43 per cent in 1990 and 44 per cent in 1995, the profit share ofnational income rose to 49 per cent in 2002. To encourage business toinvest, Pretoria also cut primary corporate taxes dramatically (from 48per cent in 1994 to 30 per cent in 1999, although a dividends tax wasadded), and offered tax concessions mainly to higher-income individualSouth Africans worth R75 billion in the first ten years of liberation (off-setting by many times a new capital gains tax). The regressive, contro-versial Value Added Tax – which catalysed a massive 1991 strike – wasalso retained in the post-apartheid era.

One result, according to an October 2002 government report, was thataverage black ‘African’ household income fell in real terms by 19 per centfrom 1995 to 2000 (to the purchasing-power parity level of $3,714/year),while white household income was up 15 per cent (to $22,600/year). Forthe entire 1994–2004 period, the fall in African income was no doubtmuch greater than 19 per cent; and, no doubt, whites received far morethan a 15 per cent income boost during the full decade of ‘liberation’(Statistics South Africa 2002). Do active social policies make up for thisdecline? In education and health care, user fees reduce the benefits ofstate spending for very poor people, and the same is even more true inconsumables such as water, electricity and telephones, which were allcharacterized by massive disconnection rates. The government’s chiefwater bureaucrat Mike Muller (2004) conceded that in 2003, ‘275,000 of all households attributed interruptions to cut-offs for non-payment’,which extrapolates to in excess of 1.5 million people affected that year alone.

These features of neoliberalism and its damage together point to asimple conclusion. Notwithstanding official rhetoric to the contrary,South Africa suffered the replacement of racial apartheid with what canbe accurately considered to be class Apartheid: systemic underdevelop-ment and segregation of the oppressed majority, through structured eco-nomic, political, environmental, legal, medical and cultural practiceslargely organized or codified by Pretoria politicians and bureaucrats.Patriarchy and racism remained largely intact in many areas of daily life,


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even if a small elite of women and black people were incorporated intostate management and the accumulation of capital.

Botswana

Botswana’s increasing integration into the global economy since itachieved political independence from Britain in 1966 also offers importantinsights into economic structure and social policy (Mhone 1993; Mhoneand Bond 2002). Botswana’s development trajectory calls into questionfundamental assumptions about the accommodating nature of the globalenvironment, for the economic restructuring and export diversificationrequired to transform Botswana’s impressive GDP growth into balanceddevelopment has not happened. Botswana is characterized not only byhigh growth but also by macroeconomic balance (notwithstanding cur-rency volatility in relation to the highly vulnerable South African rand)and political stability (notwithstanding an authoritarian security atmos-phere). With just two million people, Botswana typically ranks in the topten African countries on the United Nations Development Programme’s(UNDP’s) Human Development Index, thanks to its $3,000 per capita GDP.However, it lies at only around one hundredth in the international ratings,partly because of a dramatically lowered life expectancy due to AIDS.

Botswana’s structural vulnerabilities include its drought-prone geo-graphical location in a semi-arid part of the African continent, high costsof transport, service provision and infrastructure construction, and a smalleffective demand that prevents scale economies. Like other small coun-tries in the region, Botswana evolved through peripheral dependencyupon South Africa, from which it imported manufactured and industrialgoods as part of the Southern African Customs Union. Diamonds accountfor a third of GDP, three-quarters of exports and half the state’s income.Yet unemployment rose from 10 per cent in 1981 to 17 per cent in 1984,to 22 per cent by the late 1990s, and although there was a decline inhouseholds falling below the poverty datum line from 49 per cent in1985/86 to 37 per cent in 1993/94, 23 per cent of households remain‘very poor’. Between 45 per cent and 54 per cent of rural households do notown any cattle, and only about 15 per cent of the households accountedfor about 75 per cent of the national herd. Prospects for diversificationhave been further undermined by the smallness of the economy and thelack of minimum thresholds of demand that would warrant lumpy invest-ments to meet local (or export) demand. Indeed, Botswana has notice-ably failed to transform its high saving rates into investment. During the1990s, the savings rate was around 40 per cent, while gross investmentwas between 25 per cent and 30 per cent.

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What these mean for water and health policies is that the socio-political structure of accumulation is extremely biased towards a smallenclave of mining sector activity, which limits the basis for the broad-based development of the society, hence reducing the scope for effectivesocial policy. Enormous demand exists for water and health services,especially in view of the AIDS pandemic, yet the dispersed nature ofrural population patterns and the lack of linkages between health/waterservices and the rest of the economy are disincentives for either state orprivate investment. While Botswana relies on diamonds and cattle – thelatter consuming disproportionate water and veterinary services – andwhile industrial development remains severely constrained by insuffi-cient effective demand, these problems are not likely to be resolved.

Zimbabwe

In Zimbabwe, in contrast, the experience of the 1980s expansion ofhealth and water services to the low-income rural masses of people showedpotential for enhancing linkages between the rural and urban, and improv-ing overall productivity. Exemplary social policy during the first decadeof independence had reduced infant mortality from 86 to 49 per 1,000live births, raised the immunization rate from 25 per cent to 80 per centand life expectancy from 56 to 62 years, doubled primary school enrol-ment, and so on. Unfortunately, a subsequent shift during the 1990stowards international trade, investment and financial flows was directlycorrelated with economic collapse, and then a return to dirigism espe-cially after 2000.4

Upon taking power, the new Zimbabwe African National Union (ZANU)government of Robert Mugabe initially maintained the bulk of Rhodesian-era regulatory controls, and good rains plus a business cycle upturn led toa very rapid growth rate in 1980–1. Economic managers – especiallyFinance Minister Bernard Chidzero – were soon committed to bothfinancial and trade liberalization. As a result of stagnant levels of fixedinvestment, the government’s main strategy to increase export revenueswas periodic currency devaluation. In 1984 devaluation reached nearly40 per cent within 18 months, for example, and was accompanied bymassive cuts in development spending and an unpopular reduction ofthe maize subsidy. The main beneficiaries were agricultural and mineralsexporters, but the devaluations simply cheapened goods temporarily,rather than structurally improving Zimbabwe’s export capacity.

The quid pro quo for access to foreign commercial loans and the International Monetary Fund’s (IMF’s) and World Bank’s seal of approvalincluded not only fiscal constraints, high interest repayments and


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Zimbabwe’s hesitancy to ask for rescheduling of payments. There werealso specific conditions on US$700 million in new loans by the Bank(Zimbabwe’s single largest foreign lender), culminating in the 1991–5Economic Structural Adjustment Programme (ESAP). Contrary to Bankprojections, growth only reached 5 per cent during one year (1994), andaveraged just 1.2 per cent from 1991–95. Inflation averaged more than30 per cent during the period, and never dropped anywhere near the 10per cent goal. The budget deficit was more than 10 per cent of GDP dur-ing the ESAP era.

It is true that forces external to the logic of reforms – the 1992 and1995 droughts, durable fiscal deficits and severe losses by parastatals –all threw the plan off track. Conceptually, it is extremely difficult to con-trol for the drought factor, although historically, the previous period ofsustained economic crisis, from 1974–8, was a time of extremely goodrains, while the late 1960s and early 1970s period of booming growthwitnessed years of severe drought. Nevertheless, indicators are disturb-ing. The manufacturing sector’s real (factor cost) contribution to GDPfell by 18 per cent from 1991 to 1995, and did not subsequently recovermuch ground. Total manufacturing output fell from an indexed peak of 143 (with 1980 � 100) in 1991 by 24 per cent to 109 in 1999, as de-industrialization ravaged the textiles (�64 per cent), metals (�35 percent), transport equipment (�31 per cent) and clothing (�28 per cent)subsectors. Unemployment remained rampant, with a tiny fraction ofthe 200,000 annual school leavers able to find formal sector employ-ment. The social wage fell thanks largely to new cost-recovery policies forhealth, education and many other social services, as well as unprece-dented interest rates on consumer credit. Primary school dropout ratessoared during the 1990s, with girls particularly prone to suffer whenschool fee increases were imposed; and likewise, just as the HIV/AIDSpandemic hit Zimbabwe, from 1990–5, per capita spending on care fellby 20 per cent in real terms.

The 1991–7 period, during which ESAP was implemented, can thus beconsidered a failure in many crucial respects. Popular opinion was reflectedin ‘IMF Riots’, including the 1993 bread riots which broke out in high-density suburbs of Harare, and in the city centre in 1995. Public workerswent on strike in 1996, and other private employees (including planta-tion workers) followed at an unprecedented rate in 1997. By the timethat political opposition consolidated in 1998–99, leading to a new,labour-led political party that nearly won the 2000 parliamentary elec-tions, many ZANU came to the conclusion that ESAP was their mostimportant policy error. The crash of the massively overvalued Zimbabwe

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Stock Exchange began in September 1997 and was followed by threecontroversial political calculations by Mugabe: first, to raise rhetorical(and later actual) conflicts surrounding land maldistribution; secondly,to grant large pension fund payouts to veterans of the 1963–79 LiberationWar; and thirdly, to involve Zimbabwean troops in the DemocraticRepublic of Congo war.

As punishment, investors simply ran from Zimbabwe. On the latemorning of 14 November 1997, the Zimbabwe dollar lost 74 per cent ofits value over a four-hour period. As a result, unprecedented inflationwas imported, leading in January and October 1998 to urban riots overprice increases for maize and fuel, respectively. Mugabe and the ZANUgovernment reacted by moving back into dirigiste policy territory: impos-ing a mid-1998 price freeze on staple goods, a late 1998 tariff on luxuryimports, and several minor technical interventions to raise revenues,slow capital flight and deter share speculation. This pattern simply con-tinued into the 2000s, with the February 2000 endorsement of war-veteran land invasions and subsequent impositions of price controls,artificially low interest rates, bank bailouts, and a tightened exchangecontrol regime. These policies were variously amplified or relaxed dur-ing a zig-zag 2000–05 period of steady economic decline and intensepolitical repression.

In all three cases in which we have explored historical and contempo-rary political economic dynamics, the core tendencies and many eviden-ciary aspects contribute to what Kwon terms the sociopolitical structureof accumulation, including ‘the agendas of social actors and the devel-opment trajectories of countries’. We can now turn the focus specificallyto these three countries’ water and health policies, to make further connections.

7.4 Water policy

Southern Africa is one of the most interesting sites of debate over how toconceptualize, deliver and price water for consumption, ranging from the‘bulk’ raw water drawn from rivers, dams and aquifers, to the householdsand institutions that consume water. The central question now emergingconcerns intractable contradictions between a rights-based agenda, respect-ful of the social and ecological characteristics of water, and an approachthat emphasizes water as an economic good, a commodity. The former isbest captured in this phrasing from the 1996 Bill of Rights in the Constitu-tion of the Republic of South Africa (1996, s.24a, s27.1): ‘everyone hasthe right to an environment that is not harmful to their health or


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well-being. . . everyone has the right to have access to. . . sufficientwater’. In contrast, The Economist (2003: 1–5) magazine’s mid-2003 sur-vey on water declared the central dilemma in neoliberal terms: ‘Throughouthistory, and especially over the past century, it has been ill-governed and,above all, colossally underpriced.’ As for the problem of allocating anddelivering water to the poor, ‘The best way of solving it is to treat waterpretty much as a business like any other.’

To illustrate, in most urban systems, the cost of supplying an add-itional drop of water – the ‘short-run marginal cost curve’ (Line A inFigure 7.1) – tends to fall as users increase their consumption, because itis cheaper to provide the next unit to a large consumer than a small con-sumer. Reasons for this include the large-volume consumers’ economiesof scale (that is, bulk sales), their smaller per unit costs of maintenance,the lower administrative costs of billing one large-volume consumerinstead of many small ones, and the ability of the larger consumers tobuy water at a time when it is not in demand – that is, during the mid-dle of the night – and store it for use during peak demand periods. Thepremise here is that the pricing of water should correspond directly tothe cost of the service all the way along the supply curve. Such a systemmight then include a profit mark-up across the board (Line B), whichassures the proper functioning of the market and an incentive for contracting-out or even full privatization by private suppliers.

The progressive principle of cross-subsidization, in contrast, violatesthe logic of the market. By imposing a block tariff that rises for larger

Price

A

B

C

Quantity

Surplus

Subsidy

Figure 7.1 Three ways to price water: Marginal cost (A), for-profit (B), and cross-subsidized lifeline plus rising block tariff (C).

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consumers (Line C), the state would consciously distort the relationshipof cost to price and hence send economically ‘inefficient’ pricing signals toconsumers. In turn, argue neoliberal critics of progressive block tariffs,such distortions of the market logic introduce a disincentive to supply low-volume users. For example, in advocating against South Africa’s subse-quent move towards a free lifeline and rising block tariff, a key WorldBank expert (Roome 1995: 49–53) advised that water privatization con-tracts ‘would be much harder to establish’ if poor consumers had theexpectation of getting something for nothing. If consumers did not pay,the Bank suggested, South African authorities required a ‘credible threatof cutting service’. In 2000, the Bank’s Sourcebook on Community DrivenDevelopment in the Africa Region laid out the policy on pricing water,just after the South African water minister promised to finally implementa free basic water policy: ‘Work is still needed with political leaders in somenational governments to move away from the concept of free water for all’(World Bank 2000: Annex 2).

By way of rebuttal, the difference between Lines A and C allows notonly for free universal lifeline services and a cross-subsidy from hedon-istic users to low-volume users. There are also two additional benefits ofproviding free water services to some and extremely expensive servicesto those with hedonistic consumption habits:

• higher prices for high-volume consumption should encourage con-servation which would keep the longer-run costs of supply down (i.e.,by delaying the construction of new dams or supply-side enhance-ments); and

• benefits accrue to society from the ‘merit goods’ and ‘public goods’associated with free provision of services, such as improved publichealth, gender equity, environmental protection, economic spin-offsand the possibility of desegregating residential areas by class.

South Africa is a particularly good case to consider how neoliberal ideol-ogy translates into both water policy and state delivery practices. TheBank’s (1999, Annex C) own Country Assistance Strategy concluded withthe claim that advice by ‘knowledge bank’ water expert John Roome inOctober 1995 was ‘instrumental in facilitating a radical revision in SouthAfrica’s approach to bulk water management’. Although the presentationdealt with the transition from national-scale (bulk) ‘riparian rights’ to awater-market strategy ultimately adopted in a 1998 policy and law, themicroeconomics of water pricing were also crucial.

The most important point about the advice on microeconomic pric-ing is how it led to distributionally-regressive outcomes in South Africa’s

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cities, and caused a cholera epidemic in the rural areas. Most South Africancities moved in Roome’s favoured direction, that is, away from cross-subsidization. The Palmer Development Group (2001: 8) found, in its sur-vey of Rand Water Board users, that low-volume users, had systematicallybeen charged more than higher-volume users, during the late 1990s: ‘Itis evident that there is a continuing increase in tariffs in real terms, of theorder of 7% per year for all blocks. . . the lowest block is the one whichis increasing fastest.’ The policy changed in July 2001, when the ‘freebasic services’ promise of the ANC was partially adopted. At that point,Johannesburg adjusted its tariff curve, but, as shown in Figure 7.2, thetariff schedule was a very steep, convex curve, with the second consump-tion block unaffordable for many low-income people, leading to evenhigher rates of water disconnections in poor areas.

The 6,000 litres represent just two toilet flushes a day per person for ahousehold of eight, for those lucky enough to have flush toilets. It leftno additional water to drink, wash with, clean clothes or for any otherhousehold purposes. In contrast, from the progressive point of view, anoptimal strategy would provide a larger free lifeline tariff, ideally on aper-person, not per-household basis, and then rise in a concave mannerto penalize luxury consumption.

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R �

R 1

R 2

R 3

R 4

R 5

R 6

R 7

R 8

R 9

R 10

1 11 21 31 41 51 61 71 81 91 101

Consumption (kl/month)

Act

ual T

ariff

s (R

and/

kl)

JohannesburgIdeal for hh of 10

Figure 7.2 Divergent water pricing strategies – Johannesburg (2001) versus idealtariff for large households.Source: Johannesburg Water (thin) and own projection (thick).

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Zimbabwe demonstrates much more interesting phenomena, in turnreflecting conflicting socioeconomic objectives, the power of donor gov-ernments to set the institutional and policy objectives during the 1990spolicy reform era, and contradictions in implementation in the contextof the political-economic crisis described above. The major donors, espe-cially the Swedish International Development Cooperation Agency (Sida),helped Zimbabwean bureaucrats to draft a Water Resources ManagementStrategy, finally issued in 2000, that promoted public–private partner-ships. The national state ‘owns’ the country’s water; municipalities areresponsible for urban distribution (notwithstanding enormous politicalstrife, as noted below); and catchment councils have been established witheven more institutional rigour than in South Africa. The latter agencies’mandate is to decide upon several crucial aspects of system manage-ment: water allocations; the requirements of the water reserve; the mainissues affecting water quality and quantity which require investigation;management goals for addressing the critical issues, and potential man-agement strategies and responsibilities for action to achieve these objec-tives; and financial arrangements. Most importantly, both municipalitiesand the councils are meant to raise their own resources – from manage-ment fees, levies paid for volumetric consumption, and penalties for pol-lution or other rule violations – and become self-financing.

The pricing strategies associated with this shift are important, as the2000 National Water Resources Strategy commited to devolving powerto ‘stakeholders who will manage the system on a user-pay, polluter-pay,sliding-water price, commercial basis’. Notwithstanding the emergentnational dirigisme noted above, the state’s commitment to commercial-izing services dated to the adoption of ESAP, and by 1995, ‘rapid privati-sation of the key parastatals’ providing water and other state serviceshad become a central World Bank (1995: 35) demand on the Zimbabwegovernment. A 1995 directive by the senior secretary of the Ministry ofLocal Government, Rural and Urban Development committed the stateto ‘encouraging urban local authorities to consider options for commer-cialisation, privatisation and contracting in and out some or all of theirservices’ (cited in Plummer and Nhemachena 2001: 7). In 1996, a TaskForce for Commercialisation of Municipal Services was established. By2000, the Ministry of Rural Resources and Water Development’s WaterResources Management Strategy (2000: 49) followed up with specifics:

‘The nature of the private sector participation envisaged in the watersector will be largely in the form of public-private sector partnerships.The companies bring in management expertise, technical skills and

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credit standing in financial investments. A mutually beneficial partnership is built between the public and private sector to ensurethat consumers ultimately get the best service possible within themeans available.

Contradictions became overwhelming, even before the rest of the econ-omy went into meltdown. In 1996, Harare mayor Solomon Tawengwasigned a letter of intent to the British firm Biwater to repair water infra-structure, but Biwater backed out when profitability was found to be toolow. A few years later, as Harare water was beset by quality, shortage andleakage problems, more multi-billion-dollar public–private partnershipproposals were mooted by international agencies. The main sites for aset of international privatizers aiming to ‘cherry-pick’ the most profitablemunicipal services were the wealthiest councils – Victoria Falls, Ruwaand Gweru – whose per capita urban council revenue was higher thanother sites. In 1999, the British subsidiary of French water privatizer Saurwas selected by Gweru officials to prepare a commercialization plan. Thefirm demanded a 100 per cent increase in water tariffs. However, asZimbabwe ran out of foreign exchange during the early 2000s, the threatof foreign water corporations making inroads into supply has receded.In sum, the post-independence Zimbabwe water policy experience sug-gests several contradictions associated with creeping neoliberalism atboth national and municipal/catchment levels. Similar processes are evi-dent in the health sector.

7.5 Health policy

Across Southern Africa, the effects of neoliberal policies in the healthsector have included disincentives to health-seeking behaviour, wit-nessed by lower utilization rates and declines in the perceived cost andquality of services (Bond and Dor 2003). Household expenditures onhealth care, and the ability of people on low incomes to meet majorhealth care expenses was diminished, as did standards of nutrition. Priceinflation in health services and additional copayment costs placed often-unbearable burdens on household disposable incomes and on food con-sumption. A dramatic decline in employment status had a negative effecton disposable income, time utilization and food purchasing.

Other symptoms of neoliberal policies, such as urban drift and migrancy,contributed to the HIV/AIDS pandemic. The effects on health workerswere also mainly negative, including cuts in the size of the civil service,wage and salary decay, declining morale, and the brain drain of doctors

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and researchers. Likewise, the effects on health system integrity includeddeclining fiscal support; difficulties in gaining access to equipment,drugs and transport (often due to foreign exchange shortages accompa-nying excessive debt repayment); and the diminished ability of healthsystems to deal with AIDS-related illnesses. Moreover, other aspects ofStructural Adjustment Programmes (SAPs) and neoliberalism introducedadverse health implications, such as the increasing commodification ofbasic health-related goods and services (such as food, water and energy)that made many unaffordable. Meanwhile, the HIV/AIDS pandemic wasputting enormous pressure on the continent’s health services. On theassumption that health staff have similar prevalence rates as the popu-lation as a whole, there will need to be an increase in training of 25–40per cent just to keep staff numbers constant. Such statistics call for a mas-sive rethink on the allocation of resources to the health sector, in eachof the three countries under study.

In South Africa, seminal policies, such as the White Paper for the Trans-formation of the Health System (1997) and Towards a National Health System(1997), recognized some of these problems. However, perhaps most impor-tantly, the Community Agency for Social Enquiry (1995) documentedthat for 74 per cent of Africans, the cost of health services was a primarybarrier to access. Closures of hospital facilities in several cities were antic-ipated to save money and allow for redeployment of personnel, althoughthey also affected access, since many consumers used these in lieu of clin-ics. But other areas of implementation – the District Health System; clinicbuilding; free PHC, maternal and child health and reproductive rights;child nutrition; staffing – relied not only on provincial departments tak-ing the vast bulk of resource, planning and implementation responsibili-ties. There were serious shortfalls in medical personnel willing to work inrural South Africa, requiring two major programmatic initiatives: thedeployment of foreign personnel in rural clinics; and the imposition of atwo-year Community Service requirement on students graduating frompublicly subsidized medical schools.

The most severe blight on South Africa’s post-Apartheid record of healthleadership was, without question, its HIV/AIDS policy. These must beblamed upon both the personal leadership flaws of the president andhealth minister, and upon features of the sociopolitical structure of accu-mulation. With millions of people dying early because of AIDS, andapproximately five million HIV� South Africans in 2004, the battle againstthe disease was one of the most crucial tests of the post-apartheid government. Its systematic failure to address AIDS, and especially itsongoing sabotage of medicinal treatment for HIV� patients, led to periodic


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charges of ‘genocide’ by the heads of the Medical Research Council(Malegapuru Makgoba), SA Medical Association (Kgosi Letlape), and PanAfricanist Congress health desk (Costa Gazi), as well as leading publicintellectual Sipho Seepe.

A great deal has been written about Pretoria’s malfeasance on AIDSpolicies. The point of revisiting it in the context of the sociopoliticalstructure of accumulation is to provide a more robust explanation forthe crisis. Beyond the oft-cited peculiarities of the president himself,there are three deeper reasons why local and global power relationshipsmeant that the battle against AIDS has mainly been lost, to date. Onereason is the pressure exerted by international and domestic financialmarkets to keep Pretoria’s state budget deficit to 3 per cent of GDP.

The second structural reason is the residual power of pharmaceuticalmanufacturers to defend their rights to ‘intellectual property’ – that is,monopoly patents on life-saving medicines. This pressure did not end inApril 2001 when the Pharmaceutical Manufacturers Association with-drew their notorious lawsuit against the South African Medicines Act of1997, which permits parallel import or local production, via ‘compul-sory licenses’, of generic substitutes for brand-name anti-retroviral medi-cines. Big Pharma’s power was felt in the debate over essential drugs forpublic health emergencies at the November 2001 Doha World TradeOrganization summit, and ever since.

The third structural reason for the ongoing HIV/AIDS holocaust inSouth Africa is the vast size of the reserve army of labour, for this featureof the sociopolitical structure of accumulation allows companies to replacesick workers with desperate, unemployed people instead of providingthem treatment. For Anglo, the largest employer, the cost–benefit analy-sis conducted in 2001 confirmed that for the lowest-paid 88 per cent ofworkers, it was cheaper to deny them AIDS medicines and insteadchoose replacements from the unemployed (Bond 2005).

In sum, no matter the effectiveness of activism against government,Big Pharma and the corporate employers, all three structural factors arestill deterrents to provision of treatment. By late 2003, each was slightlymitigated, however, and that led to an ostensible change of policy byPretoria.

Because Botswana’s health policy is relatively unremarkable, it is worthfocusing on one extremely innovative aspect that follows from the mater-ial reviewed immediately above: AIDS treatment distribution. The Maserugovernment’s AIDS programme is called Masa, and cost $70 million to setup in 2000. Treatment uptake was 15,000 people by 2004, still a small frac-tion of the number who would benefit from treatment, given that there

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are an estimated 300,000 HIV � Botswanans. Physical infrastructure created under the state AIDS programme includes blood-testing, a teach-ing clinic, and the construction of several dozen treatment centres.

A key feature of Masa is its relationship to global private capital andbusiness foundations, in the form of the African Comprehensive HIV/AIDSPartnership. This project was driven by staff at the Bill and Melinda GatesFoundation with the cooperation of the Merck pharmaceuticals corpo-ration. Approximately $20 million each year is added by these enter-prises to AIDS treatment spending, not including donated or low-costantiretroviral medicines from Merck, GlaxoSmithKline and Bristol Myers-Squibb. The programme also includes private treatment, especially theDebswana diamond mining firm’s provision of medicines to nearly 7,000employees.

The programme is not without critics, however. The leader of theTreatment Action Campaign, Zackie Ahmat, has opposed the Botswanamodel’s adoption in South Africa, because ‘The drug company dona-tions are extremely limited, and are self-interested in warding off a moreserious challenge to their monopoly control of patents on some crucialdrugs. Likewise, we all understand the Gates Foundation’s self-interestin defending intellectual property rights. The Botswana prototype fordrug company philanthropy has generated a rising level of disgust’ (citedin Bond 2003).

In Zimbabwe, the most important aspect to understand is the switchfrom a post-independence populist but nevertheless top–down, statistdelivery model, to one exhibiting classical characteristics of neoliberal-ism. The main reason for the switch, which began in 1984, was the onsetof subsidy cuts that accompanied IMF macroeconomic conditionality, asnoted above. By 1985 the IMF pressured Mugabe to cut education andhealth spending, and in 1986 food subsidies fell to two-thirds their 1981levels. As a direct result of funding cuts and cost-recovery policies, exacerb-ated by the AIDS pandemic, Zimbabwe’s brief 1980s rise in literacy andhealth indicators was dramatically reversed (Bond 1998).

Although there were occasional lulls, pressure from Washington con-tinued until 1999, at which point Zimbabwe began defaulting on its debtrepayments. Beyond the predictable pressure on health policy through thefiscus, sector loans also represented powerful levers on social programmes,for while they did not reduce the scale of the programmes, they often threat-ened to denude them of their ability to provide basic services at little or nocost to the very poor. For example, a World Bank (1990: iii) health carefinancing programme in Zimbabwe argued for an ‘increase in user charges’and the establishment of insurance programmes as a means of reducing


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government involvement. The philosophy of cost recovery, initially adoptedby the Ministry of Health in 1985, began to be applied with a vengeancefrom 1991. Official fee exemptions for the poor were erratic. In 1992, withina year of the implementation of user charges, the maternal mortality ratehad doubled even in Harare due to fees imposed for ante-natal checkupsand hospital care. In early 1993 fees at rural clinics were temporarily sus-pended as a drought-recovery measure, but by early 1994 the fees were rein-troduced and increased (in some cases by more than 1,000 per cent)(Bijlmakers, Bassett and Sanders 1996).

Government’s response to decaying health conditions and to adjustment-related poverty in general – aside from lower per capita spending, theNovember 1991 ‘Social Dimensions of Adjustment’ programme and theOctober 1993 ‘Poverty Alleviation Action Plan’ (relaunched in January1995) – was underwhelming. By early 1994, the health minister admit-ted that (nominal) per capita spending on health had fallen by 37 percent since 1990 and medical services had become inaccessible to themajority. The government was now ‘so miserly that we are killing our-selves because we want to save a few cents’, he said (Bond 1998).

More generally, ESAP intensified Zimbabwe’s (and indeed Africa’s) healthproblems, especially the AIDS pandemic (Sanders and Sambo 1991).AIDS reduced income generation for rural women (now burdened withextra home-based care duties) and added new expenditures to the alreadyoverstretched budgets of affected households and kinship networks.Particular features of Zimbabwean political economy – such as themigrant labour system – can be blamed for the high rate of infection, butthere can be no doubt that structural adjustment exacerbated the sus-ceptibility to disease. As conditions deteriorated and foreign exchangebecame less available during the late 1990s, even simple medicines werehard to access at most clinics, and the major hospitals also deterioratedsharply. Together, these observations indicate the central role of fiscalresources in maintaining the health system, and they also point to theexplicit pressures faced by a government like Zimbabwe’s when it ini-tially attempted to expand health services, but in a manner driven fromthe top, and hence susceptible to reversal from the top when power rela-tions changed for the worse.

7.6 Conclusion: towards a new sociopolitical structure of accumulation

Thus far, in fields ranging from macroeconomics to water and health poli-cies, we have seen the penetration of neoliberal modes of reasoning, and

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the adverse implications for poor people. A new sociopolitical structureof accumulation is required, based on the accumulation of ‘decommod-ified’ human rights to basic services – especially water and anti-retroviralmedicines, as we have already seen. Most of the civil society advocacynetworks now working on these issues are offering critiques of neolib-eral policies, in South Africa, Zimbabwe and across Africa (even if inBotswana, progressive activism is at a nascent stage).

The challenge will be to turn the African Social Forum (ASF) network ofprogressive organizations into a vehicle that can transcend Pretoria’s NewPartnership for Africa’s Development and Poverty Reduction Strategy Papers(PRSPs), and introduce a more genuine programme and strategy that will,in turn, give African activists more confidence for future local, nationaland continental struggles. The ASF is the most likely site to ultimatelybring these struggles together. In January 2002, dozens of African socialmovements met in Bamako, Mali in preparation for the Porto AlegreWorld Social Forum. It was one of the first substantial conferences sincethe era of liberation to combine progressive non-governmental organiza-tions (NGOs) and social movements from all parts of the continent, andwas followed by ASF sessions in Johannesburg (August 2002), Addis Ababa(January 2003), Lusaka (December 2004) and Bamako (January 2006).

Many ASF affiliates promote ‘decommodification’ of services such aswater and health care (especially anti-retroviral [ARV] access). South Africaprovides Africa’s best examples. For example, the demand for free lifelinesupplies of water and electricity is being made from the urban ghettos likeSoweto where disconnections remain a problem, to the many rural areaswhich have still not received piped water; in many cases activists destroywater meters and reconnect disconnected households illegally. The needfor free access to anti-retroviral medicines, for five million HIV� SouthAfricans, is just as acute, and has been taken up in a world-class struggleagainst local state and global capital by the Treatment Action Campaign.

Social policy theorist Gosta Esping-Andersen (1990) provides historicalcomparisons to these movements, for during the first half of the twenti-eth century, the Scandinavian welfare state grew because of urban–rural,worker–farmer, red–green alliances which made universalist demandson the ruling elites. Those demands typically aimed to give the workingclass and small farmers social protection from the vagaries of employ-ment, especially during periodic recessions. They therefore allowed peo-ple to escape the prison of wage labour, by weaving a thick, state-suppliedsafety net as a fall-back position. To decommodify their constituents’labour in this manner required, in short, that the alliance defend a levelof social protection adequate to meet basic needs. Over a period of decades,


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this took the form of generous pensions, health care, education, and otherfree state services which, like child care and elder care, disproportion-ately support and liberate women. The electoral weight and grassrootspolitical power of the red–green alliance was sufficient to win thesedemands, which were paid for through taxing wealthy households andlarge corporations at high rates. They were defended until recently,when corporate power and the ideology of competitiveness have forcedsome cutbacks across Scandinavia.

The main point to make here is not only that ASF movement net-works (for example, labour-related, economic justice practitioners inchurches, health equity specialists, numerous types of environmental-ists, and so on) are advancing strong, mature, ideological statementsabout the debt, trade and related economic oppression they face. Inaddition, instead of working merely through NGO-type circuits, they areincreasingly tying their work to militant street action, as was evident atthe Durban World Conference Against Racism in August 2001 and theJohannesburg World Summit on Sustainable Development a year later.

Where will these initiatives coalesce to challenge the prevailing socio-political structure of accumulation and its associated water and health pol-icies? A transformative social policy would aim to better link the spheres of production and collective consumption, in a manner accomplished inCuba where sophisticated health care production systems – including medicines comparable to first world pharmaceutical corporate products –emerged from an initial focus on primary healthcare. Such a progressiveinward-oriented import-substitution-industrialization strategy – not gearedto local luxury goods substitution, but instead to ensuring basic needs aremet, to the extent possible through internal means (indigenous technol-ogy and materials) – is a far cry from the ineffectual applications of mod-ernization and neoliberal policies ultimately adopted by Southern Africanelites, both during colonialism and after independence.

Progress is, ultimately, dependent upon full transformation, not onlyof the sociopolitical structure of accumulation, but also the character ofeconomic policy. As this chapter has shown, the various flaws in SouthAfrica’s, Botswana’s and Zimbabwe’s sociopolitical systems, and the trendsin water and health policies, stem from the existing structure of accumu-lation and political power, even where decolonization processes appearedto shake up the potential for policy in Botswana (1966), Zimbabwe (1980)and South Africa (1994). But as is evident, instead of breaking throughinto a new sociopolitical structure of accumulation, these episodes ofpolitical liberation were quickly distorted. From racial apartheid andcolonialism came class apartheid and neocolonialism. As we have seen,

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to expect the current beneficiaries in African bureaucracies to lead theway out of these class (and gendered, and residually racialized) power relations would be overoptimistic. The future lies in those civil societyforces whose objectives are to decommodify social relations, especiallywater and health services.

Notes

1 Explicitly structuralist historical studies include Van Onselen 1976; Phimister1988; Stoneman 1988; West 1990; Moore 1991; Bond 1998; Raftopoulos 1999;and Raftopoulos and Yushikuni 1999.

2 These structuralist accounts included Williams 1975; Davies, Kaplan, Morrisand O’Meara 1976; Davies, Kaplan, Morris and O’Meara 1976; Clarke 1978;Davies 1979; Saul and Gelb 1986; Gelb 1987; Gelb 1991; Meth 1991; and Fineand Rustomjee 1996.

3 Bell and Ntsebeza 2001; Alexander 2002; Bond 2002, 2005; Hart 2002; Seepe2004; Saul 2005.

4 See Mandaza 1986; Gibben 1995; Moyo 2000; Moore 2001; Rutherford 2001;Bond and Manyanya 2003; Hammer, Raftopoulos and Jensen 2003;Raftopoulos and Sachikonye 2003; Moyo and Yeros 2004; Phimister andRaftoupoulos 2004; Raftopoulos 2004; Raftopoulos and Phimister 2004.

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the sociopolitical structure of accumulation and social policy in southern africa

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