CHAPTER 5 PAGES
3.1 Introduction
CHAPTER 3
NEO-LIBERAL ECONOMIC REFORMS AND ITS IMPACT ON THE INFORMAL SECTOR AND ON WOMEN IN PARTICULAR
The situation impacted heavily on the Black population as they experienced the high and rising unemployment levels in a sluggish economy (Terreblanche, 2005:9). The impact on women was heavier as their basic human needs remained largely unmet, deprived of information about their rights and opportunities thus becoming more marginalised, powerless and pauperised.
The above reflect the country’s class categorised apartheid legacy and its economic operation. The one class is based on socio-economic terms and was experienced many Black people through inadequate development, socio economic backlogs in terms of provision of education, health, housing and social pension as compared to White people (Coetzee, 1994:62; Knight 2004a: 6).
The other is based on a foreign culture through a shift to the right and the adoption of neo-liberal strategy to transform the economy (Knight, 2004a:6). The strategy was manifested through economic powerlessness of more than half the population which consisted of substituting labour with capital, reorganising the corporate sector and cuts in public expenditure. The shift can be understood in terms of complex political struggles within and beyond the government’s focus in the course of which alternatives to neo-liberalism were side-lined (Hart, 2002:33).
Since the early days of apartheid rule, poverty and unemployment have been much higher for South Africans of colour. However with the transition to democratic rule although progress has been made in education, health care, housing and providing basic services – unemployment and poverty continues to be widespread. In 2004, 61% of Africans were classified as poor compared to just 1% of Whites. Income disparities remain as wealth still remains concentrated in few people (Knight, 2004:4).
Even at what I would argue as the height of democracy unemployment rates for African people is higher than among Indian/Asian, Coloured and White people by a large margin. The unemployment rate of African people in 2007 was 30.2% as against 19.8% among Coloured people, 13.8% among Indian/Asians and 4.3% among White people (StatsSA, 2007).
The nature of capital largely remains the same still concentrated in the mining and finance complex, which continues to dominate the commanding heights of the South African economy. It is largely comprised of and owned by White people.
Unemployment increased by 42, 5% for Africans as compared to 4% and 6%
unemployment rates of White people since the introduction of GEAR in 1996 (Knight, 2004b:3).
Many people continue to lack necessities and this has resulted in conflict ridden tensions and demonstrations. Unemployment has rose by 9% more for African women than for any other group between 2000-2002 (LFS, 2002: 20 & Orr, 2000:8).
This has been the case as the March 2007 Labour Force Survey results indicated that female unemployment rates have been higher than male rates (StattsSA, 2007:11). A similar pattern is also evident in the labour absorption rates and labour force participation rates between men and women since the introduction of GEAR.
Since 1994 South Africa has also seen a continuation of rapid economic stratification of people into classes. By 1996 according to Knight (2001:2) distinct social classes were identifiable and the existing political ideology that South Africa was a free society in which all people are equal and share equal opportunities and resources became a myth.
In general a wealthy class, a working class and a petite bourgeoisie class among Africans became observable like before democracy among Whites. The emergence of an extensive and highly sophisticated material culture has made economic stratification more pronounced particularly between males and females (Hope,
1997:38). The foregoing is illustrated by the fact that in addition to massive levels of unemployment in the country, there is significant underemployment.
Political independence in South Africa gave society the mandate to structure the political system and with it the economy of the nation. This mandate was entrusted to the ANC government as the overall winning and majority party. In restructuring the political and economic system it also changed the national social framework (Bond, 2005:62; ALRN, 2002:9). Firstly, came the reorganization of the economy and finally culminating with the liberalising of the South African labour market.
The 1994 democratic government abandoned the inward-looking economic policies of apartheid and adopted open/free market policies. Tariffs were cut substantially and local business faced increasing exposure to foreign competition and the forces of neo-liberalism and globalisation. This resulted in a situation where local business either closed or had to modernize and become more competitive by producing more goods with fewer workers.
Despite the reform measures adopted, the downward turn of the economy continues with two persisting economies in the country – one is advanced, sophisticated economy based on skilled labour, which is becoming globally competitive and the other is mainly informal, marginalized, unskilled economy populated by the unemployed and those unemployable in the formal sector (Ten Year Review, 2003:2).
Although realising that the economic policies placed to revitalize the economy have not reached fruition, the government still stands by GEAR policy that has continued to solidify the inequality of the distribution of income (Knight, 2001: 6; Terreblanche, 2005:9). The government still emphasises the point that in the long term the policy will provide South Africa with the most economic growth. This is aimed at allowing more market forces to control the economy.
3.3 Understanding the Move from RDP to a Neo-liberal Economic Strategy-