Economic Alternatives to Neoliberalism
In the sugar-dominated economy of Mauritius, workers demanded from their bosses that they be allowed to plant vegetables in between rows of sugar cane, the beginning of a broader campaign to convert land under sugar to land for food production and thus develop an alternative economic system. In the context of rampant neo-liberalism, how can alternatives be constructed and what are the strategies and methods that can be adopted? A recent conference entitled ‘Economic Alternatives to Neoliberalism’ took place in Johannesburg and tackled exactly these issues. George Dor from the Southern Africa Centre for Economic Justice provides more details.
Alternatives to today’s dominant neoliberal system must be built from the bottom up. They must be developed through worker and community struggles against the very real ways in which workers and communities are oppressed by the imposition of neoliberal policies.
The development of alternatives entails transforming the state from one that serves neoliberal interests to one that addresses people’s needs. It also requires doing away with certain institutions that advance corporate globalisation. In particular, the World Bank should be shut down.
Alternatives to neoliberalism should not culminate in a more welfarist version of capitalism. They need to challenge the capitalist system itself and lead to a socialist society different from the examples to date that have been called ‘socialist’ or ‘communist’.
These are some of the points that resonated at a workshop, titled Economic Alternatives to Neoliberalism, organised by the Southern African Centre for Economic Justice (SACEJ) and the Rosa Luxemburg Foundation (RLS) and held in Johannesburg, South Africa, in May.
The Growth of Resistance to Neoliberalism in Southern Africa
The workshop was an outcome of an increasing interest in debating alternatives in the region. This, in turn, is a consequence of the rapid growth of resistance in various organisational forms over the last few years contesting neoliberialism in our region.
These developments are a reflection of the international upsurge in activism against corporate globalisation, including the Zapatista uprising of 1994, the building of international solidarity in support of the Zapaptistas and against neoliberalism, the growth of the Jubilee campaign calling for the cancellation of debt, the Seattle protests against the World Trade Organisation (WTO) in 1999, subsequent actions against the WTO, World Bank and the International Monetary Fund (IMF), the formation of the World Social Forum (WSF) and the growth of the international anti-war movement.
Southern Africa has seen the emergence of organisation around issues such as debt, trade and war. It has also seen the mushrooming of grassroots organisations around issues affecting people’s daily lives, such as privatisation, land, water and large dams. In some countries, these organisations have come together in the form of economic justice networks and this has been complemented by various regional networks.
The formation of the World Social Forum has sparked forums at continental, regional, country and local levels. The African Social Forum (ASF) was first held at the beginning of 2002, and the Southern African Social Forum (SASF) met before the end of 2003. Last year, Malawi and Zimbabwe have held national social forums.
The development of these organisational forms has in large measure been prompted by the very real hardships faced by the vast majority of people, both urban and rural, in the countries of the region. The content of organisational activities and struggles has initially of necessity been largely one of contesting the conditions in which the majority find themselves. This has included protest against the harsh realities of life, such as non-delivery of basic needs, high charges for services of poor quality, local corruption and enrichment of the few at the expense of others, to name a few.
Many organisations and networks have played an important role in educating people about the local, national, regional and international context which results in the gross levels of poverty and inequality experienced in the region. There has been a significant deepening of understanding of the way in which neoliberalism undermines people in their places of work and in their communities. The World Social Forum, held for the first time in 2001 under the banner “Another World Is Possible”, raised the inevitable question as to how this other more people-friendly world can be built and the beginnings of attempts to address this question.
Debating Alternatives at the African Social Forum
These developments prompted the hosting of a three-hour seminar at the African Social Forum, held in Lusaka, Zambia, in December last year. It proved to be a very popular event and attracted nearly 200 people.
It was noted that the relative lack of attention to alternatives was perhaps in part due to a fear of reopening divisions that characterised the left in years past. It was also out of concern not to make the mistake of speaking on behalf of people affected by neoliberalism. Nonetheless, elements of alternatives have been part of debate and practice. For example, in Africa, documents such as the Lagos Plan of Action and the United Nations Economic Commission for Africa (Uneca) critique of structural adjustment were fundamentally different to the New Partnership for Africa’s Development (Nepad). Anti-debt campaigners have called for and developed ideas around and African People’s Consensus to contest the Washington Consensus. Public sector delivery has been promoted in opposition to water privatisation. Land redistribution, agricultural support and food security have been stressed against GMOs.
The seminar debated how we start to give content to the slogan “Another World is Possible” and how do we do so in a way in which people in social movements drive the development of alternatives.
It was said that talk of alternatives from the top down will run into problems. There is a need to share collective knowledge to demand alternatives. We need social movements to catalyse social change. We must be part of building a groundswell against neoliberalism. In addition, we need to address a theoretical gap, to debate, develop and clarify our ideology. It is important to identify our enemy. We are not fighting poverty, but a system that is ripping us off. We must start to search for alternatives from a position of strength. We have to start talking about political power and collective ownership.
People continued debating in groups and added that we must discuss an alternative vision in local languages, hear people’s voices and develop this vision from the grassroots. This alternative vision must draw from local experiences and emphasize humanity. It must be community based and put people first, not profits. Debate must start on the ground and move to the national, the regional and the international levels. Debate is important because, when you define where you stand, this opens up possibilities for defining solutions. But, debate should result in concrete action and solidarity.
The level of energy and enthusiasm in the seminar and the positive response to the question of whether we should take these debates forward beyond the social forum prompted the organisation of the May workshop. It was attended by some 100 participants, including representation from the union sector, labour researchers, academics, community organisations, social movements, organisations of displaced persons, gender and youth organisations and national and regional economic justice networks.
Understanding Neoliberalism in Southern Africa
On the first day of the workshop, participants shared their collective knowledge of how neoliberalism affects the people of Southern Africa. They provided information on their country experiences, which highlighted the very similar ways in which all the countries in the region are affected.
For example, the textile company, Ramatex, played off three countries, namely Namibia, South Africa and Madagascar, against each other. The Namibian Government exempted the company from taxes, ploughed US$100 million into providing infrastructure for the company’s operations, ensured labour at rates from R300 to R600 a month, required that prospective employees are tested for pregnancy and allowed the company to operate free of health, safety and environmental regulations. The company locked up its factory in the Eastern Cape, an impoverished region of South Africa suffering from a high rate of unemployment, leaving 5 000 people without jobs, and set up in Namibia. This is portrayed by the Namibian Government as a success story.
The state subsidy of the clothing and textile companies in Namibia, Swaziland, Lesotho and other countries in the region has, at most, provided temporary employment in these countries as the imminent lifting of WTO quotas on Chinese exports will lead to a relocation of production to China.
Privatisation is a key feature of neoliberalism and is being implemented throughout the region. In Tanzania, 45 000 public sector workers lost their jobs, virtually overnight. In Zambia, the figure is 60 000. Privatisation has been accompanied by the growth of labour broking, in which some retrenched workers are hired on a contract basis as non- unionised labour at lower wages and without benefits.
The impact of privatisation is acutely felt by communities throughout the region in the form of the increased cost of services such as water and local telephone calls as well as the decline in the standard and quality of services provided. Inability to pay for housing and services has led to disconnections and evictions. Prepaid meters are increasingly being used to deny people access to services.
The workshop took place on the eve of the new president of the World Bank, Paul Wolfowitz, taking up office and after his stated intention to visit Africa, so the World Bank received special attention. The World Bank, together with the IMF, has used debt as a means to exert a central role in imposing neoliberal policies on countries throughout the region. In Zambia, these institutions have used the promise of ‘debt relief’ under the Highly Indebted Poor Country Initiative (HIPC) to intensify cuts in government services and force through privatisation of almost all parastatals. Teachers and nurses earn a pittance, but even so the country cannot stay within the spending limits imposed on government services. When targets are not met, the IMF and World Bank cut resource flows and signal to other funding sources to follow suit. Zambia is thus ‘condemned to debt’.
In Tanzania, these institutions are again promising ‘debt relief’, together with growth and employment, under the latest variant of structural adjustment, namely the Poverty Reduction Strategy Papers (PRSPs). People have been called on to participate in writing these papers, but the ministry leading the process is that of finance and the international institutions continue to dictate the overarching macroeconomic policy, resulting in a widening gap between rich and poor.
The compliance of the new post-colonial elites has been a central feature in implementing these neoliberal policies. In most countries in the region, the burden of debt makes it very difficult to withstand the imposition of structural adjustment, but, in the case of South Africa, only a small portion of its debt was owed to the World Bank and IMF. Yet, the Government introduced the Growth, Employment and Redistribution Strategy (Gear), which bears all the hallmarks of a structural adjustment programme. Moreover, the South African Government has been central to launching the New Partnership for Africa’s Development, endorsing the features of and the institutions that impose structural adjustment.
This facilitates the opening up of the region to the giant corporations and finance houses of the North. At the same time, it creates opportunities for South African corporations to impose themselves on the region and across the continent. These corporations have already had a devastating impact, destroying local production and employment, plundering mineral resources and damaging the environment. Now, the United Kingdom’s Barclays Bank, a key supporter of the Apartheid regime, is bidding to take over the South African ABSA bank, with the willing agreement of the ABSA executive, because the deal will open opportunities to, in the words of the ABSA CEO, “rule the continent”.
These are some of the ways in which neoliberalism manifests at an economic level. Women bear the brunt of these policies. They bear the cost of the failure of neoliberalism to provide services, both financially and emotionally. Women fetch water, bring up children and take care of the sick. This burden is increasing as the impact of HIV/Aids intensifies. The youth in the region are misplaced, unable to find jobs and therefore not in a position to participate economically in society.
The cumulative impact of neoliberalism, structural adjustment and corporate greed is perhaps most starkly illustrated by the deep decline in infant survival rate and life expectancy throughout the region.
But neoliberalism cannot be seen merely in economic terms. Its disastrous consequences inevitably generate resistance, involving various levels of organisation. The implementation of the neoliberal project thus entails both ideological and repressive elements.
At the ideological level, neoliberalism hides behind the façade of democracy. The G7 governments and the international financial institutions have blamed governments in countries suffering the consequences of structural adjustment and the new international trade regime for being corrupt and engaging in wars. The response in the form of Nepad and from many individual countries has been to agree to multiparty democracy and a limitation in presidential terms of office. Yet, policies such as Gear and Nepad and the macroeconomic elements of the PRSPs are strictly non-negotiable.
Neoliberalism also relies on the media, educational institutions and the homogenisation of culture to impose a set of ideas at odds with reality. People are told there is no alternative to the status quo, that this is the way it is. The youth are encouraged to aspire to be rich, in an environment where there are few job opportunities. They are inculcated with notions that individualism and greed are necessary qualities to this end. Lack of service delivery is accompanied by housing lists, prepaid meters and other mechanisms of control that escalate individualism into competition amongst the poor for insufficient resources, fuelling antagonisms such as xenophobia. People are encouraged, from an early age, through advertising and Western forms of culture to aspire to the individual purchase and ownership of commodities and property.
When these mechanisms fail to stem the collectivisation of anger into increasingly organised forms of resistance, the neoliberal system resorts to repression in the forms of legislation restricting protest, national intelligence gathering and the use of the police and military forces. In the case of Zimbabwe, the introduction of structural adjustment led to the free fall of the Zimbabwean dollar, dramatic cuts in services and jobs, resistance and repression. The emergence of the opposition party from the labour movement led to an intensification of violence. The combination of lack of economic opportunities and political violence has resulted in millions of Zimbabweans fleeing the country. Those that have tried to settle in South Africa are continuously harassed by the South African neoliberal state that also faces a crisis of unemployment.
The workshop participants were quickly disabused of the notion that South Africa has moved beyond its violent Apartheid past through the showing of video footage of a peaceful demonstration protesting the lack of service delivery in Harrismith, a small town in the Free State province. The police suddenly, without warning, fired into the crowd, resulting in instant chaos and killing one person. Violence is thus not merely a manifestation of the rule of undemocratic leadership in counties such as Zimbabwe and Swaziland. It is, rather, an essential feature of neoliberalism.
This is not the only way in which violence occurs. The region, in particular the Democratic Republic of the Congo, is a battleground between competing corporate interests. At an international level, the appointment of Wolfowitz as President of the World Bank is perhaps the most graphic illustration of the interrelatedness of neoliberalism and war.
Towards Alternatives to Neoliberalism in the Region
On the second day, the workshop moved towards debating alternatives on the basis of the collective understanding developed on the first day. An initiative was started last year, called Alternatives to Neoliberalism in Southern Africa (Ansa). It has been developed by researchers and research institutions affiliated to labour movements in the region. A concept paper was presented to and debated by the regional trade union body, SATUCC and it was agreed to do various sectoral studies. This process is nearing completion and the intention is now to debate the concept paper and sectoral studies amongst unions and social movements at national level.
The Ansa initiative identifies the state as a crucial site of struggle and sees the transformation of the state as critical to the implementation of alternatives. There was extensive debate about the nature of the state in Southern Africa. It was argued, on the one hand, that the nature of the state is essentially capitalist and that Southern African states are cogs in the big machine of global capitalism and, on the other, that the state is inherently neutral and can be reclaimed. The notion of the state as a capitalist state and as an institution that needs to be transformed thus requires much more debate.
It was also argued that the state is under siege, that it is disappearing and that it is becoming non-existent. This was countered by the perspective that the North needs the Southern African states, but in changed form, as vehicles to open up the region to Northern interests. The state is thus increasingly disappearing as a provider of services and a mechanism for regulating corporations and, simultaneously, increasingly visible as an instrument of repression.
The Ansa initiative also defines Africa as badly integrated into the global economy. It was integrated under colonialism and continues to be integrated in a way that reinforces exploitation. This requires selective delinking from the global economy and relinking on Africa’s terms. Related to this point is that of poor cooperation between states in the Southern African region and the domination of the South African economy over the other countries of the region. It is thus important to build a strong and balanced regionalism to both allow for integrated development across countries of the region and generate the economic weight to relink into the global economy on the region’s terms.
The bottom-up approach to developing alternatives, as so clearly stressed at the Lusaka seminar, was reiterated throughout the workshop. Alternatives must be based on the here and now. They have to be developed within the ambit and experience of the working class. We have to support grassroots struggles and become part of the rank and file. We must point the way forward beyond what already exists and challenge the rank and file towards developing a vision.
It was suggested that there are fundamental differences between neoliberalism and welfare capitalism and that there are many similarities between Keynesianism and Marxism. But it was countered that welfarism is introduced at times when capitalism is being challenged, in order to protect the rule of profit and the capitalist system. Neoliberalism is, in turn, introduced at times when the capitalist system encounters problems of accumulation, in order to address the crisis of profitability. There was broad support that an alternative vision needs to look beyond the capitalist horizon and identify methods and actions to challenge the rule of capital. Accommodation within the capitalist system will not provide a lasting solution. We need a different world “for all workers, at all places, for all time”.
The campaign for an alternative economy in Mauritius, led by Lalit, provides a good example of how to link the here and now to the development of an alternative economy. It entails building confidence through struggle. This requires the development of reasonable and winnable demands. These demands, in turn, need to be consistent with the development of an alternative economy, in this way functioning as the germs of a new society.
The Mauritian economy is based on the sugar, textile and tourism industry, all of which are in crisis. Lalit held discussions with workers in the sugar and agricultural industries who were anxious about their jobs. This led to a small pamphlet that served as a tool to initiate discussion. A demand that did not directly threaten the bosses was developed, namely to interline the rows of sugar cane with vegetables. This was followed by a demand that government taxes the sugar cane fields that are not interlined. This is now part of a broader campaign to convert land under sugar to land for food production, a key element of an alternative economy.
Various specific alternatives were explored, including the development of cooperatives and participatory budgeting. The Malawi Economic Justice Network, in its short few years of existence, has already grown to the point where it develops detailed analyses of the national budgets, educates parliamentarians on budgetary issues and influences government in its budgetary decision-making.
It was noted that cooperatives and participatory budgeting do not necessarily constitute the building blocks of alternatives to the neoliberal system. They can be used for strengthening the system or for fighting against it. Cooperatives must be economically successful, inspire confidence and be part of democratic movements in order to be part of the solution. Likewise, participatory budgeting must start from the ground and must incorporate more than just shifting money into different categories towards changing the way in which government works.
It was suggested that all too often organisations are focused on their own issues and concerns. Building alliances, demonstrating solidarity with other struggles and engaging in joint campaigns are vitally important. For example, the region has been so decimated by the World Bank and IMF that organisations across countries need to stand together in opposing these institutions. The Wolfowitz presidency provides the ideal opportunity to link with the anti-war movement to build an international coalition against the role he played in the “military war” against Iraq and role he is now assuming in the “economic war” against Africa. This is a key moment to intensify the call to shut down the World Bank and other international financial institutions. Of course, this in turn provides the opportunity to debate the forces behind these institutions and identify further strategies against the G7 governments, transnational corporations and finance capital.
Any attempt to build economic alternatives to neoliberalism also needs to take account of its ideological and repressive elements. As potentially viable alternatives are developed, the neoliberal system will do all in its power to repress these initiatives. Therefore, as well as being visionary and identifying offensive demands towards realising that vision, attention must also be given to defending the space that is available to develop alternatives. The closing down of forms of expression, passing of restrictive legislation and acts of violent repression must be resisted together with the building of alternatives. Maintaining the space to be able to develop alternatives is thus an integral dimension of the struggle for alternatives.
Taking the Next Steps
The final day of the workshop considered practical ways forward. It was noted that the workshop was perhaps a first of its kind in bringing together such a wide range of organisations and movements for a rigorous discussion of this nature. In particular, it was recognised that the participation of people from the labour sector together with people from social movements and economic justice organisations was a major step forward.
Two divergent experiences of the unions and social movements were highlighted. In Angola, trade unions have only emerged in the last decade or so and are concerned primarily with wages. For example, the teachers union is not yet taking up issues relating to the lack of classroom facilities, syllabi, books and the like. There is very little interaction with other organisations.
In Namibia and South Africa, the unions were a central force for political change in the years of Apartheid. But they have since separated themselves from their social base in the communities. The unions engage in dialogue with government and business, the social movements resist neoliberalism in the streets.
This workshop thus signifies an opportunity to forge new alliances and to overcome divisions and rebuild old alliances.
All participants at the workshop will take forward the issues and debates in their organisations. National networks will share the debates amongst their members. Regional networks will identify ways in which to take forward joint campaigns, two of which include the campaigns to shut down the World Bank and against Barclays and ABSA. The Ansa initiative and SACEJ will explore ways to deepen debate between unions and social movements.
Finally, an event to share and take forward the debate will be organised to take place at the Southern African Social Forum, scheduled to take place in Harare, Zimbabwe, in October this year.
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