South Africa Suffers Capitalist Crisis Déjà Vu

A year ago, the majority of South Africans stared into the abyss. They faced either a continuation of corrupt misrule by a stereotypical kleptocrat—Jacob Zuma—whose anti-imperialist rhetoric failed to disguise worsening austerity, or a potentially dramatic change of political direction toward liberal capitalism.1 Next door in Zimbabwe, Robert Mugabe had just been pushed out in a wildly popular palace coup that at least superficially shared South Africa’s ideological overtones, given that his successor, Emmerson Mnangagwa, also courts big business while maintaining a liberal veneer.2 The choice was obvious at least for South Africa’s urban citizenry, a large subset of which had campaigned against Zuma and his increasingly notorious cronies in the 2017 “Zuma Must Go!” movement. Finally, in late December 2017, 52 percent of the ruling African National Congress (ANC) delegates voted for the party’s next president, narrowly electing business tycoon Cyril Ramaphosa over former African Union chairperson Nkosazana Dlamini-Zuma, Zuma’s loyal ex-wife.

Ramaphosa, who, according to Forbes, was worth more than $450 million in 2015, grew rich through ownership of McDonald’s and Coke franchises, as well as banking and extensive coal and platinum mining interests. But as the major local investor in Lonmin—the British producer of platinum metals operating in South Africa’s Bushveld Complex—in August 2012, he e-mailed the police and mining ministers to describe a wildcat strike at the Marikana platinum mine as “dastardly criminal” and requiring “concomitant action.” The next day, police massacred thirty-four workers in what became known as the Marikana massacre. Ramaphosa only apologized for his e-mail in 2016, and in early 2018 admitted the need for “atonement” for Marikana. The $1,000/month minimum wage demanded by the Lonmin rock-drill operators in the mines was never won, in part because the platinum price soon plummeted. Lonmin lost 99.3 percent of its share value in 2015 as the commodity supercycle collapsed and, facing bankruptcy in 2017, agreed to a friendly takeover by a firm (Sibanye) prepared to fire 40 percent of its workforce as soon as the takeover is completed this year.3

Prior to this incident, Ramaphosa had epitomized the ANC liberation movement’s venerated old guard, having led the mineworkers’ union in the 1980s, served as the ANC’s secretary general (chief operations officer), and chaired the drafting team for the country’s first democratic constitution in 1996. The focus on constitutionalism had prevented Ramaphosa from winning the power struggle within the ANC to become Nelson Mandela’s heir apparent. Nevertheless, during the fifteen years that Thabo Mbeki edged him out of politics, his business career boomed. There were, however, snags along the way, including two embarrassing bankruptcies in the late 1990s, at a time when all South Africa’s black business elites learned the limits of borrowing money at expensive rates in order to buy into white companies that were suffering share-price overvaluation.4

But soon enough, Ramaphosa evolved into the ideal Johannesburg branch-plant comprador partner to multinational corporations, aiding both Lonmin in brazen Illicit Financial Flow (IFF) profit transfers to Bermuda, and MTN—the largest African cellphone firm, which he chaired—in its prolific profit outflows to Mauritius. He also featured as a tax-haven abuser, via his main holding company, Shanduka coal, in the Paradise Papers leak in late 2017.5 Yet, as a nationalist politician, Ramaphosa retained sufficiently strong organizational skills to advance within the ANC. In the immediate wake of the Marikana massacre, incongruously, he was chosen as Zuma’s deputy party president. He became the state deputy president during Zuma’s second term in power, from 2014 to 2018.

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Picture: Student protesters in South Africa. Photo credit: “Landmark case to have major repercussions for protests in South Africa,” Business Tech, January 25, 2018.