Capitalism in South Africa

The picture at right is the view from the Johannesburg office tower the Carlton Centre, known as ‘the Top of Africa’ because it is the tallest building on the continent, outstripping even the Pyramids. Fifty stories high — and almost completely empty.

Why doesn’t the Top of Africa have any tenants? For the same reason Africa has had the same tallest building since it was built back in 1973: the capitalist revolution that brought skyscrapers to China, the Middle East, and South America has in many ways left southern Africa behind.

Australians, of all people, should sympathize with South Africa. Both our countries are very lucky in their natural resources, and this luck can make policymakers complacent about doing what they need to do to keep the economy strong — on the logic that however much they screw up, mining wealth will bail them out. The anti-capitalist heritage of South Africa’s ruling ANC has left it particularly prone to interfering, overtaxing, and neglecting basic market stewardship.

Visiting South Africa this month, I got to see some of these errors for myself.

An obvious weak point is infrastructure. In Joburg, half the traffic lights don’t work. Garbage pickup is unreliable. The streets are filled with potholes. Irregular blackouts have made generators an office necessity.

Cape Town is not like this, and one of the main reasons is the Democratic Alliance. In the past decade, the DA has gone from being a token opposition party to a serious alternative, largely on the strength of its performance as governing party of the Cape Province. Service delivery is one of its signature issues.

To the service-starved citizens of Joburg, that basic competence in keeping the lights on could be enough to sway their votes — which depends on whether the ANC can continue to paint the DA as a ‘white’ party, in an outdated (but, for the ANC, highly effective) racial appeal.

The next big election in South Africa will be the municipal elections in May; the first the DA will fight under its new black leader, Mmusi Maimane. The party has a good chance of picking up mayoralties in the east, maybe even Joburg. If it succeeds, then hopefully the DA’s market-friendly reformism will shake the ANC out of its complacency and South Africa’s economy out of its doldrums.