Introduction
A quarter-century on from the end of apartheid, the African National Congress (ANC)’s hegemonic project is unravelling.1 Now long removed from the promise of the Mandela era, the ANC’s relative decline began barely a decade after it emerged as South Africa’s pre-eminent political party. Events such as the 2012 Marikana Massacre, when 34 striking miners were gunned down by state security forces on live television, and the state capture scandal, in which ANC-tied actors systematically looted the country’s coffers, have left indelible marks on South Africa’s socio-political landscape and punctuate a multi-decade current of popular discontent. Beyond these standout incidents, evidence of dissatisfaction with the ANC manifests on a regular basis through increasing waves of violent protest, declining party membership numbers/electoral returns, and pressure from both split-off and populist groups. To offset these varied crises and reconstruct their legitimacy, elements within the party have turned to a variety of discursive and policy mechanisms. Foremost among these is the developmental state approach first implemented by the Jacob Zuma administration (2009–2018).
At its broadest, Zuma’s developmental state approach sought to negotiate the contradictory imperatives at the heart of the post-apartheid order (i.e. both creating the conditions for capital accumulation and confronting massive redistributive pressures) via a state-led reshaping of the organisational arrangements of value creation and capture in a manner that integrated target groups into South Africa’s historical system of accumulation, the (financialised) minerals–energy complex (MEC) (Ashman and Fine 2013). Although the approach thus functions to reproduce the MEC, the construction of the linkages required to shape development trajectories has introduced new roles for state actors and changed the character of the broader state apparatus.
This article aims to add to the rich literature on South Africa’s post-apartheid political economy by analysing the specific transformative effects that Zuma’s approach has had on the country’s state apparatus – in particular, its role vis-à-vis economic processes. To achieve these goals, the article utilises a Gramscian lens, conceptualising the developmental state approach as an attempt at passive revolution (i.e. change from above designed to preserve aspects of the social structure), aimed at rebuilding the hegemony of the ruling bloc within the ANC in a manner consonant with capitalist social relations.2 Emphasis will be placed on three major transformations: the construction of novel alliances within the state apparatus, the direct exercise of state power to shape accumulative processes, and increased leveraging/privileging of Chinese (and global South, more broadly) firm internationalisation as these represent significant departures from previous government policy. In this fashion, the article illuminates the particularities of the shift away from the neoliberal Growth, Employment, and Redistribution (GEAR) suite of policies that defined South Africa’s re-engagement with the global economy, how the powers of the state are leveraged in service of the party, and how tensions emanating from the centre are relocated to local and provincial governments.
In order to ground its theoretical insights, the article will examine the evolution of South Africa’s steel sector and interrogate the logics, networks and policy mechanisms behind one of the sector’s largest new developments, the Energy and Metallurgical Special Economic Zone (EMSEZ) – a metallurgical complex occupying the southern site of the broader Musina–Makhado Special Economic Zone.3 The steel sector was chosen for analysis as it is a key part of the MEC and has historically been regarded by the state as crucial for the country’s economic stability. The sector is thus highly indicative of the broader condition of South Africa’s political economy and its study can reveal both institutionally significant patterns of behaviour among state and corporate actors and the ways in which legitimacy is (re)produced in context. In this sense, it can be considered what Flyvbjerg (2006) terms a ‘critical’ case study or one that has strategic importance within a broader field. More generally, understanding changes to governance in South Africa’s steel sector can help inform broader theory on how African states engage with emerging conjunctural forces (e.g. South–South capital flows, China’s politico-economic internationalisation).
This article draws on over 60 interviews conducted by the author in South Africa between August 2017 and March 2018. Interviewees included officials from the departments and agencies responsible for project implementation (e.g. the Department of Trade, Industry and Competition [DTIC] and the Limpopo Economic Development Agency [LEDA]) as well as high-ranking EMSEZ corporate officials and various steel industry experts and insiders. Beyond the interviews, the article relies on qualitative analysis of government and corporate documents. Specific attention was paid to the central government’s New Growth Plan (2010), the 2017–2018 Industrial Policy Action Plan (IPAP), and documents relating to the EMSEZ (e.g. the 2019 background information document, the feasibility plan and the various permits).
The remainder of the article is organised as follows. The next section illustrates how Gramscian concepts have been deployed to make sense of the complex discursive and policy changes that characterise the last 25 years of South African governance. The third section then briefly provides context on South Africa’s steel sector and the EMSEZ, describing how a mixture of domestic politico-ideological imperatives and international factors have led up to the current moment. Finally, the fourth section contains the primary analysis and elucidates how the ANC’s use of passive revolution as a technique of statecraft via its developmental state approach has transformed the state apparatus.
Gramsci and the post-apartheid order
Antonio Gramsci’s concepts have proven to be supremely useful tools for researchers analysing South Africa’s post-apartheid political economy and the state’s fluctuating policies. Scholars such as Taylor (2000), Hart (2002, 2014), Nash (2013) and Alford (2020), among others, have put forth Gramscian-inspired analyses to explore topics ranging from the country’s foreign policy to shifting landscapes of water delivery, and antagonistic governance strategies in the agricultural sector. In particular, Gramsci’s ‘passive revolution’ has been resurgent in the literature (though some have drawn attention to its limits – see Callinicos 2010).
Although the term itself is somewhat contested given the broad scope of its usage (see Roccu 2017), as Sassoon (1982, 129) notes, passive revolution indicates the ‘reorganization of state power and its relationship to society to preserve control by the few over the many’. Nash (2013, 104) expands on this and contends that when used as a technique for statecraft, passive revolution involves the reinforcement or reproduction of a hegemonic project through the adoption of policies and discourses designed to ‘forestall and at the same time adopt subaltern demands, yet without bringing those subaltern groups into the historic ruling bloc’. Broadly, then, a passive revolution can be understood as ‘reformist change from above, which entail[s] extensive concessions by relatively weak hegemonic groups … in an effort to preserve the essential aspects of social structure’ (Alford 2020, 7). In a policy sense, acts of passive revolution take the form of legislative reform or novel state-led initiatives that may be in direct opposition to previous patterns of governance although they retain similar discursive elements.
As Hart (2015) describes, both the nature of the contradictions at the heart of the post-apartheid order – which can best be understood as the need to concurrently create the conditions for capital accumulation and confront massive redistributive pressures – and the manner in which state actors have sought to negotiate these across different scales lend themselves to analysis via the passive revolution framework. However, she also makes the significant point that one cannot simply overlay or apply passive revolution onto a context or circumstance without careful consideration of the spatio-historical conjunctures that engender place-specific politico-economic structures. With this in mind, the following section briefly traces the historical developmental pathways that have led to the unravelling of the ANC’s hegemony and South Africa’s contemporary partial passive revolution.
Despite talk of nationalisation and redistribution within the ANC in the years before the end of apartheid, the party did not have a set economic policy at the time of its unbanning (Hart 2014, 160), and the negotiated nature of the settlement to bring about democracy meant that the core of the previous system of accumulation was largely continued (Carmody 2002). The system, which Fine and Rustomjee (1996) term the minerals–energy complex (MEC), is fundamentally an alliance between large-scale productive mining capital, the state and (now) the financial sector (see Ashman and Fine 2013).
Two years on from the 1994 elections, the ANC adopted the broadly neoliberal GEAR macroeconomic strategy; this led to fiscal austerity, the acceptance of apartheid-era debt, the deregulation of a wide-range of microeconomic markets, increasing privatisation of state-owned enterprises (SOEs), and the implementation of free-trade policies (Reboredo 2018). In essence, GEAR allowed large-scale capital to engineer the terms of post-apartheid re-engagement with the global economy and thus represented a broad reorganisation of state priorities towards the global orthodoxy and the Washington Consensus. Yet according to Hart (2002, 19), the adoption of GEAR represented more than just a new macroeconomic strategy; rather, it also embodied a ‘shift in the balance of power within the ruling bloc’ towards more conservative factions, often associated with Thabo Mbeki. Indeed, from the mid 1990s until approximately the mid 2000s, both the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) (two of the three members of the tripartite alliance, along with the ANC) saw their policy influence diminish, principally stemming from their opposition to GEAR. The divisions sowed throughout this period have, to a certain extent, persisted and help to explain the sometimes-contradictory economic policies emanating from the state.
Unsurprisingly, GEAR sat uneasily amidst the emancipatory proclamations of the liberation struggle, and the late 1990s and early 2000s saw widespread popular protests. Mkhize (2019) explains that instead of meeting its targets (e.g. expanding private-sector capital formation, ensuring labour market flexibility and service delivery, achieving growth rates of 6% by 2000), GEAR led to massive job losses and structural unemployment, largely caused by the collapse of the manufacturing sector (to illustrate, manufacturing’s contribution to the gross domestic product (GDP) dropped from 24% in 1990 to 13% in 2018).
In response to growing dissent both within the party and throughout society, President Mbeki began integrating ‘pro-poor’ initiatives into his policy platform near the start of his second term in 2004. Mbeki revived the concept of the ‘developmental state’, which had been limited to local governments since the introduction of GEAR (Hart 2014). His administration pursued initiatives designed to promote industrial growth in underdeveloped regions, bring needed services to impoverished communities, and cultivate an ‘African entrepreneurial class’. To address the first of these objectives, the Accelerated and Shared Growth Initiative of South Africa (ASGISA) was implemented. Although more of a ‘programmatic statement than a formal modification of existing policy’, ASGISA laid the groundwork for more extensive industrial policy as it called for a partial shift away from public–private partnerships (PPPs) and towards state investment in industrial projects and infrastructure (Haines 2015, 167). Meanwhile, the emphasis on service provision meant that the severe austerity of the late 1990s gave way to larger allocations from the national government to local ones (Hart 2014). Concomitantly, social grants were expanded and millions became eligible for pensions, child support grants and disability grants, among others (Bhorat et al. 2017; Suttner 2014). Finally, to address the latter objective, a programme known as Black Economic Empowerment (BEE) – which led to the creation of targets for ownership change (from white to black) throughout the country’s strategic industries – was instituted. Yet despite the fact that such initiatives somewhat reintegrated the state into economic processes, they remained well entrenched within the administration’s largely orthodox vision for growth and development. This vision was laid out by Mbeki through the dual economy framework, which held that the country had two linked but distinct economic systems, one ‘modern’ and productive, and the other unskilled, uneducated and dependent. As Hart (2014, 39) notes, party figures were quick to point out that ‘planned intervention[s] in the Second Economy did not in any way reduce official commitment to rapid capital accumulation driven by market forces.’ Mbeki’s commitment to neoliberal practices is also visible in decisions like the rejection of COSATU-supported proposals for small-scale universal Basic Income Grants.
Mbeki’s measures did little to quell the growing protests and municipal rebellions. Though usually directed towards local officials, the protests more generally represented the inability of the ANC to provide for historically marginalised groups – a core element underpinning party legitimacy and hegemony. The Jacob Zuma coalition both cultivated and leveraged popular discontent in the lead-up to the 2007 ANC party conference in Polokwane, Limpopo. During the conference, Mbeki was ousted as president of the ANC, and Zuma assumed power within the party. Both the results of the Polokwane conference and subsequent pressures to demonstrate a commitment to economic reform informed the ANC’s 2009 general election manifesto, with Zuma declaring that the key to substantive socio-economic ‘transformation’ (i.e. increased black participation within the MEC structure) would be the creation of ‘an effective developmental state’ (Haines 2015, 168).
Notwithstanding the terminological continuity, Zuma’s developmental state differed from Mbeki’s in both objectives and implementation. As explained above, Mbeki’s policies broadly sought to address structural inequalities through market-led growth, with the state taking on a limited role in supporting the ‘second’ economy. Zuma, on the other hand, ostensibly sought to create mechanisms through which the state could resolve market failures and attract/direct investment towards industrial growth (Masondo 2018). Zuma’s developmental state was articulated in a policy sense through documents such as 2010s New Growth Plan (NGP) and the DTIC’s IPAPs. The NGP recommended the revival of state-led economic planning with a focus on labour-intensive industries. The specified objective was to create 11 million jobs and reduce the unemployment rate from 25% to 6% by 2030. To achieve these goals, emphasis was placed on public procurement, novel incentivisation schemes and the revival of the Special Economic Zone programme, as this would allow the state to direct investment into target areas (both geographic and sectoral). In addition, the state’s push for ‘developmentalism’ led to the aligning of the country’s parastatals (e.g. Eskom, the Industrial Development Corporation [IDC]) with what it termed ‘national commercial interests’, often resulting in significant changes to the firm’s operational strategies (Interview, Analyst, October 2017, Johannesburg).
While the outcomes of Zuma’s developmental state approach have been explored elsewhere (Bhorat et al. 2017; Chipkin 2016; Haines 2015; Masondo 2018; Reboredo 2019), its utility for this article is understanding it as an ongoing passive revolution – specifically what Nash (2013, 103) terms ‘passive revolution as a mode of statecraft’. In essence, the developmental state approach as instituted by the Zuma and now Ramaphosa administrations (though Ramaphosa’s term has been characterised by a re-emergence of orthodox voices) is a commitment by the ruling bloc to aggressively use the powers of the state to integrate historically marginalised groups into the MEC. Returning to Alford’s (2020) definition above, the concessions in this instance are portrayed by the ruling bloc as being made to groups who were exploited by apartheid-era policy and neglected by neoliberal development practices. It must be noted that concomitant with these objectives are the developmental and accumulative interests of the myriad actors involved in each of the specific projects within the broader umbrella. Additionally, though space limitations prohibit exhaustive examination, this passive revolution has significant discursive elements (e.g. the radical transformation discourse; white monopoly capital) that both distinguish it from the previous era and tie it to the memories, experiences and practices of the struggle period. Mbeki-era programmes, for instance BEE, are often portrayed as antithetical to ‘transformation’ in that they served to create a small black capitalist class that allied itself to white-owned capital. As Laclau (quoted in Hart 2014, 207) notes, hegemony is in part ‘about articulating different visions of the world in a way that potential antagonism is neutralized’.
Broadly, the economic policies underpinning the developmental state framework have sought to leverage bilateral and multilateral connections to global South capital and ideologically compatible partners – most often China. While explained in detail below, this is largely because political considerations can at times influence the operational strategies of Chinese/global South capital, giving state actors greater bargaining power (see Lee 2017; Salakhetdinov and Sidorov 2019). It is principally, though not exclusively, through the privileging of Southern capital that certain departments within the state apparatus are attempting to shape the spatial and organisational arrangements of value capture and thus integrate target actors into the MEC. This is evidenced by the significant number of development projects (e.g. EMSEZ, the Beijing Automotive Industry Holding Co [BAIC] and First Auto Work’s [FAW] assembly plants, the Longyuan-Mulillo wind power project, the Bakubung Platinum Mine and Hisense’ Atlantis assembly plant) that have appeared in the last few years whose objectives include large-scale employment creation for specific populations and whose implementation is contingent on high-level linkages between state elites. While the arrangement works within the bounds of the MEC, the linkages are forged through novel intra-state alliances, a renewed entrepreneurial attitude within the ruling bloc, and new patterns of state ownership/direction in strategic industries, thus transforming the role of the state in economic processes.
Before continuing to the specificities of such processes in the steel sector, it must be noted that beyond its utility as a passive revolution, the articulation of the developmental state approach has furthered the personal policymaking power of individuals within the ruling bloc and in some cases exacerbated rent-seeking behaviour. Indeed, the naked corruption epitomised by the state capture saga (see amaBhungane and Scorpio 2017) would not have been possible without the politicisation of certain parastatals, as these allowed for the redirection of public funds towards the Gupta–Zuma network (Bhorat et al. 2017). The plundering of South Africa’s public coffers is thus a highly visible element of the Zuma-initiated approach. Ultimately, the implementation of the developmental state framework has exacerbated cleavages across South Africa’s political landscape. One noteworthy example is the expulsion of the National Union of Metalworkers of South Africa (NUMSA) from COSATU after their rejection of the ANC and SACP. Additionally, initiatives implemented under the approach have brought about charges of betrayal of apartheid-era promises, fuelling anti-ANC populist movements. Therefore, in its current form, the approach must be considered an incomplete or partial passive revolution, which puts further pressure on the ruling bloc’s position.
South Africa’s steel sector
South Africa’s steel industry has long been a core component of the country’s system of accumulation. Historically conceptualised by the state as being of strategic importance for effective industrialisation and (white) employment generation, steel was highly politicised and received significant backing. Likewise, it was embedded into the MEC via input/output optimisation (e.g. state-negotiated deals for iron ore and coking coal as well as state procurement for finished products). Although the state-owned South African Iron and Steel Industrial Corporation (ISCOR) was privatised near the end of apartheid, support for the industry has remained robust throughout the democratic era (for instance via tax incentives, cheap electricity and infrastructural assistance; see Roberts and Rustomjee 2010). Yet with the emergence of China’s own heavily subsidised steel industry and its capacity for large-scale exports, South Africa’s steel sector has fallen into crisis.
Between 2008 and 2015, steel production declined by 33%, with exports falling by 32% (between 2010 and 2015). These conditions led to the closure of a number of foundries, and key ferroalloy producers Highveld and Samancor were forced into major restructuring. In total, the iron and steel industries lost approximately 30,000 jobs between 2011 and 2015 (TIPS 2016). To offset the crisis, the state imposed a 10% tariff, the maximum allowed under World Trade Organization rules, on primary steel products. Today, South Africa continues to produce 5–6 million tons of steel a year, yet the effects of the crisis linger, manifesting in the form of low demand, inefficiency due to aging plants, escalating costs and an underdeveloped downstream industry beset by imports (Interview, Southern African Institute of Steel Construction, October 2017, Johannesburg; DTIC 2018). In the words of one analyst, the industry is ‘a mess’ (Interview, Analyst, November 2017, Midrand).
Currently, the steel value chain accounts for approximately 190,000 jobs (concentrated in iron-ore, steel making and fabrication), while the top steel-consuming sectors, which include mining, auto and construction, account for 15% of South Africa’s GDP (DTIC 2018). Throughout interviews for this research, members of both the DTIC – which oversees the sector – and LEDA maintained that for South Africa to ‘re-industrialise’ under the state’s plans (e.g. IPAP), the country requires a primary steel sector as this not only provides large-scale employment opportunities for the working classes and historically marginalised groups but is considered a foundational element for downstream economic growth (Interview, DTIC, October 2017, Pretoria; Interview LEDA, November 2017, Johannesburg; Interview DTIC, February 2018, Pretoria).
The DTIC and LEDA are thus keen to participate in China’s industrial cooperation initiatives, which are designed to export capacity abroad with the goal of then reimporting finished goods back into China (Kenderdine and Ling 2018). Indeed, officials from both groups stated that they were happy to accept ‘dirty’ (i.e. environmentally destructive) industrial capacity if it means job creation, beneficiation, and re-industrialisation (Interview, DTIC, February 2018, Johannesburg; Interview, LEDA, November 2017, Johannesburg). One official argued that Chinese investment ‘gives [us] an opportunity to beneficiate and diversify our economy’ (Interview, DTIC, October 2017, Pretoria), while another rationalised his support for Chinese-backed projects by claiming that South Africa will never achieve ‘transformation’ if the economy is ‘anchored around commodities’ and that inclusive growth will only occur through projects that can construct backward linkages and accelerate skills transfer to target communities (Interview, DTIC, February 2018, Johannesburg).
It is into this context that the nearly US$10 billion South African EMSEZ has emerged. The EMSEZ, currently the costliest and arguably most significant Sino–South African development project, given its role in furthering Sino–South African developmental cooperation, is conceptualised as a heavy industrial hub with a focus on both steel and stainless steel production. The site for the zone is located on agricultural land between the towns of Musina on the Zimbabwean border and Makhado (also known as Louis Trichardt). Though project specifics remain somewhat opaque, initial zone development will consist of a coking plant, a high-carbon ferrochrome plant, a waste-heat power plant, a vanadium–titanium smelter and a stainless-steel plant. Additional developments include living/consumption facilities, infrastructure and an administrative centre with customs and taxation services (Interview, EMSEZ, March 2018, Johannesburg). In essence, it will be an industrial town reminiscent of the previous era’s satellite settlements (Harrison and Todes 2017).
Passive revolution and state transformation
State capitalism with South African characteristics?
As Bhorat et al. (2017, 49) note, South Africa’s political structure has come to be defined by factionalism and ‘internal strife’. This in turn manifests across the country’s policy landscape. Bowman (2020, 15) describes how ‘in contrast to the centralized, coordinated operations of the archetypal developmental state, the South African [version is] defined by a fragmented approach to economic strategy.’ In practice, the bifurcation of economic policy means that the departments operating under the developmental state framework (e.g. DTIC; Department of Public Enterprises) have adopted ‘interventionist’ measures while others, notably the Treasury, have upheld more orthodox approaches. As noted, the steel sector has largely been overseen by the DTIC and a number of measures have been implemented to facilitate the use of state power to direct investment and shape accumulative processes. According to the latest IPAP (DTIC 2017):
An inter-governmental task team was formed to deal with [the] crisis in the industry, through the judicious deployment of a range of industrial policy measures. While internationally recognised as a model of government-industry-labour social dialogue, it was essentially a holding action. Much more still needs to be done to ensure that SA’s domestic steel production is globally competitive and supports an increasingly globally competitive, value-adding, technology-intensive downstream sector.
In practice, the ability to directly negotiate project parameters comes from the positioning of LEDA as a primary stakeholder. Although a Chinese firm will be tasked with overseeing general zone operations, LEDA holds the SEZ licence, making them responsible for facilitating and managing zone planning and development (LEDA 2019). One DTIC official explained that the ability of state actors to put policy goals at the forefront of negotiations means that the complex will be more ‘involved’ and ‘go further’ in terms of beneficiation and value-addition than existing steel plants (Interview, DTIC, October 2017, Pretoria).
This type of messaging is part of an emerging discourse that portrays the project as demonstrative of how the state can use its powers to confront extant inequalities through the creation of novel linkages that connect rural and impoverished areas to transnational accumulative processes. According to a 2019 report:
the Limpopo Provincial Government views economic infrastructure as a base for economic and social upliftment. To achieve this, the provincial government sought to attract investment from overseas investors. Furthermore, to expand business activities in the province, the investments [sic] opportunities and [small, medium and micro enterprises] are promoted. (LEDA 2019, 147)
At the time of writing (October 2020), the specificities behind each of the zone’s individual projects (e.g. the coking plant, the stainless steel plant) remain unknown as they are subject to negotiations among LEDA, the DTIC and the Chinese investors. According to the EMSEZ website, these negotiations cover everything from technical details to local content requirements. In this manner, South African actors can theoretically influence eventual operations, for example via local content policies, input/output optimisation and other methods. It is important to note that local content policies and local labour percentages are negotiated on a project-by-project basis in South Africa (Interview, DTIC, October 2017, Johannesburg). While this ostensibly allows for more flexibility, it can also personalise policy processes and minimise transparency.
The stakeholder meetings in which discussions have taken place have been facilitated by the DTIC on the South African side and the National Development and Reform Commission (NDRC) on the Chinese side. These meetings have largely taken place during a series of ‘roadshows’ in which delegates from LEDA and the South African central government travel to China to meet with the investor firms and are thus indicative of the state-to-state nature of the project as well as the directive role of the South African departments/parastatals involved. Echoing Taylor (2014, 354), the state capitalist strategies visible in the EMSEZ case ‘serve the class interests of externally oriented fractions with aspirations to become internationally competitive, accumulate mega-profits and entrench their domestic positions’.
Leveraging global South capital
The state-led nature of the project is indicative of another change brought on by the developmental state approach, specifically the privileging/leveraging of capital hailing from the global South, most often from China. As with economic policy more broadly, a split has appeared wherein those departments that support state-led development view Chinese actors (both the state and SOEs) more favourably. One analyst interviewed for this research stated that ‘every government department seemingly has a different perspective on Chinese engagement’, though he conceded that there are two broad camps principally demarcated by ideological compatibility (i.e. statist vs orthodox) (Interview, Analyst, October 2017, Pretoria). Correspondingly, a separate analyst noted that the political linkages between the ANC and the Chinese Communist Party are strong but ‘quite localized’; that is they can manifest through departments or even individual officials (Interview, Analyst, September 2017, Johannesburg).
The DTIC, the Department of International Relations and Cooperation (DIRCO) and the IDC, among others, primarily view relations with China in terms of ‘win–win’ development, consistent with the broader Chinese internationalisation discourse put forth concomitantly with the Belt and Road Initiative (BRI). While this in some ways reflects what Alden and Wu (2016) term the Zuma faction’s ‘southern’ orientation (i.e. preferring to engage with the BRICS (Brazil, Russia, India, China and South Africa grouping) and other global South states over traditional Western partners), the ability to negotiate, frame and publicise projects via mega-events such as the Forum on China–Africa Cooperation (FOCAC) or the annual BRICS meetings also plays a role. As Bhorat et al. (2017, 49) note, ‘political power in South Africa has fragmented across the state and society, condensing momentarily in fleeting and fluctuating networks.’ As such, high visibility mega-events have taken on increasing significance for elites attempting to legitimise initiatives and broaden domestic support.
Beyond elite-level connectivity, increased engagement is also articulated through the construction of novel avenues of cooperation. For instance, according to the latest IPAP (DTIC 2017, 53),
to derive maximum benefit from the development and implementation of SEZ policies, a five-year agreement was signed in 2014 between the dti [sic] and the Ministry of Commerce (MOFCOM) of the People’s Republic of China. Through this Memorandum of Understanding 108 officials have already been trained.
In the EMSEZ case, the project formation process is indicative of both the link between politics and economics that characterises engagement with Chinese SOE capital and the ways in which the introduction of said capital can create policy space for South African actors. Limpopo’s provincial government – which one official noted has a preference for ‘industrializing in a big way’ (Interview, LEDA, November 2017, Johannesburg) – had been unsuccessfully attempting to establish a SEZ in the Makhado area for nearly a decade when they were approached by a group of actors representing small Chinese firms who believed it was conducive to a metallurgical cluster (Interview, EMSEZ, March 2018, Johannesburg). The official’s comment is revealing as it corresponds with a documented pattern in which South African state actors aim to build-up local and provincial support via hyper-visible, large-scale development projects. Chinese capital has thus given Limpopo the means to create its own mega-development project after years of coming up short. Once LEDA and the Chinese firms were in agreement, the project was picked up by the DTIC, which provided the networks and mechanisms for bilateral cooperation. Shortly after, it was integrated into the Chinese state’s International Capacity Cooperation (ICC) programme. President Cyril Ramaphosa’s 2018 state visit to China then provided the backdrop for project prioritisation and for further agreements to be signed between the DTIC and NDRC.
Although such linkages are highly visible in the EMSEZ, they are becoming more common in other developments throughout South Africa. The BAIC and FAW assembly plants, as well as the Longyuan–Mulillo Wind Power project, have all been presented as distinctly ‘Sino–South African’ development projects and received significant support from state elites at the highest levels. To illustrate, in the BAIC case, Presidents Cyril Ramaphosa and Xi Jinping led the plant’s opening ceremony; additionally, project development was contingent on the establishment of a ‘supply park’ for local component manufacturers adjacent to the site (once again indicating the imperative to create local jobs through transnational connections) and the meeting of certain local content requirements – for instance, that high-value parts were built in South Africa (Interview, Coega SEZ, January 2018, Johannesburg). Beyond these projects, Chinese loans have been instrumental in both keeping energy parastatal Eskom solvent and assisting the South African state with COVID-19-related programmes. However, as noted earlier, corruption is a major element within the extant developmental state approach, and Sino–South African networks can create more opportunities that exacerbate rent seeking. The Transnet (South Africa’s rail and port parastatal) case document by Dodd and van der Merwe (2019) exemplifies this. In essence, members of Transnet and their associates, the Gupta family network, engineered kickbacks from China South Railway Locomotives and Rolling Stock Corporation (CSR) as part of a locomotive acquisition deal. Similar allegations of corruption have dogged projects such as the Moloto Development Corridor and the Umzimvubu Water Project.
Paradiplomacy
Returning to the EMSEZ case, project development has been indicative of novel intra-state alliances. Specifically, the concept of paradiplomacy (i.e. transnational linkages emanating from sub-national governments) stands at the forefront of the implementation process. In essence, the central government has leveraged ties between subnational actors and the Chinese state to pursue its broader agenda in a process that echoes Hart’s (2002) characterisation of sub-national governments (SNGs) as primary sites of both contestation and innovation in the post-apartheid period.
Under the South African constitution, provincial governments are charged with a developmental mandate informed by the socio-economic conditions of each province. However, while paradiplomacy has been an occasional feature of post-apartheid South African governance, early efforts at coordinating and rationalising paradiplomatic initiatives generally failed due to the central state’s ‘ambivalence toward the international agency of provincial and local governments’ (Nganje 2014, 144). This reflects the fact that while the constitution makes provisions for relative SNG autonomy, the dominant interpretation within the state during the Mandela and Mbeki eras was that foreign policy is the exclusive domain of the central government.
Zuma’s deployment of the developmental state approach has created significantly more policy space for SNGs in terms of international engagement. Throughout the Zuma era, a mix of pressures from above (increasing global competition) and below (mounting working-class protests) have provided the primary motivations for SNGs to look abroad (Nganje 2014). In some cases, SNG actors have taken on entrepreneurial mindsets which see them attempt to capture value and integrate specific territories into the global economy via targeted policies and strategic couplings.
The EMSEZ is one such coupling. As laid out plainly in a 2019 LEDA (4) report, ‘The essence of the Musina–Makhado SEZ [sic] is to create a new heavy industrial hub that forms part of the Trans-Limpopo Spatial Development Initiative.’ Indeed, given the conditions of project formation, it can be considered a (transnational) provincial development project. Legitimisation has thus been significant for continued project financing, especially in the context of the aforementioned bifurcation of economic policy. As one project executive stated, ‘the main challenge right now is that there are a lot of competing budgetary interests at the national scale.’ He went on to note that his ‘fear is that they reach a point where there is no money from the government because this is a long-term project’ (Interview, LEDA, November 2017, Johannesburg). Reflecting these concerns, South African government officials ranging from the DTIC to LEDA and the provincial government of Limpopo have sought to highlight, and sometimes exaggerate, the involvement of large-scale Chinese firms and the Chinese state, with one project executive stating that EMSEZ is ‘being led by Chinese state-owned companies’ despite them not engaging in a leadership capacity (Winning 2018).
The central government, in the form of the DTIC, has thus far embraced Limpopo’s efforts primarily because the zone is compatible with the framework of socio-economic transformation and reintegration of the state into the steel industry pursued by the ministry – which more broadly reflects the state’s attempt to pacify the subaltern classes. Successful construction would thus strengthen the state’s infrastructural power (i.e. the ability of the state to penetrate civil society and implement policy choices across the territory it claims to govern) (Mann 2008) and its ability to project authority over distance. In this manner, from a central government perspective, the EMSEZ can also be considered an attempt at extending and consolidating the geographical boundaries of ANC influence. Likewise, the element of strategic coupling with Chinese SOEs furthers the South African state’s core foreign policy objectives. As one analyst noted, the DTIC ‘has a strong ideological commitment to China’ in terms of shared developmental vision and interests (Interview, Analyst, October 2017, Pretoria). Several DTIC officials interviewed throughout this research characterised the Chinese as ‘developmental partners’, while one said he believes the Chinese ‘will be benevolent’ in their negotiations – indicating the extent to which the bilateral cooperation discourse has taken hold at the top levels of the South African government (Interview, DTIC, October 2017, Pretoria; Interview DTIC, February 2018, Pretoria). The EMSEZ is thus indicative of novel intra-state alliances wherein varied but complementary objectives coalesce and crystallise in the form of development projects. Similar processes have been documented by researchers studying other South African projects such as the Atlantis SEZ (see Grant, Carmody, and Murphy 2020).
Conclusion
Theorising South Africa’s shifting political economy and the complex discursive and policy changes that have characterised the post-apartheid order has proven to be a difficult task. However, utilising Antonio Gramsci’s concepts can illuminate the myriad actors and imperatives whose coalescence leads to substantive policy changes.
This article has sought to add to the literature on South Africa’s post-apartheid political economy by using Gramsci’s passive revolution as a lens through which to understand the transformation of the South African state. In particular, the paper has sought to elucidate the effects of Jacob Zuma’s developmental state approach on the state apparatus. Three major transformations emanating from the implementation of the approach were analysed: a shift towards what ostensibly appears as state capitalism, or the use of direct state power to shape the spatial and organisational arrangements of value creation, enhancement and capture; the privileging of inbound capital hailing from ideologically compatible global South countries (in a manner that is discursively framed as ‘win–win’) by certain elements within the state; and the construction of novel intra-state alliances to achieve specific policy goals. Through its analysis, the article illuminated the incomplete yet multi-scalar shift away from GEAR, the particularities of how the powers of the state have been leveraged by certain elements within the party, and how central tensions are relocated to local and provincial governments.
The article grounded these theoretical insights with an examination of South Africa’s steel sector and the EMSEZ, in particular. The steel sector was chosen for study as its significance within both government plans and the broader economy allows researchers to observe noteworthy patterns and processes at work. Regarding the EMSEZ, the project remains in its initial phases, and in many ways, it retains a certain fluidity in its responsiveness to structural and conjunctural factors. However, even in this early stage, the aforementioned processes are highly visible as state actors operating across different levels (local, provincial, central) have sought to create the space for localised mineral beneficiation and employment creation by leveraging political linkages to the Chinese state, and more specifically, the country’s ICC programme. The project thus offers significant insight into how state actors utilise the developmental state approach to (re)produce their legitimacy in ways concordant with capitalist social relations. However, the lack of public or community-based participation in the EMSEZ case is indicative of the exclusion of subaltern groups from geographies of power.
Although the EMSEZ may be one of the pre-eminent examples of the aforementioned transformations, these are visible in other development projects as well. As mentioned, elite-level negotiations among state actors are at the core of projects such as the BAIC/FAW automotive assembly plants and the Longyuan–Mulilo wind power array. Discursively, these projects have been similarly integrated into the ANC’s transformation discourse and the state has actively sought to shape value chains and opportunity structures towards its core groups. All these cases also leverage the internationalisation strategies of Chinese firms and have been linked to the BRI to facilitate embedding. It is important to note that a gradual reintegration of Western capital into state-led initiatives has been a facet of Ramaphosa’s term thus far, for instance Ford’s investment in the Tshwane SEZ. Thus, while China may remain the go-to partner for certain departments, Ramaphosa’s more flexible investment drive may open the door for Western capital to play a larger role in the next phase of the developmental state approach. This is an area that will require further study moving forward, considering the potential implications for South Africa’s accumulative strategies.
Ultimately, the ruling bloc’s passive revolution has yet to generate its intended results in terms of employment creation and increases in political support, at least to the scale necessary for it to be deemed successful. Similarly, it has thus far been unable to negotiate the contradictory imperatives of securing capital accumulation and facing down massive redistributive pressures. Although to some extent this is due to its ‘partial’ nature, the corruption and maladministration of the Zuma era have also compounded the failures of the state to provide for its core groups and weakened the ANC’s legitimacy. Projects such as the EMSEZ may ease the pressure if successfully built; however, the long-term future of South Africa’s post-apartheid order remains in flux.