South Africa 2003-04: Two Economies?

Second in a series of posts about South Africa, originally written during the 13 months I lived there in 2003-04.

In November 2003, President Thabo Mbeki spoke of South Africa's

two parallel economies, the First and the Second. The First Economy is modern, produces the bulk of our country's wealth, and is integrated within the global economy. The Second Economy (or the Marginalised Economy) is characterised by underdevelopment, contributes little to the GDP, contains a big percentage of our population, incorporates the poorest of our rural and urban poor, is structurally disconnected from both the First and the global economy, and is incapable of self-generated growth and development.

To a large extent the "First" economy is formal, with receipts, records, a credit system, and legally enforceable rights and remedies. The "Second" economy lacks all of these things; it is informal, regulated by community norms, and based on small cash transactions.

The division isn't purely racial, but it is very largely so. Affirmative action policies have improved the situation since 1994, but not very much. In recent years a more aggressive policy known as "black economic empowerment" (BEE) is pushing corporations to acquire substantial equity investment from black partners. So far this too has brought disappointing results. Since the total amount of black-owned capital is tiny relative to that owned by whites, it's common for would-be "empowerment partners" to borrow most of the money they want to invest, sometimes from the very firms they are investing in. The financial markets and the multinationals don't like this very much. Corporations that acquire highly leveraged "empowerment" investors get kudos and government contracts, but their share value tends to plummet dramatically. Heavy demand for their capital has benefited the rich black elite, but the BEE strategy has not (yet) succeeded in drawing poor blacks into the "First" economy in the very large numbers needed to make a dent in South Africa's massive poverty and unemployment. The endemic weaknesses of affirmative action programs — entitlement sensibilities, frictions between beneficiaries and non-beneficiaries, rapid promotion of inadequately qualified staff — are already creating debate among policy intellectuals here about sunset provisions for these programs.

Mbeki certainly didn't invent the "two economies" idea, or even the phrase, but his public endorsement of it created something of a stir. Commentators here criticized the concept on a number of fronts. It tends to re-racialize an issue whose post-apartheid basis is (in principle) class; it's part of what some observers see as an Mbeki-led trend toward re-racializing South African political discourse. As rhetoric, the notion lets the government explain away its failure to overcome persistent, and in fact increasing, poverty. Gloomier pundits read it as ANC preparation for a more direct state intervention in the economy. Finally, some said, this language tends to constrict thinking about the "Second" economy, since it suggests fighting poverty by progressively converting the second economy into the first — rather than finding creative ways to improve living standards within indigenous economic traditions.

There's something to all of these criticisms. Yet there's an intuitive power to the idea that simply can't be denied. As a middle-class white American, it's impossible to live in South Africa without staring the "two economies" in the face. As a historian of technology, it's impossible to ignore the ways these economies are built into everyday life here. The two economies aren't just about money and property. They are very definitely about race and ethnicity, as well as class. They're embedded in two parallel, interconnected sets of infrastructures, and in two sets of expectations about the role of technology in work.

For us, daily reminders of the Second Economy come in the form of two human beings: Henrietta, the Zulu housekeeper we inherited from our landlady, and Nolizwi, Luka's Xhosa nanny. (I've left out their last names to preserve anonymity.) We've learned more about South Africa from them than from anyone else. On her monthly half-time salary of R1200 (about $200), 45-ish Henrietta supports her elderly mother. She also supports her 10-year-old grandson Siphosihle, who takes antiretrovirals for the AIDS he contracted from his mother (Henrietta's daughter), who died of the disease a few years after he was born. 27-year-old Nolizwi supports her arthritic mother, her own daughter, and her two sisters on R2500 (about $420).

At double to triple the minimum wage, these are handsome salaries by South African standards. What we pay Nolizwi is about as much as a professional nurse earns here; nonetheless, with food prices at about 75 percent of US levels, the margin between these salaries and bare subsistence is paper-thin. Both Henrietta and Nolizwi tell horror stories about their former employers, who expected 16-hour days of hand-and-foot service for R500 a month. The luxury of cheap domestic help is a trope of conversation among Euro-American expats here. Between 1 and 1.5 million South Africans, almost all of them black women, are domestic workers — a huge chunk of the total workforce.

South Africa 2003-04: Durban

This is the first in a series of posts about South Africa, originally written during the 13 months I lived there in 2003-04. I've left them in the present tense, even though I'm only posting them now, in spring 2007:

Since July 2003, Gabrielle Hecht and I have been living in Durban, South Africa with our baby Luka (8 months old when we arrived). We're both historians of technology, so we've spent a lot of time this year thinking about how South African technologies and infrastructures were shaped by apartheid, race, and poverty in one of the world's most multi-ethnic societies. What follows are personal and intellectual reflections on how the past affects the present through the persistence of infrastructures that are simultaneously physical and social.

2003-04 is an important year here. 2004 marks the tenth anniversary of the "South African miracle" of peaceful transition to democratic government. In April, an ANC landslide in the country's third democratic election handed the party full control of the government, with almost 70 percent of seats in the national Parliament — enough to alter the constitution. Nelson Mandela retired from public life. Despite terrifying rates of poverty, unemployment, crime, and HIV infection, in many ways things are looking up here. Consumer confidence reached the highest point since it was first measured 20 years ago. The government finally creaked into action on HIV, rolling out free anti-retroviral drugs for AIDS patients. The rand roared dramatically back from a five-year slump, gaining over 20 percent against the dollar in a single year — a mark of global confidence in the country's economic and political stability. The country won its bid to host soccer's 2010 World Cup. This is not only an honor, but a major economic benefit and another sign that South Africa has re-entered the global mainstream.

We live in Morningside, an upscale area of Durban populated mainly by white people and Indians (who constitute about one-third of the city's population). Durban is the busiest port in Africa. Located on the country's eastern coast, it's South Africa's second-largest metropolis, home to some 3.2 million people. During the 1980s and early 1990s, Zulu members of Inkatha and ANC supporters fought a low-level civil war in this region that cost more than 12,000 lives.

In many respects Durban looks and feels much like many cities in America or Europe. Huge skyscrapers dominate the downtown skyline. Broad, well-marked, brightly lit roads make driving easy. In our area, large, solidly built homes and apartment towers offer comfortable housing. Ubiquitous shopping malls filled with chain stores supply a depressingly familiar range of globally available products. American visitors always notice the profusion of new, expensive cars. Mercedes, BMW, Toyota, and Volkswagen all manufacture vehicles here; automobiles are now one of South Africa's major exports. In the cities, the fixed-line telephone system is state-of-the-art (though expensive). But cellular services dominate the telecommunication system, largely since they extend into the rural areas where the majority of the population lives. Some 15 million people — one out of three South Africans — have cellphones. Broadband and wireless Internet are extremely expensive (over $140/month for ADSL), with limited international bandwidth, but even these advanced services are available if you can pay the price.

In all these ways, Durban can feel so familiar that it's almost possible to forget you are living on the world's poorest continent, in a country where unemployment is at least 30 percent (42 percent according to some estimates), half the population scrapes by on a few dollars a day, and some 5 million people are infected with HIV.

Meeting Mac Maharaj

Here is a story whose weirdness will be fully appreciated only by South Africans, SA historians, and others who really know the country.

In 2003-04 I spent thirteen months in South Africa researching the technopolitics of information infrastructure during and after apartheid. Among other things, I wanted to find out more about Operation Vula, the last military movement of Umkhonto we Sizwe in the dying days of apartheid. This mattered to me because the MK operatives kluged together an encryption system using portable PCs, telephone modems, and tape recorders. Tim Jenkin, who designed the system, claimed that it was crucial to Vula's unprecedented success, because it allowed MK operatives to communicate with the leadership in exile while working inside SA, something never before possible. Kelly Garrett and I have an article about this coming out in the next issue of Social Science Computer Review.

The commander of Operation Vula was Mac Maharaj, a major figure in the SA freedom struggle. Maharaj was an ANC leader who spent 12 years imprisoned on Robben Island with Nelson Mandela. After his release in 1976, he escaped to Zambia and became a principal leader of the ANC in exile. He led Operation Vula from 1987-1991. After the first democratic elections, he served as Minister of Transport from 1994-1999. Since he had also been the first user of the Vula encryption system, I really wanted to talk to him.

But a month or two after I arrived in SA, Mac became embroiled in a huge scandal involving bribes allegedly paid to Deputy President Jacob Zuma by a French arms manufacturer and laundered by Zuma's financier Schabir Shaik (also a friend of Maharaj). These guys were Mac's buddies, especially Shaik, and he spoke up for them, in part by accusing Bulelani Ngcuka -- head of the Scorpions, SA's elite national anti-corruption unit -- of having been a spy for the apartheid regime. (Maharaj was wrong, though he probably thought he was telling the truth. He had a document that seemed to point to Ngcuka, but the real apartheid spy announced herself a couple of months later, clearing Ngcuka beyond doubt.) Ncguka retaliated by adding Maharaj to his list of corruption investigations. Shaik was convicted and went to prison for 15 years. Zuma got off, the court having apparently concluded that while Shaik was guilty of delivering the bribes to Zuma, Zuma was not guilty of receiving them. (Zuma was soon back in court, narrowly escaping conviction on a rape charge last summer. During that trial he said he'd protected himself from HIV by taking a shower.) Zuma has a pretty good shot at becoming the next president of SA.

As for Mac Maharaj, he was eventually cleared of corruption charges, but his reputation lay in ruins, with a lot of lingering suspicions.

This scandal peaked during 2003-04, while we were in SA, so Mac was avoiding journalists and keeping a pretty low profile. Nonetheless, I managed to find somebody who knew him. She asked him if I could get in touch, gave me his address, and told me he had asked me to email him. In December of 2003 I did that, describing my project and requesting an interview (and promised not to ask him about current events, or publish anything without his permission). No response. Two months went by; I sent the same email again, pretending that maybe he'd never received it. Still no answer. As I was getting ready to leave SA in June 2004, I sent one last email. And got no answer, again. I was more than a little depressed by this, since Maharaj was a key to the story. Given his public disgrace, I doubted he was too busy to respond, though I could also understand why he might not want to talk.

Now, fast forward to early November 2006.

Gabrielle and I went to Vancouver, British Columbia, for the Society for Social Studies of Science meetings. Hungry and tired, we went looking for dinner. Gabrielle was in a lousy mood because her bag hadn't arrived and the airline didn't seem to care about tracking it down. Then, passing by a Chapters bookstore downtown, we came across a sign, handwritten in chalk on a sandwich board:

"Mac Maharaj speaks about Nelson Mandela. Here, tonight, at 7 PM."

It was 6:15.

We just stood there for a minute, stunned. Then we read the rest of the sign. Maharaj was in Vancouver to promote a new "authorized biography" of Nelson Mandela, on which he was listed simply as an "editorial consultant." The sign billed Mac as "Mandela's closest living colleague from Robben Island Prison." Nothing about his own role in the struggle. Nothing about being tortured in prison. Nothing about Vula. Nothing about being Minister of Transport. Basically nothing at all about Mac -- only about Mandela.

What should I do? Listen to him hawk his book, then walk up and try to nail him for an interview, on the spot? Not likely to succeed. Introduce myself before the talk? And say what, exactly -- "I tried to interview you two years ago and you never answered my email"? A bit lame, not to mention petty. Try to set up an interview later, in Vancouver, with no tape recorder, no notes, not even a notebook? Go get dinner and pretend this never happened?

We went into the bookstore to ponder all this. While we were waiting, a guy came on the loudspeaker and in a bored voice intoned -- I kid you not, read this sentence carefully -- "Tonight at 7, hear Mac Maharaj speak about Nelson Mandela and the struggle for freedom in South America." (At least he got the hemisphere right.)

Finally I decided to go upstairs and at least scope out the scene. They had partitioned off an area with a podium and about 50 chairs. A few people were drifting in, more than I expected but it clearly was not going to be a full house. A bright-faced young woman saw us lingering around the entry and offered her help. I said I'd like to leave Mr. Maharaj a note. She said oh certainly, of course, we can arrange that, and by the way here he comes now.

So she introduced us. I shook his hand. I launched into my short-form explanation of who I was. As soon as I said my name, Mac frowned and said, "Paul Edwards. I never answered your email. How is your research going?"

There followed a polite exchange of maybe five substance-free sentences. Then he began his own explanation. When he received my email, he said, he was collaborating with Padraig O'Malley, who's writing his biography. They had discovered an archive of documents which they had believed destroyed. (What these were, he did not reveal, but promised that they would be put up on the Web when the bio is done. Maybe they're about Vula, maybe not.) This biography project is nearing completion now, but in 2003-04 he didn't want to talk to me because he didn't want his biographer getting scooped.

I assured him this was never likely, then or now. (I'm way too slow.) Then Mac smiled, wished me best luck, and swept on to the podium, with the studied grace of the professional politician, leaving me feeling surprisingly good about being blown off once again. Everyone who knows him says he's charming, and they're right.

Late that night, there he was again, being interviewed on Vancouver TV. And again, the day we got back to the US, he was being interviewed on NPR. Not a word, in any of these interviews, about Maharaj himself, the first democratic government, the Ministry of Transport, Jacob Zuma or Schabir Shaik. Mac was described only as an "editorial consultant" on the book, or a "friend" of Mandela's. They didn't even ask him about his own experience in prison -- only about Mandela. He didn't seem bothered by this. Maybe it's a relief to be somewhere where people have no idea who he is, much less any notion of his recent troubles. Maybe the respect he's due from his struggle years is more available elsewhere than at home.

Here at Free World HQ, all of SA history boils down to Nelson Mandela, Robben Island, and the "struggle for freedom in South America." Nothing and nobody else counts.

Just too weird. And by the way, here he is.