GeoJournal 57: 313, 2002. 2003 Kluwer Academic Publishers. Printed in the Netherlands. 3

Neoliberalism and privatisation in South Africa

Sagie NarsiahDepartment of Geography, University of Natal, Pietermaritzburg, Republic of South Africa (E-mail: narsiah@nu.ac.za)

Abstract

Perhaps the defining characteristic of development as a global discourse is its neoliberal character. Even recently liberatednations such as South Africa have not escaped its reach. In South Africa, there has been a movement from a developmentpolicy with a socialist resonance the Reconstruction and Development Program (RDP) to one decidedly neoliberal inform and substance the Growth Employment and Redistribution (GEAR) policy. The articulation of neoliberalism throughdevelopment policy is being facilitated through a series of measures among which are fiscal austerity, export orientedproduction and the privatisation of public sector services. While the GEAR policy, as a macroeconomic framework, is beingcontested by labour unions it is privatisation which is facing widespread opposition among communities. My intention istwofold, firstly, to investigate how neoliberalism as a global hegemonic discourse has succeeded in capturing, colonisingand repackaging the development imaginary of the African National Congress (ANC). Secondly, I wish to examine howprivatisation as a sub-discourse of neoliberalism is being articulated in the historically black township of Chatsworth, inDurban.

Introduction

The central feature of development during the last threedecades has been its neoliberal character. Neoliberalism isused as a pejorative term for the phenomenon of global-isation. Moreover, Harvey (2000) contends that terms suchas globalisation mask the underlying class basis of what isessentially a capitalist system writ large. Furthermore, theanalytical tools best suited to an examination of the systemhave been confined to the academic periphery. Analyticaltools are themselves the center of contention. While aca-demic engagement on such issues is essential, there is a riskthat opportunities for progressive change may be missed.South Africa is very much a case in point.

The post-1990 era has been marked by both continuityand discontinuity. The decade-old history of the new SouthAfrica reveals a bizarre unraveling of the revolutionary dia-lectic (cf. Murray, 1994). For the masses of South Africans,prejudiced under an apartheid regime: new prejudices, newapartheids and more importantly new resistances. Not in-significantly, the new is intensely spatial. It is in poorhouseholds and communities where the impact is greatest:the neoliberal spatial fix (cf. Harvey, 1984). New spaces forcapital accumulation are opened up. The neoliberal spatialfix also acts as a barrier to capital accumulation, bearingthe seeds for its own destruction, as communities transformthese spaces into the object for social mobilisation.

A discussion of the central themes of this paper evolvesin the following way. Firstly, I outline theoretical preceptspertaining to neoliberalism. I then attempt to account forthe changes in ANC development policy particularly theperceived movement to neoliberalism. I specify the move-ment through an analysis of privatisation in South Africa.

I finally engage with the impact of neoliberalism at thelocal scale through an analysis of the privatisation processin Chatsworth, Durban.

Neoliberalism and theory? A theory of neoliberalism?

Neoliberalism is a doctrine which has philosophical rootsin Adam Smiths free market school of economics. Neo-liberalism also stems from a reaction to the Keynesianeconomic programs of the post-World War II era up to the1970s. The hegemony of neoliberalism is a consequenceof the perceived failure of Keynesian programs during the1970s, accentuated by the global economic recession. Vi-cious attacks by the monetarist school of economics leadby P.T. Bauer, Friedrich von Hayek, and Milton Friedmanamong others, together with the political impetus gainedfrom the conservative regimes of Thatcher and Reagan ledto the hegemony of neoliberalism in the late 1970s and early1980s.

Neoliberalism as a global doctrine the outcome ofa particular form of bourgeois class struggle echoingthe struggle between the landed gentry and the merchantclasses in England during the 19th century meant thathuge swathes of space were subsumed under a free-marketcapitalist system (cf. Negri and Hardt, 2000). Neoliberalismis characterised by fiscal austerity, deregulation and privat-isation. There is a distinct withdrawal/shrinking of the stateand a transfer of competence to the private sector. Areaspreviously the competence of the state are subsumed undera capitalist mode of production.

In his magisterial work, Capital, Karl Marx outlined theoperation of the capitalist mode of production. In explaining

4the process of primitive accumulation and theory of moderncolonisation, Marx suggested that geographical expansionwas a logical outcome of the development of the forces ofproduction. New lands untouched by the capitalist mode ofproduction were drawn into the web of capitalist relationsthrough colonisation. But, in order for this process to evolvethere was a need for a separation between the owners of themeans of production and the means of production. There wasa need for the private appropriation of the means of produc-tion. Thereafter, the processes characteristic of a capitalistmode of production would evolve.

Marx suggested that the process evolves in the follow-ing way. Pre-capitalist modes of production are subsumedunder the capitalist mode of production through a processof formal subsumption. By formal subsumption he meantcapitals acquisition of direct control of the labour process a penetration and appropriation of the means of production.Out of the process of formal subsumption, the process ofreal subsumption arises whereby there is a transformation ofthe nature of the labour process and its actual conditions(Marx, 1977, p. 1034). While these processes are takingplace other processes are also in operation. A process ofconcentration occurs as new branches of capitalist produc-tion open up. Out of this, a process of centralisation occursas capital becomes concentrated in the hands of fewer andfewer capitalists.

The nature of Marxs dialectic militates against a purpor-ted teleology. Rather, fluidity, flux and flow (cf. Thompson,1980) is a more appropriate characterisation of Marxsmethod. Thus, processes such as primitive accumulationare not singular once-off phenomena, rather, (dis)continuos,constantly (re)evolving (Negri and Hardt, 2000). The con-temporary capitalist epoch is characterised by primitiveaccumulation that is largely discursive. The global phe-nomenon labeled neoliberalism has a discursive character.Essentially, separation between the owners of the meansof production and their means of production occurs dis-cursively, through trade treaties and legislation policed andfacilitated by organisations operating beyond the scale ofthe nation-state. Neoliberal ideas move effortlessly acrossscales, (re)colonising places and spaces, in the process beingre-formulated and regurgitated. Moreover, John MaynardKeynes (cited in Yergin and Stanislaw, 1998, p. 14), couldproclaim that ideas are more powerful than is commonlyunderstood. Indeed, the world is ruled by little else. Madmenin authority, who hear voices in the air, are distilling theirfrenzy from some academic scribblers of a few years back. . . Sooner or later it is ideas, not vested interests, which aredangerous for good or evil.

Neoliberal South Africa?

The bourgeoisie, by the rapid improvement of all instru-ments of production, by the immensely facilitated meansof communication, draws all, even the most barbarian,nations into civilisation. The cheap prices of its commod-ities are the heavy artillery with which it batters downall Chinese walls, with which it forces the barbarians

intensely obstinate hatred of foreigners to capitulate. Itcompels all nations, on pain of extinction, to adopt thebourgeois mode of production; it compels them to in-troduce what it calls civilisation into their midst, i.e. tobecome bourgeois themselves. In one word, it createsa world after its own image (Marx and Engels, 1998,p. 55).

A number of attempts have been made to explain the purpor-ted shifts in African National Congress (ANC) developmentpolicy. The question that is most often posed is: Why dida liberation movement with a largely socialist agenda shiftso quickly to a neoliberal position? There have been someconvincing attempts at answering the question. One schoolof thought suggests that multilateral institutions such as theWorld Bank brought discursive power to bear on the ANCthus, converting the organisation to neoliberal orthodoxy(cf. Saul, 2001; Bond, 2000; Marais, 1997; Lee, 1993;Kentridge, 1993).

Briefly, the argument goes: during the early 1990s, theWorld Bank sent a number of missions to South Africa;ANC researchers and policy advisors were targeted by thesemissions. Senior ANC officials were sent for training to theWashington headquarters of the World Bank and the IMF.The World Bank in particular was highly successful in as-similating the ANC into orthodoxy (Williams and Taylor,2000). A senior World Bank official wrote:

The Bank, in short had gained the confidence of import-ant sectors of the new Government, a number of NGOs,business leaders, senior academics and trade unionistswith whom it had worked. At the same time, the Bank hadbeen able to accumulate an extensive and deep know-ledge of South Africas economic situation, and had builtthe basis for responding effectively to any request forfinancial and technical support in the immediate future(Cofino, nd:2).

The influence of the World Bank was apparent in ANCpolicy which emerged during 1992 and 1993 (cf. Gilbert,2002). The policy networking initiatives of the World Bankpaid dividends when the ANC assumed power in 1994. TheWorld Bank made no secret of the fact that it had succeededin gaining the confidence of the key policy, academic andNGO constituencies.

Another influential school of thought suggests that theANC had no alternative, but to change. It was clear thatthe ANC was going to inherit huge budget deficits and asocialist program would have hastened the decline into ruinand economic isolation. Fiscal and monetary discipline thusbecame non-negotiables. Gelb (1998) under the guise of apathetic mea culpa suggests that the ANC had little optionbut to follow (implement) the program initiated by the Na-tional Party during the late 1980s. Thus, there is an essentialcontinuity in the policies of the national government from1980s onwards. Gelb (1998) could argue, therefore, quitecorrectly, that ANC development policy was consistent from1993 onwards. Gelb (1998) notes that the Minister of Fin-ance and the Governor of the Reserve Bank were appointedunder the apartheid government.

5The ANCs enthusiasm for all things neoliberal after Fin-ance Minister Keys and Governor Stals were replaced byTrevor Manuel and Tito Mboweni, respectively, attributesto orthodoxy the status of inherent truth. Perhaps Gelbs ar-gument could be attributed to some Freudian defence, notingthat Gelb, an erstwhile policy guru for the trade union move-ment, during the 1980s, was a member of the team, whichformulated the GEAR policy.

A third school of thought suggests that the power ofthe neoliberal discourse led to the ANC capitulation (Hart,2002; Peet, 2002; Lester et al., 2000). Peet (2002) suggeststhat carefully structured arguments historically constitutedand deployed through what he refers to as an Academic-Institutional-Media (AIM) complex ensured that the ANCwould subscribe to economic orthodoxy. The ideas of free-market gurus such as Milton Friedman and Von Hayek weretransformed into policy positions in conservative think-tanksand institutions and deployed through various popular me-dia e.g. newspaper columns; economic journals; talk-shows(Peet, 2002). There is a geography to the AIM-complex inits deployment across space. Peet (2002) identifies globalAIM-complexes located in the centers of power in the First-World and regional AIM-complexes located at the scale ofthe nation-state. There is an articulation between these com-plexes creating a geography of knowledge construction anddeployment.

These schools of thought, however, fail to account for theperceived speed of the turn from socialism to neoliberal-ism. Was the ANC already a convert to neoliberalism prior to1994? Waldmeir (1997) suggests that a sophisticated court-ship of the ANC, initiated in the mid-1980s, by big businessin South Africa was indeed successful. The hospitality af-forded to the liberation movement in opulent surroundingssuch as Mells Park House in the UK meant that the interestsof big business were secured long before political emancip-ation of the masses in South Africa (Waldmeir, 1997). But,this still attributes too much to a few individuals turning thewheels of history.

There is another reason for the ANC shifting policyposition. The ANC had long subscribed to a theoretical un-derstanding of the South African social formation referred toas Colonialism of a Special Type (CST). The argument wasthat South Africa is a capitalist country where the means ofproduction are in the hands of the whites. Both oppressorand oppressed were not separated by the friction of distance.Capitalism in South Africa had a racial character. Hence,the overthrow of racism would mean the overthrow of cap-italism. This position was staunchly defended by the mostinfluential members of the ANC such as Joe Slovo. Har-old Wolpe (1980) demonstrates very convincingly that thisposition submerges the economic into the political. Political-economy thus translates into political hegemony. Wolpe(1980, p. 16) cogently argues:

But by submerging the economic into the politicalit becomes unnecessary to analyse the effects of spe-cific transformations of the economy on the politicalstruggles. Thus there is little analysis of changes in thelabour process and its effects on the racial division of la-

bour, the problem of labour discipline, the consequencesof the balance of payments, the search for export mar-kets, the intensification of exploitation and so forth. Noris there any analysis of the way in which such changesare politically defined and therefore, of the manner inwhich such changes enter the political arena.

This theoretical failing meant that the ANC could easilyoverthrow racism, however, when it came to articulatingpolicies which would realise a just economic order they werein a minor league compared to big business and bureaucratsof the apartheid regime (cf. Gilbert, 2002). Furthermore, theANC had a tiny research department and lacked the capacityto produce and articulate strong policy positions. The theor-etical failure of the ANC was exacerbated by the hegemonyof neo-Poulantzian regulation theory during the late 1980s.By the time the liberation movement was unbanned it wasalready too late.

In the early 1990s the Economic Trends group (ET),which had provided research support to the Congress ofSouth African Trade Unions (COSATU), was enlisted bythe ANC to formulate post-apartheid economic policy. To-gether with progressive international economists, the Macro-economic Research Group (MERG) was formed. A post-Keynesian policy document was presented to the ANC in1993. However, the MERG document was not adopted bythe ANC (Padayachee, 1998). This marked the defeat ofthe growth through redistribution faction within the ANC.In late 1993, the trade union movement, which formedpart of the alliance with the ANC and the South AfricanCommunist Party (SACP), provided the impetus for a basicneeds approach, later referred to as the Reconstruction andDevelopment Program (RDP). The RDP was the electionmanifesto of the ANC. When the ANC assumed power in1994, the RDP was translated into policy. The RDP WhitePaper showed a significant departure from the principlesof the RDP base-document (Habib and Padayachee, 2000;Adelzadeh and Padayachee, 1994). Gilbert (2002) suggeststhat even before the RDP was adopted neoliberal ideas weredominant within the ANC.

The RDP ministry, which was run by the former sec-retary general of COSATU, Jay Naidoo, was hamstrungfrom its inception. Naidoo was powerless to implementRDP policies and faced resistance from government min-isters who fiercely guarded scarce resources. Naidoo facedresistance from the then deputy-president, Thabo Mbeki,who personalised attacks against him (Bond, 2000). Fundingwas not adequately used with huge roll-overs (Turok, 1995).The prelude to the closure of the RDP office came withthe National Growth and Development Strategy (NGDS) inFebruary 1996.

The new version of development began a movementfrom social heterodoxy to neoliberal orthodoxy. SouthAfrica was formally subsumed into a neoliberal, free-marketparadigm in 1996 with the adoption of the Growth Em-ployment and Redistribution (GEAR) program. Particularpolicy positions were adopted as a consequence, promotingfiscal austerity, export oriented development and privatisa-tion.

6On the 14 of June 1996 the GEAR policy was unveiled.With the publication of GEAR the ANCs neoliberal meta-morphosis was complete. Contrary to the claims of thePresident, Mr Thabo Mbeki, the GEAR policy marked abreak with the basic needs oriented Reconstruction and De-velopment Program (RDP). The RDP was mentioned fourtimes somewhat flippantly in the GEAR document and oncemore in the appendix in relation to budget cuts! (Marias,1997). This hardly qualifies as a continuity between GEARand the RDP. The GEAR policy was a combination of thestandard IMF and World Bank stabilisation and structuraladjustment policies. The GEAR strategy has been referredto as a homegrown structural adjustment programme.

What is interesting is the change in lexicon from thegrowth with redistribution of the RDP base document togrowth and redistribution of GEAR, a tendency that wasexplicitly rejected in the original RDP document. TheGEAR strategy proposed stimulating growth through anexport-oriented economy. Adelzadeh (1996) questioned thisstrategy by arguing that approximately 25% of the out-put of the South African economy was geared towards theproduction for foreign markets, substantially higher thanmany of the OECD countries and the South East Asian tigereconomies!

Adelzadeh (1996) criticized the GEAR policy for lack ofintegration and over reliance on the private sector to pro-mote development. His predictions were that the GEARpolicy would not increase the growth rate of the economy, itwould not lower the unemployment rate and that it would notyield sufficient progress towards the equitable distribution ofincome and wealth.

In 1999, Adelzadeh revisited the GEAR policy to gaugewhether its targets were being met. Almost all the GEARtargets were missed (by huge margins in most cases) for theperiod 19961998. The GDP declined from 3.2% to 1.7%to 0.1% in 1996, 1997 and 1998. The GEAR predictionswere 3.5%, 2.9% and 3.8%, respectively. Per capita incomefell 2.6% from 1996 to 1998. Unemployment increased withjob losses of 71,000, 126,000 and 186,000. GEAR predictedjob gains of 126,000, 252,000 and 246,000. Private sectorinvestment which was what the GEAR policy was primarilypredicated on plummeted from 6.1% to 3.1% to 0.7% in-stead of increasing 9.3%, 9.1% and 9.3%. Private investmentwas related to the purchase of state assets through its divest-ment programme rather than new plant equipment. Therewas a outflow of capital of $2.3 billion in 1997 comparedwith an inflow of $1.7 billion. There have been certain tar-gets which have been met for example the budget deficit hasbeen decreased and the inflation rate has been kept below10% throughout the period. In 1997 there was an attemptto graft a developmental framework onto GEAR (Marais,1997). However, this strategy was doomed to failure be-cause the priorities of a people driven development and thepriorities of capital are different (Bond, 2000; McKinley,1997).

The Department of Finance has worked with almost mis-sionary zeal to keep budget deficits and the inflation rateslow. Presumably this is in keeping with their model. How-

ever, Brixen and Tarp (1996) using the World Bank modelwhich is not dissimilar to the GEAR model argue that therewas room for increased public spending in real terms tohelp South Africas social needs! Perhaps those economistswho were involved in modeling the South African economyusing GEAR orthodoxy, had been seduced by the object-ive pseudo-science nature of the process. While modelsand modeling are undoubtedly important, their limitationsneed to be understood, and they should not be fetishedas some South African progressive economists, recent cov-erts to modeling, appear now to be doing. Good economicideas, backed by theoretical rigor and substantive argu-ments, and informed by a real concern for the lines of ordin-ary people should still matter (Padayachee, 1998, p. 442).Leontief (cited in Padayachee, 1998, p. 442) warned, themathematical-model-building industry has grown into one ofthe most prestigious, possibly the most prestigious branch ofeconomics. [Unfortunately] uncritical enthusiasm for math-ematical formulation tends often to conceal the ephemeralcontent of the argument. An investigation into the role thatthe economic modeling discourse played in the percolationof neoliberal influences into ANC economic thinking re-mains to be undertaken. GEAR forms the substrate for thegovernments privatisation policy.

Privatisation in South Africa

Feigenbaum et al. (1998) suggest that political imperativesdrive privatisation initiatives. They suggest a typology ofprivatisation pragmatic, tactical and systemic. Pragmaticprivatisations are frequently introduced as technical solu-tions to immediate social problems. They are seeminglydevoid of ideological considerations. Tactical privatisationsare introduced solely for the purpose of achieving the short-term political goals of a constituency. They seek either toalter the balance of power by attracting allies and reward-ing supporters or to achieve specific short-term objectivessuch as reducing the budget deficit (p. 42). Systemic privat-isations are intended to reshape the entire society by fun-damentally altering economic and political institutions andby transforming economic and political interests. Systemicprivatization seeks to lower peoples expectations of whatgovernment can and should be held responsible for, reducethe public sectors oversight and enforcement infrastructureand transform the interest group landscape to make it lesssupportive of governmental growth (p. 43).

During the late 1980s, Hentz (2000) suggests that privat-isation was used as a (successful) exit strategy by theerstwhile National Party government. In effect, Hentz (2000)argues that the privatisation policy adopted by the apartheidstate during the 1980s was a political tactic used to satisfya political constituency. The neoliberal approach adopted bythe National Party could be termed a tactical privatisation,using Feigenbaum et al. (1998) typology. I would suggestthat Hentz is partly correct. Privatisation was being deployedby the United States, United Kingdom and the World Bankglobally during the 1980s. The apartheid state maintained

7close ties with these countries and global financial institu-tions. I maintain that the National Party government hadsubscribed to the neoliberal discourse that was deployed bythe institutional apparatus of the global north during theperiod leading up to the demise of apartheid.

The privatisation attempted by the National Party re-gime could only be tactical, due to the denouement ofapartheid, i.e., there were temporal constraints to what couldbe achieved. This does not detract from the stated inten-tion of the apartheid governments privatisation program:Privatisation means the systematic transfer of appropriatefunctions, activities or property from the public to the privatesector, where services, production and consumption can beregulated more efficiently by the market and price mechan-isms (emphasis added) (Republic of South Africa, 1987,p. 8). However, the assimilation of the ANC into a neo-conservative economic philosophy implied that the space forsystemic privatisation was created in a post-apartheid era.The GEAR policy mapped out an unequivocally market-oriented growth strategy. In doing so it set the parametersfor the National Partys privatisation initiative to take on asystemic character.

Privatisation took on a systemic character. An institu-tional structure was setup to promote closer relations withthe private sector. The Municipal Infrastructure InvestmentUnit (MIIU) was established for the purpose of enablingthe penetration of private capital into the provision of basicservices. The Municipal Systems Act, the Municipal Struc-tures Act and a host of documents relating to public-privatepartnerships created the space for an increasing role of theprivate sector in the provision of public services.

The frameworks enabled the devolution of decision mak-ing to the local-level. Since 1997 a number of local author-ities have exercised the option of outsourcing of services;concessions and so-called Build Operate Train and Transferor BoTT schemes. The record of private company involve-ment is a poor one with specific reference to disadvantagedcommunities.

Privatisation has occurred on a wide scale throughoutSouth Africa. There have been water and sanitation con-cessions in Nelspruit, in the Mpumalanga Province, Queen-stown, in the Eastern Cape Province and on the DolphinCoast in KwaZulu Natal Province. In Johannesburg, thewater and electricity utilities have been corporatised. InCape Town, in the Western Cape Province and Durban, inKwaZulu Natal Province, water and sanitation concessionsto multi-national companies are being negotiated. The stateshousing policy has followed the same route. In 1993 theHousing Ministry decided to sell-off its housing stock, ineffect to privatise the housing stock. The approach was sim-ilar to Thatchers housing program in the 1980s an attemptto create a peoples capitalism (Hanke, 1987).

With the privatisation of basic services, the means ofproduction of services are in the hands of capitalists whonow operate facilities on the basis of profit. Processes ofconcentration the acquisition of services contracts, outrightacquisition of services provision infrastructure etc. are oc-curring on an increasing scale throughout South Africa with

the rationalisation of municipalities (during the last localgovernment elections there was a rationalisation of municip-alities from over 800 to 284), more opportunities for privatesector provision of services are arising. Public-private part-nerships are the new buzz-words. These new initiatives arebeing dressed up in the garb of black-empowerment andentrepreneurialism. However, these so-called local partner-ships are controlled by multi-national corporations. Thereis a process of centralisation of basic services provisioncapital as these little fishes are eventually gobbled up bythe bigger fishes which in turn are chomped upon by thesharks. It is estimated that 70 percent of the worlds watersupply is controlled by four multi-national corporations. Theimplications are far-reaching indeed. Thousands of jobs areat stake as rationalisation takes place. Fewer jobs for labour,but the demands placed on those employed are greater asthey are flogged to work more intensively (or efficiently inprivate sector lexicon). It is a given that jobs will be lost a ploy commonly used by owners who have newly acquiredfacilities is to rationalise labour in order to show a quickreturn on investment to shareholders. Contracts which havebeen bought with the blood of labour become nullified andhave to be re-negotiated. Workers usually have to settle forless and are offered short-term contracts without benefits.In February 2001, 150 workers were fired by a companyto which the Johannesburg City Council had privatised itsfleetservices and maintenance. After negotiations with theSouth African Municipal Workers Union some jobs were re-offered. However, contracts had to be re-negotiated. TheUnion discovered that the company was part of a biggergroup of companies whose policy is to create subsidiariesto which they outsource everything, as such no worker hada permanent job. Numerous protests have taken place, asworkers take to the streets dissenting against impending joblosses and loss of benefits.

Sadly, the self-same protestors who are employed todaywill form the relative surplus population of tomorrow. Ra-tionalisation will lead to thousands being unceremoniouslybooted out of their jobs. They become part of what Marxrefers to as the floating relative surplus population eitherbeing re-employed under very different working conditionsor occupying casual jobs in other branches of production.These people get shunted from one branch of production toanother. Many of floating relative surplus population findthemselves with little or nothing to lose, thus turning to alife of crime becoming part of the lumpenproletariat vagabonds, prostitutes and criminals. What happens whenpeople cannot afford basic services?

Chatsworth struggles

The Constitution of South Africa is unique in that it en-shrines in its Bill of Rights, access to adequate housing andsufficient water (Republic of South Africa, 1996). In otherwords these rights are recognised as universal and cannot beapplied subjectively, i.e., privatised. However, these socio-economic rights have been systematically undermined andviolated at the grassroots level. Critics have almost without

8exception placed the blame firmly at the door of govern-ments macroeconomic policy position. The question arises:How can socio-economic rights of the citizens of SouthAfrica be respected if the Bill of Rights and macro-economicpolicy are at odds? Two words in the Bill of Rights hascreated sufficient space for maneuver: access to adequatehousing and access to sufficient water (emphasis added).The word access also carries enormous power. Thus thegovernment can provide RDP houses and 6 kiloliters of freewater and not be in violation of its citizens rights. In Durban,however, citizens rights not to be evicted from their homesand their access to water have been violated. In this sectionthese issues are taken-up with reference to a community inthe former black township of Chatsworth, which falls withinthe Durban Metropolitan Area.

Approximately 1520 km to the south-west of centralDurban lies the township of Chatsworth (Figure 1). Chats-worth was proclaimed, in 1959, under the aegis of the GroupAreas Act of 1950, as a township for the Indian race groupby the Durban City Council. Ironically fourteen thousandpeople were displaced from what was to become Chats-worth. Construction of the township began in 1962 with thefirst inhabitants moving in shortly thereafter. Construction ofthe township was completed in the early 1970s. Chatsworthhas a population of approximately 300,000 people. It ischaracterised by a sterile, stultifying, modernist landscape.

Inhabitants had three massed produced options: flat-ted houses, row houses and semi-detached double storeybuildings. The development of flat type dwellings wereregarded as an efficient use of physical space. How-ever, there were disadvantages. Tenure was based onrental and non-ownership. Maintenance costs would behigher because the Council would have to pay a con-tractor utilizing artisan labour. Furthermore, experiencehad shown that tenants tended to abuse rented property.Supervision would incur additional costs to the council.Having taken these factors into consideration, the Coun-cil decided against the large-scale construction of flattedhouses. Sub-economic units of this type were only builtin parts of Unit Two (Bayview) and Unit Three (Westcliff)for the low-income groups (Subramony, 1993, p. 58).

A total of 20,214 housing units with 405 blocks of flatsconsisting of between 6 and 8 units each were built in Chats-worths 9 neighbourhood units (Figure 2). When Chatsworthwas built, there were a number of open spaces left un-developed. Since the early 1990s, with the repeal of theGroup Areas Act, these spaces have been filled-in by in-formal development. Informal settlements such as the JoeSlovo; Cocobar; Crimby; Lusaka and Bottlebrush settle-ments now adjoin the established residential areas in thetownship. While the informal settlements represent areas ofextreme poverty and deprivation, there are areas within theestablished township which are in a similar if not a worsesituation. Pockets of poverty exist in flats or tenements suchas those in Westcliff and Bayview. The nature of the tenurearrangement in the flatlands means that the Council actsas the landlord. However, since the Council is a public body,the provision of housing becomes a basic service. Therefore,

those living in the tenements have a package of basic ser-vices which includes water, electricity, refuse removal andhousing.

The policy positions during the denouement of apartheidwere decidedly neoliberal in character. For example, the DeLoor Commission on housing advocated home-ownershipfor all (Gilbert, 2002). This revealed a movement frombasic-needs to commodification. It was evidence of theformal subsumption of housing into the private sphere ofcapitalist accumulation. This approach was adopted withminor changes by the new government (cf. Gilbert, 2002;Bond, 2000). Indeed the Ministry of Housing could reportthat by the end of 2000 over 370,000 council homes had beentransferred to tenants.

The local variant of the governments strategy to sell-off the state housing stock was a decision taken in 1996 tosell council flats under sectional title. The National HousingSubsidy Discount Benefit Scheme was to be used to promotethe sale of the flats. The Discount Benefit Scheme offered asubsidy of R7,500 ($ 1,000) to tenants who wanted to buytheir flats. The scheme has not achieved its objectives. ByJune 2000 only 10% of stock had been sold off. The MetroHousing Unit indicated that in terms of the Council policyand the Discount Benefit Scheme indigent tenants who werein arrears (rent, water and electricity) could not purchasetheir flats until they had settled their debts with the Council.Furthermore, in the majority of cases, a residual amount wasstill payable after the Discount Benefit Scheme grant andindigent tenants were still unable to afford this in many cases(Metro Housing, 2000). The Council decided that only thosewho had arrears of R1,000 ($ 135) or less would be eligibleto purchase their flats.

The flats were to be sold under sectional title as part ofbodies corporate. As a consequence, the administrative re-sponsibilities were to be removed from the Council to thebodies corporate. Rental to the Council would be replacedby a levy to the body corporate. According to calculationsby the Council, the body corporate option would result in anincrease of approximately 5% in costs. The Housing Depart-ment constituted a team of officials to make presentationsto groups of tenants on the process of the establishment ofbodies corporate. Tenants in arrears are viewed as a majorobstacle to the sale of council flats. It was estimated that20% of the tenants would elect to remain tenants becausethey could not afford to purchase their flats. Eviction of thesetenants would imply that the Council automatically becamea member of the bodies corporate should a 100% take-upnot be achieved. The Council resolved that in the event thosetenants decided against purchasing their flats, they would beliable for both rent and the levy to the body corporate. Thissituation would obtain until the tenants were relocated. TheCouncil also resolved to pay levies to the bodies corporateuntil 100% occupancy was achieved (South Central Coun-cil Agenda, 19990729, pp. 1517). The establishment ofbodies corporate did not remove the issue of administrationcharges. A number of well-established real estate agenciesare suggested to the bodies corporate to manage the entity.Legal contracts define relationships between members of the

9Figure 1.

body corporate; the municipality and the body corporate andmanagement agencies and the body corporate.

The Council used a slightly different approach to theresidents of the flats in Bayview and Westcliff. As a dir-ect consequence of the protracted struggle by the residentsagainst eviction the Council valuation of each flat was set atR7,500. This, despite the fact that no house in Chatsworthcost more than R2,500 to build. The subsidy from the Na-tional Discount Subsidy Scheme was R7,500. Thus, thoseresidents who chose the body corporate option would get

their dwellings for free. Residents still had to pay a R600transfer fee. There were conditions. Arrears had to be settled.The Council made provision for prospective owners to signmortgage arrangements to settle debts. Tenants would be ac-countable to banks at a stroke of a pen. Further, once part ofa body corporate,

constitutional fetters to evicting people no longer ap-plied. These were civil matters, where the sheriff couldeject people on behalf of the banks or other propertyowners without regard to human dignity . . . By getting

10

Figure 2. Chatsworth

rid of the houses that it rented out, Council would removean important mobilising subject . . . By privatising livingarrangements, collective memories of struggle would bereplaced by the immediacy of dealing with banks andother lending institutions as individuals(Desai, 2000, p. 48).

Organised protest by the community frustrated the Councilsattempts to promote the body corporate approach.

The strategy of the Council is essentially spatial. TheCouncil acts as a conduit for the capitalist appropriation ofspace. In effects it facilitates the formal subsumption of themobilising object (flats) into the capitalist dynamic. Spaceis now privatised. Private property, the essential buildingblock of capitalism is realised with the formation of thebody corporate. Ownership may well pass onto formal fin-ancial institutions as residents seek to upgrade or simply putup dwellings as collateral. The formation of bodies corpor-ate is an initial insinuation, a formal subsumption, into awider project to create stable, politically moderate, spaces.The formation of the body corporate deterritorialises cent-ral and local state discipline. Discipline is reterritorialisedat the scale of the tenement. Bentams panopticon colon-ises the collective imaginary of the (prison) body corporate.This is real subsumption, the management of the capitalistmode of production. New relationships are created with theformation of the body corporate: the generation of rents, themicro-management of cost recovery through a new spatialrelationship based on the propinquity of the disciplinary ap-paratus. The rabble, anti-Masakane, ubuntu bashers haveno place in this bourgeois utopia, they must be displaced

to be replaced by the displaced ubuntu practitioners: theresponsible citizen who pays for services.

While strategies to off-load the governments housingstock the process of commodification - has been continuingapace, there has been a similar process of commodifica-tion of other basic services such as water and electricity.The cost of water to domestic consumers is a case inpoint. Since 1996, the average increase in the water tar-iff has been 19.195% per annum. In 2001 the water tariffincreased by 33.54%. Since 1995 water tariffs have in-creased by 183.81%. And this while Durban Metro WaterServices (DMWS) has improved the efficiency of its oper-ations (Montaigne, 2002). Electricity charges have gone upby 149% since 1995 (Durban Metro Electricity, 2000). Itis the poor in communities such as Bayview and Westcliffwhich have been hardest hit.

Furthermore, the economic downturn has exacerbatedthe problems of flat dwellers. The economic strategy fol-lowed by the government has led to the closure of a numberof clothing and textile factories (from approximately 450 toaround 150). The South African Clothing and Textile Work-ers Union (SACTWU), had a membership of 148,830 in1996. By March 2002, this figure had shrunk to 103,792,which represents a 30% decline. Many workers from theseareas have been thrown onto the streets.

The GEAR strategy followed by the government has hada devastating impact upon the most disadvantaged people.Firstly, tariffs which protected the clothing and textile indus-tries have been removed, resulting in cheap imports floodingthe South African market. South African industry has been

11

unable to respond to sudden loss of protection, as a res-ult many companies have closed down. There hasnt beena proactive response by the government, other than cas-tigating local industry for not being competitive enough.This however, is part of the capitalist dynamic. It is glob-alisation at its efficient best those companies unable tocompete are either taken-over or have to close down. Whathappens is that workers are thrown out of the system, be-coming part of the reserve army of labour or the relativesurplus population. Ongoing work in Chatsworth has sug-gested that this phenomenon is clearly apparent. Skilled andsemi-skilled garment workers, leather workers and machineoperators have been either put out of work or transformedinto flexi-workers a casualisation of labour has occurred.Their incomes are drastically reduced. They have not beenre-trained and are basically surplus to capitals requirements.The closure of many factories has meant that there are fewerjobs to compete for. People working in factories are forcedto work more intensively for lower rewards because of thespecter of the growing relative surplus population.

A socio-economic survey undertaken by the Institute forBlack Research (IBR) revealed the following: 76% of theresidents in Bayview and Westcliff were living below thepoverty datum line, 58% were unemployed, 42% were sur-viving on welfare grants of approximately R300 per month.The majority of household heads were single mothers or oldage pensioners. The report suggested that arrears in rentaland services charges were due to a genuine inability to meetpayments rather than a culture of non-payment. The surveyfound that

only 28.4% of the residents of employable age (18 to60 years) were in formal employment, almost 40% wereunemployed. 17.9% are housewives, but desperately inneed of gainful employment. So employment is around58%. 11.7% of the residents of employable age are de-pendent on welfare, which averages about R300 permonth. Furthermore, 41.6% of heads of households areon welfare grants, 24.8% are unemployed and 31% arein formal employment. The majority of household headssubsisting on welfare grants are single mothers and pen-sioners over 60 years of age. It is hardly surprisingthat households experience difficulty in paying rent andservices charges (Concerned Citizens Group, 1999,p. 1).

It becomes increasingly apparent that global neoliberalismin its hybrid scalar informed incarnation, craving a spatialfix, is intent on destroying communities historically con-stituted through struggle (See Desais (2002), rendition onpost-apartheid community struggles). However, the spatialfix is also the poisoned chalice for neoliberalism in its vari-ous scalar incarnations, because communities are engagingin counter-hegemonic discursive struggle.

The community of Chatsworth is not unfamiliar withstruggle. Theirs is a struggle which has a historical geo-graphy. The bizarre eccentricity of apartheid acted as acrucible for the collective history of people of Indian originin various movements: from particular areas of India, to theEast coast of South Africa, specifically Natal to townships

such as Chatsworth. Here the fabric of struggle and spaceand spatial struggle was woven its racial character theproduct of apartheid. For example, in July 1989, there wereclashes between police and the protestors from Chatsworth.They were protesting the increases in rent tariffs (Mercury,1989). In July 1994, just after the first democratic generalelection, notices of eviction were served on 950 tenants whowere in arrears with rent, water and electricity payments.Subsequently, there was a 4% increase in electricity tariffs.Water and electricity disconnections soon followed. Durbanuses a consolidated billing system. This means that rates,rent, water and electricity are included on one statement.Arrears are calculated by crediting rentals, first; thereafterwater and lastly, electricity. Therefore, the electricity supplyis initially terminated in the disconnection process followedby the water supply and finally by eviction. Rents, waterand electricity cannot be treated separately. They are linkedthrough the consolidated billing system. The withdrawal ofthe state from the provision of any of these services impactson the other services and is in effect an act of privatisation.Eviction is the private appropriation of a socially ownedgood. The history of Chatsworth is replete with horror stor-ies detailing the cruel inhuman treatment of Indian peoplewho were thrown out (some quite literally) of their (un-wanted) homes (cf. Desai, 2000). Housing officials appliedthe letter of the law stringently.

Increased tariffs by a post-apartheid administrationmeant that by 1996 there were 573 and 417 tenants in theBayview and Westcliff areas of Chatsworth, respectively,in arrears (Post, 1996). A decision was taken by the SouthCentral Council to write-off service arrears up to June 1996(South Central Council Agenda, 19970529, p. 22). Therationale seemed to be driven by the spirit of the KemptonPark agreement (South Central Council Agenda, 19970529, p. 21). (The Kempton Park agreement was signedbetween the apartheid government and the liberation move-ment committing themselves to a democratic South Africa).The specter of arrears did not disappear, however. The es-tablishment of a Hardship Fund, in March 1993 to help thosefamilies with no income (later increased to R600 and R1,200per month presently), did little to prevent the escalationin arrears. The Hardship Fund used an arbitrary quantitat-ive means test of poverty and showed little understandingof the structural causes of arrears. Arrears, notwithstand-ing, the Executive Director (Corporate Financial Services)reported that Council financed projects were operating ata surplus! (South Central Council Agenda, 19980423,p. 8). Nonetheless, the Council approved a 6% increase inrent for 1998. The Council reported that rents were cal-culated according to a formula comprising the followinginputs: capital charges; administration; wages and sundries;maintenance contribution and loss of rent contribution. Thecapital charges refer to the historical cost of constructionof the dwellings. Construction was financed from centralgovernment transfers, during the 1960s. In effect the inhab-itants of Chatsworth were financing their own dislocation.Perversely, the people of Chatsworth are being coerced intosettling an apartheid debt. Moreover, the plausible argument

12

that a substantial number of the inhabitants, 26% who havelived there for over 30 years and over 50% who have paidrentals for more than 16 years (Concerned Citizens Group,1999), have paid many times the historical costs of theirdwellings suggests that a process of cross-subsidisation,whereby the poor subsidise the rich has long been the norm.Furthermore, around 15% of rent go towards rates. Tenantsare not to be charged for rates according to paragraph 7 ofa 1965 Sub-economic Housing Scheme Agreement of Ten-ancy (Concerned Citizens Group, 1999). It is evident thathidden costs have contributed to arrears.

In 1999, just before the second general election in a freeSouth Africa, the Concerned Citizens Group (CCG) consist-ing of prominent leaders from the Indian community wasformed to garner the approximately 1 million Indian votes.The CCG was aligned with the ANC. The Indian vote wasviewed as a key factor in the struggle for political power inKwaZulu Natal. Leaders of the CCG met with staunch res-istance when they arrived in Chatsworth. Many allegationswere made by community members regarding evictions, wa-ter and electricity disconnections and unemployment in thearea. A subsequent socio-economic survey conducted by theIBR revealed widespread hardship. As a consequence, theCCG stopped campaigning for the ANC and set itself firmlyagainst ANC neoliberal policy. The CCG quickly mutatedinto an organisation, some would argue a conduit, to artic-ulate the grievances of the poors (See Desai, 2002, for agenealogy of this characterisation). It should be borne inmind that the CCG was not the first such organisation in thearea. The Flatdwellers Action Committee was a fore-runnerto the CCG. It was formed by people who were in arrearswith their service payments and facing eviction.

The CCG together with the Bayview Flat ResidentsAssociation (BFRA) and the Westcliff Flat Residents As-sociation (WFRA) presented the socio-economic survey tothe City Council. A number of suggestions were made tothe Council regarding rental arrears, transfer of dwellings toresidents, the provision of water and electricity and generalimprovements to the area. The Council considered the re-port at a meeting on 10081999, and provided its Directorof Housing with the brief to explore alternative housing forindigent tenants. The CCG was also invited to participate inthe Housing Liaison Working Group, a body that providesinput on Council housing policy. However, at a meeting ofthe Housing Liaison Working Group the representative ofthe CCG staged a walkout. It was quite clear according tothe CCG that the Housing Liason Working Group was work-ing against poor communities by supporting evictions. Thetenor of a Council report on interactions with the CCG wasdecidedly hostile, with a decision being taken not to liaisewith the CCG unless they were part of the Housing LiaisonWorking Group. The Councils hard-line approach couldbe read in a number of ways. Firstly, the Housing LiaisonWorking Group was part of a discursive apparatus to fosterconsensus and defuse awkward situations before they gotto the Council. Secondly, the Council had already decidedon the fate of those who were in arrears. It was apparentthat the cancellation of the arrears of tenants was not an op-

tion the Council suggested that the debt recovery processcontinues. Ultimately, the Council wanted the flats off theirbooks. The Council emphasised that alternative housing befound for those who could not afford to settle their arrears.The alternative was the tiny RDP houses which were evensmaller than the flats. Housing legislation, the Prevention ofIllegal Eviction from and Unlawful Occupation of Land Act(Act 19 of 1998) prevented the Council from evicting tenantswithout first providing alternative housing.

The Prevention of Illegal Eviction from and UnlawfulOccupation of Land Act (Act 19 of 1998), notwithstanding,there were a number of confrontations between Council staffand the police, who were attempting to evict people fromtheir homes on the one hand and flat residents and membersof the CCG on the other. It is important to note that theCCG played an important role in galvanizing the communityto strategically engage the Council. These were not simplyfragmented happenings, but strategic interventions and in-sinuations directed at winning material benefits and forcingthe Council to re-think its policy. Workshops were heldfor community leaders educating them about the differentincarnations of neoliberalism. Alliances were also formedhorizontally, with communities engaged in similar struggles,such as those in Isipingo and Mpumalanga township (locatedabout 40 km west of central Durban). Out of this a regionalco-ordination structure developed the Concerned CitizensForum. Alliances were also formed nationally with organisa-tions in other regions, such as the Anti-Privatisation Forumin Johannesburg and the Anti-Eviction Campaign in CapeTown. The struggle against neoliberalism has thus taken ona geography whose goal is the recreation of the spaces ofliberation.

Conclusion

Negri and Hardt (2000) refer to the growing superfluity ofthe nation state as Empire that is (re)constituted at a globalscale and ruled by proxy through the multi-lateral organ-isations such as the World Bank and the IMF. Empire isthe global capitalist state. But Negri and Hardt privilege theglobal scale. While at an abstract level, there is an homo-genisation process at work Marxs formal subsumption it is at the local level, the scale of the everyday individual,household, community that Empire is being contested andrethought.

I have attempted to understand neoliberalism at differentgeographical scales: the global, national and local scales. Isubscribe to the view that neoliberalism is capitalism oper-ating on a global scale (Harvey, 2000). It is clear that whenthe liberation movement was unbanned in the early 1990s, itbecame an open target for the influences of global capital. Aprocess of primitive accumulation had to take place. Sincethe era of colonisation was supposedly over, the separationof the ANC from its policy of nationalisation (ownershipof the means of production) had to take place insidiously.The manner in which this was achieved, I would submitwas discursively use of highly technical languages andexpertise. It is evident that the ANC did not totally embrace

13

World Bank policies. But, I would submit that the ANCwas influenced by a discourse of neoliberalism which hadalready colonised institutions such as the World Bank. It islittle wonder that Alan Gilbert could muse perhaps SouthAfrica merely showed that there are much more powerfulhegemonic forces operating than the World Bank (Gilbert,2002, p. 1911). I would suggest that the process of discursiveprimitive accumulation was ultimately realised through theANC governments espousal of the GEAR policy.

The general law of capitalist accumulation suggested byKarl Marx refers to the growing poles of a rich minorityon one end and the majority of the poor at the other end.This law is not set in stone but subject to flux and flow. Theeconomic crisis is South Africa is part of this dynamic. Theimpact of this law is apparent in the growing pool of theunder- and unemployed. In South Africa, this component ofthe working class is doubly oppressed, in both the sphereof production and the sphere of reproduction (at home).There seems to be a spatial dimension to this law. Areaswhich are inhabited by the poorest people are now targetsfor the withdrawal of basic services, for example the Chats-worth area in Durban. The uniqueness of the South Africansituation, demands that due consideration be given to theimpact of apartheid. Apartheid geographically locked-in ra-cial inequalities. The poorest areas under apartheid were theblack areas. There is no difference almost a decade sinceits demise. The reluctance of the post-apartheid state to pro-gressively engage with this issue will ensure that apartheidremains inscribed in the South African landscape, this timenot as race, rather as class. Moreover, the local state isfacilitating the real subsumption of the working class intoa capitalist dynamic. However, there is the growth of anincipient class consciousness among the oppressed, a col-lective consciousness being shaped through struggle over theeveryday. Increasing mobilisation is occurring as spaces ofoppression are used as the seedbed for a space of liberation.

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