Dependency and Hegemony in Neoliberal South Africa

This article is about South Africa in the post-apartheid period. It has two aspects; first it examines the social and political process through which the African National Congress (ANC) shifted its emphasis away from the construction of the nationalist project (as defined by its 1955 Freedom Charter), towards a world view that privileges markets as the main organising mechanisms in society. Inevitably, accompanying this shift to neoliberalism there has been a corresponding surrender of macroeconomic economic policy autonomy. Such policy is now geared to propitiating global markets that periodically exhibit high degrees of instability. The question arises – how is the ANC able to manage two diametrically opposed tendencies without social upheaval and dislocation? The answers proffered here centres on hegemonic and dependency dynamics that are in motion in contemporary South Africa

The Africa Rising Narrative - Whither development?

Over the last ten years the mainstream press have put together an Africa Rising narrative which tells us that because of a series of “good” governance reforms and more responsible economic management (by technocratic and not ideological leaders), African countries have managed to transform their economies into growing vibrant engines of growth. Robust growth rates that averaged 5.8% a year between 2002 and 2012 formed the basis of expectations that there was more to come. In 2011 The Economist (Dec 3rd) reported that, after decades of slow growth ‘Africa now has the real chance to follow Asia in embarking on fast growth in a very short period.’ After years of repose - Africa was rising. Basing its predictions on data from the IMF, The Economist (ibid) declared that Ghana, Mozambique, Nigeria and Zambia would be among this decade’s star performers. Recent events (like Ghana’s 2015 IMF bailout) may have dented the narrative but it persists because although Africa’s 2015 GDP declined 1.2% to 3.4% from 4.6% in 2014, it is still among the fastest growing regions in world. There is clearly a huge disconnect between the narrative and the images of African migrants risking life and limb to get away from Africa and into Europe. This article explores the sources of the disconnect and evaluates the narrative. How and why did The Economist (and others in the media and the economics profession) manage to put forward the bold claim that the 21st Century belonged to Africa

Monetary transmission in Africa: a review of official sources

This paper focuses on the subject of monetary transmission in Africa. It begins with a report on the effects of the financial crisis of 2008 in Africa. In the countries with more developed financial systems the financial channel proved to be the most important in transmitting the crisis. In the more peripheral countries the trade channel proved to be the most important. Where countries were able to withstand the global shock coming from the financial crisis they did so with a diversified group of trading partners in fast growing economies. The paper then turns to examine three post crisis institutional developments and asks, how are: a) an increased momentum towards regional integration, b) the rise of Pan African banking and, c) an increase in cross border flows, affecting the monetary transmission mechanism (MTM) in Africa. It is clear from the literature that the rise of Pan African banking and the regionalization thrust of the authorities are deepening the financial channels between countries. But with respect to cross border flows, the huge size of deposits maintained by Africa’s BIS reporting banks suggest relatively low levels of bank intermediation and competition. Thus the benefits that are assumed to accrue as a result of increased cross border flows are withdrawn from the local economy and stored up in the BIS banks. We know large deposits reflect the expectations of the deposit holders. But beyond that very little is known about the role of expectations and the workings of the expectations channel in monetary transmission in Africa. Even less is known about how such expectations would interact with those formed as a result of operations in the large informal sectors which characterise African macro economies. Until research can bridge this gap, the increasing cross border flows with the large deposits held in BIS banks form the basis yet another explanation for the historical weakness of the MTM in Africa

Financial and Corporate Structure in South Africa

Concentration in the South African financial sector has its origins in three main influences that are all historical (i) the legacy of domination by a small number of large imperial banks, (ii) the struggle between English and Afrikaner capital and (iii) the statutory legislation that framed the operation of banks. In this paper we describe the part played by these three historical influences in the formation and development of the corporate sector in South Africa. One recurrent theme throughout the history is the relative position of the foreign bank and domestic bank in the local market place. We take up this theme and argue that the scale and extent of foreign bank operations in South Africa is far greater than estimates provided by the local authorities. We have found that the main vehicle in deepening the concentration of the sector has been the merger. In later sections of the paper we lay out how the amalgamation by absorption approach to expansion that has been a constant feature of the country’s business life comes together with a merger frenzy in the late 1980’s and 1990s that succeeds in further deepening concentration within banking, finance and industry. Last, we end with an analysis of industry structure by Johannesburg Stock Exchange (JSE) capitalisation between 1994 and 2011

What's in the laundromat? Mapping and characterising offshore owned domestic property in London

The UK, particularly London, is a global hub for money laundering, a significant portion of which uses domestic property. However, understanding the distribution and characteristics of offshore domestic property in the UK is challenging due to data availability. This paper attempts to remedy that situation by enhancing a publicly available dataset of UK property owned by offshore companies. We create a data processing pipeline which draws on several datasets and machine learning techniques to create a parsed set of addresses classified into six use classes. The enhanced dataset contains 138,000 properties 44,000 more than the original dataset. The majority are domestic (95k), with a disproportionate amount of those in London (42k). The average offshore domestic property in London is worth 1.33 million GBP collectively this amounts to approximately 56 Billion GBP. We perform an in-depth analysis of the offshore domestic property in London, comparing the price, distribution and entropy/concentration with Airbnb property, low-use/empty property and conventional domestic property. We estimate that the total amount of offshore, low-use and airbnb property in London is between 144,000 and 164,000 and that they are collectively worth between 145-174 billion GBP. Furthermore, offshore domestic property is more expensive and has higher entropy/concentration than all other property types. In addition, we identify two different types of offshore property, nested and individual, which have different price and distribution characteristics. Finally, we release the enhanced offshore property dataset, the complete low-use London dataset and the pipeline for creating the enhanced dataset to reduce the barriers to studying this topic.Comment: 27 pages, 7 figures, 7 table