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Accepted Paper:

has pdf download Engineering de-industrialisation: the post-apartheid restructuring of South Africa's steel and engineering sectors  
Nimrod Zalk (Department of Trade and Industry)

Paper short abstract:

This paper explores weak South African post-apartheid industrialisation through the lens of restructuring of steel and engineering. It highlights the role of dominant conglomerates in shaping post-apartheid institutions and the destructive consequences for industrial capabilities that ensued.

Paper long abstract:

This paper examines weak post-apartheid industrial performance through the lens of the restructuring of steel and engineering and the three private and public conglomerates - Iscor, Anglo American and Rembrandt - that dominated these sectors over South Africa's transition to democracy. The twentieth-century evolution of these groups is illustrative of apartheid accumulation processes rooted in mining and heavy industries, and their exertion of increasing control across the economy. Confined to a subordinate role, conglomerate engineering subsidiaries developed significant but truncated industrial capabilities. Orthodox explanations for weak post-apartheid industrial performance, based primarily on the persistence of market distortions and skills deficits, are found to be unsatisfactory. Rather underperformance is better understood through a political economy framework emphasising the overlapping influence of interests and legitimation strategies on the one hand and (flawed) scholarship and ideology on the other. Advocacy by the largest conglomerates for orthodox policies amenable to unfettered restructuring were legitimated by ideological claims and asset transfers to politically influential black individuals. Unguided by national strategies, industrial restructuring was undertaken by the conglomerates themselves in concert with increasingly influential institutional investors. This resulted in widespread destruction of industrial capabilities; the foreclosure of opportunities to develop globally competitive engineering firms; underinvestment and ultimately crisis in the steel sector; and weakened manufacturing linkages with the rest of the economy and impeded efforts since 2007 to mobilise policy at scale to promote industrial diversification.

Panel Pol42
New frontiers of political economy in Southern Africa
  Session 1 Thursday 13 June, 2019, -