Within 30 years, countries such as Poland, Saudi Arabia and South Korea grew from struggling economies into high-tech, highly educated and prosperous industrialized nations, while South Africa, within the same period since 1994, has been deindustrialising, with large parts of the state collapsing and its citizens becoming more illiterate.
South Africa now ranks among lower-tier African economies like Nigeria, far ahead of emerging market peers like Poland, Saudi Arabia or South Korea. If South Africa continues on its current old ideological economic policy path, it may face a situation where the World Bank and the International Monetary Fund or China will have to be called in to rescue the country, in the same way that many post-colonial African and Latin American countries had to be rescued after years of self-inflicted economic, state and policy failure.
South Africa's collapse is entirely self-inflicted, caused by the ridiculously outdated ideological policies, astonishing incompetence and runaway corruption of the former majority-ruling ANC.
As South Africa's domestic economy has been in decline, ANC politicians have tried to compensate by shouldering the country's economic weight with a strong foreign policy, pointing out the failures of other countries, or trying to align South Africa with other large economies such as China, in the false belief that a benevolent “big brother” will somehow come to the country's rescue.
Unemployment is around 32%. In 1994, at the end of apartheid, it was 13%. If we use nominal GDP figures, South Africa's economic ranking is now around 36 globally. In 1994, the rand was R3.60 against the US dollar. It is now around R17 to the dollar.
South Africa has seen the decline of public infrastructure – in some areas, rail, electricity, roads, housing and ports have gone back 30 or 40 years. The country's share of world exports has declined by more than 30% since 1994.
The country is experiencing an almost complete collapse of manufacturing. It is deindustrializing, meaning that products that were produced for local use and export in 1994 are no longer being produced, but are being imported. Sectors of the economy have become informal: minibus taxis now transport the majority of passengers as formal public transport has declined. Many citizens have started collecting water from tanks instead of their taps and using candles for lighting.
recipe for success
In 2015, Poland's GDP per capita in purchasing power terms exceeded $24,000, or 65% of the Eurozone average. It was ranked the world's 19th largest economy in 2025. In 1989, at the end of Communist Party rule, Poland was in a social, political and economic crisis, on its knees, with inflation at one point in the mid-300% range.
Saudi Arabia began as a petroleum state and has transformed itself into the Middle East's largest economy over the past 30 years. Its $1-trillion economy is now larger than South Africa's.
Singapore, a former British colony, had a GDP per capita of $56,000 in 2015, the same as Germany, the world's fourth-largest economy. During colonialism, Singapore was poorer than most African countries, while many African countries are now poorer than they were during colonialism.
South Korea, a former colony of Japan, now has a nearly $2 trillion economy, and is one of the top global specialized economies. It used to be poorer than South Africa.
What has been the recipe for economic success for many of these emerging markets?
In these countries, governments are strongly motivated to engage economically with quickly developed countries, or former colonial powers, or imperial countries.
These countries have largely avoided being plunged into mass oppression because of their past colonial or imperialist control over them. At the present time, leaders and governments in these countries rarely blame external or internal “enemies” for current problems. They clearly acknowledge that the past has happened, but fundamentally, they remain focused on the present and prioritize building the future.
The debate in these countries does not focus on whether their form of colonialism was more exceptional than others, and therefore needed to be given more time to develop. These countries do not depend on excuses. This frees up the collective energy of the country to be put into industrialization.
These countries adopted real-economy policies, not slogans-as-policy, or pseudo-Marxist ideology-as-policies, or replicated policies that have clearly failed in other developing countries, claiming that they would somehow implement these failed policies “better.” These countries often imitate hyper-successful peer countries. China, South Korea and Singapore copied Japan's economic miracle. Mauritius copied Singapore's economic transformation. Poland looked to the German economic miracle.
Many of these successful emerging markets adopted pragmatism almost as an ideology. He adopted practical, evidence-based policies that proved successful elsewhere.
Education and Manufacturing
South Africa is copying the land reform and black economic empowerment strategies of failed state Zimbabwe, and the mineral indigenization, empowerment or resource nationalist policies of poverty-stricken Zambia, Algeria and Venezuela.
Competent state economic leadership has been important. These countries have generally elected leaders who understand the real economy, who have generally worked in the real economy outside of politics and the state, whether running their own businesses or as professionals.
Many South Africans idolize politicians who have never worked a day of their lives in the real economy. The overwhelming majority of South African politicians have spent their entire working lives exclusively in politics or state employment.
The only qualification for many South African politicians is to sing songs, shout slogans, attack imaginary enemies, be it “white totalitarian” capital, the World Bank or the IMF, or Western “imperialists”. Many opportunistic politicians secure votes – and hence a pay cheque – by asking voters to vote for them, simply because they share the same colour, ethnicity, region or past.
Successful emerging countries strongly prioritize promoting economic growth, which comes through partnerships – partnerships or stakeholder-led development – between the state, the private sector, civil society and professionals.
Since Liberia became the first African country to become independent in 1847, some African governments have adopted economic development as a core economic policy. Most African governments, leaders and activists, including most ANC leaders, view the idea of adopting a country's economic development as a cardinal economic policy as a World Bank conspiracy or “neoliberal”.
Quality education has been one of the pillars of development in these successful emerging market economies. They prefer to receive a world-class competitive education at par or better than that of the former colonial powers. They promote world-class quality education in partnership between the private and public sectors. There is deep ideological opposition to private sector-led education in South Africa.
In South Africa, the “decolonization of education” debate focused on criticism of so-called Western education, as if education, especially technology, science and mathematics, which are extremely important for any country to move from poverty to developed status, are not universal assets for all mankind.
In the late 1960s, 90% of Singapore was an informal slum – the majority of people lived in informal settlements. By the late 1980s, Singaporean mathematics began to be taught in British schools. The Singapore leadership did not say that mathematics was a colonial subject. He firmly ensured that most of the children mastered it. It has been at the heart of Singapore's economic miracle.
Mathematics is not taught in more than 500 black schools in South Africa. Pure mathematics in schools has been downgraded by the ANC in favor of mathematics literacy – in a technology world, where mathematics proficiency is fundamental to individual and country prosperity.
Many of these successful emerging markets manufacture for the world. Manufacturing the products the world needs drives economic growth, transforms domestic economies, and transforms societies.
These successful economies adopt manufacturing-based growth strategies. Many have created entirely new domestic industries that will be in demand around the world in the future. South Korea established the gaming industry from the beginning in the 1980s and is now a huge industry in the world economy.
Manufacturing for export brings catalytic changes to an economy. If a company wants to manufacture, for example for the American market, it needs to understand the American market, tastes and trade regulations. It must compete with foreign and local American competitors in that market. All this requires the development of new knowledge, new technologies and new specialist skills not only for the exporting company, but also for the home country.
eliminate corruption
These successful nations strengthen the capacity of their public services by introducing merit as the basis for appointments, promotions and benefits. In Singapore, Taiwan and South Korea, entry into the public service requires taking a competitive examination. Introducing merit as the sole criterion for individual advancement fundamentally changes these societies for the better.
Levels of corruption are comparatively low in these successful emerging markets. Eliminating corruption is a fundamental economic strategy for these countries. Reducing corruption has also brought about change in these societies, making leaders more accountable, inspiring ordinary citizens to obey the law and follow the rules of society even when no one is watching.
In South Africa, sadly, being non-corrupt is not a requirement for political leadership for many citizens. Corrupt leaders are often forgiven because they are popular and share the same colour, ethnicity or party. Others say, “Why worry about corruption – the colonial and apartheid rulers were corrupt too”.
Surprisingly, others, such as former South African and ANC president Jacob Zuma, say that corruption is a “Western” concept, as if ordinary citizens in African societies are happy to have their leaders steal their money, their resources and their lives.
Establishing the rule of law has been critical to the prosperity of successful emerging markets. Citizens and leaders follow a set of social rules that apply to everyone. In these countries, political leaders are not exempt from obeying the law or the rules of society because they are “leaders” or because of their color or their “conflict” past.
Successful emerging market countries made better use of foreign financial assistance. Poland clearly received massive EU support money, but it was used for entrepreneurship, building physical infrastructure, catching up with technology, and improving quality education. South Korea received a large influx of American financial aid after the war, and then, the country used it for entrepreneurship, infrastructure, and manufacturing development. Singapore also tapped foreign investors for its infrastructure and entrepreneurship development, knowledge, education and technology acquisition.
These successful emerging markets strategically used their historical endowments for growth. Singapore used its geography as a port country to industrialise. Other countries used their diversity as a historical endowment for industrialization. Many ANC leaders mistakenly view South Africa's diversity as a hindrance rather than a source of economic growth. DM
This is an edited extract from Professor William Gumede's public lecture, “The Economic Decline of South Africa”, delivered at the University of London in lockdown.