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Within 30 years, countries such as Poland, Saudi Arabia and South Korea developed from struggling economies to hi-tech, highly educated and rich industrialised nations, while South Africa, within the same period, since 1994, has been deindustrialising, with large parts of the state collapsing and it citizens becoming more illiterate.
South Africa is now in the class of lower-league African economies, such as Nigeria, far outstripped by emerging market peers such as Poland, Saudi Arabia or South Korea. If South Africa continues on its current outdated ideological economic policy path, it could face a situation where the World Bank and International Monetary Fund or China have to be called to bail out the country, similar to how many postcolonial African and Latin American countries had to be rescued after years of self-inflicted economic, state and policy failure.
South Africa’s decline has been entirely self-inflicted, through ridiculously outdated ideological policies, astonishing incompetence and runaway corruption from the previously majority-governing ANC.
As South Africa’s domestic economy declines, ANC politicians have increasingly tried to compensate for this by punching above the country’s economic weight with muscular foreign policy, pointing out the failures of other countries, or tried to hitch South Africa to other large economies such as China, in the misplaced belief that a benevolent “big brother” would somehow come to the country’s rescue.
Unemployment is about 32%. In 1994, at the end of apartheid, it was 13%. South Africa’s economic ranking now is about 36 globally if we use nominal GDP figures. In 1994, the rand was R3.60 to the US dollar. Now it is about R17 to the dollar.
South Africa has seen a collapse of public infrastructure – in some areas, rail, power, road, housing and ports have gone backwards by 30 or 40 years. The country’s share of world export has declined by more than 30% since 1994.
The country is experiencing a near-total collapse of manufacturing. It has been deindustrialising, meaning that products that were produced for local use and for export in 1994 are not being produced anymore, but are being imported. Sectors of the economy have become informalised: minibus taxis now transport the bulk of commuters as formal public transport has deteriorated. Many citizens are back to collecting water from tanks, not their taps, and using candles for lighting.
Recipe for success
In 2015, Poland’s GDP per capita, based on purchasing power, exceeded $24,000, or 65% of the Eurozone average. In 2025 it was ranked the 19th-biggest economy in the world. 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%.
Saudi Arabia started as a petroleum state and transformed itself into the largest economy in the Middle East over the past 30 years. Its $1-trillion economy is now far larger than South Africa’s.
Singapore, a former British colony, in 2015 had a GDP per capita of $56,000, similar to 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, is now an almost $2-trillion economy, and among the top global elite 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 absolutely driven to catch up economically with developed countries, or former colonial powers, or imperial nations, as quickly as possible.
These countries have largely refrained from wallowing in collective victimhood because of past colonialist or imperialist control over them. In present times, leaders and governments in these countries rarely blame outside or internal “enemies” for current problems. They obviously accept that the past has happened, but they invariably, in fundamental ways, stay focused in the present and prioritise building the future.
The debate in these countries has not focused on whether their form of colonialism was more exceptional than others, and because of this need to be given longer periods to develop. These countries are not stuck on excuses. This frees collective country energy to be channelled into industrialisation.
These countries adopted real-economy policies, not slogans-for-policies, or pseudo-Marxist ideologies-for-policies or repeating policies that have manifestly failed in other developing countries, claiming they would somehow implement these failed policies “better”. These countries often copy super-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 as almost an ideology. They adopted pragmatic, evidence-based policies that were proven to be successful elsewhere.
Education and manufacturing
South Africa has been copying failed-state Zimbabwe’s land reform and black economic empowerment strategies, and poverty-stricken Zambia, Algeria and Venezuela’s mineral indigenisation, empowerment or resource nationalist policies.
Competent state economic leadership has been critical. These countries have generally chosen leaders who understood the real economy, who have generally worked in the real economy outside politics and the state, whether running their own business or as professionals.
Many South Africans embrace politicians who have never worked a single day of their lives in the real economy. The overwhelming majority of South African politicians have spent their whole working life only in politics or state employment.
Many South African politicians’ sole competence is singing, shouting slogans, attacking imagined enemies, whether “white monopoly” capital, the World Bank or the IMF, or Western “imperialists”. Many opportunist politicians secure votes – and therefore a paycheque – by calling on voters to vote for them purely because they share the same colour, ethnicity, region or past.
Successful emerging countries resolutely prioritise boosting economic growth, which comes through partnership between the state, private sector, civil society and professionals – partnership or stakeholder-led growth.
Since Liberia became the first African country to become independent, in 1847, few African governments have pursued economic growth as the anchor economic policy. Most African governments, leaders and activists, including most ANC leaders, view the idea of a country pursuing economic growth as the 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 prioritise getting world-class competitive education on par with or better than former colonial powers. They foster world-class quality education in partnership between the private and public sectors. In South Africa there is deep ideological opposition to private sector-led education.
In South Africa, “decolonisation of education” debates narrowly focused on criticising so-called Western education, as if education, specifically technology, science and mathematics, so absolutely critical for any country to move from poverty into developed status, are not universal assets to all humankind.
In the late 1960s, 90% of Singapore was an informal slum – most people lived in informal settlements. By the late 1980s, Singapore mathematics was taught in UK schools. The Singapore leadership did not say maths was a colonial subject. They determinedly made sure that the majority of children mastered it. This has been at the heart of the Singapore economic miracle.
More than 500 black schools in South Africa have no mathematics teaching. Pure mathematics in schools has been downgraded by the ANC in favour of mathematics literacy – in a technology world, where maths proficiency is fundamental to individual and country prosperity.
Many of these successful emerging markets manufacture for the world. Manufacturing products that the world needs boosts economic growth, transforms domestic economies and changes societies.
These successful economies pursue manufacturing-led growth strategies. Many have created entirely new domestic industries, for which the world will have future demand. South Korea in the 1980s established a gaming industry from scratch and it is now a giant industry in the world economy.
Manufacturing for export unleashes a catalytic change in an economy. If a company wants to manufacture, say for the US market, it needs to understand the US market, tastes and trade rules. It must compete with foreign and local US competitors in that market. All this necessitates the development of new knowledge, new technologies and new specialist skills, not only for the exporting company, but for the home country.
Slashing corruption
These successful nations strengthen the capacity of their public services through introducing merit as the basis of appointments, promotions and benefits. In Singapore, Taiwan and South Korea, one has to write a competitive exam to enter the public service. Introducing merit as the sole criteria for individual advancement fundamentally changes these societies for the better.
These successful emerging markets have comparatively low levels of corruption. Slashing corruption is a fundamental economic strategy for these countries. Reducing corruption has also changed these societies, making leaders more accountable, getting ordinary citizens to adhere to the law and follow society rules, when no one is looking.
In South Africa, being non-corrupt is sadly not required for political leadership for many citizens. Corrupt leaders are often excused because they are popular and share the same colour, ethnicity or party. Others say, “why bother about corruption – colonial and apartheid rulers were also corrupt”.
Astonishingly, others, like former South African and ANC president Jacob Zuma, say that corruption is a “Western” concept, as if in African societies ordinary citizens are happy that their leaders steal their money, their resources and their lives.
Embedding the rule of law has been critical to the prosperity of successful emerging markets. Citizens and leaders follow one set of societal rules applicable to everyone. In these countries, political leaders are not exempt from following the law or rules of society because they are “leaders” or because of their colour or their “struggle” past.
Successful emerging market nations used foreign financial support much better. Poland obviously received massive EU support funds, but used it for entrepreneurship, to build physical infrastructure, to catch up with technology and to improve quality education. South Korea received a huge influx of postwar US financial support, and again, the country used it for entrepreneurship, infrastructure and manufacturing development. Singapore also tapped foreign investors for their 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 to industrialise. Many ANC leaders wrongly see South Africa’s diversity as an obstacle, rather than a source for economic development. DM
This is an edited extract of Professor William Gumede’s public lecture, “The Economic Decline of South Africa”, given at the Lockdown University, London.