WHY DO DEVELOPING COUNTRIES ADOPT THE WASHINGTON CONSENSUS? I. Points covered in this lecture: - South Africa’s apartheid system - The ANC’s Freedom Charter - Why did South Africa adopt free market reform (‘Washington Consensus’)? II. Critical skills: guest lecture APARTHEID ‘Separateness’ along racial lines South Africa’s multiethnic society: - 20% ‘whites’ (Afrikaners/British) - 10% ‘coloureds’ - 70% Africans Examples of discrimination SOME IMPORTANT DATES 1910: Union of South Africa 1913, 1936: Land Acts 1948: NP election victory 1960: Sharpville massacres 1976: Soweto uprisings 1960s-80s: increasing isolation of S. Africa 1994: elections with universal suffrage ANC’S FREEDOM CHARTER (1955) http://www.anc.org.za/ancdocs/history/charter.html “The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole”. “Restrictions of land ownership on a racial basis shall be ended, and all the land re-divided amongst those who work…”. WHAT HAPPENED? The post-apartheid government embraced a free-market policy. Why? - Declining value of the Rand Indebtedness Capital flight Increasing health costs (HIV) HIV AND INTELLECTUAL PROPERTY 1997: Medicines Act (compulsory licensing) US threatens trade sanctions Pharmaceutical companies’ court case Did S. Africa contravene TRIPS? WHY DID US DROP ITS OPPOSITION? a) b) c) Domestic pressure on Clinton/Gore International awareness of ‘profits-before-life’ policy of US. US compulsory licensing (anthrax) THE NATIONAL DEBT 2009: S. Africa’s public debt = 29.5% of GDP. The post-apartheid government inherited a national debt of US$ 20.9bn. INTRODUCTION TO HISTORICAL INJUSTICE Why should the post-apartheid government pays the debts bequeathed to it by its predecessor? Post-apartheid government owed money to international banks, other governments, international organizations (e.g. IMF) who had all lent money to the apartheid regime.