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Neo-Liberal Apartheid: Lessons from the Crisis of South African Liberation

Wednesday, March 7, 2007

'For the Record' No. 274 (27 February 2007)

At a 27 February 2007 Palestine Center briefing, Andy Clarno discussed the similarities between Israel and the apartheid regime in South Africa. He described the economic impact of the Israel's apartheid policy, lessons learned from the dismantlement of the South African apartheid regime as well as the impact of the system of global capitalism and U.S. military domination in the region.   

The Palestine Center
Washington, DC
27 February 2007

Andy Clarno

What I want to begin by talking about the World Conference Against Racism, that was held in Durban, South Africa in September 2001.  It was this event that brought the discourse of Israeli apartheid to a world stage.   The Declaration of the NGO Forum presented a powerful critique of Israel as a colonial state, a racist state, and an apartheid state.  Tens of thousands of protesters marched through Durban carrying Palestinian flags and wearing t-shirts emblazoned with the slogan: APARTHEID IS-REAL.  Palestinians cheered when Israel and the United States withdrew their delegations from the WCAR.  Contrary to its intended effect, this walkout demonstrated the enormous power of labeling Israel an 'apartheid state' and ensured that this framework would play a key role in the future of the Palestinian struggle. 

For decades, activists and researchers have highlighted the similarities between Israel and the apartheid regime in South Africa.  These comparisons became more common during the 1990s with Israel's introduction and intensification of permits, closures, checkpoints, and cantons.  But it was the WCAR that brought this comparison to a worldwide audience.   Since that time, the language of apartheid has become pervasive.  This language appears in recent books by Uri Davis, Virginia Tilly, and Ali Abunimah all of whom explicitly call for a one-state solution. An increasing numbers of Zionists and post-Zionists have admitted that Israel faces a decision between apartheid, ethnic cleansing, and a one-state solution.  Now even Jimmy Carter is describing Israel's policies as a system of apartheid.

From the naming of Israel's 'Apartheid Wall' to the adoption of boycott, divestment, and sanctions campaigns, activists are taking lessons from the struggle against apartheid in South Africa.  Some of these lessons involve questions of principle and strategy: a rejection of separation and apartheid, calls for a one-state solution, and a vision of reconciliation and multiracial democracy based on a common humanity.  Edward Said drew on the South African experience to argue that the Palestinians' greatest strength is the moral argument and that the strategic imperative is to promote a vision of multiethnic democracy based on the principle of 'one person one vote.'  As Ali Abunimah points out, 'What Palestinians can learn from South Africa is that the promise of a future of reconciliation rather than revenge can rob an unjust system of the support it needs to survive because such systems are often built on fear in the case of Israel and South Africa, the fear, stoked by politicians, of being destroyed.' 

Other lessons are practical such as the appeal by over 170 Palestinian organizations for 'international civil society organizations and people of conscience all over the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era.'  This call has received a tremendous global response as churches, trade unions, student movements, faculty organizations, and solidarity groups attempt to isolate Israel and its supporters by organizing boycott, divestment, and sanctions campaigns. 

The success of the South African struggle provides powerful lessons for the Palestinian struggle against apartheid.  This power was evident three years ago when Abu Ala warned Israel that the Palestinians might soon demand a one state solution.  It was evident in Thomas Friedman's warning about how difficult it would be for Israel's supporters to 'argue against the principle of one man, one vote.' And it is evident today in the Zionist response to the title of Jimmy Carter's book. 

The Limitations of Liberation in South Africa

As Abunimah points out, 'The hope held out by South Africa is that when Israelis and Palestinians finally do conclude that separation is unachievable, there is an example of an alternative to perpetual conflict.'   The South African example is a remarkable story of peaceful coexistence, equality under the law, and even reconciliation.  But as Palestinians increasingly draw inspiration from South Africa, it is important to pause for a moment and more closely examine the model of liberation that stands before us.     

One way to approach this is to ask a simple question:  why were there tens of thousands of Black South African protesters marching through the streets of Durban during the WCAR?  And let's not fool ourselves the poor and landless South Africans who made up the vast majority of the marchers were not there simply to voice their support for the Palestinian struggle, or, for that matter, any of the other anti-racist movements that shaped the WCAR.  The South Africans were building a new movement to challenge the limitations of liberation in South Africa in particular, the neo-liberal capitalist policies of the African National Congress (ANC) that have deepened the poverty of millions, prevented the redistribution of land, and turned post-apartheid South Africa into one of the most unequal societies on earth.  The resistance that was taking shape in Durban has continued to spread throughout South Africa as struggles for land, housing, water, electricity, education, and health care galvanize the poor.

Inequality is deeply rooted in the fabric of South African society due to three hundred fifty years of colonization and apartheid.  The colonization and settlement of South Africa was fundamentally shaped by the discovery of diamonds and gold in the late 19th century.  The opening of the mines required a large supply of inexpensive, unskilled labor.  No longer able to simply displace the natives, the European settlers established separate native reservations later known as Bantustans as a spatial strategy for regulating the African labor force, governing the African population, and maintaining physical separation between the colonizers and the colonized.  The unification and independence of South Africa in 1910 institutionalized the contradictory dynamics of exclusion and exploitation that came to characterize racial capitalism in South Africa.  From the late 19th century through the mid 1990s, South African social relations were shaped by the tensions between the Europeans' desire to expel and exclude Black South Africans, their absolute dependence on Black labor, and Black resistance to both exploitation and exclusion.  After 1948, the National Party government developed the theory of 'apartheid' to formalize white supremacy, racial separation, and racial capitalism through a system of pass laws, Bantustans, forced removals, urban segregation, and differential wages.

In the 1970s and 80s, protests by the Black majority became increasingly powerful with the rise of militant labor actions and widespread popular uprisings.  By the mid-1980s, many white South Africans especially the owners of major banks and mining companies realized that the contradictory logics of exclusion and exploitation could no longer be sustained.  The major capitalists began reaching out to the leadership of the ANC, promising to help facilitate the transition to democracy as long as the ANC was willing to abandon all talk of socialism and the redistribution of wealth.   

This led to a series of reforms and negotiations that eliminated the racist apartheid legislation, while also restructuring the South African economy along neo-liberal lines.  In its final years, the apartheid regime liberalized trade, dismantled the welfare state, and privatized many state-run industries.  During the negotiations, the ANC made major economic concessions to win the support of the South African and global business elites.  Dropping its demand to nationalize the banks, mines, and land, the ANC agreed to fully protect private property and existing property ownership even though this property had been acquired through brutal massacres and forced removals.  The ANC also agreed to take on the international debt accumulated by the apartheid regime and to adopt a neo-liberal economic strategy that promoted export-oriented industry and the privatization of state-owned businesses.  Ironically named 'Growth, Employment, and Redistribution' (GEAR), this strategy has led to the collapse of industrial employment and the loss of over 1.5 million jobs in the last ten years.  As unemployment skyrockets throughout the country, poor Black communities are being devastated by poverty and HIV/AIDS.  The rapidly expanding gap between the wealthiest and poorest South Africans has already grown so wide that post-apartheid South Africa is ranked as one of the three most unequal countries in the world.  

GEAR also reversed Constitutional promises to provide housing, land, and basic services to every citizen, making it increasingly difficult for the poor Black majority to access water, electricity, health care, and education.  Municipal 'cost-recovery' strategies have turned poor South African townships into testing grounds for 'pre-paid' water and electricity meters. Like the prepaid phone cards in Palestine, residents are forced to purchase credits before using their water or electricity and the meters automatically cut off the flow whenever the credit runs out.   The privatization of housing has driven up the cost of shelter, led to widespread evictions, and multiplied the number of people living in squatter camps.  The government's 'willing seller, willing buyer' land redistribution program is based on World Bank-approved market principles and has utterly failed to return stolen land to the dispossessed Black majority.  Only 3% of the land has been redistributed and this has merely enabled the growth of a small class of Black corporate farmers while ensuring that the land remains predominantly in the hands of 46,000 white corporate farmers.  Meanwhile, twenty-eight million South Africans remain landless either as tenants on white farms, homeless in the cities, or squatters in the townships.

Most analysts too easily dismiss the intensity of the crisis facing the poor, Black majority in post-apartheid South Africa.  It is usually written off as either the lingering hangover of a defeated system or a momentary speed-bump on the highway to democracy.  These analyses miss the point: the crisis facing poor, Black South Africans reveals the limitations of liberation itself.  The elimination of apartheid laws was a major victory that freed Black South Africans from the confines of an explicitly racist political system.  But the illusion of 'liberation' obscures the fact that an increasingly aggressive form of global capitalism shaped by neo-liberal economics, dominated by multinational corporations, and enforced by the US military has deepened the poverty of millions and rapidly expanded the gap between the poor, Black majority and a tiny South African elite still primarily white despite the emergence of a Black bourgeoisie.  As the South African scholar and former political prisoner Neville Alexander explains, 'what we used to call the apartheid-capitalist system has simply given way to the post-apartheid-capitalist system.'

For millions of poor, Black South Africans the neo-liberal 'liberation' has meant the elimination of jobs, the eviction of families from their homes, the denial of life-saving medication to people living with HIV/AIDS, and the commodification of basic services such as water, electricity, health care, and education.  By the late 1990s, uprisings against the ANC government had begun in townships and squatter camps throughout the country.  Over the last six years, waves of revolt have shaken the country from Durban to Cape Town, from Johannesburg to Harrismith.  Some of these uprisings arrived dramatically and then quickly disappeared.  Others have crystallized into lasting social movements such as the Anti-Eviction Campaign (AEC), the Anti-Privatization Forum (APF), the Landless Peoples Movement (LPM), and most recently Abahlali baseMjondolo a shackdwellers movement based in the squatter camps around Durban.  In communities throughout South Africa, the streets are alive once again as these new social movements generate powerful critiques of post-apartheid neo-liberalism and invent new forms of struggle and popular resistance.

Apartheid and Capitalism in Palestine

Since the WCAR, Palestinians have developed important relationships with the emerging South African social movements at World Social Forums, anti-war conferences, BDS mobilizations, and on the ground in Palestine.  But the critique of neo-liberalism developed by the new South African social movements has not yet been incorporated into the discourse of 'Israeli apartheid.'  Far too often, analysis of the Palestinian struggle ignores economics and capitalism altogether.  Most writers approach questions of economics as if they are merely the side effects of political processes.  Yet the deepening of Israeli apartheid is inextricably tied to the neo-liberal restructuring of the Israeli economy.  Whereas in South Africa, the transition to neo-liberalism facilitated the dismantling of formal apartheid, in Palestine neo-liberalism has enabled the fortification of an Israeli apartheid system.   In both cases, neo-liberalism has exacerbated already high levels of poverty and inequality.  

The fundamental difference between the colonial-settler projects in Palestine and South Africa is the fact that the Israeli economy has never been fully dependent on Palestinian labor.  As a result, Israel has avoided the contradictory dynamics of exclusion and exploitation that shaped the development of racial capitalism in South Africa.  Zionist colonization has always involved a much more one sided pressure towards separation, exclusion, and expulsion.  The large-scale expulsion of Palestinians in 1948 and the continuing popularity of 'transfer' as a solution to Israel's demographic concerns would have been inconceivable in mineral-rich and labor dependent South Africa.  The minimal Israeli dependence on Palestinian labor also helps explains the more limited role of the labor movement in the Palestinian struggle.

Nevertheless, until the mid 1980s, the Israeli government managed a centralized, racial capitalist economy structurally similar to that of South Africa.  Both economies were based on state support for domestic production, a racially segregated labor market, and a strong welfare state for the white and Jewish settlers based on the exploitation of the colonized population.  After 1967, the Palestinian economy was systematically underdeveloped and the occupied territories turned into a labor reserve and a captive market for Israeli capital much like the Bantustans in South Africa.  By the mid 1980s, however, the Israeli government began a series of market-based reforms that reduced state spending and control over the economy, liberalized trade and investment, and began to dismantle the welfare state.  Thus began a process through which the Israeli economy has undergone a steady transition to neo-liberalism.

Through the Oslo process, Israel transformed the occupation from a system of direct military patrols into a form of indirect rule over a system of isolated and enclosed Palestinian enclaves. Enforced through permits, checkpoints, and the policy that Israel calls 'closure' and Palestinians call 'siege,' this new governmental strategy has solidified Israel's growing reputation as an apartheid state.  But the reorganization of the occupation and the neo-liberal restructuring of the Israeli economy should not be understood as separate processes.  In fact, they were one and the same. 

The Oslo process was initially driven by the belief that peace with the Palestinian would open up the Arab world to domination by Israeli capital.  When Shimon Peres drew up his vision for the 'New Middle East' that would emerge from the Oslo process, he described the core of the new system as a Middle East free trade zone that would allow Israeli firms to invest their capital throughout the region.  Immediately after the Oslo Accords were signed, the US government and the Council on Foreign Relations began organizing a series of Middle East/North African economic summits that promoted the adoption of neo-liberal policies by Arab countries, provided opportunities for investors to learn about new projects, and facilitated joint ventures between capitalists from Israel and the Arab world.  Although the breakdown of negotiations prevented the emergence of a regional free trade zone, Israel signed economic accords with Jordan and Egypt that allowed Israeli firms to outsource production that was previously performed by subcontractors in the West Bank and Gaza Strip.

Under the constant supervision and often direct control of the World Bank and the US Treasury, the Palestinian Authority (PA) has followed a strict program of neo-liberal economics based largely on the World Bank's 1993 report: Developing the Occupied Territories: An Investment in Peace.  The first substantive accord signed by Israel and the PLO the Protocol on Economic Relations established a free-trade 'customs union' between Israel and the PA.  An export-oriented industrial zone was established along the fence surrounding the Gaza Strip, with several more planned for the West Bank.  Palestinian economists, industrialists, and merchants began to talk about Palestine becoming the 'Singapore of the Middle East' producing affordable consumer goods for export to the entire world.  The PA worked hard to join the World Trade Organization (WTO), finally achieving observer status in 2005.   With encouragement from the World Bank, the PA has recently been privatizing basic services and even installing pre-paid water and electricity meters throughout the West Bank and Gaza Strip. 

Palestinian subcontracting industries such as textiles, shoes, and furniture have been devastated by the opening of the Palestinian market to cheap Asian imports and Israeli outsourcing to Jordan and Egypt.  Meanwhile, since the early 1990s, Israel has steadily reduced the demand for Palestinian labor by importing nearly 300,000 low paid foreign workers from China, Romania, and Thailand and the absorption of over one million Russian immigrants.  At the same time, Israel has undergone a major transition from a labor intensive economy centered on production for the domestic market to a high-tech economy integrated into the circuits of global capitalism.  This shift has undermined the basis of agricultural and industrial labor, further eliminating the need for Palestinian workers while crippling the Histadrut.  As a result of these changes, Israeli capital has significantly reduced its reliance on cheap Palestinian labor.

By making Palestinian labor increasingly obsolete, the transition to neo-liberalism has facilitated the emergence of an Israeli form of apartheid.  Throughout the 1990s, the Israeli government drastically reduced the number of permits for Palestinians to work in Israel.  Constructing Israeli settlements became one of the few sources of employment for Palestinian workers.  Poverty and unemployment soared within the Palestinian enclaves reaching well over 60% in the Gaza Strip during the most intense months of siege.  Nearly 25% of Palestinian families became dependent on the PA for their livelihood.  Tens of thousands joined the ranks of the security forces, the only branch of the PA relatively immune from World Bank demands to cut government spending and reduce employment.  Since 2000, Palestinian workers have been almost entirely excluded from the Israeli economy and now the international financial stranglehold on the Hamas-led PA is attacking the last remaining source of income for the vast majority of Palestinians. 

In South Africa, apartheid was a strategy for not only maintaining racial separation and governing the rebellious Black majority, but also for ensuring access to cheap Black labor.  The Israeli strategy of separation and enclosure, on the other hand, has involved the steady eradication of work for Palestinians.  A familiar story throughout the world, the globalization of production made possible by neo-liberal restructuring has generated surplus populations on an unprecedented scale.  In Palestine, the Zionist ideal of an exclusive Jewish state has accelerated the process of turning the Palestinians into outcasts that can be enclosed, expelled, encouraged to kill one another, or simply slaughtered as Israel has made clear in Gaza over the last year.


There is still a great deal to learn from the success of the South African struggle for national liberation.  As Edward Said and Ali Abunimah argue so powerfully, the principles of equality, multi-ethnic democracy, and reconciliation provide an important foundation for this struggle as does the call for a one-state solution.  Another powerful lesson from South Africa is the importance of isolating and delegitimizing the apartheid regime on the international scene. 

While learning from the strengths of the anti-apartheid struggle, however, it is important not to forget its weaknesses.  Perhaps its greatest weakness was the strategic decision to de-link the struggle against apartheid laws from the struggle against racial capitalism.  This strategy is one of the principle reasons that the end of formal apartheid was accompanied by the transition to neo-liberalism.  In fact, the living conditions of poor, Black South Africans are arguably worse now than before the transition.  If there is one message that activists from the new South African social movements try to impart to Palestinians, it is that there is no liberation from apartheid without a struggle against capitalism. 

This argument has several important implications.  First, it suggests the desperate need for further economic analysis especially regarding the shifting strategies of Israeli capital and its integration into the flows of global capital.  Second, it implies that the struggle for a one-state solution must address strategic questions about the redistribution of land and wealth.  These questions have largely been ignored, dismissed for being divisive, or subsumed under the question of refugees and the right of return.  

On another level, the argument about the connections between apartheid and capitalism points to the importance of building closer ties between the Palestinian struggle and the global justice movement.  Palestinians are confronting not only Israeli apartheid, but also the powerful capitalist Empire that is devastating the lives of the poor and unemployed throughout the world.  The transition to neo-liberalism in South Africa has entrenched the separation and inequality created by apartheid despite the fact that the racist legal infrastructure has been torn down.  Poor, Black South Africans now confront a neo-liberal apartheid system.  The main difference between neo-liberal apartheid in South Africa and Palestine is that the system has been privatized in South Africa and is run by the state in Palestine.  More broadly, critics have argued that the new Empire is institutionalizing apartheid on a global scale.  It is thus imperative to build links between the Palestinian struggle and social movements fighting against neo-liberalism, apartheid, and Empire throughout the world.  Palestinians organizations have been building these links at international gatherings such as the World Social Forum (WSF) as well as protests against the World Trade Organization (WTO), the World Bank, and the International Monetary Fund (IMF). 

All of this implies that one way that international activists can support the Palestinian struggle is by working with local movements to challenge the system of global capitalism and US military domination.  While we continue the crucial work of building movements to directly support the struggles of the Palestinian people and BDS campaigns to isolate the Israeli apartheid regime, we must not forget our own battles against Empire.  By refusing the commodification, challenging corporate power, and resisting American hegemony, social movements from South Africa to Canada, from Argentina to India are working to undermine the global capitalist system that provides one of the principle foundations for Israeli apartheid.  Building these struggles locally and forging ties between them and the Palestinian struggle will help ensure that Palestinian liberation remains a constitutive force in the global justice movement.  

Andy Clarno is completing his PhD in sociology at the University of Michigan, Ann Arbor. His dissertation examines the relationship between globalization and the political transitions in South Africa and Palestine/Israel since the early 1990s. He has been active with social movements in both South Africa and Palestine for many years.


This 'For the Record' transcript may be used without permission but with proper attribution to The Palestine Center. The speaker's views do not necessarily reflect the views of The Jerusalem Fund.

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