Economic apartheid and the builders of the world city

Terry Bell.

Terry Bell

12 November 2013

Christmas is clearly coming. The store decorations are in place and chocolate Santas jostle on the shelves with strings of lights on ornamental trees while bins of festive season toffees and biscuit specials vie to keep the tills ringing.

And while household debt is at dangerous levels, it is still likely that the all the tills of all the towns will once again jingle merrily as retailers and their shareholders reap sizeable rewards. But rewards will also accrue to importers and to manufacturers and exporters not only in Asia, but in the Americas and Europe. And this, arguably, has — and will continue — to come at the cost of South African jobs.

This is a global phenomenon in a world where price is the ultimate arbiter; a world where cut-price goods, although not necessarily of better quality or more efficiently produced, will strangle and finally kill off efficient businesses in unsubsidised areas where reasonable wages and conditions apply. Or such businesses will relocate — as several in South Africa have done — to jurisdictions where wages, conditions and, therefore, costs, are much lower.

In the industrialised world, I came across a classic example in the festive season category of a company in Wales that once manufactured the Christmas decorations that festooned homes, shops, flats and offices throughout the British Isles: plastic trees and the baubles, trinkets and lights to dress them, along with imitation holly wreaths and mistletoe sprigs. Porth Decorative Products provided jobs in the fairly depressed former coal mining centre of the Rhondda valley.

But Porth is no more although the baubles, trees and trinkets, the wreaths, sprigs and other paraphernalia still gaudily herald the coming of Christmas in Britain. Only now, for the most part, they are made in China.

Like the domestic — and still extant — Proudly South Africa campaign, Porth made an attempt to stay afloat by appealing to nationalism, proclaiming that its products were “Proudly made by British workers”. That ploy didn’t work.

This festive season the stores of South Africa, with or without giving support to the Proudly SA slogan, are more than ever examples of how the Rhondda Valley lost Porth. Not that such an example is needed: the damage done to the local textile and garment industry alone provides more than enough evidence.

It is this unfair competition that has, over the years, raised the ire of the trade union movement. Unions have pointed out that in many parts of the world, employee and human rights leave much to be desired; that the governments of some trading partners ban trade unions or are complicit in the jailing, torture and killing of labour activists.

Such examples aside, they point out that when goods arrive across many thousands of kilometres of land and sea and undercut — even with duty being paid — local products, it is invariably an indication that workers elsewhere are being grossly exploited or that wealthy national or regional administrations are providing subsidies to exporters.

The labour movement has also become increasingly aware that there is a third alternative: that both subsidies and gross exploitation can go hand in hand. A simple product, on some supermarket shelves this month, may provide an excellent example: chocolate biscuits imported from Sharjah.

This sliver of desert, jutting into the Arabian Gulf, is a member of the oil-rich United Arab Emirates, a region notorious for the poor treatment of a massive migrant labour force, recruited mainly from South-east Asia. As with neighbouring Abu Dhabi, Sharjah produces neither wheat nor cocoa, yet both emirates are able to export baked chocolate products across the Indian Ocean to undercut, in price terms, local products in South Africa.

But then, in the biscuit category, there are also products from Malaysia, from Brazil and Vietnam. Yet neither Malaysia nor Vietnam are wheat producers and Brazil imports, mostly from the United States, the bulk of its requirement. This year, nearly half South Africa’s wheat demand will be produced locally.

As to cocoa: the bulk of it comes from West Africa where steps are now being taken, supported by various activists and trade unions, to end the widespread use of child and even slave labour.

“But what about potatoes from Europe?” a unionist asked recently, pointing out that packets of instant mashed potatoes, imported, not from struggling Poland or elsewhere in Eastern Europe, but from Germany, undersold the South African product by R2. In the same supermarket that she pinpointed, large boxes of breakfast cereal from Canada also challenge the prices of the domestic products.

On the same shelves, there are chocolate Santas from France, Germany and Greece, while German wine gums and liquorice allsorts compete with jelly beans from Thailand. There are also the “packed in South Africa” products, such as asparagus, bought in bulk from distant lands and parcelled up locally, all of this widely hailed as signs that we live in a “global village”.

This is a misnomer. The planet today could more accurately be described as a world city, comprising numerous metros, suburbs, villages and ghettoes where economic apartheid is more the norm than the exception.

In those halcyon days following the transition from South Africa’s race-based system, local trade unions recognised this fact. Having achieved labour laws probably as good as any anywhere, the unions suggested that all workers everywhere be accorded similar rights; that any country or region — any suburb, village or ghetto — that failed to apply similar conditions should not be traded with.

It was a hardly revolutionary suggestion and was even fully in line with the fair trade platitudes peddled by the likes of the World Trade Organisation before its talks crashed into a wall of self-interest and stalled. But then, the demand for an eight-hour day — eight for work, eight for rest, eight for recreation — first raised 196 years ago, is not yet a global norm.

So perhaps, as we shop we should note labels — and give a thought to workers everywhere on whose backs this global city has been built.