4
“Economies rarely get rich on agriculture alone.” — Beattie (2009)
4.1 Objectives and Structure of the Chapter
At its core, this book seeks to contextually understand the challenges faced by the municipal EDI, which evolved in tandem with, and continues to be influenced by, two key factors:
- Government structures (national and provincial); and
- The national ESI and its contribution to the development of the economy; which municipalities form only a part of.
So, it is to the second context that we now turn, because while in truth the ESI of every modern nation is the lifeblood of its economy, for South Africa this is perhaps even more so. Here, the state’s entire economic development and industrialisation strategy was premised on inexpensive and plentiful energy, especially low-cost electricity, providing a competitive advantage. And indeed, the ultimate price of the crucial extent to which the system was dependent on cheap, abundant, electricity, has been borne by the entire economy throughout South Africa’s history as a unified nation (Mohammed, 1997).
4.2 Introduction
Economists broadly agree that a country’s ability to create or attract capital for local investment is what leads to economic development. Countries that do not, or choose not to do so, find themselves in a vicious cycle of poverty. Although each country will follow a different road to industrialisation, certain generalisations can be made (Trapido, 1971, p.50). In the case of South Africa, it was the discovery of diamonds, gold and other metals from the 1860s onwards that catapulted it from a poor, rural context, to a sought-after urban destination for entrepreneurs and skilled migrants. Initially, industrialisation led to high growth rates that peaked in the 1950s and 60s. Then South Africa’s economic fortunes began to unravel. To understand this, over the decades, local and international academics have intensely scrutinised the country’s economy; with much focus falling on the relationship between apartheid and capitalism. In the ideologically polarised world of East vs. West during the Cold War era, this resulted in academic comment and analysis largely following similar divergence. Indeed, South Africa’s segregationist policies, which had a direct, if not overwhelming, influence on the economy, meant that an area of study which ordinarily would have been dominated by economists, was ultimately shared with political writers and historians.[1] And it is here, under the “liberal-radical” debate, where some had postulated that capitalists were not implicit in the apartheid system, with little choice but to comply with, and operate under, prevailing conditions (Nattrass, 1991; Verhoef, 1998; Saunders, 1988), while others disagreed. This chapter now delves objectively into these conditions and the country’s economic development and the role of electricity within them.
4.3 Economic Development up to 1910: How the Discovery of Minerals Changed Everything
4.3.1 Economic Developmen