Was The “Mbeki Economy” Really That Great? (Warning: this is loooong! Feel free to skip to the Conclusion and then like and repost) People either say President Thabo Mbeki’s time in office was a huge success or a complete failure. For those who grew up hearing about strong growth, smart budgeting and investor confidence, the suggestion that his presidency was bad for the economy might sound strange. Now, most of the time, debates about Mbeki turn into a back-and-forth comparison with the Zuma years, which doesn’t help us think clearly. What if, instead, we compared South Africa under Mbeki to another country entirely—Bolivia—which took a radically different approach to inequality and economic growth? Two Presidents, Two Different Roads In the early 2000s, both South Africa and Bolivia were dealing with deep inequality. But their leaders took very different paths. Thabo Mbeki was an economist who believed in careful budgeting, keeping inflation low, and encouraging foreign investment. He wanted to grow the economy in a way that would eventually benefit everyone. Evo Morales, on the other hand, was a former coca farmer and union leader. As Bolivia’s first Indigenous president, he promised to give power back to ordinary people. He believed the government should take more control of the country’s wealth—especially its oil and gas—and use it to help the poor directly. Mbeki’s Strategy: Growth First, Then Redistribution Mbeki’s economic plan was called GEAR—short for Growth, Employment And Redistribution. It followed globalist free-market thinking: keep the budget tight, control inflation, and make South Africa a good place for business. The hope was that if the country looked stable and investor-friendly, jobs and opportunities would follow. One of Mbeki’s defining choices was his unwavering commitment to fiscal discipline. He insisted that the new democratic government must repay Apartheid-era debt in full—debt that had been racked up to finance the very regime that oppressed the Black majority. Rather than challenge its legitimacy or push for cancellation, Mbeki’s administration chose to pay it down religiously. Billions of rands that could have funded public housing, land reform, or basic services were instead sent to global creditors. Markets applauded. For many ordinary South Africans, however, all of this symbolised how the government prioritised investor confidence over justice. Another hallmark of the Mbeki era was the push for privatisation. State-owned enterprises like Telkom were partially sold off, and there were attempts to commercialise or privatise other public services, including transport and energy. The goal was to increase efficiency and attract private capital—but in many cases, the result was job losses, higher costs for consumers, and weakened public oversight. At the same time, investment in post-school education—particularly technical and vocational training—declined sharply. While universities continued to receive attention, many of the institutions meant to equip young people with practical skills—TVET colleges—were neglected. These colleges, which could have played a key role in tackling youth unemployment and preparing workers for the economy, became underfunded, poorly managed and stigmatised. In a country facing a deep skills crisis, this disinvestment would have long-term consequences. And yet, on paper, Mbeki’s strategy worked. The economy grew steadily—averaging 4–5% per year. Inflation remained low. Government debt shrank. Foreign investment poured in. South Africa won applause in global business circles as a model of post-colonial economic discipline. A small Black elite emerged through policies like BEE, and South Africa seemed to be integrating smoothly into the global economy. Because of this, many people today still speak about the “Mbeki economy” with pride. It symbolised progress, modernity, and respect on the world stage. But there’s a contradiction: most people who admire that era didn’t actually benefit from it. Unemployment remained high. Wages stagnated. Public services struggled. Inequality barely changed—and in many ways, deepened. So why do so many still praise it? Part of it is aspirational. The success of a few was seen as a sign that success was possible for everyone—someday. The media, business leaders, and government officials painted the Mbeki years as a golden era of smart, technocratic leadership and global integration. This message stuck, even for people who remained on the margins. There’s also nostalgia for a time when things felt more stable—before the media-fueled political turbulence of the Zuma presidency, Mbeki’s calm, technocratic style is often remembered more fondly than the actual results. But that nostalgia hides a deeper truth: Mbeki was not simply an unlucky technocrat—he was the face of a larger historic compromise. As early as 1985, during South Africa’s debt crisis, corporate elites like Gavin Relly of Anglo American had already begun courting the ANC. These secret meetings, held in elite retreats like Mells Park in England (google it), laid the groundwork for a transition that would change who held political office but leave economic power untouched. Mbeki—educated abroad, trusted by capital, and fluent in the language of markets—was the perfect custodian of this settlement. When the ANC came to power, it had the political strength to rewrite the rules but chose instead to reassure global markets. Mandela promised to “reintroduce South Africa to the global economy”; Mbeki delivered on that promise with GEAR. He cut deficits, prioritised low inflation, and opened the doors to capital—while inequality stayed firmly in place. By the early 2000s, international financiers like George Soros had no illusions: “South Africa is now in the hands of international capital.” It wasn’t just a shift in policy—it was a change in class power. A small Black elite emerged through BEE deals and boardroom access. But for most people, joblessness remained high and poverty deepened. Redistribution was postponed again and again in the name of “stability,” which really meant keeping the wealthy, both old and new, comfortable. Mbeki didn’t lack the power to change things. With a two-thirds parliamentary majority, he could have restructured the economy, tackled land reform, or challenged the Apartheid-era property protections baked into the Constitution. Instead, he treated the Constitution like a sacred document, never to be altered—even when it preserved the very economic injustices the ANC had once vowed to dismantle. As political economist Professor Patrick Bond put it, “[Mbeki] had the power to change the economic structure of Apartheid. He chose to stabilise it instead.” Morales’s Strategy: Share the Wealth Now When Evo Morales took office in 2006, he didn’t just promise change—he made it happen fast. One of his first major acts was to nationalise Bolivia’s oil and gas industries, reclaiming control from foreign multinationals. Instead of profits leaving the country, state revenues now funded bold social programmes aimed at reducing poverty and inequality. And it worked. Under Morales, extreme poverty was cut by more than half, and overall poverty fell from about 60% to 35% in just over a decade. The Gini coefficient—a measure of inequality—dropped significantly, making Bolivia one of the few Latin American countries where inequality actually declined. Crucially, Morales’s government didn’t treat redistribution as just handing out money. It reinvested in the country’s human potential, especially through public education, skills training, and rural infrastructure. Where Mbeki’s government disinvested in technical colleges, Morales did the opposite. His administration launched new vocational and technical institutes, often in rural and Indigenous regions that had long been neglected. These institutions offered practical training in fields like agriculture, construction, and industrial work—helping to create a skilled labour force while giving young people meaningful options outside of urban migration or informal jobs. His government also built thousands of new schools, improved teacher training, and ensured that education reached remote areas through programmes like “Educación Intercultural Bilingüe”, which taught children in both Spanish and Indigenous languages. Perhaps the most ambitious effort was Bolivia’s national literacy campaign, “Yo, Sí Puedo” (“Yes, I Can”), developed with Cuban support. Within just three years, Bolivia was declared free of illiteracy by UNESCO standards. For a country where large segments of the population had never been offered basic education, this was a transformative achievement. Beyond education, Morales invested heavily in infrastructure—building roads, hospitals, and schools in the poorest and most remote parts of the country. These projects didn’t just provide services—they created jobs, integrated the national economy, and connected long-isolated communities. And yet, the economy still grew steadily—averaging around 4–5% GDP growth annually, often outperforming regional peers. Bolivia accumulated record foreign reserves, maintained low inflation, and cut public debt. Contrary to the fears of neoliberal economists, redistribution didn’t crash the economy—it stabilised and diversified it. That said, the Morales model had its critics. When he sought a fourth term in 2019—after Bolivia’s highest court ruled that term limits violated his political rights—some accused him of undermining democracy. This claim was widely repeated by Western media, which alleged electoral fraud without evidence. These accusations ultimately fueled a military-backed coup of Morales. Independent researchers later found no proof of fraud. Supporters argued that Morales remained popular and had followed legal processes, and many Bolivians still supported him because their lives had visibly improved. Constitutional Power: One Used It, One Didn’t One of the biggest contrasts between Mbeki and Morales lies in how they approached constitutional change. Evo Morales didn’t just inherit the presidency—he reshaped the very foundations of the Bolivian state. In 2009, under his leadership, Bolivia adopted a new Constitution after a long public consultation process. It formally declared Bolivia a plurinational state, recognising the rights, cultures, and autonomy of Indigenous peoples—who make up the majority of the population but had long been excluded from power. The Constitution didn’t stop at symbolism. It enshrined social and economic rights, gave nature legal standing, and redefined the role of the state in the economy, emphasising redistribution, public ownership of natural resources, and collective welfare. It was a radical shift from a colonial and neoliberal legal framework to one grounded in Indigenous values and social justice. In contrast, Thabo Mbeki—despite enjoying a powerful political mandate and the ANC’s two-thirds majority in Parliament—chose not to amend South Africa’s post-Apartheid Constitution. While the 1996 Constitution is widely celebrated as progressive, it also reflects deep compromises, particularly in its economic and property clauses. These clauses have made land reform, redistribution, and transformation of ownership structures extremely difficult, even when there’s political will. Mbeki upheld these frameworks, treating the Constitution almost as sacrosanct and unchangeable, even when it stood in the way of transformation. As a result, key pillars of South Africa’s Apartheid-era economic structure were left intact, legally protected by a liberal order that prioritised property rights over redress. This contrast is telling: Morales used State power to rewrite the rules in favour of the majority; Mbeki, even with that same power, chose to work within inherited constraints, ultimately limiting the scope of economic and social transformation. Playing by the Rules—or Rewriting Them One of the sharpest contrasts between Mbeki and Morales was their relationship with global financial institutions like the International Monetary Fund (IMF) and the World Bank. Thabo Mbeki embraced the orthodox economic advice promoted by the IMF and World Bank in the 1990s. His government’s GEAR policy—Growth, Employment and Redistribution—was not imposed by these institutions directly, but it closely followed their framework: fiscal discipline, inflation targeting, and market liberalisation. In fact, Mbeki’s South Africa was often praised by global lenders and investors as a “model emerging market.” He avoided any confrontation with creditors, chose to pay off Apartheid-era debt rather than challenge its legitimacy, and pursued privatisation of key state assets such as Telkom and portions of Eskom and Transnet. He also resisted debt cancellation campaigns that could have freed up resources for public investment. Despite South Africa’s stark racialised inequality, Mbeki feared that any deviation from global market norms would lead to investor flight, currency devaluation, and economic instability. This strategy may have reassured international markets—but it also meant that South Africa remained economically constrained by external expectations rather than reshaping them to meet internal needs. Evo Morales, by contrast, took a confrontational stance against the IMF and World Bank. Early in his presidency, he expelled the World Bank’s country representative and reduced Bolivia’s reliance on international lenders. He refused new IMF loans and paid off existing debt early, not out of loyalty to creditors but to escape their policy influence. Once Bolivia’s gas and oil revenues increased after nationalisation, Morales used those earnings to fund social programmes without borrowing from abroad. In doing so, he broke the cycle of debt dependency that had shaped Bolivian policy for decades. Morales’s administration also reversed earlier IMF-imposed reforms—such as privatisation of utilities—and reasserted state control over sectors like mining, telecommunications, and energy. When the IMF warned of inflation risks or fiscal indiscipline, Morales ignored them—and was proven right: Bolivia maintained macroeconomic stability while dramatically reducing poverty and inequality. This approach wasn’t just economic—it was political. Morales explicitly rejected what he called “neoliberal colonialism,” accusing institutions like the IMF of treating the Global South as permanent debtors whose economies were to be managed on behalf of foreign capital. In 2009, Bolivia helped launch the Bank of the South, a regional alternative to the IMF, and championed South-South cooperation, especially with countries like Venezuela, Cuba, and later China. This was part of a broader vision to create economic sovereignty, especially for Indigenous and formerly colonised nations. Different Styles, Different Results Mbeki and Morales didn’t just have different economic ideas—they also had very different relationships with their people. Mbeki was seen as smart but distant. He didn’t always listen to unions or social movements. His top-down leadership style made him unpopular with some groups. Morales, meanwhile, stayed closely connected to the people who elected him. He was seen as someone who came from the same background as most Bolivians. Even when he made mistakes, many still believed he had their best interests at heart. García Linera, Bolivia’s former vice president and Marxist intellectual, said about Morales, “Evo didn’t just redistribute wealth. He redistributed dignity.” Conclusion President Thabo Mbeki wasn’t a bad president. He was thoughtful, book-smart, and deeply committed to the idea that South Africa could stand tall on the world stage. He believed that if he managed the economy carefully, attracted investors, and played by the rules of the global economy, prosperity would come—not just for some, but for everyone. He didn’t ignore poverty or inequality—he just believed the best way to fix them was through steady growth, careful planning, and long-term vision. He thought that if he could build a strong economy first, justice and fairness would follow. But history doesn’t only judge intentions. It also asks what was possible—and what was missed. Mbeki gave South Africa macroeconomic stability and respect abroad. Yet, at home, millions still waited for dignity, work, land, and opportunity. The growth he delivered belonged to the elite parasite class. When we look at someone like Evo Morales, we’re reminded that another path was possible—one where the poor didn’t have to wait. Where the economy didn’t just grow for the sake of it, but in ways that lifted people up and rewrote the rules of who gets to belong. Mbeki led with reason. Morales led with heart. Both wanted what was best. But only one made the majority feel seen, heard and cared for. And that difference matters.