The role of South African business in South Africa's post apartheid economic diplomacy

309 Pages·2012·1.73 MB·English

by  Antoinette Valsamakis

THE ROLE OF SOUTH AFRICAN BUSINESS IN SOUTH
AFRICA’S POST APARTHEID ECONOMIC DIPLOMACY

By

ANTOINETTE VALSAMAKIS

A thesis submitted to the University of Birmingham for the degree of
DOCTOR OF PHILOSOPHY

Department of Political Science and International Studies
School of Government and Society
College of Social Sciences
University of Birmingham
May 2012
University of Birmingham Research Archive

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ABSTRACT
This thesis explores the role of South African business as non-state actors (NSAs) in South
Africa’s post-apartheid economic diplomacy. The work is an empirical contribution to the
debate within diplomacy studies asserting the importance of NSAs in diplomacy studies and
that the inclusion of economic considerations in diplomacy studies is crucial. Whilst a
broader agenda in diplomacy studies is increasingly being recognised by diplomacy scholars,
there is limited case-based evidence of the increasingly active role being played by NSAs in
diplomacy generally and economic diplomacy more specifically.

The research uses a multistakeholder diplomacy framework to analyse the extent to and ways
in which corporate actors engage in South Africa’s post-apartheid economic diplomacy. This
study explores specific business activities around economic diplomacy, expounds why South
African business adopts different strategies at different times and crucially examines how
corporate actors do this. The thesis identifies three distinct modes of corporate diplomacy:
consultative, supplementary, and entrepreneurial. The thesis concludes that corporate
diplomacy warrants far more scholarly attention than has hitherto been the case, both in
developed and emerging economies, on the basis that corporate actors in South Africa play a
crucial role in economic diplomacy, both as consumers and producers of diplomatic
outcomes.
Table of Contents

CHAPTER ONE: INTRODUCTION ................................................................................................. 1
1.1 Defining the concept of economic diplomacy ......................................................... 5
1.2 The Thesis Argument ............................................................................................. 13
1.3 Analytical framework ............................................................................................. 14
1.4 Methodological approach ..................................................................................... 22
1.5 Thesis outline ......................................................................................................... 25
CHAPTER TWO: THE CONTEMPORARY COMPLEXITY OF ECONOMIC DIPLOMACY ................. 29
2.1 Introduction ........................................................................................................... 29
2.2 Theoretical perspectives........................................................................................ 32
2.3 Including economics in diplomacy studies ............................................................ 51
2.4 Business as NSAs in economic diplomacy ............................................................. 57
2.5 Multi-actor frameworks for diplomacy ................................................................. 63
2.6 Conclusion ............................................................................................................. 69
CHAPTER THREE: SOUTH AFRICA’S POLITICAL ECONOMY ...................................................... 72
3.1 Introduction ........................................................................................................... 72
3.2 South Africa’s historical political economy ........................................................... 73
3.3 South Africa’s apartheid-era economic diplomacy ............................................... 79
3.4 Business during apartheid and at political transition ............................................ 82
3.5 Post-apartheid ‘liberalisation’ ............................................................................... 90
3.6 The present economic milieu ................................................................................ 98
3.7 Conclusion ........................................................................................................... 103
CHAPTER FOUR: SOUTH AFRICA’S ECONOMIC DIPLOMACY STAKEHOLDERS ....................... 105
4.1 Introduction ......................................................................................................... 105
4.2 Government Institutions ..................................................................................... 105
4.3 Non-State Actors (NSAs) ...................................................................................... 111
4.4 Analysing agency in South Africa’s economic diplomacy .................................... 126
4.5 Conclusion ........................................................................................................... 138
CHAPTER FIVE: MODES OF DIPLOMACY, THE CONSULTATIVE ROLE OF BUSINESS ............... 141
5.1 Introduction ......................................................................................................... 141
5.2 Constructive Contestation ................................................................................... 143
5.3 South Africa’s Trade Agreements ........................................................................ 146
5.4 Consultation Mechanisms ................................................................................... 151
5.5 Diplomatic process, tools and methods .............................................................. 156
5.6 Analysing the consultative role of business NSA ................................................. 156
5.7 Conclusion ........................................................................................................... 170
CHAPTER SIX: MODES OF DIPLOMACY, THE SUPPLEMENTARY ROLE OF BUSINESS ............. 173
6.1 Introduction ......................................................................................................... 173
6.2 South-South diplomacy – sites of diplomatic engagement ................................ 174
6.3 Africa – fearing the South African (economic) hegemon? .................................. 186
6.4 Analysing the supplementary role of business NSAs .......................................... 193
6.5 Conclusion ........................................................................................................... 204
CHAPTER SEVEN: MODES OF DIPLOMACY, DIPLOMATIC ENTREPRENEURS ......................... 208
7.1 Introduction ......................................................................................................... 208
7.2 Sites of diplomatic activity – a global stage ........................................................ 210
7.3 Corporate agency – mapping South Africa’s MNCs ............................................ 224
7.4 Analysing the entrepreneurial role of corporate diplomacy ................................ 229
7.5 Conclusion ........................................................................................................... 237
CHAPTER EIGHT: CONCLUSION .............................................................................................. 239
8.1 Towards a multi-centric view in IR and diplomacy studies ................................. 239
8.2 Empirical Depth ................................................................................................... 240
8.3 A MSD approach to diplomacy ............................................................................ 241
8.4 The relevance of South Africa’s political economy ............................................. 243
8.5 Stakeholders in South Africa’s economic diplomacy .......................................... 245
8.6 Modes of Engagement......................................................................................... 246
8.6 Further research .................................................................................................. 254
8.7 Conclusion ........................................................................................................... 255
APPENDIX ONE: LIST OF INTERVIEWS .................................................................................... 257
BIBLIOGRAPHY ....................................................................................................................... 258
List of Tables and Figures

Figure 3.1 GDP Growth rates 1950-1990.........................................................................78
Figure 3.2 Distribution of South Africa’s Exports by World region (2010).....................102

Table 3.1 South African Trade by Country: Exports (2006-2010)....................................99
Table 3.2 South African Trade by Country: Imports (2006-2010).................................100
Table 5.1 Selected List of South Africa’s Trade Agreements November 2011..............147
Table 7.1 Selected examples of South Africa’s MNCs...................................................227
ABBREVIATIONS

ACP African, Caribbean and Pacific

AGOA African Growth and Opportunity Act

AHI Afrikaanse Handels Instituut

ANC African National Congress

ANCYL ANC Youth League

ARA Industry for Responsible Alcohol Use

ASA Agri South Africa

ASCII Association of SADC Chambers of Commerce and Industry

ASEAN Association of South- East Asian Nations

ASGISA Accelerated and Shared Growth Initiative for South Africa

Assocham Associated Chambers of Commerce and Industry of India

ASSOCOM Association of Chambers of Commerce and Industry

ATF Agricultural Trade Forum

AU African Union (formerly OAU)

BASIC Brazil, South Africa, China, and India

BATNA Best Alternative to a Negotiated Agreement

BBBEEE Broad-Based Black Economic Empowerment

BBC Black Business Council

BBWG Big Business Working Group

BCG Boston Consulting Group

BEE Black Economic Empowerment

BEEC Black Economic Empowerment Commission

BIAC Business and Industry Advisory Committee
BIP Bilateral Investment Protection

BIT Bilateral Investment Treaty

BLNS Botswana, Lesotho, Namibia and Swaziland

BLSA Business Leadership South Africa

BMF Black Management Forum

BRIC Brazil, Russia, India and China

BSA Business South Africa

BUSA Business Unity South Africa

CAIA Chemical and Allied Industries’ Association

CBM Consultative Business Movement

CCCI Cape Chamber of Commerce and Industry

CGIAR Consultative Group on International Agricultural Research

CHAMSA Chambers of Commerce and Industry of South Africa

CIBS China, India, Brazil and South Africa

CII Confederation of Indian Industry

CNI National Confederation of Industry Brazil

COMESA Common Market for Eastern and Southern Africa

COPE Congress of the People

COSATU Congress of South African Trade Unions

CSR Corporate Social Responsibility

CTDSS Committee on Trade and development Special Session

CTL Coal to Liquids

DAFF Department of Agriculture, Forestry and Fisheries

DBSA Development Bank of Southern Africa

DCCI Durban Chamber of Commerce and Industry
DDR Doha Development Round

DFA Department of Foreign Affairs (now DIRCO)

DDG Deputy Director General

DG Director General

DIRCO Department of International Relations and Cooperation

DoD Department of Defence

DR Doha Round

DRC Democratic Republic of Congo

DSM Dispute Settlement Mechanism

DTI Department of Trade and Industry

EAC East African Community

ECIC Export Credit Insurance Corporation

EFTA European Free Trade Association

EMNC Emerging Multinational Corporation

EPA Economic Partnership Agreement

ETC Economic Transformation Committee

EU European Union

EU TDCI EU Trade, Development and Co-operation Agreement

FABCOS Foundation for African Business and Consumer Services

FAO Food and Agricultural Organisation

FAWU Food and Allied Workers Union

FCI Federated Chambers of Industry

FDI Foreign Direct Investment

FEDUSA Federation of Unions of South Africa

FICCI Federation of Indian Chambers of Commerce and Industry
FNB First National Bank

FTA Free Trade Agreement

GATT General Agreement of Trade and Tariffs

GDP Gross Domestic Product

GEAR Growth, Employment and redistribution Plan

GEIS General Export Incentive Scheme

GNU Government of National Unity

GRI Global Reporting Initiative

GTL Gas to Liquids

HIV/AIDS Human Immunodeficiency Virus /Acquired Immune Deficiency
Syndrome

IBSA India, Brazil and South Africa

ICA International Court of Arbitration

ICC International Chamber of Commerce

IDC Industrial Development Corporation

IEO International Employers Organisation

IF Industry Forum

IGO Intergovernmental Organisation

ILO International Labour Organisation

IPAP Industrial Policy Action Plan

ITAC International Trade Administration Commission

ITED International Trade and Economic Development Division

IFI International Financial Institution

IGD Institute for Global Dialogue

ILO International Labour Organisation

IMF International Monetary Fund