Will the environment get crushed in the cogs of GEAR
1 August 1997
It has taken a while to gather momentum, but South Africa's civic and labour groups now pose a serious threat to the implementation of the government's Growth, Employment and Redistribution (GEAR) macro-economic strategy, officially launched in 1996. Soon, the voice of environmental lobby groups may be added to this new chorus of protest songs, for there are strong reasons for the environmental perspective on GEAR to be heard. Here are just a few of the possible arguments which may be raised.
One can begin with the emphasis GEAR places on pure economic growth. Environmentalists have been warning (largely in vain) of the disastrous ecological effects of such myopia since the 1972 Limits to Growth report of the Club of Rome. This is not to suggest that all economic growth is bad, only that it is a poor indicator of development, and squarely in conflict with environmental sustainability when given blind priority. Economists like to ignore the fact that the economy is in reality a subsystem of the ecosystem.
We move on to the similarities between GEAR and the much maligned World Bank Structural Adjustment Programmes (SAPs) - they were among the chief advisors in drawing up the policy after all. The rationale is quite simple - in order to improve SA's Balance of Payments, the goverment must spend less and earn more.
Not surprisingly, an easy target for reductions in government expenditure are the environment-related budgets. This is confirmed by a recent study of the 1997 National Budget by the Environmental Justice Networking Forum (EJNF), and is echoed by the experience of other countries such as Brazil, Costa Rica and Mexico.
On the earnings side, the need to increase both foreign investments and exports is often achieved by devaluing the national currency, an action which may cause environmental degradation in itself. This is suggested by a 1995 study by environmental economist Scott Reid on the statistical correlation between currency devaluation and tropical deforestation.
Another method to promote the inflow of capital is to lower the environmental legal requirements for potential investors. An illustration of this can be found in the so-called "maquiladora zone", a regulation-free investors' haven near the Mexico border, where environmental clean-up costs are now estimated to be $9 billion. Finally, the most common way to increase exports is to convert land and labour to the task of increasing resource extraction, harvesting and cash crop production, a practice which a Yale University Study showed to be not only "ecologically suicidal", but economically sub-optimal.
Another issue environmentalists may wish to raise in the GEAR debate are the high levels of SA's foreign debt, some $18.7 billion (R90 billion), which it considers to be within internationally acceptable levels. Tied to these high levels of debt are annual interest payments equalling approximately 20% of the national budget. Besides the obvious "opportunity cost" of spending this money on tackling pressing social and environmental issues, there may be a direct link between indebtedness and environmental destruction.
Already this has been the convincing conclusion of statistical studies on tropical deforestation. And consider the simple facts presented by debt researcher Susan George:
Could the same forces be at work in other areas of environmental exploitation?
All of these arguments might be insubstantial or inaccurate. But where is the debate and research to prove this one way or another? And in the absence of these, where is the Precautionary Principle which the SA government signed up to through the 1992 Rio Earth Summit's Agenda 21.