Globalization and State Autonomy in the Information Age: Telecommunications Sector Restructuring in South Africa.

Author:Cogburn, Derrick L.
 
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The world system is experiencing fundamental structural change characterized by the increasing globalization of production and distribution, increased interdependence and the emergence of a knowledge-based global information economy. The fundamental nature of these changes makes it particularly difficult to understand the impact they may have on the prevailing nation state model. Globalization and the Information Revolution present increasing difficulties for nation states as they attempt to make choices about public policy, or allocate their scarce resources to confront these challenges. Telecommunications and advanced information and communications technologies are extremely important components of this transformation in the global economy.

As this period of global economic restructuring lurches forward, it is important that social scientists attempt to understand the impact on local realities. The existing literature on globalization and the Information Revolution is, to a large degree, theoretical and overly speculative. There is a need for a clear theorization of globalization and the transformation occurring in the world economy that is grounded in an empirical analysis of local realities, including the process of high-technology policy formulation and the exercise of state autonomy.

These factors point to important research issues which are examined in this article with respect to one very unique nation state: South Africa. Some of the key questions that these issues raise are: What are the changes occurring in the international telecommunications arena that are influencing national sector restructuring? What is the historical development and projected direction of the South African telecommunications sector and how does it compare to the rest of the world? What has been the influence of selected global and domestic factors on the restructuring of the South African telecommunications sector? And finally, what are the implications of globalization and advanced information and communications technologies for South Africa's autonomy as a state?

The successful process of developing a policy to restructure the telecommunications industry in South Africa's highly charged political economy has required tremendous political skill. In doing so, the fragile new South African Government has exhibited a high degree of state autonomy, and is illustrative of Peter Evans' concept of an "embedded autonomous state." It was able to chart a course between the global pressures of the World Trade Organization (WTO) Negotiating Group on Basic Telecommunications (NGBT), advancing technological developments (such as call-back services and new satellite systems), the domestic pressures of organized labor and a host of intermediate associations. The analysis in the article is set against the historical background of South Africa and within the context of the contemporary economic challenges engendered by globalization.

In his 1986 book, Politics in Hard Times: Comparative Responses to International Economic Crises, Peter Gourevitch made the argument that in times of severe economic crisis, normal economic rules break down and nation states become increasingly vulnerable and responsive to a plethora of global and domestic pressures.(1) This article expands that argument and applies an analytical framework to the South African political economy called the Global Innovation-Mediated Paradigm Shift (GIMPS). Following Gourevitch, the five components/explanations of GIMPS--production profile, intermediate association, state structure, economic ideology and international system--are used to examine a range of international and domestic variables to determine their relative impact on the historical process of telecommunications sector restructuring in South Africa.

TELECOMMUNICATIONS

One can outline four reasons why telecommunications, and the policy packages designed to stimulate and regulate the sector, deserve extensive study.

First, there is the relationship between telecommunications, information infrastructure and social and economic development. There is already a significant body of literature which illustrates the increasingly important role that telecommunications and informatics--or telematics--play in the economic growth of advanced industrial nations and developing countries alike. This link between information infrastructure and development has been shown by numerous studies, including several conducted by the World Bank.

The second reason that telecommunications policy packages deserve a special analytical focus is the growing international trend towards telecommunications liberalization, which includes privatization and increased competition in the telecommunications sector. The strongly pro-competitive policies that emerged in the late 1970s and early 1980s from the U.S. Federal Communications Commission (FCC), the National Telecommunications & Information Administration (NTIA) and the Modified Final Judgment (MFJ), which brought about the AT&T divestiture, set the stage in the public policy arena for the unraveling of the international telecommunications cartel in the years that followed.(2)

For example, when the MFJ was issued by the U.S. Department of Justice to break up AT&T, it effectively deregulated the telecommunications sector in the United States. Following the deregulation, demand increased within the United States for the opening of telecommunications markets internationally.

A third reason to focus on telecommunications policies is their role in facilitating the development of a global economy. The telecommunications sector offers an excellent case in which to explore the effects of the changing techno-economic paradigm and the globalization of production. Also, this sector is ideal for examining the changing relationship between public authorities and the private sector.

The rapid pace of innovation and high research and development costs favor the merger of leading telecommunications firms, while new technologies have led to a greater array of information processing and communications services available to business and consumers. Increased competition, mergers and high research and development costs may alter the traditional relationship between national telecommunications firms and the public telecommunications authorities.(3)

One final reason for exploring telecommunications policy is the changing nature of the underlying business model for the telecommunications sector. In most countries, telecommunications networks have been operated by a combined post, telegraph and telephone (PTT) operator, which normally has a monopoly on the provision of basic telecommunications services. The central role that the PTT plays within most national political economies, and the place assigned to the telecommunications sector in the future economic growth of the country, offers an interesting case in which to view the conflicting pressures on the state. These conflicting pressures are especially acute within South Africa as it attempts to overcome its racially oppressive history and move into a new democratic era.

SOUTH AFRICAN TELECOMMUNICATIONS IN TRANSITION

Since the transition to nonracial democracy in April 1994, the South African Government of National Unity (GNU) has faced the very difficult task of revitalizing and restructuring a political economy that was shaped by hundreds of years of racist practices and, since 1948, by formal apartheid policies. Additionally, the South African economy was battered by international economic sanctions from the mid-1980s.(4) The achievement of social justice, economic development and political stability are contingent upon the new government's ability to provide jobs, housing, education and employment amid the current radical changes occurring in the global political economy The development of a South African Information Infrastructure and comprehensive planning for effective participation in a global political economy, based on knowledge and information, can make an extremely important contribution towards realizing these goals. This planning must take into consideration processes at regional, continental and global levels to provide opportunities for telemedicine, distance learning, electronic commerce, government services, digital libraries and a host of other information infrastructure applications.

South Africa is already moving down this path towards an information society The historical development of information and communications technologies within South Africa has closely paralleled--and at times exceeded--their development in the rest of the world. For example, the first commercial application of telegraphy was introduced in 1843 in the United States. Less than two decades later, commercial telegraphy was active in South Africa. Also, in 1978, when the South African Department of Post and Telecommunications (SAPT) converted from analogue to digital switching, it was one of the first such organizations in the world to take what was considered a bold move at the time.

HISTORICAL DEVELOPMENT OF TELECOMMUNICATIONS IN SOUTH AFRICA

On 4 October 1996, the long-awaited Telecommunications Bill was introduced in the South African Parliament. It became law on 15 November 1996. This new telecommunications legal and regulatory framework, which started as a recommendation from the former South African Minister for Posts, Telecommunications and Broadcasting, Dr. Z. Pallo Jordan, provides the foundation for a new era in information and communications in one of Africa's most dynamic economies.

South Africa has one of the most sophisticated information and communications infrastructures in Africa. There are more than 4.2 million telephone mainlines installed throughout the country Over 70 percent of the South African public-switched telephone network is digitalized, with over 259,000 kilometers of fiber-optic cable. Public access to telephones is provided through a...

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