Melt­down of 2008 still here

In this in­ter­view, SACP gen­eral sec­re­tary Blade Nz­i­mande speaks to Tim Modise of BizNews about the econ­omy, his party and the chal­lenges that lie ahead

CityPress - - Business -

The SA Com­mu­nist Party (SACP) has been crit­i­cised by var­i­ous com­men­ta­tors and an­a­lysts who look at the South African eco­nomic sit­u­a­tion, say­ing the pres­ence of the party in gov­ern­ment is con­fus­ing the pol­icy choices gov­ern­ment is mak­ing and also con­fus­ing the ide­ol­ogy, if you will, of the ANC.

There is no truth in that. Firstly, what is the ide­ol­ogy of the ANC? In the first in­stance, the ANC is a broad or­gan­i­sa­tion/broad move­ment that be­lieves in a mixed econ­omy, where you’ll have the pri­vate sec­tor, but a strong public sec­tor as well. Lately, the ANC has been em­pha­sis­ing where the state needs to play more of a lead­ing role in the process of trans­form­ing the econ­omy. And we agree with the ANC, in so far as those mat­ters are con­cerned and the ANC takes de­ci­sions. These are de­ci­sions taken by the ANC, in its own struc­ture. They are not de­ci­sions of the SACP. The fact that we agree on many things doesn’t mean that, for us, it’s the SACP try­ing to ma­nip­u­late the ANC. That’s an old story, Tim, if you re­mem­ber. That’s a Rooi Ge­vaar story, per­ceived by the apartheid gov­ern­ment. I’m sure the peo­ple who are say­ing that are just peo­ple who would like to see the ANC as noth­ing but an ex­ten­sion of busi­ness – which the ANC is not and it has said so – not be­cause there’s a com­mu­nist party in the ANC. What do you think of the state of the econ­omy at this time?

We raised this at the right time be­cause, at the week­end in our cen­tral com­mit­tee, our main item for dis­cus­sion was our econ­omy and the chal­lenges. Firstly, we con­cluded one of the big­gest prob­lems fac­ing the South African econ­omy orig­i­nates from out­side South Africa. What is it? We are still deal­ing with the af­ter­math of the fi­nan­cial melt­down of 2008 in the US that led to the near crash of the global econ­omy in a man­ner that had not been seen since the 1930s with the Great De­pres­sion.

How is this ac­tu­ally af­fect­ing us? We were partly cush­ioned, around 2009 to 2012, be­cause China was ab­sorb­ing a lot of min­eral re­sources and South Africa was one of those coun­tries that ben­e­fited be­cause we were send­ing our iron ore, plat­inum, and a num­ber of other min­eral re­sources to China.

At the time, China was de­vel­op­ing its econ­omy, man­u­fac­tur­ing and ex­port­ing a lot of the goods they were pro­duc­ing, partly from these re­sources they were ab­sorb­ing from us. Later, about two years ago, China de­cided to em­bark on a dif­fer­ent eco­nomic tra­jec­tory for it­self, by want­ing to fo­cus on in­ter­nal eco­nomic de­vel­op­ment and stim­u­lat­ing lo­cal de­mand. This meant, among other things, that the com­mod­ity boom we’d had came to an end and we’d pos­si­bly never be able to go back to selling our min­eral re­sources at such high prices.

That is what is now af­fect­ing our econ­omy. For in­stance, the prices for our com­modi­ties have gone down. We were talk­ing about iron ore, coal and plat­inum. We counted about four of the com­modi­ties that have been af­fected. There is a prob­lem with steel, as well. China pro­duced a lot of steel and no longer needs it. The world de­mand has also gone down, and so there’s dump­ing of Chi­nese steel, very cheaply, which has af­fected our econ­omy. That is the sum of the is­sue af­fect­ing us.

There is lead­er­ship in the coun­try al­ready. Two min­is­ters, Rob Davies of trade and in­dus­try and Ebrahim Pa­tel of eco­nomic de­vel­op­ment, have en­gaged unions and man­age­ment in the steel in­dus­try. They have said they are go­ing to have to pro­vide some cush­ion but it’s not a free­bie. Those com­pa­nies must com­mit to cre­at­ing jobs – and even save jobs un­der threat – be­cause it can’t be just that they want to be bailed out but then con­tinue the be­hav­iour of re­trench­ing work­ers.

Busi­ness must also come to the party. They have a re­spon­si­bil­ity. Doesn’t this of­fer an op­por­tu­nity then, for mines to be na­tion­alised, given that they are in trou­ble?

We do be­lieve that cer­tain key fac­tors of our econ­omy must be so­cialised. Some peo­ple are say­ing they must be na­tion­alised. Well, it sounds nice and good – po­lit­i­cally – but why should gov­ern­ment na­tion­alise com­pa­nies in cri­sis? What we’d also be na­tion­al­is­ing – largely – is debt, as with min­ing. That’s a prob­lem­atic call for na­tion­al­i­sa­tion when the mines are down. We must na­tion­alise them when they are do­ing well so that, as gov­ern­ment, we do not in­herit debt. At the mo­ment, they’ve been hav­ing it nice, selling steel in South Africa, pro­duced in Vereenig­ing, as if it was or­dered from China or the US. We are pay­ing in­ter­na­tional prices, which is af­fect­ing all other com­pa­nies that use steel as their in­put in man­u­fac­tur­ing.

Even Sa­sol has been selling petrol to the petrol pro­duc­ers in South Africa at in­ter­na­tional prices. Then, when things are down, these com­pa­nies rush to gov­ern­ment for bailouts and want them as free­bies. Some of the peo­ple, op­por­tunis­ti­cally, call for na­tion­al­i­sa­tion, as a way of say­ing the state must ab­sorb debt.

No – na­tion­al­i­sa­tion must not ac­tu­ally en­tail na­tion­al­i­sa­tion of debt. How do we get out of this dif­fi­cult eco­nomic sit­u­a­tion we find our­selves in, at this time, ac­cord­ing to you?

Firstly, this is an op­por­tu­nity to re­ally up the game, in so far as in­dus­tri­al­i­sa­tion of our coun­try is con­cerned, start­ing with ben­e­fi­ci­a­tion. For ex­am­ple, there is al­ready talk that we need to ben­e­fi­ci­ate plat­inum to ac­tu­ally pro­duce energy and other byprod­ucts that can come out of that. You know, Tim, the min­ing in­dus­try has been re­sist­ing ben­e­fi­ci­a­tion. It’s time now, when we have this sit­u­a­tion, to push harder for ben­e­fi­ci­a­tion so that our min­er­als be­gin to pro­duce other prod­ucts that we can even ex­port.

The sec­ond thing we’re say­ing is that it’s im­por­tant for gov­ern­ment not to re­duce – as much as pos­si­ble – its in­vest­ment in in­fra­struc­ture. You’ll re­mem­ber that the pre­vi­ous ad­min­is­tra­tion un­der Pres­i­dent Ja­cob Zuma, for the first five years in of­fice, in­vested R1 tril­lion in in­fra­struc­ture.

That also went a long way in help­ing to cush­ion our econ­omy from what could oth­er­wise have be­come a huge jobs-loss blood bath. We need to main­tain that. It’s very, very im­por­tant be­cause, in any case, we do need in­fra­struc­ture, even for bet­ter days, so that our econ­omy is able to per­form bet­ter. The other thing the SACP, in par­tic­u­lar, is call­ing for, is up­scal­ing a na­tional youth ser­vice so that we’ll be able to ab­sorb many young peo­ple into in­tern­ships and learn­er­ships through public em­ploy­ment pro­grammes. Even if they are not per­ma­nent jobs, but to ex­pose them to work – be­cause that may ac­tu­ally give many of those young peo­ple an op­por­tu­nity to be able to do other things once they ac­quire some skill and get some work ex­po­sure. If we had ap­pro­pri­ate skills be­ing pro­vided and many young peo­ple be­ing trained ap­pro­pri­ately, they would be able to cre­ate em­ploy­ment for them­selves.

In our post-school ed­u­ca­tion, one of the big­gest weak­nesses we face is that many of our kids who go to vo­ca­tional col­leges do not get work place­ments, which are nec­es­sary if we are to skill this coun­try. That is why we are say­ing to em­ploy­ers: “Why are you al­ways com­plain­ing that we are pro­duc­ing poor grad­u­ates? You know those grad­u­ates from col­leges need work ex­po­sure. Open your com­pa­nies for work­place ex­pe­ri­ence.”

That will im­prove the qual­ity of skills dra­mat­i­cally.

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