Dark clouds gather over jobs summit
Ramaphosa has his work cut out to rally everyone behind his vision and some are already grumbling
Labour federation Cosatu has called for a review of the National Development Plan (NDP), which it believes is bound to fall short of its development targets. The proposal will be part of Cosatu’s contribution to the presidential jobs summit, which started in Midrand on Thursday, and is likely to place the federation at odds with its social partners, as well as President Cyril Ramaphosa’s administration and organised business.
Although Cosatu has long had issues with the NDP, particularly regarding the economic chapter, its fresh call for a policy revision has been prompted by the decision of the National Planning Commission (NPC) to drastically alter the NDP’s projected 2030 unemployment rate.
Ramaphosa was the deputy chairperson of the commission under former finance minister Trevor Manuel.
The NDP, in its most optimistic forecast, had projected an unemployment rate of 6% by 2030, but the NPC has described this as out of reach and adjusted it to 14%.
South Africa is only 12 years away from the NDP’s “vision 2030” and, according to Statistics South Africa, has a 27% unemployment rate.
Speaking to the Mail & Guardian this week, Cosatu general secretary Bheki Ntshalintshali said the magnitude of the unemployment crisis had reached a point at which no policy, including the NDP, could be viewed as “untouchable”.
“In our view, nobody can deny that the NDP is not going to meet its target. We don’t want to say ‘we told you so’ but, rather than putting on a posture of blaming, we need to go back to the table and say what needs to be done,” he said. “And we can’t review only figures. We must go to the foundation and say why are we not going to meet what we thought was going to work.”
But business has raised concerns about Cosatu’s approach and has warned that global investors and rating agencies could read a tampering with policies as policy uncertainty, which would affect the country’s credit rating.
This week the presidential jobs summit launched its first phase, which is to identify projects that could create jobs, co-ordinate where money should be channelled to increase employment and assess why some policies did not work.
The summit comes two weeks after Ramaphosa announced a package of economic reforms and spending in an effort to boost a sluggish economy.
Cosatu’s NDP recommendations are likely to be raised only in the second phase of the summit, which will probably lead to open discussions on policy and more robust negotiation among social partners.
But Business Unity South Africa (Busa) chief executive Tanya Cohen warned that the world was watching South Africa and backtracking on policy issues ran the risk of scaring away much-needed investment.
“From a business perspective, our concern is that we don’t do things that are going to plummet our prospects of attracting investment, remaining competitive and making sure that we don’t get a ratings downgrade. That would be catastrophic,” she said. “So things like fiscal stability and not putting out messaging that demonstrates that we are going to go backwards in terms of policy stability, those things are important. We’re being watched.”
She said there needed to be a way of balancing the short-term goal of creating jobs with the long-term goal of ensuring policies and solutions that would deliver sustained results.
Strained relations between the social partners are also likely to put pressure on the rate of the summit’s progress.
The president of the Black Business Council, Sandile Zungu, said business, labour and government were stuck with a major trust deficit, which would have to be addressed for the summit to succeed.
“I think there is a trust deficit among social partners and this trust deficit is historical and informed by events not only in our recent past but in our history in general,” he said. “Business views government with scepticism and government views business with scepticism. It’s the same with labour and business. And [between] labour and government.”
Ramaphosa’s biggest task at the summit will be to unite everyone behind a common goal, which will have to involve some compromises.
Zungu said he believed Ramaphosa is the right person to thaw relations because he is trusted by all three sectors.
But Cosatu has already identified areas it would not be willing to compromise on.
“The issue of wage demands: when 50% of the working population is earning below the poverty line, you can’t ask workers to compromise on certain issues. It can’t work,” Ntshalintshali said. “Even if you say workers must compromise with regard to wages, where will that money go to? If it goes to shareholders, it means you are just allowing the company to maximise profits [instead of creating jobs].”
Ntshalintshali also said Cosatu would forge ahead with its efforts to ensure workers had a direct say in how their pension funds were being invested, especially if that money could create jobs.
“For example, if we are talking about developing infrastructure in schools and there is no money, should we take our money and just put it in banks? Or should we use it to say we will buy government bonds and give a directive to say the money we are putting in should only be utilised for infrastructure in the public service and create jobs?” Ntshalintshali asked. “It is not acceptable that we can just give money to those private sector fund managers and say ‘invest our money, decide where to invest it’.”
He said business had to compromise, specifically on an “investment strike”, if local business invested too little in the economy and was indifferent to retrenchments.
Part of Cosatu’s demands has been that the private sector and government should halt all retrenchments.
At Cosatu’s national congress last month, Ramaphosa told delegates the government would not be retrenching public servants.
Busa, in its response to Cosatu’s call for a moratorium on retrenchments, said: “To be competitive, businesses must be able to adapt and change to changing circumstances and opportunities. Business acknowledges that, particularly in the current climate, retrenchments must be a last resort.”
Cosatu has taken this as a refusal by business to halt any retrenchments that may either be planned or already under way.
These thorny issues are only expected to be negotiated once the summit enters its second phase.
So far there has been an agreement on the need to increase local procurement and to monitor the pay disparities between workers and executives in the private sector.
Cosatu will also call for a review of the “excessive” remuneration packages given to Cabinet ministers.
Speaking on the first day of the summit, Ramaphosa said a framework had been adopted in the first phase of the summit that saw a pledge from the financial sector to invest R100-billion over five years in black-owned industrial enterprises. The framework also saw social partners agreeing to buy more local goods, to find strategies to retain existing jobs and to make funding and support available to the beneficiaries of land redistribution.