Rolling mass action v the rating agencies
| In one corner, Pravin Gordhan is fighting junk status; in the other, Irvin Jim is battling capitalism
SOUTH Africa’s most powerful trade union leader, Irvin Jim, says Finance Minister Pravin Gordhan will get no help from him in his attempts to appease the ratings agencies.
The general secretary of the 400 000-strong National Union of Metalworkers of South Africa vows that he will fight Gordhan on the streets if necessary if he tries to honour commitments he has given to the agencies that affect labour in any way.
“Any attempt to squeeze workers like cranberry juice, we will reject. And I will lead that fight.”
Among Gordhan’s commitments are a more flexible labour market, mandatory secret strike balloting, private-sector participation in state-owned enterprises and implementation of the National Development Plan.
“What Gordhan has promised the agencies we are going to resist,” says Jim, 48.
He says the minister is deluded if he thinks he has the support of labour just because Cosatu, from which Numsa was expelled in 2014, has joined the government and business in the “Team SA” that has been negotiating with the agencies.
“The minister might think that he has the real unions on his side. He doesn’t. Whatever he has promised to deliver we are not part of. And there will be nothing about us without us.”
Jim has been eulogised for saving the steel industry after he threw Numsa’s weight behind business last year to get the government to raise import tariffs.
But he brutally quashes any notion that this spirit of compromise for the greater good might extend to helping Gordhan save the country from being “junked” in six months.
“We’re in this mess because we spent the last 22 years trying to please the ratings agencies,” he says.
“We were told if we liberalise trade, remove exchange controls and embark on a conservative macroeconomic policy, we’d get more foreign direct investment, there’d be more jobs and more growth.
“And now we’re here. When we removed exchange controls we saw massive capital flight. The policy choices we were pressured into making have not helped to steer our economy on a growth trajectory that delivers jobs.”
The biggest disaster inflicted on South Africa by outside agencies was the switch from the government’s reconstruction and development programme to Gear: growth, employment and redistribution.
“We must listen to the ratings agencies but they are not taking responsibility for the mess we are in. They are the same guys who forced us to adopt Gear. Now that it is not delivering their only response is: ‘We are going to downgrade you.’ ”
His own prescription is the very opposite of what S&P Global Ratings, Moody’s and Fitch need to see from South Africa, and what Gordhan has promised to deliver.
They want less state involvement in the economy and more privatisation.
Jim wants a full-on Marxist society with maximum state intervention and nationalisation.
“I really don’t want to say this, but I have to. We need to run the economy as the National Party did. They had the maize board, the wool board, et cetera. Instead, we privatised. And what did we reap? Potholes and corruption.”
By means of high tariffs the state needs to “champion” the steel and manufacturing sectors. It needs to force the steel industry to sell cheap to downstream industries to create jobs, and force manufacturers, stateowned enterprises, provincial governments and municipalities to procure locally.
To do this, the government must “control the commanding heights of the economy”.
The auto industry must be forced to increase local content, source its components from local suppliers and stop these suppliers from shifting production to neighbouring countries, he says.
Aren’t they relocating because of high labour costs in South Africa?
“That’s another thing people must relax about. If this economy is going to grow it will not be on the back of sweatshop conditions where people are paid starvation wages. Paying people a living wage is the catalyst for growth because you give people buying power, and when people spend the economy grows.”
He rejects “any form of privatisation” of state-owned enterprises. But he concedes that their failure to deliver is because they are entirely controlled by the government.
“They’re in trouble because of cronyism and political influence. Instead of ensuring they are run effectively and efficiently they’re busy with their own agendas.”
And so even if privatisation is not acceptable, a certain level of private participation is.
“We need to make sure the boards are reconstituted, where people who sit on the boards come from government, labour and business.”
Oddly enough, he does not support labour representatives sitting on the boards of private companies as they do to great effect in Germany. They might get too close.
“We don’t believe that in a class-divided society we must promote class harmony,” he explains.
“We have negotiated good wage agreements for our members with employers without sitting on their boards where we would compromise ourselves.”
So isn’t it nonsense to talk about “slave wages”?
“There is still a huge gap between CEOs and ordinary workers,” he says. “South Africa is still one of the most unequal societies.”
Is he afraid that labour representatives on the board might be co-opted?
“The problem with capitalism is that it’s a system of greed,” he answers. “It is not a system that advances humanity. It’s a system that lives by maximising profits.
“It can only be relevant to sit on their boards if the profits that workers make are redistributed equally to the producers of wealth.”
Despite trashing capitalists, he readily admits that South Africa needs their money.
“We do need foreign direct investment, nobody can dispute that.”
He also sees no contradiction between calling on capitalists to invest in the country and at the same time calling for the “complete overthrow of capitalism”.
He says: “We need them to invest but this doesn’t mean we have to listen to their prescriptions about how to run our economy. That is what got us into the mess we’re in.”
And so he dismisses the argument that to attract investment our labour costs need to be globally competitive.
“They’re lying. There’s no such. If we pay our people well they will invest in the country and we will get the returns.”
How can they be paid well, let alone be employed in the first place, if there are no investors?
Investors will come when we turn around the economy, he says.
“If the state does not intervene quickly to turn around this economy, no one will invest here.”
Talking to Jim soon makes two things starkly evident. One is his eccentric take on economics. The other is the naivety, or worse, of Gordhan’s assurances to the ratings agencies about what he, or “Team SA”, will be able to achieve in six short months.
While Gordhan tries to project the image of a country moving in the right direction, Jim’s default position remains, as ever, rolling mass action.
This is what he promises if the current standoff between Numsa and employers in the Metal and Engineering Industries Bargaining Council is not resolved to his satisfaction.
Employers say incompetent management has driven the council to bankruptcy, and refuse to pay an 18% levy increase that has been demanded by the Numsa-backed leadership.
Jim accuses them of “racism” and “taking unilateral decisions that are destroying the bargaining council”.
If that happens, then “every day there will be strikes in this country. We will embark on rolling mass action to defend the bargaining council. If efforts to resolve the dispute fail, Numsa will be on the street.”
Even if it means the country being downgraded to junk?
“It can’t get any worse for the workers than it is already,” he says.
He remains committed to starting a “Marxist-Leninist workers’ revolutionary party”.
Can he name a country where Marxist-Leninism has worked?
“Countries in South America,” he ventures after a long pause.
Like Venezuela? This, of course, being a country all but destroyed by its late MarxistLeninist president, Hugo Chávez.
“Why do you have to ask me about Venezuela?”
Jim laughs. He’s a likeable guy. So was Chávez, apparently.
I really don’t want to say this, but . . . we need to run the economy as the Nats did Capitalism is a system of greed, not a system that advances humanity