Go­ing back­wards, not for­ward

NDP’s cos­metic re­forms only look to de­ra­cialise mo­nop­oly own­er­ship, in­stead of trans­form­ing the struc­ture of na­tion’s econ­omy

The New Age (Gauteng) - - OPINION & ANALYSIS - Anal­y­sis Sidumo Dlamini is pres­i­dent of Cosatu

THE re­cent poverty and un­em­ploy­ment statis­tics val­i­dates Cosatu’s long-held con­tention that the Na­tional De­vel­op­ment Plan (NDP) in its cur­rent form can­not pro­vide so­lu­tions to the coun­try’s triple cri­sis of un­em­ploy­ment, poverty and in­equal­ity.

South Africa is strug­gling with a real un­em­ploy­ment rate of 38%, with close to 10 mil­lion peo­ple strug­gling to get jobs and 17 mil­lion peo­ple on wel­fare. The re­cent data by the Statis­tics South Africa re­port shows that out of a pop­u­la­tion of 56 mil­lion, around 13.8 mil­lion peo­ple are now liv­ing be­low the food poverty line of R17.38 a per­son a day. It also shows that more than 30 mil­lion peo­ple out of 56 mil­lion are im­pov­er­ished.

Since the adop­tion of the NDP by the ANCled gov­ern­ment in 2013, the fifth ad­min­is­tra­tion – as led by the ANC – con­tin­ues to pre­side over eco­nomic con­trac­tion and job losses, de­spite that the man­date from the ANC’s

53rd Man­gaung con­fer­ence was for ur­gency and de­ter­mi­na­tion in pur­suance of the rad­i­cal sec­ond phase of the na­tion’s tran­si­tion.

Five years ago, when the NDP was adopted by gov­ern­ment, Cosatu ar­gued that there was a need to review the eco­nomic and labour chap­ters of the NDP be­cause they were punt­ing the failed neo-lib­eral eco­nomic tra­jec­tory and also push­ing for labour “flex­i­bil­ity” and weak­en­ing of labour laws.

The NDP was pre­sented as a frame­work that “lays the foun­da­tion for long-term plan­ning for this rad­i­cal so­cio-eco­nomic agenda over the next 20 years”, with the aim of erad­i­cat­ing poverty, in­creas­ing em­ploy­ment and re­duc­ing in­equal­ity by 2030.

In its 2014 man­i­festo the ANC stated that the Na­tional In­fra­struc­ture Plan and In­dus­trial Pol­icy Ac­tion Plan would “con­tinue to drive the gov­ern­ment’s pol­icy agenda”.

How­ever, the ad­vent of the NDP meant an end to the at­tempt to forge an align­ment of the macroe­co­nomic poli­cies, in par­tic­u­lar the mon­e­tary pol­icy, with the in­dus­trial pol­icy and job cre­ation as pro­posed in the NGP.

Ba­si­cally, with its chap­ters on macroe­co­nomic and labour mar­ket poli­cies, the NDP meant a re­turn to the same old con­ser­va­tive poli­cies in­her­ited from Gear. Hence, this pro­voked re­jec­tion and a cri­tique from Cosatu.

It is clear now that the en­gage­ments that took place on th­ese mat­ters within the al­liance were noth­ing but a way to man­age ob­jec­tions by al­liance part­ners, as they have yielded no re­sults.

The Trea­sury con­tin­ues with its re­stric­tive fis­cal pol­icy which is ob­ses­sively fo­cused on achiev­ing the tar­get of a 3% bud­get deficit and the Re­serve Bank con­tin­ues to pur­sue its in­fla­tion tar­get of 3­6%, thus ex­ces­sively re­strict­ing the econ­omy to a low-growth path.

Cur­rent eco­nomic trends have un­leashed very harsh con­di­tions, es­pe­cially for the work­ing class and the poor, on top of the al­ready se­vere triple­crises of un­em­ploy­ment, poverty and in­equal­ity. Nearly half a mil­lion peo­ple lost their jobs last year and we have al­ready lost 120 000 jobs this year.

Ac­cord­ing to Statis­tics South Africa, of the 546 000 peo­ple who have just joined the ranks of the un­em­ployed, ap­prox­i­mately 58% were young peo­ple aged 15-34. This means that in terms of the ex­panded def­i­ni­tion, we ac­tu­ally face a cri­sis of 70% youth un­em­ploy­ment.

As work­ers, we con­tinue to ar­gue that the NDP does not rep­re­sent a nec­es­sary rad­i­cal eco­nomic shift that will help the coun­try to­wards a new growth tra­jec­tory. It has be­come ob­vi­ous now that the NDP has not only failed to ad­vance a rad­i­cal eco­nomic shift, but is ac­tu­ally threat­en­ing to re­verse cer­tain pro­gres­sive ad­vances that have been made by the ANC and gov­ern­ment.

South Africa’s un­em­ploy­ment rate is at its high­est level since 2003, ac­cord­ing to Statis­tics SA. The NDP con­tra­dicts, or fails to take for­ward, key pro­gres­sive poli­cies that have al­ready been adopted by gov­ern­ment in or­der to help us cre­ate large num­bers of de­cent, sus­tain­able jobs.

The Man­gaung con­fer­ence re­solved that the New Growth Path (NGP) would be “the defin­ing frame­work” for the medium­term pol­icy im­per­a­tives. It went fur­ther to say that the in­dus­trial pol­icy ac­tion plan would guide rein­dus­tri­al­i­sa­tion – and de­cent work would be the pri­mary fo­cus of eco­nomic pol­icy.

Fur­ther­more, it said that the state min­ing com­pany would be strength­ened to cap­ture a share of min­eral re­source rents and eq­uity; and more im­por­tantly from our point view as a fed­er­a­tion of work­ers, Man­gaung re­solved that “crit­i­cal ser­vices such as clean­ing ser­vices, se­cu­rity ser­vices, food ser­vices and laun­dry ser­vices and linen sup­ply must be pro­vided in­house and not be out­sourced”.

Un­like the NDP, the NGP placed em­pha­sis on the cre­ation of de­cent jobs and re­duc­tion of in­equal­i­ties – rather than nar­rowly fo­cus­ing on a growth tar­get. The NDP has a one-sided fo­cus on eco­nomic growth. There is con­sen­sus within the al­liance that eco­nomic growth is not the panacea to all of our prob­lems, but rather there is a need for a new growth tra­jec­tory, which ad­dresses rather than re­pro­duces our triple crises of un­em­ploy­ment, poverty and in­equal­ity.

How­ever the pri­mary fo­cus of the NDP is on eco­nomic growth and the rate of growth, not on its com­po­si­tion, or the role of re­dis­tri­bu­tion in de­ter­min­ing the im­pact of growth. It con­tra­dicts the NGP and a range of ANC eco­nomic pol­icy res­o­lu­tions on this, in­clud­ing the eco­nomic trans­for­ma­tion com­mis­sion res­o­lu­tion from Man­gaung which states “struc­tural prob­lems re­quire struc­tural so­lu­tion that trans­form the tra­jec­tory of eco­nomic growth, rein­dus­tri­alise the South African econ­omy and ac­cel­er­ate so­cial de­vel­op­ment”.

The NDP pro­poses cos­metic re­forms to the eco­nomic struc­ture, aimed at best to de­ra­cialise own­er­ship, rather than trans­form the struc­ture of the econ­omy.

Mo­nop­o­lies are only seen as a prob­lem to the ex­tent that they dis­tort the mar­ket and block black own­er­ship.

De­spite its mas­sive em­pha­sis on rais­ing the “com­pet­i­tive­ness” of the econ­omy, amaz­ingly the en­tire NDP makes very lit­tle ref­er­ence to com­pe­ti­tion pol­icy and only ref­er­ences to the com­pe­ti­tion com­mis­sion un­der health.

The plan fo­cuses all its pro­pos­als for greater com­pe­ti­tion in ar­eas where state owned en­ter­prise op­er­ate for ex­am­ple on in­fra­struc­ture, which has nu­mer­ous pro­pos­als to in­crease com­pe­ti­tion. In other words its fo­cus is on in­tro­duc­ing pri­vate sec­tor com­pe­ti­tion where there is state own­er­ship and has a blind spot when it comes to act­ing against mo­nop­oly own­er­ship and con­trol in the pri­vate sec­tor.

The NDP’s so­lu­tion to prob­lems of con­cen­trated own­er­ship lies in eco­nomic growth and new op­por­tu­ni­ties, which will ul­ti­mately see the de­ra­cial­i­sa­tion of the econ­omy.

It goes on to say “a rapidly grow­ing econ­omy that is di­ver­si­fy­ing into new sec­tors will open up op­por­tu­ni­ties for black­owned firms and smaller busi­nesses, pro­mot­ing in­clu­sive growth”. This is the faith in mar­ket forces at its best and is not dif­fer­ent to the DA’s “equal op­por­tu­ni­ties” dogma.

The re­cently re­leased gov­ern­ment’s In­clu­sive Growth Ac­tion Plan as pre­sented by the na­tional Trea­sury is dog­mat­i­cally fol­low­ing in the pre­scripts of the NDP be­cause it is noth­ing but the rein­tro­duc­tion of trickle-down neo-eco­nomics that says the pri­vate sec­tor knows best and that the state must play a lesser role in the econ­omy – and at worst not be in­volved at all.

Cosatu ar­gues that we can ex­pect noth­ing from a plan that does not even at­tempt to fun­da­men­tally trans­form the struc­ture of our econ­omy and pro­mote a new growth path that will help us to in­dus­tri­alise our econ­omy.

Noth­ing will be achieved with a plan that does not place the cre­ation of de­cent work for all, at the cen­tre of eco­nomic pol­icy and also fails to place re­dis­tri­bu­tion and com­bat­ing of eco­nomic in­equal­ity and poverty as fun­da­men­tal pil­lars of eco­nomic de­vel­op­ment.

In­stead the NDP’s jobs plan is prob­lem­atic and un­sus­tain­able, based on cre­at­ing low qual­ity pre­car­i­ous jobs out­side the core pro­duc­tive sec­tors of the econ­omy.

Cosatu re­mains fully in sup­port of a planned econ­omy and a strong in­ter­ven­tion­ist state and will con­tinue to re­ject the over­re­liance on the mar­ket econ­omy This view has been pow­er­fully val­i­dated and re­in­forced by the lat­est statis­tics that show that since the adop­tion of the NDP by the fifth ad­min­is­tra­tion, we are go­ing back­wards in­stead of go­ing for­ward in ad­dress­ing the so­cio-eco­nomic chal­lenges fac­ing the coun­try.

The cur­rent eco­nomic cri­sis is as a di­rect re­sult of un­reg­u­lated cap­i­tal­ism be­ing al­lowed to dic­tate eco­nomic strate­gies, with dis­as­trous con­se­quences for the ma­jor­ity of the coun­try’s pop­u­la­tion, the work­ers and the poor.

The NDP is fail­ing the ma­jor­ity and its pro­po­nents – and hard-line sup­port­ers are guilty of sell­ing out.


GO­ING NOWHERE SLOWLY: The coun­try is strug­gling with a high un­em­ploy­ment rate and noth­ing will be achieved with a plan that does not place the cre­ation of de­cent work for all at the cen­tre of eco­nomic pol­icy.

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