Going backwards, not forward
NDP’s cosmetic reforms only look to deracialise monopoly ownership, instead of transforming the structure of nation’s economy
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.