SACP CENTRAL COMMITTEE POLITICAL REPORT

Taking responsibility for the revolution

Unite our movement for radical economic transformation and to defeat all regressive tendencies

This is our first Central Committee since the holding of two different, but similarly successful, national events, the special national congresses of the SACP and our ally Cosatu. It is therefore important that we use this political discussion to reflect on these two important events. However, since the conclusion of these events, the global and domestic economic situations have worsened, including the very real possibility of a domestic economic recession.

Urgent, focused attention on the economy

We are meeting in this CC in the context of an economy faced with the prospects of a severe job-loss bloodbath, especially in the mining and steel industries. This would certainly have a huge negative impact on the rest of the economy.

It is very important that we contextualise the immediate economic challenge facing our country, in order to properly understand the tasks confronting us. The global capitalist crisis inaugurated by the 2008 financial meltdown in the US and its (economic and ideological) crisis has actually never been resolved. Much as that crisis shattered the then Washington consensus, to which capitalism itself has never found an alternative. That crisis had somehow been partly shielded by Chinese export-led growth, which absorbed enormous amounts of the world’s mineral resources, especially between 2009 and 2012. Our own South African economy benefitted enormously from its exports of its mineral resources to China. Soon thereafter China shifted its economic strategy from being a mineral resourceabsorbing, export-led growth country and to focusing on a domestic, public investment strategy to develop China’s own internal economic productive and consumer market bases.

According to Cde Ebrahim Patel, the current economic storms largely originate from outside the country, in the commodity markets of Asia and Europe but principally from the slowdown of China’s extraordinary growth, and with it, the demand for minerals, steel and oil.

This has seen the prices of our major mining exports iron-ore, coal, platinum and gold fall by an average of 50% from 2011. In the last few years to June 2015, the international iron-ore price fell by 67%, coal prices fell by 54%, platinum by 39% and gold by 13%.

These four products employ 425 000 mineworkers, they account for one quarter of South Africa’s exports and they have been thus far an important source of growth for South Africa.

Not surprisingly, as pointed out by Cde Patel, other economies with major mining industries are also dealing with serious challenges.

Some 20 000 mining jobs in the coming year are under threat in Australia, whose growth rate is also projected to decline; while the US mining sector lost 15 000 jobs in April, its 4th straight monthly loss and Canada lost 19 700 jobs in the resources sector.

Anglo American reported a $3-billion loss, mainly due to its flagship iron ore project in Minas-Rio in Brazil, compared with a net income of $1,5-billion a year ago.

This commodity storm is a major reason that two countries in Brics, Russia and Brazil, expect their economies to be in recession this year. It is also the main reason that the IMF last month downgraded growth projections for sub-Saharan Africa by almost a full percentage point.

The slowdown in Chinese demand has contributed to a glut of steel in global markets, leading to severe price and profitability pressures on the steel industry.

Six years since the current international capitalist economic crisis in 2008, most world economies have plummeted into a low growth path. From 2011 to 2014, growth levels in most countries were, on average, lower than the pre-crisis levels.

It is important to pay attention to the Chinese economy: it is world’s production workshop with a strong trade position and is also South Africa’s single most important trading partner. Most South African exports to China are raw materials or unfinished products, while China’s imports to South Africa are mostly finished products. The IMF statement released following bilateral discussions with China on 14 August underlines that Chinese growth last year fell to 7,4%. It was 7,7% in 2013. Chinese growth this year is forecast to slow down to 6,8% and to between 6 and 6,5% next year. The slowdown in China has been acutely reflected recently with trillions of dollars melting down in stock and financial markets. This has serious implications for the South African economy, especially the mining sector.

Due to the new challenges facing the Chinese economy, our minerals exports to that country have dried up, thus significantly affecting especially the mining and steel industry.

It is, however, important to point out that due to the semi-colonial mineral-exporting economic growth trajectory, which we examine in detail in our discussion document, ‘Going to the root’, our semi-dependent insertion into the global capitalist economy has hardly changed. This semi-colonial trajectory, which we are now seeking to change through our Brics linkages, has historically benefitted the economies of the Western imperialist countries. Despite the alternatives we are seeking to build, the economic crisis in China is potentially undoing elements of our trajectory away from dependency on the Western imperialist countries – a challenge and contradiction we are currently facing along with other resource-dependent economies. This has huge implications for the South-South agenda we are seeking to build through Brics.

In addition, Europe, another of our major trading partners, has been lurching from one crisis to another and this has had its own negative impact on our exports to the region.

There are a number of strategic policy issues we need to deal with in this international economic context. Some of these have been discussed in detail in ‘Going to the root’. They include the question of revisiting our international trade policy from the high road liberalisation of the 1996 class project, which was too fast and too deep compared to the norms in the World Trade Organisation regime. It is also important, within the context of our Financial Sector Campaign, to vigorously push for capital controls and the overall transformation of the financial sector to achieve a new financial architecture. This means that, while we take forward our renewed call to Nedlac to convene the second financial sector summit, we must conduct extensive research and policy development work to inform the new financial architecture and structure we are calling for. We need to intensify the call and struggle for prescribed assets in the financial sector in order to raise the necessary resources to drive an alternative economic agenda. We have a further opportunity to discuss this matter during this CC.

We must also vigorously advance our strategic task of industrialisation in terms of our Alliance’s shared perspective of the second, more radical phase of our democratic transition, the national democratic revolution. This is even more important with China’s growth path being less resource-intensive than had been the case before.

There is a lesson we must draw from the Chinese experience. China has developed local production through industrialisation but is experiencing a slowdown because of, among other things, sliding changes in international trade patterns, which have a negative impact on its export-driven growth model. There are at least two important developments to note in this regard. China is presently focusing on economic upgrading to move up the global value chains to the top of high value added activities. It is also focusing on developing its internal market.

There are short-term issues that we need to consider, discuss and possibly pronounce upon as we move out of this CC.

The mining sector has reacted to the current turmoil by announcing intentions to restructure its operations, including closures and retrenchments of thousands of workers. We need to urge government to be tougher with the mining sector and resist South Africa being its major focus of global retrenchments. Government needs to clearly signal that the award and renewal of mining licenses must be tied to saving jobs in the current period, as well as appropriate pricing for local beneficiation, including supplying Eskom.

The steel sector has joined the mining sector in this looming jobs bloodbath. The sector has also announced intentions to retrench thousands of workers. Government needs to put pressure on the steel industry so that any incentives to save the steel production value chain must be linked to saving jobs, as well as moving away from import parity pricing for local beneficiation.

We need to call for sustained, if not increased investment in government-led investment in infrastructure, as well as significantly improved state capacity to drive such investments.

We need to call for significant and increased focus on creating learnership opportunities for youth, including significantly expanding the national youth service as a national emergency through, amongst others, hugely up scaled public employment programmes, as well as learnerships and internships in all state departments, agencies and state-owned enterprises, including government led training lay-off schemes.

We require a comprehensive economic strategy and priorities to leverage more from our Brics countries, including the strategic use of the New Development Bank.

Meanwhile, it is important to note that during resource booms, mining capital appropriates the benefits alone, including resource rents – which actually belong to our people as a whole – and therefore it makes a killing in super profits. Both the mining and steel sectors charge import parity prices on our own local products. Sasol has also been doing the same, as have other sectors. This has the overall effect of stifling downstream activity, especially the development of manufacturing and beneficiation.

We have in the past discussed strategies on how to deal with some of these issues. It is important that we push forward with policy changes and implementation, including the elimination of import parity prices and a windfall tax of super profits as the starting point to take rightful control of our resource rents.

All of these and other measures will require decisiveness in order to dynamise and re-energise our economy according to our key platforms of industrialization and job creation. We must also stop fudging the very serious management crises faced by some of our most strategic and key state-owned enterprises, and we must urgently and frankly engage the Alliance in this regard.

To achieve this we must pay particular attention to the capacity of our own movement to drive such an economic transformation programme. Given that this is the first CC after the SACP and Cosatu special congresses, it is important to start with an assessment of them, against the background of the need to build the capacity of the motive forces to drive economic transformation.

Evaluating the 2015 SACP and Cosatu SNCs

Starting with the Cosatu Special National Congress (SNC): one of the most important lessons to be learnt from the actual convening of the SNC is that over time there has been a serious weakening of worker control and accountability of leaderships to the workers across all the Cosatu affiliates, and within the federation itself. The improved organisational efficiency in Cosatu and its affiliates since the 1994 democratic breakthrough has also had its unintended consequences, including that of the bureaucratisation of the trade union movement. This had also led to the creation of a distance between leaders and members and erosion of worker leadership.

The rebuilding of Cosatu affiliates is going to be important, especially for (re)elevating the issue of worker control and leadership accountability, with a renewed focus on organisation and shop-steward education and development. There is a need to refocus on the political and policy education of shop stewards as crucial components of worker education moving forward.

We must admit that Cosatu went to its SNC being on the defensive, as a result of a massive attack by Numsa, Zwelinzima Vavi and from some of its ‘renegade’ affiliates. The backing of Numsa strengthened this offensive and these forces received support from most of the bourgeois media, including significant news outlets of the public broadcaster. The non-participation of some of the unions became an ideological weapon to project a divided Cosatu, as well as intensified attacks to delegitimise the current Cosatu leadership. The failure by its detractors to capture the SNC, and the defeat of their counter resolutions at the SNC was important in changing both the context and the balance of forces inside the federation. This has led to further tensions and divisions amongst these Cosatu detractors, and has created a hugely positive climate to rebuild the federation. It has forced these detractor unions to go back and seek a new mandate from their members, many of whose commitment is to the federation. The challenge is to grasp this moment, which also creates an even better climate to further consolidate the federation at its next Congress in November.

However, another important lesson coming out of the period leading up to the Cosatu SNC is the need for long and painstaking work to rebuild and strengthen the affiliates. Particular attention must also be paid to rebuilding and strengthening industrial unions inside Cosatu. This is absolutely essential as part of building the motive forces to achieve one of the principal objectives of driving a second, more radical phase of our transition, that of industrialization.

Intensive strategic discussions and organizational work need to be undertaken in Cosatu as part of strengthening it organizationally in the run up to its November Congress. It is important that we therefore convene the joint and high level political school between the SACP and Cosatu well before the November Congress.

The SACP SNC

Our SNC demonstrated the extent to which the Party has significantly grown in size and numbers and that this is a positive and welcome development. But the potential downside of this is that there is huge unevenness in terms of the political and policy development of our Party cadres. Unless we address this systematically and systemically, we will also degenerate into manifesting some of the tendencies that we see in the ANC today. The primary task of our organizational renewal must be that of significantly enhancing the political and policy development of SACP cadres. In doing this it is important that we develop solid policy collectives at all levels of our Party and support these with on-going political development. These must be SACP collectives that specialise and deepen their understanding in various policy areas, including governance. These policy collectives must become the core of our mass campaigning in the various sectors e.g., education, health, public employment programmes, land reform, the financial sector, etc.

The SACP SNC also showed the extent to which the SACP makes a wider public impact by raising key policy and political issues that are generally not adequately covered in the public domain. Whilst we must not exaggerate, we also must not underestimate the influence of the SACP on the ground and in the general sphere of the battle of ideas, although unevenly and often for different reasons, amongst the different class forces in society. Part of our organizational renewal must once more focus on further building our capacity for effective engagement in the battle of ideas. As part of this we need to raise important ideological and intellectual debates on a number of topics that are of public interest, including contesting the ideological space inhabited by, or of interest to, the middle classes.

Some of the immediate organizational challenges in the revolution

It is important that this CC finalises the focus of our 2015 Red October Campaign, and to particularly ensure that the Financial Sector Campaign, unlike in the past few years, takes off in earnest. Given our inability to adequately resuscitate this Campaign in recent times, it is suggested that it be our main campaign for this Red October and well into 2016. Our key demand must be that of the convening of the Second Financial Sector Summit by Nedlac – however, we may want to ensure that this summit is convened on the back of sustained popular mobilisation and other campaigning activities. We must also use this CC to reflect upon and approve our ‘Financialisation’ Document to be the main discussion and education document to empower our cadres for this campaign.

A second campaign that we must launch at the same time is for the transformation of the media. Before the end of September, we will be convening a two-day media transformation summit. Co-incidentally this summit comes at an opportune time when our own assertions about the dirty role played by most of the commercial media in the anti-majoritarian liberal offensive is being further exposed from inside the media itself. However the anchor of our summit will be media transformation as a whole, including change in ownership patterns and intensifying the struggle against media monopoly, with Naspers being our main target. This campaign must also seek to take forward the unfinished business of the ANC’s Media Charter of the early 1990s.

Perhaps one of the most important challenges facing our revolution and movement in the immediate period is that of the absolute necessity to roll back and defeat what is emerging as a hugely divisive offensive that wants to capture the ANC in the lead up to 2017. The strategy this time seems to be that of capturing the ANC long before 2017 and to turn our movement into an instrument of personal and class accumulation by a faction bent on weakening the unity of our movement and isolating the allies. This faction is using money to buy conference delegates at all levels of our movement, the Leagues and Alliance, in pursuing its agenda. This faction is using gatekeeping at especially branch and regional levels, and deliberately seeks to undo our Alliance structures on the ground. Access to state power is now less about even the problematic notion of a wheelbarrow (service delivery) state, but largely about dispensing patronage to consolidate factionalist groupings, both in the ANC and government. This is reinforcing rather than reducing the politics of slates.

However, there are positive signs that there is already some significant resistance to these divisive manoeuvres from significant pockets of the ANC and Alliance partners in virtually all the provinces. The ANCWL and ANCYL congresses are being used as power brokers and storm troopers for this divisive tendency, instead of consolidating these organisations to organize important sectors in our revolution. It is time that we confront these divisive and factionalist elements right up to those in the NEC of the ANC and in all other structures of our movement. Much as these elements are based in the ANC, their divisive behaviour is causing tensions across all Alliance structures and indeed in all the structures of our movement.

It is important for the SACP to draw consistently from ‘Going to the Root’ to deepen our critique of capitalism as the foundation for growing inequality in our society. This must include the economic behaviour of monopoly capital in general, including divestment, the investment strike and retrenchments. On this score we must also be guided by our SNC Declaration to the effect that:

“We have agreed with the general theses advanced by our discussion documents that the present phase of our on-going national democratic revolution requires a principled anti-imperialist, anti-monopoly capital and anti-patriarchy struggle. This is the pre-condition to advance, deepen and defend our national sovereignty... An anti-monopoly capital struggle is not an abstract slogan. It is about the struggle against the daily dispossession of homes by major banks, inflicted by cartels linking property developers, banking staff, and corrupt officials in magistrates’ courts... The struggle against monopoly capital is also a struggle against the siphoning of-billions of rands out of social grant payments by financial institutions, retail creditors and unscrupulous loan sharks. The struggle against monopoly capital is a struggle against illegal garnishee orders”.

In essence our campaign for the transformation of the financial sector must be a concrete anti-monopoly struggle and a foundation to critique the role of capitalism in the reproduction and widening of inequality in our country. The SACP must also use all of these to expose the commercial media for not speaking truth to capitalist economic power, while selectively only speaking (some) truth only to government, letting capitalist monopolies fleece our economy. We need to seek assistance from progressive think tanks, including the Chris Hani Institute (CHI), to assist us in doing research and analysis in this regard.

It is important that we continue a sustained critique of the antimajoritarian agenda, now more stridently projecting our movement and government as inherently corrupt. This agenda is actually embodied within those institutions and power bases of the old apartheid ruling bloc that remain untransformed, especially the capitalist economic base of the apartheid regime and the media.

In addition, despite a positive emphasis by the ANC NGC documents on the national question, we have to face the reality that the DA has succeeded in mobilizing majorities in most non-“African” communities behind its banner, and this reality increasingly makes the ANC an organisation for Africans. This is a serious setback in the struggle to build a non-racial society, and even more disturbing is the resurgence of especially anti-African racism in a number of instances. The SACP needs to direct the CHI and other progressive think tanks, to undertake on-going class analysis as well as focused analyses on the national and gender questions, as part of capacitating us and the movement as a whole to build a non-racial society.

Part of the anti-majoritarian offensive is captured (albeit in problematic language) in the ANC’s discussion document on the balance of forces: “A worrying trend in the recent period has been the tendency for leaders of various sectors of society, especially in the political arena, to seek judicial resolution for matters that can be managed through other channels. These range from quarrels with a puppet and singing of songs, to legal challenges against constitutionally valid administrative actions by the Executive. On the other hand such ‘lawfare’ can suck up the judiciary into the maelstrom of day to day societal management and thus unnecessarily splutter it with mud. On the other, repeated attempts of this kind, into which huge resources (are) thrown, do suggest that some privileged sectors of society seek to undermine the popular electoral mandate.”

It is unfortunate that the ANC seems unable to effectively and organizationally respond to many of these challenges. Our participation in the ANC NGC must also aim to contribute towards the capacity of the ANC to deal with these many challenges. There are two main reasons for the failure of the ANC on this front.

Firstly, as reflected in its ‘Balance of Forces’ document, it seems as if the language of the 1996 class project, that of seeing the ANC and government as a mediator ‘above society’, and simultaneously managing societal contradictions, is dominant. In fact the ANC is unable to act and strengthen its character as a people’s movement operating both inside and outside the state. This is a development and weakness that has cost many liberation movements in power.

The second reason is that the ANC is unable to lead any mass campaigns and activism outside of election campaigns. In fact the younger cadres of the ANC who historically were its leading activists at crucial, historical moments, increasingly do not have any experience of mass activism. Instead, as is shown in the recent politics of the ANC Youth League and the progressive youth alliance as a whole, political activism is now being replaced by money politics and bingeing, something that is threatening to kill the militancy of the youth. Progressive youth militancy has in fact historically propelled our struggle to higher levels, from the ANCYL programme of 1949 to, inter alia, the 1976 student uprisings. But now our youth is faced with the danger of being domesticated and demobilized by the politics of money, tenders and patronage, a phenomenon taken to its highest level under Julius Malema’s Youth League.

The second part of the CC Political Report was the draft discussion document on “Financialisation”, which will appear in the next issue of “African Communist”.

This document first appeared in the SACP journal the African Communist, October 2015