President Ramaphosa’s economic recovery plan will disappoint and enrage workers

14 October 2020

We dread the “economic recovery plan” President Cyril Ramaphosa will present on October 15.

Why? It is because of what we know so far. In August, presenting to the National Economic Development and Labour Council (NEDLAC), government issued a 16-slide PowerPoint summary of its thinking.

Recall that SAFTU members have been kept out of these discussions because NEDLAC has excluded us from its meetings. Indeed, NEDLAC has, since 2017, shut out the second-largest labour federation (including the country’s largest trade union). This leaves us only the streets and workplaces where we can demonstrate our dissatisfaction.

Any claims that government makes, to genuinely consult labour and community constituencies, must be taken with a large grain of salt.

We nevertheless got hold of the presentation. We also received the “SA Economic Reconstruction and Recovery Plan” (SAEERP) issued on 7 October.

These draft strategies are terribly disappointing. We warn the society not to be confused by pleasing rhetoric from Ramaphosa, but to look at the details – and specially to look at alternatives that we all know are needed, but that we have no voice inside the system to advocate for.

As a result, the government’s priorities do not begin to properly take into account the desperate need SAFTU always expresses, for bottom-up economic growth based on restoring lost incomes, establishing a mass public works programme, and ensuring that infrastructure meets our basic needs.

In contrast, remember that white-elephant, corrupt, capital-intensive projects are the intrinsic bias of Eskom, Transnet, the airline and airport industry, and all the other major state agencies.

This is not a failure of ‘government’ or the ‘state’ or ‘public ownership’ or our ‘commons.’ It is a failure of the elite who have all the wrong priorities. And one simple reason is a failure to identify what is wrong in our economy, as well as our society and environment.

Faulty diagnosis

We are first concerned with Government’s diagnosis of our crisis conditions, which according to the October 7 document presented to Cabinet, is only partially correct: “persistent crisis of low growth, slow development, capacity under-utilisation, rising unemployment, poverty and inequality.”

SAFTU would add to this another dozen critical contributing factors equally important to any far-reaching diagnosis of the South African economic crisis:

- Government’s continuing commitment to failed neoliberal economic policies, including fiscal austerity, tight and inappropriate monetary policy, liberalised finance, outsourcing of workers, privatisation (or ‘corporatisation’ as in Eskom’s case), deregulated commerce, weak pollution and emission controls,

- the black majority is too poor, propertyless and landless. This means the overwhelming majority which is the face of unemployment and inequalities only participate through supplying cheap labour in a neocolonial economic relations

- unhealthy economic biases reflecting power of the Minerals Energy Complex (in spite of the failure to reliably provide industry with Eskom electricity) and financialization

- corporate management apparently remains committed to disinvestment, hoarding cash, massive CEO salaries and outsourcing workers

- the drag on productivity due to apartheid’s ongoing geographical inheritance (distant townships and ex-Bantustans)

- South Africa’s vulnerability to global economic turmoil (finance, investment and trade) especially when carbon taxes are soon applied

- the massively overvalued Johannesburg Stock Exchange is #2 in world ‘market capitalisation/GDP’ ratio

- we are suffering worrying foreign and domestic debt crises (public, corporate and household)

- Government is blind to Illicit Financial Flows, corporate criminality and state capture

- we are already suffering extreme ecological vulnerabilities and destruction as climate crisis continues to worsen

- Government mainly ignores oppression and super-exploitation of women through patriarchy, gender-based violence and ongoing migrant labour system

- Government’s failure to provide good schooling has left us with an inadequate skills and educational base

- the economy prioritised the assimilation of leading black and women cadres into existing system, instead of the system’s transformation

Dishonesty

SAFTU also has ongoing concern about Government’s dishonesty regarding its neoliberal policy orientation:

- the R500 billion ‘fiscal stimulus’ was in fact only around a tenth of that amount through August, given the utter failure of the state’s loan programme and its rearrangement of state spending

- the failure to reduce corruption in state outsourcing (35-40% of an average procurement contract is stolen, according to Treasury)

- the refusal to pay civil servants what had been negotiated thus eroding trust in orderly industrial relationships

- the rhetoric about localisation and a Just Transition will be negated by ongoing export-led growth strategy (in spite of global recession) and reliance on Minerals-Energy Complex

SAFTU also has concerns about Government’s defeatist rhetoric about the “4th Industrial Revolution,” which is disturbing because state and capital have embraced digitisation but left most of society unprepared, given that poor schooling leads to some of the world’s worst educational outcomes in maths and sciences:

“Digitisation is accelerating globally. Countries and populations that are not keeping up will be left even further in behind. In SA this will lead to deeper inequalities. The process of ensuring universal access to affordable broadband and digital public services has become even more critically important and should be prioritised. The special character of the Covid-19 is that it limits labour-intensive industries that happen to also have significant supply chains. It accelerates structural change towards digitalisation and diminished use of labour in the production process.”

Because of these conditions, SAFTU insists on the state making major interventions to prevent the 4IR becoming a disaster for labour and society. South African workers and social movements have shown the way in 4IR resilience, by, for example:

- rejecting 4IR surveillance systems when applied to Gauteng e-tolling (73% non-compliance)

- helping to kill some of SA’s worst fake-news social-media machinery (Bell Pottinger and other Gupta bots)

- removing the Intellectual Property (that is the heart of 4IR) when applied to technical innovations in vital medicines (with free generic antiretrovirals saving millions of lives of people living with HIV and raising the life expectancy from 52 in 2005 to 65 today)

- halting the 4IR ‘financial inclusion’ strategies of CPS/Net1 when applied to social grant distribution, microfinance and cellphone contracts (now with SASSA using the Post Office instead, CPS is going into bankruptcy)

- fighting the robotisation of jobs where it is clearly leading to inferior services to society as well as mass unemployment

Skewed priorities

So far, the state has provided insufficient detail on each of the eight priority areas mentioned in the October 7 statement. But we have experience with each to know that the bias will be against poor and working people. SAFTU would therefore warn all workers to look at the devils in the details, in these categories of prioritisation:

• Strengthening Energy Security

SAFTU and our members anticipate that the bias here will be to continuing coal-fired power and fracking gas, as well as nuclear – we have demanded a just transition to move us away from CO2 dominated economy – and that the renewable energy will continue to be privatised with European companies dominating, which we reject.

• Localisation through industrialisation: a thriving local industrial base

SAFTU supports this priority but anticipate that all the Free Trade deals done with Europe, the U.S., the BRICS countries and the World Trade Organisation will place severe limits on what can be done – strategic thought will be needed on breaking neoliberal trade agreements

• Strengthening food Security

Given the vulnerability that South Africa has in relation to corporate agriculture and white farmers, whose interests are not always aligned to providing ecologically-sound, nutritious, affordable food to the mass of poor and working-class people (and whose ‘zoonotic diseases’ such as Covid-19 are the result of excessive stress on natural systems), SAFTU instead would promote “food sovereignty,” a much richer understanding of human relations to nature, with an emphasis on decommodifying healthy food

•Infrastructure investment and delivery that meets the NDP Goals

SAFTU would want to see the dramatic increase in financing for basic-needs infrastructure to meet the needs of the masses – instead of the mega-projects that are continuing

•Support for tourism

SAFTU would advocate a sensible strategy, to lower reliance and vulnerability on rich international tourists given the pandemic – causing persistent fears for long-distance travelers – as well as given the climate implications, and to instead promote affordable tourism and recreation aimed at South Africa’s under-served working class

• Green economy interventions

SAFTU is concerned that these are articulated in Phase 1 entirely in terms of waste recycling. While vital to pursue this, it’s a tiny fraction of all the Just Transition projects that are urgent to embark upon.

• Public employment Programmes

SAFTU is concerned that this is simply rhetoric, and that government will impose freezes and pay cuts on workers, with no prospect for hiring the many millions who are desperate now for employment.

• Macro-economic policy interventions

SAFTU notes how all the fiscal and monetary interventions that could have been progressive – as is the case in many countries – have turned out to be more neoliberal than nearly anywhere on earth. Even Boris Johnson is far more generous on creative UK state programmes and health support, and even Jair Bolsonaro is more generous with social grants, reducing poverty in Brazil dramatically.

Partly because consultation has been limited to NEDLAC, and NEDLAC’s own processes and outcomes are terribly unsatisfactory, we anticipate SAFTU will not rejoice when a Government economic recovery plan is finally announced.

On the contrary, we will be working even harder to take people (safely) to the streets to protest, to engage in mass strikes such as happened on October 7, and to establish unity with social movements, community groups, women, youth, environmentalists and all other progressive forces – to defeat the drift towards yet more pain and suffering during this era of Covid-19, climate crisis and resurgent neoliberalism.

Issued by SAFTU, 14 October 2020