Cosatu is the real roadblock to development in South Africa

Note to Editors: This is an extract of a speech delivered by Helen Zille at the University of Stellenbosch, April 24 2012

Let me start with what may seem to many to be an irrational statement: Cosatu is the main roadblock in the road to job creation and redress for millions of South Africans. 

I say it may seem irrational to many because Cosatu has built up a brand over the years as being the defender of the poor, supposedly acting with their interests at heart. 

But is this brand accurate? It is not. In fact, sadly, the opposite is often true.    

Thursday this week marks one of the most important dates in the Western Cape government's term of office. It marks the launch of the Economic Development Partnership (EDP) which will bring together all stakeholders in our economy across all sectors to create a joint vision for the Western Cape's economic future and to facilitate innovative approaches to job creation.

The national government, local governments across the province, and our provincial government have participated enthusiastically in supporting the partnership, which will function independently. Over the past fifteen months the team facilitating the EDP has consulted with scores of organisations and hundreds of leaders drawn from all over the Province, business associations, social movements, NGOs, organisations representing work seekers, the FEDUSA trade union federation, professional associations, education institutions, etc. 

Bizarrely, Cosatu is the only organisation in the whole of the province that has refused to engage with the process since March 2011 when it started. It has now declared it will boycott Thursday's launch because the process has not been "inclusive". 

It is, frankly, hypocritical for Cosatu to refuse to engage with the EDP and then claim the process was not inclusive. Sadly, this has become characteristic of an organisation that played such a pivotal role in establishing workers' rights in South Africa. 

The truth is Cosatu does not want a partnership. It is stuck in the bargaining model of 1950s Britain, based on a contestation between "workers" and "management". This is a zero sum model. Every gain by one side represents a loss for the other. Each side views the other as the obstacle to getting a bigger slice of the pie for itself. 

This view of the economy is entirely obsolete. Countries that grow and create jobs are able to form partnerships across all sectors and put their best minds from all sectors together to find innovative ideas to solve complex policy problems and to drive job creating growth. 

The depth of South Africa's unemployment crisis is known well to everyone here today. The National Development Plan correctly identifies as South Africa's two biggest problems that, firstly, not enough people are working, and secondly, that the quality of education delivered in South Africa prevents people from accessing employment opportunities. 

The Centre for Development & Enterprise (CDE) notes a revealing statistic - only 41 per cent of the population of working age (everyone aged 16 to 64) have any kind of job - formal or informal. To reach the global average labour participation rate of 56 percent, South Africa would need to employ 18-million people - five-million more than it employs today. 

What this means is that there are many more people who are locked out of the job market, than those who do have access. Put simply, the only real question in South Africa is how to get more people working. Unemployment is the root of poverty, and it should be our government's top priority. But it is not. 

It is now clear that President Jacob Zuma's government is in office, but it is not in power. The truth is that Cosatu exercises a veto over government policy in education, labour and economic reform. 

Every serious economist in South Africa agrees, as does the National Planning Commission, virtually every think tank, university and even a significant portion of the ANC - that certain key interventions are required to really kick-start development and job creation:

1. We need a more flexible and responsive labour market, where wages respond to productivity and industry needs, while still protecting workers.

2. We need to give young people a chance to work - to get their foot in the door of the job market. The fact is that while the official unemployment rate hovers around 25%, unemployment among people under thirty is 50%.

3. We need to fix our education system. A good education is the best investment in development that the state can make. Our education system needs to produce matriculants and graduates who can participate in the modern, knowledge-based economy, who can thrive in the job market and who can innovate and start companies.

But when you look at what is happening in the policy debates in each of these areas, you can't escape the fact that it is Cosatu and its influence that is blocking progress. On each score Cosatu advocates policy positions precisely the opposite of what is needed for development and job creation, and precisely the opposite of what is in the best interests of poor, unemployed South Africans. 

Consider the facts.

Firstly, job creation relies on small and medium size businesses. Nearly 50% of workers in South Africa work in companies which employ less than 50 people. If we want to create jobs, we need people to start businesses. But the restrictive centralised bargaining regime currently enforced in South Africa means that massive corporations and tiny start-ups are subject to the same wage bargaining process. This is a massive disincentive to start businesses, and a huge financial burden for existing small businesses. 

Every Finance Minister since 1994, most notably Trevor Manuel, has tried to reform the labour market in line with international best-practice. Despite their efforts, South Africa's labour marker has become ever more restrictive and exclusive. Earlier this month Minister Pravin Gordhan proposed "labour market reforms" to "directly improve employment by providing flexibility and the right incentives to work". But Zwelinzima Vavi, in a clear display of who calls the shots, responded by instructing President Zuma to "give the minister a call to tell him to stop sending out these messages". 

Secondly, with regard to the take up of youth in the job market, again Cosatu's role is obstructive. Cosatu has opposed the Youth Wage Subsidy, a policy proposal supported by both the DA and the centrists in the ANC. The National Treasury has put aside R5bn for this proposal, which it estimates would assist up to 430 000 school leavers. But Cosatu opposes the subsidy, and has refused to budge in the Nedlac negotiations, which has effectively filibustered the proposal. 

On education reform too, Cosatu's role has been destructive. Education is a constitutional right. Yet Cosatu and its biggest affiliate union, Sadtu, routinely act in such a way that denies that right to millions of learners. Sadtu, opposes measures to improve the performance of teachers and principals by holding them accountable for outcomes. Teacher absenteeism is rife, and teacher strikes contributed the largest portion of the unprecedented 16 million work days lost to strikes last year.

In fact, the unofficial figure for work days lost to strikes in 2011 is closer to 20 million days, the highest it has ever been. In 1988, with a nationwide mineworkers strike, there were 9 million work days lost. Sadtu might from now become an acronym for the "Strike and Don't Teach Union". 

In 2010, according to Statistics South Africa's General Household Survey, teachers' strikes were a major cause of disruption of learning for more than a quarter of learners in South Africa. It is not possible to imagine any other nation where the largest teaching union would threaten a strike involving 53 000 teachers on the eve of matric exams, as Sadtu did in the Eastern Cape last year. Or let six weeks of the school year go by without teaching. In learning and in economic terms, it is impossible to calculate the damage that a day of lost teaching does to a child.

When Basic Education Minister Angie Motshekga tried to take on Sadtu and introduce performance contracts for teachers and principals, she was shot down without any covering fire or support from President Zuma. He knows who's really in charge.

The truth is that Zwelinzima Vavi and Cosatu are just doing what trade unions do best - protecting their members, who are all employed and are working their way up the economic ladder. Its animating purpose is solely to protect its own members' interests. That is understandable and that is Cosatu's purpose. But then it should not try to masquerade as the champions of the poor. 

In our context, in South Africa today, this attitude is inimical to the interests of the poor and unemployed - the far larger group of people who do not yet even have a foot on the first rung of the economic ladder. 

In the real world, outside Cosatu House, where parents have to feed and clothe their children, Mr Vavi's dogma is reckless and it blocks people from the opportunities they seek to improve their lives step-by-step. 

But if you want to get a real sense of Cosatu's attitude towards the poor, you need only consider for a moment how profoundly hypocritical it is on so many issues that affect poor people. 

Consider for example that Cosatu and many of its affiliate unions have got investment companies that are invested in companies which lay off hundreds of workers. Seardel, a major local textiles producer, for example, is majority owned by Sactwu's investment arm, HCI. Seardel recently retrenched 1500 workers locally, while maintaining an operation in Lesotho which pays workers less than half the minimum wage in South Africa. So while Cosatu and Sactwu preach the "buy local" and "Proudly SA" message, they are actively involved in retrenching locals and sending jobs to Lesotho where they can pay cheaper wages. 

Consider how Cosatu campaigns against e-tolling, while it is also a shareholder in a company called Raubex, which won an R800 million tender as part of the e-tolling project. Cosatu then said it didn't know it was a shareholder, but then it turned out that the CEO of Cosatu's investment arm was until recently serving as the non-executive Chairman of Raubex. There is no better way of saying "uitgevang". 

But Cosatu really plumbed the depths of hypocrisy when it led a campaign against the Secrecy Bill, even though its own Members of Parliament, sitting in the ANC benches, voted for the Bill. 

In the context of the picture I have sketched above, it is clear that Cosatu does not have the interests of the poor at heart. 

Cosatu's interest is power. 

It is clear that Zwelinzima Vavi is engaged in a campaign to construct for himself a power base from which he will attempt to capture the alliance at the ANC's 2017 conference. 

The tripartite alliance does not cohere around a cogent policy framework. It is only held together by the glue of cadre deployment and the maintenance of power. 

As the internal battle in the ANC heats up, and Cosatu jockeys for more of the power, it has cleverly tried to paint itself as the "internal opposition" inside the tripartite alliance - the faction which supposedly stands up for clean, open government and resists the culture of greed and self-enrichment in the ANC. 

It is time South Africans saw through Cosatu. It wants to keep unemployed people excluded from jobs and economic opportunities, to protect its power base. 

The Democratic Alliance will keep offering South Africans an alternative government that will open opportunities to all, get many more South Africans working, that will do what it takes to turn around education, and that will give every South African the chance to be part of the economy. 

We'll carry on winning votes one by one, street by street, town by town across the country. We already have an electoral mandate from 3 million South Africans - something Mr Vavi does not. If he wants to run this country, then he should put his name on the ballot and stand for election. But I'm not holding my breath. 

Thank you. 

Issued by the DA, April 24 2012

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