Statement on the necessity to achieve SA Post Office turnaround.  

15 June 2023

The South African Communist Party (SACP) is strongly opposed to the contemplated retrenchment of over 6,000 workers at the SA Post Office and is deeply disappointed with the government’s failure to reposition the entity to thrive.

The provisional liquidation and business rescue process was entirely unnecessary, given the ample opportunity that the government has had to reposition the SA Post Office.

The SACP will call an urgent meeting with the Minister of Communications and Digital Technologies Mondli Gungubele to discuss the SA Post Office situation. Besides, we will raise our views both inside and outside the Alliance and practically express our solidarity with the workers through joint action with the trade union movement after consultation.

As part of its turnaround process, the SA Post Office must be adequately recapitalised to support its legislative mandate and growth. Its operations, technology and skills must be upgraded, its services and activities must be diversified, and its accountability must be strengthened.

The regulatory framework and operating environment for the SA Post Office must also be reviewed, to protect it from unfair comparison and unequal terms of competition with foreign-controlled multinational entities and private sector players that do not have any national legislative mandate to serve all the people and areas, including underdeveloped rural areas. Therefore, driven by the profit motive, they focus only on the well-off, relatively developed and lucrative areas. Their cost structure differs from that of the SA Post Office. Unlike the SA Post Office, they do not incur the costs that it incurs in striving to deliver on its legislative mandate.    

The necessity to upgrade, reposition and turn around the SA Post Office to thrive.

Understanding change and the trends that drive it should have long informed the government to recapitalise and upgrade the SA Post Office to thrive.

In the courier, package delivery and mail services sector, the decline in letter volumes because of technological changes such as the short messaging service, instant messaging applications, emails and other digital innovations, cannot spell an end to an adequately recapitalised and upgraded Post Office, when in fact the daily movement of goods has unprecedentedly increased and is continuing to grow.

There can be no doubt an adequately recapitalised and upgraded SA Post Office with a diversified range of activities is important for rural areas. However, it is also a fact that it is equally important for urban areas, and, in addition, for global logistics linkages. To be sure, such an SA Post Office will thrive even in the context where people have and use smartphones daily.

That said, the generalised assertion that people in rural areas do not have smart phones is not factual. Still, it will be backward to narrow the importance of an adequately recapitalised, upgraded and turned-around SA Post Office to people who do not have smartphones.

As the Minister of Communications and Digital Technologies, Gungubele should know that, in fact, the use of smart phones and digital connectivity play a key role in facilitating orders and sharing Global Positioning System locations. This has brought about new opportunities in the digital economy and ensures accurate physical delivery addresses for the massively increased volume of goods moved every day as package deliveries, including through e-hailing services. Because of the problem of uneven development, including lack of digital infrastructure mostly in rural areas than elsewhere, most of this activity is presently concentrated in urban areas. This contradicts the wrong assertion that a turned-around SA Post Office can only thrive in areas where people do not have smartphones.

That said, South Africa cannot have underdeveloped rural areas as its permanent feature. The national democratic revolution, properly understood, has to eliminate, systematically, uneven development between rural and urban areas.

To emphasise, an upgraded SA Post Office is not an anti-thesis of digital technological innovations and cannot abstain from participation in new opportunities that have arisen and continue to grow in the digital economy.

Destruction of the public economy by neoliberalism and corruption

Not only has neoliberalism inhibited the success of State-Owned Enterprises (SOEs) but has also contributed in no small measure to the crisis many find themselves in. This has occurred in favour of expanding the sphere of private capital accumulation.

The economic policy reforms mainly driven by imperialist states and sections of transnational capital through institutions such as the IMF, World Bank and the OECD are part and parcel of the neoliberal agenda. Included in this is the microeconomic liberalisation targeting the conquering of network infrastructure, which has hitherto been under SOEs, by private capital accumulation competitors. To pave the way for this outcome, the agenda, also called structural reforms, includes unbundling some SOEs.

The neoliberal policy regime was and is still driven by an attack on state participation in the economy. Many of the factors underpinning declining organisational performance in SOEs can be traced to the neoliberal policy regime, which has forged an unfavourable operating environment for the affected entities.

The crisis facing the SA Post Office should therefore not be viewed in isolation. It is part and parcel of the crisis facing the likes of Eskom, Transnet and Prasa, to name but a few. The neoliberal policy regime included restricting capital expenditure in SOEs. This deprived the affected SOEs of adequate recapitalisation and upgrading.

Instead of moving with the times, the productive capability of the affected SOEs lagged cutting-edge advances, including technological innovation. It was consequently overwhelmed or overtaken by new demands in their operating environment. This contributed to a fall in publicly owned productive capacity, a decline of the public economy, and a financial crisis in SOEs. Hand-in-hand with this was market takeover by multinational and privately owned domestic entities. This was also enabled by liberalisation without regard to its impact on domestic and publicly owned productive capacity.

Because of neoliberal dominance, South Africa has become a country in which a multinational logistics entity from a global North country thrives in the same sector where the publicly owned SA Post Office was forced into crisis, including provisional liquidation. To be sure, state capture included policy and regulatory capture by neoliberal forces, among others. This, together with other forms of corruption, was behind the performance and financial crises that many SOEs found themselves forced into.

Issued by Alex Mohubetswane Mashilo, National Spokesperson, SACP, 15 June 2023