POLITICS

We need to go back to the Freedom Charter - SAFTU

Federation says SA is trapped in a neo colonial structure that reproduces unemployment, poverty and inequalities

SAFTU is not shocked by the 3.2% decline of the GDP in the first quarter of 2019

South Africa has long being stagnated! It is trapped in a neo colonial structure that reproduces unemployment, poverty and inequalities. Even when it grew at some point notably during the Thabo Mbeki presidency, where it grew by up to 5%, the growth was jobless. 

The quality of growth needs to change so that growth goes together with the redistribution of wealth, job creation, elimination of poverty and inequalities. Little has been done to restructure the neo-colonial economy from what we inherited from the colonial and apartheid era. 

Government has, instead of taking bold steps to address the economic fault lines of this colonial and apartheid economy followed the prescription of neoliberalism and has in response to the world economic crisis embarked on austerity measurers that simply worsened the situation, hence economic stagnation and now economic decline. 

The 3.2% economic decline spells a disaster to the 10 million of South Africans  who are unemployed. Our youth is being robbed of its future. More will be added to that long queue of unemployment. Already government plans to slaughter 30 000 jobs in the public service. It has announced that it seeks to retrench more workers at Eskom. We believe the suspended decision to retrench 1200 SABC will now be carried out. Standard bank and ABSA has closely followed the announcement of the mining companies that they intend to lay off more workers. This situation is dire!

Government has stubbornly refused to change the medicine even though after 25 years of catastrophe it has run out of excuses as to why the patient has died despite a successful operation. 

Government chosen road, which is nothing but a giving-in to the dictates of white monopoly capital and imperialist interests includes:

1. Removal trade tariffs even faster than demanded by the WTO, without following any industrial plan! This led to decimate of sectors like clothing, textiles, leather and lately the steel industries. Our country is deindustrialising at the alarming rate and the figures released to today point to the worsening situation. 

2. Removal exchanged rates and allowed billions to leave the country. 

3. Doing nothing to stop miss pricing, miss trading and illicit cash flows which meant millions every year leave our shores to tax safe heavens.

4. Allowed major corporations to list in foreign lands robbing our country of desperately needed credibility and resources.

5. Adopted conservative fiscal policies: drastically reduced corporate taxes from 45% during apartheid to 28% today. 

6. Done away with the prescribed investments that played such a critical role during the apartheid in releasing resources so desperately needed to improve investment levels in the economy.

7. Adopted conservative and inappropriate monetary policies:  It adopted an extremely conservative position that inflation rate must be between 3% – 6%. The mandate of the Reserve Bank in the hands of private citizens must be only to protect the price of money. Interests rates had to be kept high to keep this low inflation regime in check. 

While this was being vigorously implemented, no other structural reforms were undertaken in a meaningful way. We have a two-tier education system. Education in the public sector remains dysfunctional and is not able to compete with our neighbouring countries. Private education, which has been commodified and is completely affordable even for the middle class can compete with the world standards. We have a two-tier health system. The public health care remains dysfunctional and producing massacres such as Life Esidimeni. The elites care little as they enjoy the best private health and private security. 

Corruption and crony capitalism brought almost every state-owned enterprise to its knees. This exacerbated this inappropriate and wrong economic policy mix. 

This is the package that has brought the economy into doldrums! 

SAFTU has consistently argued that there is an alternative to the disastrous road. Empirical evidence exists that shows that other countries did not use this toxic package to develop their economies. The USA facing the same situation we faced at the end of the apartheid system following the end of the world war, in the 1930s never responded to its crisis using the instruments advocated by the IMF and World Bank today. The so-called Asian Tigers facing same circumstances as we face today in the 1960s never used this policy mix, and in both cases, results are entirely different from ours. 

We call on the government to abandon the current economic package and go back to the Freedom Charter demands that after 25 years have not to be taken forward. 

SAFTU warns that economy will not grow if the black majority is trapped in poverty, without property and without land. 

Statement issued on behalf of SAFTU, 4 June 2019