NUMSA statement on the State of the Nation Address 2016

The National Union of Metalworkers of South Africa is appalled by the State of the Nation Address delivered by President Zuma on 11 February 2016. It came from a president and government which has not only lost all grasp of the deep problems facing the overwhelming majority of South African people, but now seeks to impose a positive spin to deflect attention away from what is likely to be the worst economic and social crisis to be experienced in post-Apartheid South Africa. 

This comes at the expense of the almost 35% unemployed (according to the expanded definition), the quarter of the population who go hungry daily, the 12 million children forced to live on R340 a month (a third of the poverty line), and other significant vulnerable sections of society who failed to get even a single mention in the speech.

Symptomatic of the problem, is that after 22 years of ANC governments, the President reported that he has started visiting areas experiencing problems with service delivery. Why has it taken so long to just to look at people’s problems, which have led to a rising wave of violent protests for years? Police statistics record 2300 such protests last year, amongst many thousands of other demonstrations – compare to 600 annually during the early 2000s.

Equally shocking was his minimization of South Africa’s economic catastrophe, preferring to talk of “an economy facing difficulties”,  “volatile markets” and “low growth”, as if these are the economic equivalent of bad weather – unpleasant but unavoidable, rather than accepting responsibility for its failure to implement even its own nine-point turnaround plan from last year’s SONA, let alone the fundamental, socialist policies which are the only solution to the deepening crisis of rocketing levels of poverty, high unemployment and widening and racially skewed inequality.

He conceded that government’s target of economic growth of 5% a year is a fantasy and will not be achieved within the time envisaged. He acknowledged that capitalist institutions like the IMF and World Bank are now predicting growth of less than 1% and that the economy risks further downgrading by rating agencies.

The President even sought to downplay SA’s crisis by referring to the similar problems facing other, mainly developing, countries, such as the drop in mineral prices, as if that excused his failures, rather than highlight the emergence of a global crisis of monopoly capitalism. 

His optimism that “the situation has improved” in mining cannot be shared considering the ever-present threat of a job losses blood bath in the sector.  It would have been expected that he would have taken time to consider the serious neglect of mine heath and safety, especially considering that three miners remained trapped underground at the Lily Mine in Mpumalanga even as he delivered his speech.

In the last year, companies like Lonmin, Anglo American and Glencore have lost 85% of their value and they recently announced more thousands of retrenchments. The same is true in the steel industry, with Arcelor Mittal and Evraz Highveld shutting down foundries along with thousands of jobs.

South African capitalism has drifted to the cliff edge of an economic crash. Business confidence is crashing to new post-1994 lows. The Manufacturing Purchasing Managers Index – based on new orders, inventory levels, production, supplier deliveries and the employment environment – is now at 43, compared to 56 five years ago.

Vehicle sales are down 25% from their 2014 peak. Capitalists are taking their funds out of South Africa by any means they can, averaging $21 billion in annual Illicit Financial Flows from 2004-13, according to a recent Global Financial Integrity study, with $29 billion taken abroad illegally in 2009 alone. Why doesn’t Zuma mention this looting and apply emergency exchange controls?

The failure of state-owned enterprises was barely considered, with Eskom’s avoidance of load-shedding held up as a triumph, rather than what they ought to be doing as routine. The decline in demand for power in the crisis-ridden mining and smelter sectors is the real reason we have avoided outages.

He praised the role of civil society in bringing water to drought-stricken communities, rather than ask why government has failed to provide such a basic service after all these years. Last year it was revealed than when Zuma claimed 95% of South Africans were receiving water, his own water ministry had to correct him and admit the figure with water flowing in pipes was only 65%.

There were no new policies, but worrying signs of a move to an even bigger shift to pro-business policies, as opposed to a Government-led path out of escalating economic crisis. He called for a “common narrative from government, business and labour” which was necessary for the “common good of the country”, and to make South Africa an attractive investment destination. 

Worrying was the emphasis of the speech on financial services, with no acknowledgement of the role of financialisation in precipitating the 2008 global financial crisis, and locally how investment in currency speculation has fueled the volatility of the rand. Our stock market is amongst the most overvalued ever.

Instead of cooling the financial casino with exchange controls, and instead of lowering interest rates for ordinary borrowers – of whom half already cannot make their payments and are called ‘credit impaired’ – Zuma’s economic managers are doing the opposite.

While welcoming the agreement in principle on a national minimum wage, while debate on the level continues, Zuma ominously warned that it must be set at a level that does not threaten jobs or sustainable growth. He welcomes proposed legislation to limit the length of strikes and the level of violence, which has long been excessively exaggerated. We will never support laws that force people back to work and deny them their rights to freedom of association – which is nothing short of slavery.

While NUMSA would support his concern regarding murders of police officers, we strongly take issue with his silence on the increasing incidence of police violence, both in respect of ordinary law enforcement and brutal repression of strikes and protest action.  It has been under the President’s administration that militarisation of the police has been effected alongside an unjustifiable expansion of the role for state security institutions.

The budget is likely to make even more explicit a shift towards the brazenly pro-business and anti-worker policies advocated by the DA, organised business and capitalist academic and commentators, including the possible the privatization of state-owned enterprises.  In fact Treasury has already identified Eskom as being in line for privatisation, with Independent Power Producers as one example of this trend.

There was little good news on the long awaited comprehensive social security system, on which all Zuma could say was that “discussion is continuing”.  With rising mass job losses, double-digit food inflation, further electricity hikes and other anticipated socio-economic shocks, we need much greater state spending to redistribute wealth. The current grants are far too little.

The Treasury’s desire to push workers out of the old-age grant – by not allowing them full access to their provident funds, as Zuma’s recent legislation mandates – is another example of his government’s bias against workers.

This speech brings nothing to give working people and the poor hope of any relief from the nightmare that white monopoly capitalism is inflicting on the country.  Instead its main emphasis appeared to be in providing assurances to the private sector by reducing so-called “regulatory blockages”.

In sum, the State of the Nation Address strengthens Numsa’s resolve to move with urgency to establish a new democratic workers’ party, which will stand for the complete socialist transformation of society.

It will replace a society run by a tiny, mainly white and incredibly rich minority, with one democratically controlled, planned and managed socialist economy in which the country’s wealth is used for the benefit of the people.

Statement issued by Irvin Jim, NUMSA General Secretary, 13 February 2016