South African CP: A new growth path to address the jobs crisis and foster sustainable livelihoods


5-20-05, 10:11am

The ANC election campaign manifesto of 2004, supported by its allies, the SACP, COSATU and SANCO, agreed on a ‘People’s Contract to Create Work and Fight Poverty’. This necessarily situated the challenge of job creation and sustainable livelihoods as a national priority. Our immediate task is to translate these Manifesto commitments into reality, by building on the Alliance Ekurhuleni 2 declaration and resolutions.

Our Special National Congress, the 2005 May Day rallies, the 2005 Alliance Summit and the release of the ANC NGC discussion documents have once more, and correctly, focused the attention of our country on the urgent challenge of job creation in particular. As to be expected the media has dived into these matters in a manner that is sometimes generating more heat than light. As the Alliance we should not be distracted by this from our commitment to create work and fight poverty.
These debates have once more raised the old issues: Is the jobs situation in our country a “crisis” or merely a “challenge”? Are job losses the unfortunate but “inevitable” and “temporary” consequence of post-apartheid restructuring of an uncompetitive economy? Or is the current growth path itself systemically shedding jobs? Do we need more labour market flexibility? As the SACP we believe that we must ensure that we continue to debate these matters, but we must not, at the same time, undermine the general consensus we have built at the Growth and Development Summit and the two Ekurhuleni Alliance Summits about the priority of jobs, including stemming the current job loss bloodbath.

The SACP believes that we should avoid the temptation of polemicising about this challenge. Nor should we seek to debate this matter narrowly from the standpoint of specific measures outside of a more fundamental challenge of identifying systemic blockages in the current growth path and elements of an overarching strategy to transform it.

The Alliance Summit Declaration is clear on its commitments to tackling the jobs crisis. Amongst other things it said: “Our Alliance Summit has agreed that we need to take forward our discussion, debate and implementation of programmes that will help put South Africa onto a sustainable growth and development path that creates and protects jobs and that ensures decent work and livelihoods for all.

“However, in the face of the current wave of job losses, we cannot look to medium and longer term measures alone. Urgent intervention is required, and as an Alliance we are determined to ensure that decisive steps are taken in the short-term.

“The Summit agreed that the Rand should be valued competitively. We need an appropriate and more competitive exchange rate that will assist South Africa to create and save jobs, and build and expand industry. Appropriate monetary policy is only one part of urgent measures that are required. A package of short-term interventions should include local procurement, trade and industrial policy measures”.
This should be our point of departure. The Alliance further committed itself to developing medium to longer-term measures to create work and fight poverty. But it is obvious that despite GDS agreements and Alliance Summit agreements there are still important strategic differences that exist in broader South African society, that also echo within our own Alliance. We are not necessarily surprised about the persistence of strategic differences, ours is a capitalist society after all. We want to point to some of these strategic differences as a way of arguing our point of view in these matters.

The first area of strategic difference that needs to be debated further revolves around the relationship between growth and development. There exists a common argument to the effect that our primary focus should be a 6% economic growth per annum, and everything else should be subordinated to this objective. Of course no-one would be against such levels of growth in principle. However, a singular focus on growth outside of clear developmental interventions will not necessarily create jobs at the level we want. This is, amongst other things, because of the scale of poverty, poor skills level and infrastructure backlogs and inequalities. In fact the very basis for growing the economy under our conditions can only be through investing in tackling these challenges. Growth strategies and measures, divorced from tackling this development backlog, will inevitably result in a trickle down approach, if there is even any trickle at all! The very first ten years of our democracy are proof on this. Growth levels of 3% (albeit inadequate) have not seen the creation of sustainable jobs, but has been accompanied by large-scale job losses and casualisation.

We welcome government’s focus on the “second” economy. This we believe can go a long way towards reducing poverty in our country. It is for this reason that the SACP through, amongst other things, its campaigns will support and buttress government efforts in this regard. However, interventions in the “second” economy without some decisive state-led interventions in the mainstream capitalist economy are not sustainable. This is because the problems of the “second” economy (unemployment, casualisation, poverty), directly arise out of, and are reinforced by, the current accumulation path in the economy as a whole.

What are some of state-led interventions necessary to transform the current accumulation path? The SACP firmly believes that one of the key weaknesses in our economy is a lack of an overarching industrial strategy, based on sectoral strategies for key sectors of our economy. This was the message and commitment in both the 1998 Jobs Summit and the 2003 Growth and Development Summit. Such a strategy should form the basis of the kind of accumulation path that our Alliance Summit talks about. An overarching industrial strategy can only be developed under the leadership of the state, buttressed by mass activism, as the private capitalist market is incapable of rising above its short-term, narrow profit motive. The question of an industrial strategy must be debated within the Alliance and in society.

Embedded in these two debates outlined above is the question of whether our country needs a new growth path, or we just need to do more of what we have been doing during the first decade of our democracy, particularly in relation to the mainstream capitalist economy.

In the previous edition of Umsebenzi Online we characterised the current accumulation path as follows: “The present growth path remains basically the same as in the apartheid years. It is a growth path that is excessively oriented towards exports. It is an economy that is too much dependent on imports. It is an economy that is capital intensive and labour-shedding – the bosses prefer less workers and more machines… It is an economy in which not enough resources are going to training and re-skilling. It is an economy that is heavily concentrated around a few major banks and mining houses – stifling the entrepreneurship of small businesses and operations that cater for local needs and local markets”. Let us illustrate our argument with some concrete examples that underline the need for an industrial strategy and a new growth path and the relationship between them. Government has been rolling out electricity, housing, water and sanitation on the one hand, but on the other hand our economy has significantly downscaled the training of artisans. These are the very artisans necessary for maintaining this roll-out in infrastructure, a roll-out likely to increase with the planned (new) investments by state-owned enterprises.

A related example is that of the ongoing debate about the restructuring and funding of higher education. It is difficult to engage in this debate sensibly outside of an overarching industrial strategy that should be pointing us towards priority developmental objectives and how these should be reflected (not in an instrumentalist fashion) in our spending and restructuring of higher education.

Our debates about a growth path should also introduce much more dynamically key economic global realities into the national debate. This should be done openly with an understanding that there is no single corner of our society that has the monopoly of wisdom on these matters. For example there may well be an impending peak oil production crisis (the point at which production outstrips the discovery of new reserves, and globally we enter upon a downward slope). Have we started planning around how best to use our strategic advantage that 79% of our energy needs are provided by electricity from our own coal reserves? What are the implications of a possible price of oil at, say, $100 a barrel in 10-15 years time? For instance what would be the specific implication of such an oil price for our overall economy which is currently so import and export-dependent, in a country in which there are very lengthy logistics lines to distant major markets? What are the implications for areas that are currently key to our growth strategies – international tourism or auto exports, for instance? Some of these strategic questions begin to highlight additional reasons for considering perspectives advanced by the SACP in regard to paying much more attention to local economic development, local markets, fostering sustainable communities, and land reform that focuses on food for subsistence and local consumption. These are some of the concrete strategic questions essential for a sustainable industrial strategy and alternative growth path that link and integrate the poles of our present economy (the one developed, the other continuously under-developed).

We have welcomed government’s shift away from privatisation of key state owned enterprises, and this marks an important point of convergence in our Alliance. But this convergence could also be masking two potentially very different strategic objectives that need to be surfaced and debated: Are we using an expansionary budget approach and key state owned enterprises to essentially “lower the cost of doing business” (i.e. capitalist business as determined by the major national and transnational corporations)? Or, are we using the budget and SoEs to CHANGE the current (capital intensive, export/import dependent, labour shedding, highly concentrated) growth path and lower the COST OF LIVING to create a better life? Located in these perspectives is perhaps the crux of the debate. For instance the one argument in the ANC NGC discussion document on the economy is that we should consider a dual, “flexible” labour market. In this context the challenge is thrown to workers and the working class to think and act beyond their “narrow” sectoral interests. Of course workers and the working class should always guard against acting in a narrow and sectarian manner (and South Africa’s working class knows this very well from its very participation in the liberation and reconstruction struggles in our country!). But there is something deeply disturbing in this argument. There is a conspicuously loud silence about the really narrow, sectarian, greedy and selfish interests of the capitalist class, spoilt by a market friendly capitalist environment. That is why as the SACP we are calling for a frank analysis of the current growth path and the behaviour of the capitalist class therein.

In addition, as the SACP we would like to warn against an approach that tends to characterise workers and working class interests as being narrow by virtue of being workers’ interests. By so doing, whilst simultaneously privileging the ‘lowering of the costs of doing business’, we might objectively be placing the interests of the capitalist class as the national interest. It is also incorrect to narrowly conceive of workers and working class interests as interests purely located at the point of production or as primarily labour market issues. Workers interests are also about long distances they travel to work, access to basic services in their households and communities, lack of access for their families to job opportunities, sustainable livelihoods, and so on. Could it be that it is such a narrow conception of workers’ interests, as interests located at the point of production, which is a problem, rather than the narrowness of workers’ interests as such?

There are other related questions that the SACP will be posing and seeking to answer as the debate unfolds. For instance, to what extent can South Africa’s workers and the working class as a whole take further ‘punishment’ from the current accumulation regime, and still hope to get our economy on the right track? What is the evidence that the jobs crisis is as a result of a ‘rigid’ labour market as opposed to the predatory tendencies of a spoilt South African capitalist class? For instance, the Presidential Working Group on Labour recently carried out research which showed that there has been a massive increase in casualisation of workers in some of the key sectors of our economy (a de facto existence of a dual and flexible labour market affecting mostly youth and women!), significantly increasing their vulnerability. But this question of labour market flexibility is being raised without any reference whatsoever to the meaning and implications of these results, which have now been placed before NEDLAC.

Perhaps these matters might as well be at the heart of a much needed debate about the current trajectory of the national democratic revolution in our country.

All these challenges, properly appreciated and collectively debated, actually offer compelling reasons to transform our economic growth path in the directions that create jobs, putting back tens of thousands of small farmers onto the land; developing more integrated towns and cities and drive job-creating infrastructural development. The capitalist market (left to its own devices and only being incentivised to do more of the same) will not address the fundamental challenge of job creation and sustainable livelihoods. Simply further unleashing the capitalist market onto our economy, will not address our key developmental priorities. Just as we believe that a focus on the “second” economy whilst leaving the mainstream capitalist economy intact will not yield the desired developmental outcomes.

We look forward to debating these matters in the forthcoming ANC NGC and in the broader public arena.

--Blade Nzimande is the general secretary of the South African Communist Party. From Umsebenzi Online