The political crisis of the apartheid regime had also led to South African businesses embarking on an 'investment strike'. Businesses were sending their money out of the country or were speculating on the stock exchange - not to protest against apartheid, but to protect their profits.
At the same time, during the mid to late eighties, the apartheid regime was embarking on a programme of unilateral economic restructuring, in preparation for the end of apartheid rule. This was to ensure that, even if minority political domination came to an end, the economic privilege and power which formed the core of apartheid would still be protected.
Elements of this restructuring included privatisation, reduction of company tax, trade liberalisation, deregulation, and large-scale borrowing to indebt a future state. These steps were intended to prevent a democratic government from implementing a programme of fundamental economic transformation.
Workers had no say
Cosatu was faced with the challenge of developing an economic programme to defend working people against these attacks. Struggles for a living wage would prove ineffective if workers' pay packets had to stretch further to support more people because of rising unemployment, while each Rand earned could buy less and less. Cosatu had to act both from a defensive point of view - to stop measures which would be harmful to workers - and from a proactive point of view - campaigning for policies which would be in the interests of working people.
Workers in South Africa have historically been excluded from all economic decision making. On national economic questions, a cosy relationship between big corporations and the apartheid state ensured the protection of white minority privilege and super-profits. Issues such as subsidies to companies, trade agreements, industrial policy and taxation were settled by these players. Workers were never asked their opinions.
The situation was the same within industries. The development of each sector was determined, not by the country's long-term economic needs, or the needs of the people who sweat to turn the wheels of the economy. Rather, the large corporations were driven to maximise short-term profit, and government sought to ensure the economic base for its bureaucracy and the social welfare needs of the minority.
The mining industry was a typical case. Our mineral resources were plundered for export, with no long-term plans for the development of the industry. Workers' health and lives were expendable, and no concern was exhibited to secure jobs, or to expand the job creation potential of the industry.
The regime also did little to protect the long-term economic interests of the country, but simply regarded the industry as a 'cash-cow' which could be milked to service apartheid.
Generally, at the level of the workplace, workers were simply expected to be onlookers, while decisions affecting their lives were taken by others. The employers' failure to invest in new plants, equipment, training, research and the development of new products, all had profound effects on workers and the economy. But company decision making was regarded as the 'prerogative' of management - it was their right to manage or mismanage without interference.
Putting a stop to unilateral restructuring
Until 1992, on the economic terrain, Cosatu focused on resisting unilateral economic restructuring by the regime. This included the campaign against the privatisation of state assets. In 1991 Cosatu spearheaded a campaign, which included a national general strike, against the unilateral imposition of VAT, and other economic restructuring. The campaign had major ramifications.
It placed the demand for a progressive taxation system on the national agenda, establishing that the trade union movement was not only concerned with the interests of its members, but of all working and poor people. The campaign showed the determination of the trade union movement to stop unilateral restructuring and it ultimately led to the formation of the National Economic Forum, a tripartite forum for the negotiation of economic issues.
In the process which followed, Cosatu took part in discussions both about the structure of the tax system, as well as the budgeting process and the allocation of state resources.
Cosatu also entered, very late in the day, into negotiations to limit the damage of the imposition of the agreement on trade and tariffs (GATT) on our industries. The federation was also part of negotiations on the setting up of a labour intensive public works programme and other job creation programmes. An attempt was made to reach agreement on the setting up of centralised bargaining forums, and the involvement of unions in formulating industry policy.
These initiatives were weakened by a hostile, anti-worker government, and the reluctant participation of employers. The trade union movement had also not yet developed the capacity to enter this terrain effectively.
Policy formulation
In the late 1980's, Cosatu initiated a process of economic research and policy formulation. Various research projects and Cosatu workshops identified the structural problems in the economy. The findings were published in a Cosatu Education publication - Our Political Economy: Understanding the Problems.
Together with its allies, Cosatu formulated an economic development strategy which was in every respect the opposite of the apartheid growth path. Apartheid had been based on the use of cheap labour, the exclusion of the majority from basic services and infrastructure, the entrenchment of power and privilege for a few, a low skills base, reliance on the exploitation of raw materials, production of luxuries for a minority market and extensive state protection and subsidies to business.
The alternative growth path proposed by the democratic movement saw the raising of living standards for the majority of people. This path would bring people into the mainstream of the economy, as the key to unlocking the country's economic potential.
The main elements of this approach involved:
The creation of sustainable jobs and public works programmes to service, particularly the unemployed youth, was seen as the priority.
The state in this scenario is a key actor in helping to direct the economy through selective strategic interventions. Allowing market forces to dictate would simply reproduce the apartheid growth path.
Finally, the transformation process needs to be driven by the participation of ordinary people through their organisations. This is not just desirable, but fundamental to its success.
Growth through redistribution
This people-driven growth path came to be known as the "Growth through Redistribution" approach, although some felt that this slogan didn't fully capture the economic restructuring element of the strategy.
Cosatu's Economic Policy Conference in March 1992 outlined the framework for this approach.
The conference saw this growth path as a major advance in promoting working class power in society and, in that sense, as a qualitative advance towards socialism. This was particularly in relation to:
Economics of a democratic South Africa
The advent of a democratic government in 1994 saw the introduction of the National Economic Development and Labour Council (Nedlac). This institution involves trade unions and other major stakeholders in civil society in negotiations with business and government on key socio-economic and labour market issues.
The new government was inaugurated in a world climate extremely hostile to the policies advanced in the RDP. At the same time, powerful local forces, including business and the old bureaucracy, were promoting an agenda at odds with the RDP.
The 'neo-liberal agenda' as it has come to be known, prescribed the drastic reduction of the role of the state, the adoption of free market policies, the lifting of all trade barriers, privatisation, and financial policies which made rapid development very difficult. Powerful institutions such as the World Trade Organisation, the World Bank and the IMF, were dictating economic policies to governments, particularly in the developing world.
In this context, Cosatu embarked on a two-pronged strategy of campaigning for measures to defend workers against the effects of these policies while attempting to combat them.
At Cosatu's Fifth National Congress in 1994, and Cosatu's International Policy Conference in 1995, resolutions were adopted calling for campaigns to restructure the World Trade Organisation and international financial institutions, and to campaign for a social clause in trade agreements to limit the exploitation of cheap labour and the abuse of trade union rights in developing countries. Positions were also adopted to oppose the unplanned lifting of tariffs in a way which threatened industries and jobs, but called for a co-ordinated approach to combine industrial policy with tariff policy to ensure the strengthening of our industries.
Congress also called for the introduction of a Social Plan Act to compel employers to contribute to a fund to retrain and assist workers displaced by restructuring. Campaigns would also be undertaken for worker control of pension and provident funds to end speculative use of these funds, and ensure that they were invested in job-creating productive activity. Congress also committed Cosatu to ensure the restructuring of the taxation system to relieve working people of the unfair burden, and to ensure the budget reflected new priorities. Congress made specific proposals to ensure that workers are more effectively involved in economic decision making at national, industry and workplace levels.
Both Congress and the CEC strategy workshop in October 1995 emphasised the defense of jobs and job creation as the priority of the trade union movement. A national conference on alternatives to retrenchments will be called to focus on ways to retain jobs. Cosatu will place job creation as a priority on all agendas, from policy discussions in parliament and Nedlac, to industry and workplace negotiations.
Finally, Cosatu has committed itself to press for the convening of a summit of Southern African states and trade unions, to formulate a regional development strategy. This recognises that the RDP can never succeed if South Africa is surrounded by poverty-stricken neighbors. The economic future of the region is indivisible and questions such as migration cannot be addressed effectively outside of a regional economic framework.
Neil Coleman, Cosatu internal relations officer