Cosatu has emerged from its inaugural Central Committee more determined than ever to push forward its vision for social transformation.
The CC, from 22-25 June, took stock of transformation and the current political and socio-economic situation. After four days of intense deliberations, the 500 delegates emerged with a comprehensive policy package designed to deepen socio-economic transformation and strike a decisive blow against apartheid’s legacy of poverty and inequality.
The event culminated in the adoption of a broad programme of action to ensure its vision and policy proposals become a reality.
While identifying subjective and objective weaknesses in the transformation process, the CC rejected the view that "nothing has changed" since the ANC took over the reins of government.
A declaration on the 1999 elections said the ANC-led government had adopted a range of measures which have improved the lives of the majority of South Africans, including labour labour legislation, social policies and delivery of services such as water, electricity, land reform and health. These had been implemented despite opposition from other political parties, the business community and orthodox economists.
In line with Cosatu’s 6th national congress resolutions, the CC pledged to work for a decisive ANC victory in the 1999 elections and resolved that the ANC-led Alliance remains the only force capable of bringing about fundamental change in the interests of working people and the poor.
The CC programme of action commits Cosatu’s 1,8 million members to a wide range of campaigns, alongside other sectors of society campaigning for social and economic justice. The Alliance, churches, the NGO coalition and other mass formations, as well as government, will be part of ensuring the success of the programme.
The CC kicked off with a tough-talking opening address by Cosatu vice-president Connie September, who gave government’s macro-economic policy, Gear, "a red card". She said Cosatu members were "gatvol" and were demanding a clear programme of action in defence of jobs, for a more equitable tax policy, decent houses and public transport and an industrial policy which would protect jobs and create more jobs.
"Our members who carry the burden of providing a social security net for the unemployed demand that this role be shifted to the state," September said.
"We have a responsibility not only to our members, but to all South Africa’s poor and working people, employed and unemployed, to take up these issues and build mass campaigns around them.
"The days of militant struggles led by our shopstewards are now needed. Let’s issue a notice to all those clinging to an unworkable and failed Gear that Cosatu’s patience has run out."
While the CC was unanimous in rejecting Gear, the event wasn’t a complaints session. The bulk of the deliberations went beyond criticism of current macro-economic policy to emerge with a workable alternative in the form of a detailed and comprehensive policy package. This is an achievement the federation can be proud of.
Cosatu is convinced that its proposals, if implemented, will put the country firmly on the road to sustainable economic growth and a better life for all.
The CC’s deliberations also went beyond sloganeering or an economic wish list. And those who believe Cosatu’s stand is based on a lack of understanding of economic issues would have been sorely disappointed and perhaps surprised to see the federation’s worker economists in action.
The quality of debate was evidence of an indepth analysis of our economy and society, as well as the forces at play in South Africa and the world.
But Cosatu’s united perspective was not just based on abstract analysis. It was informed by the experiences of workers and their communities and their vision of a better life.
"The proposals we make are informed by our vision for overcoming the bitter experience of life under apartheid and capitalism," said September. "This is Cosatu’s unique contribution to policy debate in South Africa and is the most viable vision for truly bringing democracy and equality to post-apartheid South Africa.
"We are providing alternatives to current mainstream thinking motivated by our practical experience as part of a broader working class.
"We know we do not have a monopoly of ideas on these issues. We are doing so from the practical experience we have of the effects of job losses, unemployment and poverty."
Presenting the secretariat report to the CC, Cosatu general secretary Mbhazima Shilowa said the current situation in South Africa and shifts in economic thinking pointed to an opportunity for restructuring and implementing a more progressive and developmental economic agenda.
"A missed opportunity at this time could have dire consequences for the socio-economic well-being of South Africans in future years," he warned.
The CC made it clear that Cosatu’s socio-economic proposals were not based on a narrow protection of "partisan interests". "We reject with contempt the view that we are only concerned with the interests of employed workers," said Shilowa.
"As Cosatu we are aware of the historic role a progressive trade union federation such as ours should play in the transformation of our country.
"We have combined our role as a defender of worker rights and interests with that of the broader liberation movement." At the same time, Shilowa said, Cosatu would make no apologies for defending its members’ interests while pushing for broader social transformation.
Cosatu’s credentials were beyond reproach. "We dedicated ourselves to the liberation of our country while business spent their lives defending apartheid and reaping the fruits of its economy.
"We therefore have to state very clearly to business and their proteges that central to our challenge is the transformation of the economy, the creation of jobs and the elimination of poverty and inequality."
Shilowa said that, despite trade union and government strategies to uplift and improve the living standards of all South Africans, poverty remained widespread and the gap between the rich and the poor is widening. Despite productivity increases, real wages were down while profits had risen.
Cosatu’s CC programme of action outlines the following key campaigns:
Phase One of the action (see back page) will kick off in July and run until October, when Cosatu’s CEC will set out Phase Two. For the full programme of action, see insert in this edition.
Cosatu’s most scathing attack was reserved for big business and their political parties. The federation sent a strong message that it would not bow down to the dictates of the market and global capitalist interests, nor would it allow business to derail transformation in South Africa.
"The reality is that most of the problems we find ourselves in stem from the ills of capitalism the world over," said Mbhazima Shilowa. "The problem of unemployment is part of the legacy of apartheid, its economy and capitalism that we inherited."
"The bourgeoisie, their representatives inside and outside parliament and orthodox economists want us to believe that it is employed workers and the ANC-led Alliance that is destroying jobs and causing unemployment. It is as if jobs were plenty during apartheid rule.
"The reality is that the majority of the unemployed have been job seekers long before the ANC came to power. Some of them are victims of retrenchment by employers as part of their strategy to undermine the unions."
The CC said business was relentlessly chasing ever-higher profits at the expense of working people and the country. Employers continued to destroy jobs, invested their massive profits in financial speculation instead of the productive sector of the economy and put growing pressure on government to cut back the public sector, slash social spending and privatise state-owned assets.
Evidence presented at the CC has only served to confirm Cosatu’s 6th national congress rejection of Gear. The message was loud and clear: Gear is failing to effectively address the socio-economic ills inherited from apartheid and capitalism.
Delegates rejected calls that the poor and the jobless should wait for Gear’s benefits to trickle down.
"The working class and society in general are expected to tighten their belts and wait patiently for the year 2000," said general secretary Mbhazima Shilowa. "This we believe is linked to the strategy to prolong what was supposed to be a short-term strategy into a life-long strategy." He said some were trying to elevate Gear’s content to the level of principles on which the broad democratic movement should be based.
Shilowa expressed Cosatu’s irritation at continued "all-round implementation" of Gear. "This is in spite of the Alliance Summit, the 50th ANC national conference and the ANC NEC Lekgotla, which called for continued review of the economic framework so that it is in line with RDP goals and objectives.
"The NEC decision that we need to address the social deficit in our country seems to have been ignored," Shilowa said, adding that the NEC’s approach "was arrogantly regarded as mere guidelines by some in government", when they were meant to be ANC policy.
In her opening address to the CC, Cosatu first vice-president Connie September told delegates that Cosatu’s 6th national congress had issued Gear a "yellow card". "At this CC we need to give it a red card," she said to wild applause.
"Our rejection of Gear is not a narrow ideological stance. It is not a position to just show the country that we are independent from our Alliance partners. There is mounting evidence for all who have eyes to see pointing to the correctness of the position we took on Gear."
This evidence included continued job carnage throughout the economy; the axe of retrenchment hanging over the heads of public service workers; a widening gap between the rich and the poor; declining real wages despite increased company profits and labour productivity; spiralling interest rates and big business’ continued disinvestment and rampant speculation instead of investment in the productive sector and jobs.
September said the captains of industry had reason to celebrate Gear’s second birthday on 14 June. It had met key business demands such as easing exchange controls, cutting back government expenditure, tax holidays and accelerated tariff liberalisation and privatisation.
"Based on this track record, the captains of industry and their political parties know they are lying when they say Gear has failed because it has not been implemented properly.
"Gear has failed because it is an inappropriate growth model for our economy, focused not on the interests of the majority, but on the selfish short-term interests of certain sections of business."
Two years into Gear, workers and their families were really beginning to feel its pinch, September said. Gear’s rigid deficit and revenue targets had limited RDP implementation. The job crisis was worsening. Education, housing and other social services had not been expanded sufficiently to overcome apartheid’s legacy.
"We have made speeches on Gear for two years. We have tried to reason for two years. We have tried to persuade for two years. Our members are gatvol."
We, delegates to this inaugural Cosatu Central Committee, having rigorously analysed and debated the current political and socio-economic situation in our country, progress made in social and economic transformation, subjective and objective factors that led to delays and blockages, hereby declare our overwhelming support for the ANC in the forthcoming general elections in 1999 in line with our 6th national congress resolution.
This is based on the acknowledgement that, while there are indeed areas where more progress could have been made in social transformation, the ANC-led government has adopted a range of measures which have led to the improvement in the lives of the majority of South Africans. As workers we are aware of the many pieces of labour legislation, social policies and delivery of such services as water, electricity, land reform and health, despite opposition from the NP, DP, IFP, FF ACDP and the PAC. The same opposition has been mounted outside parliament by the business community and orthodox economists.
Our goal in the elections is to mobilise such that the overwhelming majority of our people vote for the ANC in the national parliament and in all nine provinces. This successful contestation of elections and the consequent election victory with a decisive majority at all levels constitute a key vehicle through which the ANC-led Alliance and the people of South Africa, particularly the working class and the rural poor, can pursue their goal of political and socio-economic transformation.
We seek to strengthen the Alliance and build a popular movement for transformation through a clear political programme of action that includes, amongst others, recruitment, organisational renewal, effective servicing of membership, accelerated cadreship development and improving internal communication. In this regard we will ensure that we communicate with and listen to the masses based on simple but clear messages on an ongoing basis.
The Central Committee endorses the proposals made in the secretariat report with regard to Cosatu’s approach to campaigning at provincial and national level. Through our participation in an election campaign that mobilises all our people behind the ANC, we want to ensure that our political, socio-economic and organisational objectives are achieved.
Together with our Alliance partners, we will build the capacity of the Alliance to exercise overall political leadership of the process of governance through strengthening links between the Alliance and government, ANC and government, as well as between the people and government. At the same time, we should make it clear that there are elements inside and outside of parliament and in the security forces who are engaged in a counter revolutionary agenda. This may take the form of attacks to communities, misinformation or promotion of splinter unions such as the Mouthpiece.
In particular, in the campaign process, we need to:
The following principles should underpin the development of Electoral Platforms:
We need to develop a comprehensive communication and clear election message. Amongst other things, our message should be aimed at advancing:
In terms of our communication strategy, we should look at effective use national TV/radio, community radio, leaflets, posters, people’s forums, rallies, door-to-door and workplace-to-workplace campaigning.
In terms of voter mobilisation:
The Central Committee endorses the November 1997 CEC decision that Cosatu should not put forward its own list of candidates. Comrades should be encouraged to stand or be nominated in their capacity as ANC members and in line with the policy on deployment adopted by the 6th National Congress. In line with the ANC proposal on the list conferences at all levels, our participation should aim to ensure that working class cadres across the Alliance and worker leaders in particular, are prominent during the process.
The principle of recall needs to be accompanied by clear guidelines to ensure that all the deployees are accountable to the ANC in particular and the Alliance in general. This should be done through the Alliance structure that has the necessary political authority to deal with deployment and the list process.
The Alliance must take collective political responsibility for developing policies, actual deployment of cadres in strategic areas of governance to drive the process of transformation and the defence of the gains that we have made and will continue to make. Unlike in 1994, it must be clear that ours is a governing Alliance in the real sense of the word. All comrades must therefore consider themselves as deployed by the Alliance in the broad political sense. We reiterate our position on the need for an Alliance Political Centre to oversee all issues of governance such as redeployment of cadres, code of conduct for deployed cadres, as well as building organisations and broad policy formation. The Alliance Political Centre should exercise final political authority on issues relating to the overall transformation of the state of the economy. This structure should be established at national, provincial and local levels.
Cosatu wants the Alliance to reach consensus on strategic priorities as part of a coherent strategy to implement the RDP. In line with Cosatu’s national congress mandate, the CC adopted a proposal for an Alliance transformation programme which identifies core areas for implementation, particularly in the socio-economic sphere.
"These core areas should not be a wish-list," the CC agreed, "but a carefully thought-out identification of strategic areas which, if implemented, will tilt the balance of economic power in favour of popular democratic forces." The core areas are:
The Alliance transformation programme should be broadly supported by other progressive social forces and "able to achieve political hegemony in society".
The Alliance needs the organisational capacity and political will to drive this programme in a way that unleashes "sustained mass mobilisation and participation in the transformation process".
The implementation strategy should give the emerging national democratic state and supporting institutions "strategic leverage over areas of investment, production and service delivery".
This strategy to reduced inequality and attack poverty would include a combination of supply-side measures to boost production and industrial performance; the effects of rising demand in the economy as a result of improvements for the majority; and state mechanisms to target investment in job creation.
Fiscal and monetary policies, public service transformation, restructuring of state enterprises and labour market policies would all be realigned to facilitate the implementation of this strategy. Its success also depends on a strong social security system that is part and parcel of the creation of a social wage.
Implementation should raise effective incomes and create basic services for the poorest 70% of the population.
Like at Cosatu congress, union leaders at the CC expressed frustration that government policy was often not Alliance-led.
"The problem is that policy formulation is taking place outside the Alliance," said NUM. "We need to agree on a programme which must be binding to all of us in the Alliance."
Nehawu agreed with NUM that key political and policy decisions had shifted away from the ANC and the Alliance.
"We need to reassert the political authority of the Alliance, led by the ANC, over all processes of policy formulation and governance in general," Nehawu said. "We need an Alliance political council, which is not just an ad hoc structure, but one which is politically defined as having the ultimate authority on policy matters.
"In this way we can start addressing many of the problems that have arisen, such as those around macro-economic policy. If this happens we won’t repeat these errors."
The CC agreed that the transformation process, both inside and outside government, should be driven by an ANC-led Alliance political centre. This would involve the Alliance leadership meeting with ANC ministers and other people deployed at all levels of government as well as in state institutions.
"This approach involves collective decision-making and shared responsibility. It requires a high degree of coordination and ongoing consultation in order to ensure that the process is managed effectively, given that there will, from time to time, be differences in nuance and approach," the CC resolved. It also agreed:
The CC said the state should be developmental, democratic and interventionist. It should play a central role in political and socio-economic development. This should include an accelerated, comprehensive political programme to transform the character and operations of all state institutions.
Delegates singled out the judiciary as one state institution that needs to be brought in line with the country’s transformation objectives.
"We need an accelerated, comprehensive programme to transform the operations of the judiciary," said Numsa. "It has been a stumbling block to transformation and is contesting transformation. It must be restructured and subordinated to the transformation agenda."
Delegates agreed that Cosatu should engage with the recommendations of the Presidential Review Commission. This should aim to influence the restructuring of government ministries and departments at national and provincial level to ensure the proper utilisation of public resources.
Other core areas of the Alliance programme should include:
The Alliance Summit planned for 17 and 18 June had been postponed following a proposal from Cosatu leaders, general secretary Mbhazima Shilowa told CC delegates.
Contrary to media speculation, the summit was not postponed because of differences over policy issues, he said. While most Alliance task teams preparing for the summit had made substantial progress, they needed more time to effectively complete their work.
Task teams made up of ANC, SACP and Cosatu representatives have been working on the key issues on the Summit agenda: employment creation and a common approach to the Jobs Summit; labour market policy; social needs, social security and the social wage; fiscal and monetary policy; industrial policy; globalisation; building organisation and the election campaign; and public sector transformation.
The postponement also meant Cosatu would carry the mandate of not just the federation’s central executive committee, but also the central committee, which involved a wider representation of shopfloor leadership.
Cosatu’s 6th national congress resolved that Cosatu should take forward the September 1997 Alliance Summit decisions on the need for a broad transformation agenda which dealt with:
This would provide the basis for engagement to shift the power balance in favour of the democratic movement and to prepare properly to marshal the democratic forces’ victory in the 1999 general elections.
The secretariat report to the CC said the ANC had tabled the Summit’s decisions and recommendations at its December 1997 Mafikeng conference. It said the ANC conference adopted a number of social and economic resolutions which, if implemented, would take the Alliance transformation programme forward.
"Contrary to media reports, the conference did not adopt Gear, as it was never placed before the conference for adoption or rejection."
Shilowa, who was elected to the ANC’s NEC at the conference, said the conference reinforced the Alliance Summit position that macro-economic policy should be reviewed from time to time, taking into account the country’s needs and to reflect RDP goals. He said the ANC NEC Lekgotla had taken this further and had placed on the agenda "the need to eliminate the social deficit as a matter of priority". Shilowa said regular Alliance meetings had taken place since the Mafikeng conference.
"We have, through the Alliance, tackled issues which otherwise could have led to more differences of opinion in the Alliance." Among the examples he gave were the payment of Northern Cape municipal workers’ salaries after Cosatu raised the issue in the Alliance. The Alliance had also helped broker the agreement between Sadtu and the education department. While Cosatu, NUM and Numsa had declared a dispute around the Eskom Bill, the Alliance would be taking up the issue.
"This is not to say there will be no areas of disagreement," Shilowa said, "but to point out the commitment of the leadership to as much as possible work as one."
The Central Committee adopted a range of resolutions which form a comprehensive package of socio-economic policy proposals. The resolutions set out a vision as well as policy proposals in each area. Here we give summaries of some key resolutions on:
Resolutions on social security and the social wage were referred to Cosatu’s October CEC.
Socialism: Our economic policy must be guided by our political vision of socialism. Our programme should be socialist-oriented and define economic policy in terms of meeting the needs of citizens; furthering the culture of solidarity, community and social responsibility; open up the space for economic democracy; and redistribute wealth, income, assets, opportunities and power.
Key strategic sectors must remain, or be placed in public hands. These include water; education; housing; municipal services; health; energy; communications; land.
We envisage an economy composed of the public service, a state sector, and a social sector. Property relations must be transformed in a way which favours the poor and the working class. We are therefore proposing a significant public and social ownership in the economy as distinct from private ownership.
Transforming the four sectors: Industrial development, redistribution and economic democracy should be implemented through specified transformation in different sectors of the economy. These are: the public service; the state sector; the social sector and the private sector.
The activist, developmental state: The state should be biased towards the working class and the poor. The state should act as a key economic agent. The state is the biggest employer, consumer and investor in the economy. Through fiscal and monetary policies and composition of its budget, it exerts a tremendous influence on the economy. An active, interventionist state is necessary to achieve our goals of economic development – to overcome poverty and redistribute power, wealth, income and economic opportunity from a small minority to the majority of the citizens. The state must progressively limit the power of capital.
Link to the RDP: The RDP remains the cornerstone policy of Cosatu. We seek to build on the RDP by outlining a coherent set of economic tools and strategies for achieving our vision.
Reclaiming redistribution: The aim of economic development should be to overcome poverty and inequality. The fundamental goal of economic policy should be redistribution and generating economic growth. Redistributive policies should focus on four goals:
Increase productive activity in the real economy, producing more wealth, creating more and better jobs and increasing the range and variety of economic opportunities and support structures for South Africa’s citizens.
Meet the needs of all citizens of the country — the need for work and income, for health, shelter, infrastructure, transport, education, decent childcare and provision for old age, as well as a high quality of community life.
Economic democracy (redistribution of power) – the participation of the working class in determining the conditions of their economic activity and general priorities of economic policy.
Redistribution of economic resources through the payment of a living wage and improving the skills of workers; and increasing taxation on the wealthy and corporations to fund redistribution.
The focus of our economic policies should therefore be on:
There are key areas of macro-economic policy which support our vision and broader employment-creation strategy. These policies should:
Monetary policy is an important instrument in driving economic policies and delivery of social services. Gear and government’s focus on phasing out exchange controls, high interest rates, preserving the value of the Rand, and defending foreign exchange reserves will undermine productive economic activity, and make our economy vulnerable to speculators. Monetary and interest rate policies should be urgently refocused in a manner that promotes the primary objectives of the RDP. Restrictive monetary policies need to be reversed in order to stimulate economic activity.
The state must play an active role in encouraging investment to achieve employment growth. Policies should limit the mobility of capital and reduce the volatility in the economy due to rapid short-term capital investment.
Cosatu reaffirms its rejection of Gear and government’s macro-economic practises which entail high interest rates and advance a one-sided approach to cutting down inflation and the mythical notion that the lack of investment in South Africa is the result of non-saving.
Interest rates should be substantially reduced. This will increase the buying power of consumers, facilitate the shift of capital from financial markets into productive investments, and substantially reduce the burden of public debt.
In fighting inflation, the government and its institutions should desist from using the blunt instrument of high interest rates and should look at an alternative, broader approach. This should be pursued at Nedlac and at sectoral level.
Serious consideration should be given to the impact which the removal of exchange controls has on outflows of resources abroad. The state should retain and introduce adequate measures to ensure that domestic assets are deployed in the national interest. Mechanisms should be introduced to regulate capital movement and to penalise speculative capital. Cosatu should link up with fraternal organisations internationally on this issue.
The constitution should be amended to explicitly commit the Reserve Bank, in implementation of its policies, to development and employment creation.
Increased government spending is imperative during the reconstruction phase. Criteria in identifying spending priorities should include: people development; crowding in of investment; income generation (direct and indirect); access to basic facilities and needs; redistribution of wealth and income.
Housing, health, education, public transport, telecommunications and social security should be prioritised.
Government should start a massive housing programme including rental accommodation to address the inherited backlog; set up a comprehensive social security net and a national health system and introduce food security measure.
The tax system is still highly inequitable. A new tax regime should provide an incentive to development, productive investment, employment creation and promote the social sector. Cosatu calls for a thorough, ongoing review of the taxation system based on the following:
No VAT should be payable on all basic foods, medicines, water, domestic electricity and education. This will offer effective, easily administered relief to the unemployed and to low and middle-income earners. A varied rate should be introduced, including a higher rate on luxury goods and a lower rate on household necessities.
Internal debt: Steps should be taken to drastically reduce South Africa’s debt burden, which is frustrating the country’s transformation programme.
A pay-as-you-go system should be introduced in the public service pension fund, thereby freeing R150 billion in interest bearing debt. This would release roughly R18 billion a year which in turn will reduce the deficit by 76%. This additional money can be used for investment and to strengthen the government’s capacity. A final decision on this is needed before the end of 1998.
The government should re-evaluate the repayment period and interest rates on internal debt. It should also investigate other sources of borrowing that would not lead to an escalation of interest rates and explore creating its own institutions of borrowing.
External Debt: Foreign debt incurred by the previous government has to be reviewed. Cosatu should actively support the international campaign against foreign debt and the scrapping of debt owed by the poorest nations.
The decision by Sanlam and Old Mutual to demutualise is an arrogant effort to escape policy-holder involvement in decision making. It strips policy holders of potential control over the mutual societies they built up and now opens the companies to normal share market transactions.
Cosatu should oppose the demutualisation programme of Old Mutual and Sanlam, though our own campaign, our work at an Alliance level, and in our work in parliament. Cosatu will oppose current legislation providing for demutualisation. Legislation should:
Cosatu should campaign to ensure that the economic power of the Mutuals is harnessed to the benefit of all South Africans, not as a vehicle for the enrichment of a few.
