Speech by COSATU President, Willie Madisha, Organised Labour at Nedlac 27 September 2003.

SPEECH BY WILLIE MADISHA, President of
COSATU, FOR ORGANISED LABOUR AT NEDLAC
SUMMIT, 27 SEPTEMBER 2003.

Deputy President,

Leadership of COSATU, NACTU and FEDUSA,

Leadership of government, business and community,

Distinguished delegates,

Comrades.

Normally, at the NEDLAC Summit we take stock of our work
over the past year. But first, we need to place that work in
context.

Above all, this week the government released data showing that
unemployment has, again, reached a new high. Today,
unemployment by the narrow definition, which includes only
workers still actively seeking jobs, stands at over 31%. If we
include workers too discouraged to look for work, the rate rises
to 42%. For Africans, the rate is 49%.

What do these figures mean? To start with, there are now over
eight million South Africans out of work. That spells
immeasurable hardship and pain. As a teacher, I am particularly
concerned that the vast majority of the unemployed are young.
Workers under 30 years old make up a quarter of formal
employees, but half of the unemployed. To put it bluntly, this
joblessness is destroying our futures.

Jabu Xulu and Cynthia Gumede have now joined the ranks of
the long-term unemployed. They get by on a little hawking, a lot
of borrowing, and granny's old-age pension. Hunger is now a
constant in the household.

But the worst thing is that none of their children has been able to
find a job, and one of them has HIV and can't afford treatment.
They are anxiously waiting for anti-retrovirals to become
available in the public health system - her life depends on it.
How can we explain such high unemployment to our two old
friends? The fact is that apartheid left stubborn structural
problems, which only our common action can overcome. These
structural problems include the history of deprivation of the
majority, which in turn means that many lack the resources, skills
and contacts to engage with the economy. That, in turn, is
reflected in deep-seated dualism, with many of our people
effectively excluded from participation in the rich formal sector.
Meanwhile, in the formal sector, we have seen a massive loss of
jobs due to restructuring in the public sector, downsizing in gold
mining and construction, and the abrupt ending of protection for
manufacturing and agriculture.

These factors have also been associated with a fall in
investment. On the one hand, in the private sector, major
companies have moved overseas. That has led to an outflow of
profits on a massive scale, particularly in the past two years. On
the other hand, state investment dropped rapidly in the late
1990s, and has still not recovered. Government investment is
now lower relative to the GDP than it has ever been since 1946.

In this context, the extraordinary strength of the rand has further
slowed growth and led to job losses, as imports have grown and
exports shrunk. These job losses may not yet be reflected in the
data, but we hear from our affiliates in clothing, metal work and
chemicals production about them. For this reason, COSATU's
recent Congress adopted a declaration on the rand, noting that it
was overvalued and proposing that government should adopt
measures to bring it down to a more appropriate level of
between R9 and R10 to a dollar.

While speculation as well as high gold and platinum prices
contribute to the overvaluation of the rand, there can be no
question that the high interest rate by world standards is a major
factor. It leads to short-term inflows of funds. That may help
with inflation and cut the price of imports, but at the cost of
longer-term growth and stability. For this reason, the Reserve
Bank must urgently reduce the interest rate. More broadly, as in
other countries including the U.S., its mandate should be
strengthened further to take development and specifically
employment into account.

At the same time, in light of the immensity of the unemployment
challenge, employers in both the public and private sector must
take a more careful approach to preserving jobs. Today, for
instance, the public service threatens to lay off 20 000 workers
right after the elections; Telkom is continuing with a massive
retrenchment programme; and government has continued to
insist that companies charge for plastic bags, leading to job
losses amongst producers. We need to ask: have we really
reflected on the long term costs and benefits of these measures?
Will they really strengthen employment creation in the long run,
or will they just bring short-term gains to some while contributing
to broader economic and social problems?

Comrades and friends,

In light of these trends, the most important event of the past
year - for our interaction at NEDLAC overall, and for the
country as a whole - was the Growth and Development Summit.
Those agreements should form an important step in overcoming
rising unemployment and poverty.

Perhaps most important, at the Summit we all agreed on the
centrality of quality employment for sustainable development and
for addressing poverty. This challenge lies at the heart of all our
endeavours, and must drive both our economic policy
framework and our social policy interventions.

Our convenors met all yesterday to discuss how they can
accelerate implementation of the GDS agreements. We expect a
detailed plan of action from them. But let us here re-emphasise
the key elements of those agreements.

First and foremost, the agreements pointed to the centrality of
retaining and creating decent work for our people. That is critical
both to engage all of us in rebuilding our economy and our
society, and to overcome poverty. We must persistently,
patiently and consistently redirect all of our policies and
engagements to achieve the goal of halving unemployment by
2014. We must assess all our actions against this target.

The agreements include a mix of short and longer term
measures and strategies to achieve our aim.

The commitment to working together on Expanded Public
Works Programmes, including to provide community services,
should provide some immediate relief. So, too, should the
agreement to do more to provide basic services for the poor and
to strengthen the social security network, especially for the
unemployed.

But our agreements also recognise the need for more far-
reaching measures to restructure the economy in order to ensure
growth. Critical in this context is the commitment to sector
strategies, to redirecting procurement to local producers, to
building a co-op movement, and to genuinely broad-based black
economic empowerment. These elements in the GDS
agreements point to the need to lead the market, to drive the
economy toward job-creating growth.

As one step on the way, COSATU Congress threw its weight
behind the Proudly South African Campaign and has called on
retailers and their investors to commit to 90% local content in
their sales. This commitment would go far to building up strong
local value chains and, as a result, employment. We have
decided to mobilise our 2,5 million members, and their families in
active support of this campaign to rebuild our manufacturing
base by securing from the retail community a commitment to a
practical patriotism: a patriotism founded on keeping jobs in
South Africa. We call on government to contribute through
targeted reviews of tariffs where these can save jobs.

We have introduced in COSATU an annual award for 'most
unpatriotic retailer', and the award this year goes to Mr Price
retail stores, for its persistent practices of importing large
quantities of clothing and other products, and for its collusion
with companies who break our labour laws. Mr Price destroys
local jobs. We are now placing the sourcing decisions of Edgars,
Woolworths, Pick 'n Pay, Shoprite-Checkers, Foschini and
others under scrutiny. We extend a hand of cooperation to the
retail sector: work with us to achieve the goal of jobs for all,
through your sourcing and buying decisions.

Finally, at the Growth and Development Summit we agreed that
financial institutions must seek to invest more actively in
developmental areas that can create jobs and meet the needs of
our people. As workers, with a degree of control over our
savings through the pension funds, we see this commitment as
particularly important.

As always at NEDLAC, it is easy to talk, hard to ensure that
action follows the talk. But we dare not fail in implementing these
agreements. For all of us, the future is at stake. Unless we
conquer the inequalities and unemployment left by our apartheid
past, none of the NEDLAC constituencies can hope to prosper
in the long run. Our only hope is solidarity.

At the Growth and Development Summit, we agreed that issues
around HIV would be discussed in a separate task team. We
deeply regret the failure to reach agreement there. At the same
time, we welcome the decision by Cabinet to roll out anti-
retroviral treatment in the public health service. That process
should start as soon as possible.

But we still need to strengthen our work together, not only on
treatment, but also on education, prevention and work to end
discrimination and stigmatisation of those with HIV. This is not
only a task for government. It is a job for all of us, and we must
use NEDLAC, as our central institution for social dialogue, to
make real commitments and build a strong partnership.

We have recently held discussions on folding the Labour Court
and Labour Appeal Court into the High Court and the Supreme
Court of Appeal, with a specialist panel of judges
knowledgeable on labour matters, co-appointed by NEDLAC
and the judiciary. That bill is before parliament.

There are rumours of attempts to tamper with a very delicate
compromise agreed to by the Chief Justice, the President of the
Supreme Court of Appeal, organised labour, government and
business, comrade Minister of Labour, and we call on you to
ensure that the consensus that was developed is in fact given
effect to, especially the role of NEDLAC in the process. The
compromise is not first prize for us, but we can live with it.
Anything less than that will not be an acceptable basis to move
forward.

In conclusion, let us thank the NEDLAC staff, the labour representatives who
served our constituency with distinction, and the colleagues from business,
government and community with whom we continue to forge groundbreaking
agreements. I particularly want to thank the negotiators at the Growth and
Development Summit, who spent many long hours, sometimes far into the night, to
find constructive solutions to the challenges we face.

Organised Labour also joins the chorus of gratitude to Phillip Dexter. We must
thank him for the huge amount of work he put into NEDLAC, including his central
role in ensuring we reached agreement on a host of hard issues. He has made an
invaluable contribution to social dialogue in this country. We wish him well in
his future career.

At the same time, we want to welcome Herbert Mkhize into the
hot seat. All of us here know Comrade Mkhize well - in fact, he
has served every NEDLAC constituency at some point in the
past ten years. We are sure he will play a central role in helping
us to translate the words of the GDS into action. Simultaneously,
we look to him to maintain the efficiency and effectiveness of
NEDLAC as the central structure for social dialogue in South
Africa.