‘LACK OF LEADERSHIP’ GETS MILITARY UNIONS MARCHING

13.06.2008
South Africa’s defence forces are in a shambles, mismanaged, badly led and grossly underpaid. That is the view of the military unions which are threatening further protest action in coming weeks and months.

And it is claimed mismanagement and lack of leadership leading to the waste of human and material resources that will be the prime focus, rather than pay. However, wage rates, expecially for highly skilled and specialist staff, are far below those in the private sector.

A protest march on the Union Buildngs in Pretoria last week by a section of the SA National Defence Union (Sandu) grabbed headlines when the memoradum handed in by the protestors demanded the resignation of defence minister Mosiuoa Lekota. Also highighted was a demand for a 19 per cent across-the-board pay rise.

This demand for Lekota’s resignation and the reaction it, ensured considerable publicity, which was the apparentl intention, although not all Sandu members agreed with the tactic. Nor did officials of the generally more militant SA Security Forces Union (Sasfu) who also criticised the pay demand.

Says Sasfu president Bheki Mvovo: “At a meeting on November 2 last year, we were told that there would be a complete review of pay and that a package would be presented that would amount to more than 19 per cent.” But despite “numerous approaches” to the ministry, there was still no word about what this package might contain or when it would be available.

Mvovo, a naval lieutenant, points out that some of the lowest ranks in the miltary earn a basic rate of only R3 000 a month. As a naval lieutenant with a university degree in mechanical engineering, his basic pay is R106 000 a year.

The air force has already admitted that the low rates of pay and declining morale have seen a steady exodus from the servce of pilots and skilled maintenance personnel. “Same in the navy,” says Mvovo.

He adds: “We bought ships and submarines, but cannot adequately man them; the air force cannot keep all its planes in the air because of personnel shortages.” As he sees it, this results largely from the misalignment that exists between top leadership “hailing mainly from the liberation movements” and middle management from the old apartheid order.

“It affects all services because we have much of the top leadership without vision or experience and who, as a result, are remote controlled by white middle managers from the old order who still have difficulty coming to terms with the new dispensation,” he says.

Although it has been officially denied, several officers at the country’s major naval base in Simonstown maintained that there were now insufficient crew to enable the navy’s newly acquired submarines and frigates to sail simultaneously. “We only have one fully trained submarine crew available now,” one petty officer claimed.

Ashore the situation is also serious. According to Mvovo, the mechanical workshops are “40 per cent staffed” with the result that they cannot handle much of the work “which is then outsourced at great cost”.

Accusations of insensitivity and arrogance have also been levelled at senior officers. A particular target is army chief Lt General Solly Shoke following a series of recent statements by by him relating to court cases won by the unions. Shoke has categorised as “problems” the high court decisions which last month forbade discrimination against HIV-positive service personnel and the 1999 decision which allowed union organisation in the military.

Says Mvovo: “The unions are not the problem. The reason that it is necessary for us to exist is because of the lack of leadership.”

WHAT KIND OF ‘SOCIALISM’ IS DEMANDED?

06.06.2008
The events of recent weeks in South Africa, followed by statements from Cosatu about plotting a new way forward, raise again the spectre of the past. And it is an international past. Especially when these events are looked at against the background of conflicts in regions such as Iraq, Afghanistan and Somalia and the politely termed world economic crisis.

I say politely, because it is a potentially avoidable crisis that is causing misery, death and horrendous suffering to millions of people across the globe. This is also an era where that self-proclaimed “great democracy” the United States, practices judicially-sanctioned kidnapping, torture and murder under the euphemism of “rendition”; where acts of state terror are portrayed as examples of lauded patriotism.

Given this situation it is little wonder that there is a growing chorus of voices calling for change. Some change. Any kind of change.

While the world has certainly changed in the years since 1915, all of this has echoes in the writings in that year of a then imprisoned revolutionary socialist, Rosa Luxemburg. She was jailed for opposing World War I at a time, such as now, when lies and propaganda tended to take the place of needed analysis and debate, when a minority controlling international business continued to thrive on destruction and slaughter.

In a famous pamphlet, smuggled out of her cell, she warned that the world faced a stark choice: transformation or barbarism. She saw the necessary transformation as “socialism” a term also appropriated as the goal of Cosatu and the SACP.

Luxemburg clearly understood the absurdity of a world producing a surplus of food alongside millions of people dying of starvation and the diseases of malnutrition. She also saw how business could “flourish on ruins” and how profits can can spring “like weeds, from the fields of the dead”.

So she presented the alternatives as she saw them: “…..the destruction of all culture and, as in ancient Rome, depopulation, desolation, degeneration, a vast cemetery; or, the victory of socialism”.

In rather less grandiose and poetic terms, this is what Cosatu’s newly appointed president, Sidumo Dlamini stated last week. In fact, such a general statement would almost certainly find favour with the majority of trade unionists.

But since Luxemburg was murdered in 1919 by rightwing troops on the orders of a “socialist” government, it is best to be clear about definitions. “Socialism” is a label which clearly means different things to different people.

Luxemburg, born in Poland and active in Germany, saw socialism as the extension of meaningful political and economic control to the majority of humanity. That she was totally “unpatriotic” she saw as a prerequisite of her “socialism”.

The last paragraph of her 1915 pamphlet reads: “This madness will not stop, and this bloody nightmare of hell will not cease until the workers of Germany, of France, of Russia and of England, will wake up out of their drunken sleep; will clasp each others hands in brotherhood and will drown the bestial chorus…..with the mighty cry of labour, ‘Workers of all countries, unite!’”

If the only test of truth is the ability to predict, Luxemburg’s 1915 warning was an accurate — truthful — assessment of conditions at the time and where they might lead. But the global barbarism that now threatens seems much worse than what followed Luxemburg’s prediction and culminated in the holocaust and World War II.

In these conditions the trade union movement is again to the forefront in stating that meaningful transformation is an urgent requirement. “Socialism” is the word used. But what, exactly, does this mean?

TIME TO MAKE UNITY IN DIVERSITY A REALITY

29.05.2008
The death of Walter Ntombela, worker activist, National Union of Metalworkers (Numsa) shop steward and father of three has focussed trade union attention on the poison of xenophobia. For Walter, a senior shopfloor leader for the past decade, died because he was from Mozambique.

He stayed and worked in Gauteng, an example of the unity in diversity that is the basis of our much lauded constitution. It is also the the bedrock of trade unionism, with its slogans calling on workers of all countries to unite and proclaiming that an injury to one is an injury to all.

Following his death, and the decision of his wife and children to flee for their safety across the imaginary line that separates South Africa from Mozambique, Numsa launched a series of factory meetings. This week, around the country, these were used to explain xenophobia and how it can spill over into other often blood soaked divisions.

Divisiveness is part of the history of the labour movement which we ignore at our peril. It is a history peppered with examples of the principle of worker unity being turned into empty rhetoric by contradictory actions and statements. A classic example being the slogan of the 1922 “Rand revolt”: Workers of the world unite for a white South Africa.

Yet for more than a decade now we have seen many people in authority attempting deliberately to erase much of our history. They try to obscure the social and cultural poisons bequeathed to us by the past by papering them over with platitudes about nation-building, patriotism and a rainbow nation. These are the people who maintain that 1994 meant that the door on the past should be closed.

A few trade unionists, mostly with the mentality of the white miners of 1922, also promote this nonsense. But other union leaders, often with excellent credentials in the struggle for human rights, also seem, in recent years, to have ignored the lessons of history.

By words and actions that sent out confused and conflicting messages to their members and to the public at large they contributed to a climate in which xenophobia could thrive.

More aware trade unionists now ask how it is possible to speak of international worker solidarity while joining in campaigns with local bosses to compete against workers of other countries. Especially when capital is global and the bosses internationally may be identical: it is in their interests to pit worker against worker in what is correctly termed a race to the bottom.

In such circumstances, any calls to worker patriotism by bosses and by governments seem clearly to be the acts of scoundrels.

It is also difficult to refute the argument that actions by union leaders that result in divisions among organised workers deserve to be classified as either stupid or knavish. One unionist claimed on radio this week that “comrades have been destroying each other because of differences of political opinion and tactics”.

This was an obvious reference to the apparently vindictive actions prompted by differences of opinion about who should be the president of the ANC. Other unionists have also noted the failure of the trade union leadership to immediately condemn the flaunting of “100% Zulu Boy” T-shirts especially when such condemnation could have been used educationally to campaign against xenophobia.

After all, our early trade union movement, for all its faults and failings, was started by immigrants. And it was a migrant worker from Nyasaland (Malawi), Clements Kadalie, who launched in South Africa what was once the biggest trade union on the continent, the Industrial and Commercial Union.

Perhaps it is time now to try again to make real the pledge of worker unity in all its diversity.

A MOST BITTER ‘WEEK OF TEARS’

22.05.2008
This week, South Africa experienced a week of tears as xenophobic violence shattered much of what remained of the image of this country as a beacon of peace and tolerance. Our transition to a liberal parliamentary democracy was seen by many as the harbinger of a new society, despite surging crime levels, unemployment and lingering poverty.

But our week of tears has been particularly bitter in that the poor, dispossesed and exploited who suffered, did so at the hands of their fellows. This was not a case of an old guard re-emerging to wreak bloody havoc.

And government cannot escape its share of responsibility, despite the frankly silly protestations of the Pahad brothers, deputy foreign minister Aziz and minister in the presidency, Essop with their imputations about media, third force and right-wing responsibility.

Poverty, bureaucratic inefficiencies, arrogance and corruption all played a part in creating the conditions in which frustration and hopelessness could turn to blind rage. And the social and economic environment of a country is largely created by governments, encouraged always by those who profit most from the status quo.

So it was that our government, in alliance with domestic business and supported by most opposition parties, promoted the virus of nationalism which, in the right conditions, can mutate into rabid xenophobia. In July, seven years ago, when the Proudly South African campaign was launched, this column noted: “Proudly South African or proudly xenophobic. That is the question facing the more class conscious elements of the trade union movement.”

The column added that this use of nationalism contained “the whiff of a Shakespearean tragedy” where “forces beyond the the control of the well-meaning players conspire to guarantee grief”.

The union federations did at least express some “ideological and practical” reservations. Their initial demand had been that South Africa should not import goods from countries that did not adhere to labour standards — to wages and conditions — at least on a par with those in South Africa. This was the practical application of an injury to one being an injury to all, of internationalism.

Still, they capitulated although Gwede Mantasahe, then general secretary of the National Union of MIneworkers warned that “xenophobia is a risk in a campaign like this”. But Cunningham Ngcukana, then president of the National Council of Trade Unions, noted that it was “better to be inside than out”.

This stress on “South Africaness” was further exacerbated by the tendency of government and home affairs officials to refer to migrants by the dehumanising term, “aliens”.

A section of the media played its part echoing such terms and the perceptions they convey. From such seeds of nationalism the virulent poison of xenophobia seeped quickly into a culture already steeped in sexism and violence.

Aggressive, night-time police raids on refuges at the Johannesburg’s Central Methodist Mission and patronising and ill-considered statements by authorities, from MPs to ministers, all added to the mix. A clear target for communal frustration and anger was created.

But most unions, although to the forefront in protests against the recent barbarism, have failed to address the fundamental issue of nationalism: they have failed to acknowledge that it was lines drawn on maps by imperialists in Europe that made aliens, foreigners and makwere-kwere of fellow Africans.

They also continue to accept the “imagined communities” of nations in blatant contradiction to their professed adherence to the slogan: workers of all countries, unite.

This seems particulartly sad on the eve of Africa Day and on the 137th anniversary of the first “week of tears,” the crushing of the Paris commune of 1871 when workers and the poor, for the first time in modern history, seized control, for just two months, of their destiny.

LOOKING FOR ANSWERS TO POWER, PRICES AND THE POOR

15.05.2008
High powered delegations from all three main trade union federations were busy yesterday (subs: Thursday) “putting flesh on the bones” of their submission to the energy summit which convened in Johannesburg this morning. The summit brings together a wide range of interest groups to discuss and hopefully to plot ways out of the power crisis.

By lunch time today there should be agreement about the first steps to be taken to address the power crisis in a sustained and carefully planned way. The broad policy framework — the “bones” — should, however, be solidly in place.

A draft framework put before the summit this morning resulted from discussions at the National Economic Development and Labour Council (Nedlac), the multi-sector policy advisory forum that unions have, in the past, accused government of neglecting. There now seems a widespread sense among the federation negotiators that Nedlac may be coming into its own.

Faced with the crisis, the representatives of government, unions, business and community groups in Nedlac seem to have reached consensus on a draft “Agreement on Electricity Emergency”.

This provides suggested policy outlines agreed by “all stakeholders”, including the ANC and government. Here, clearly, is the reason for public enterprises minister Alec Erwin’s backtracking on Wednesday on his suggestion that large price rises demanded by Eskom be applied “quickly”.

The Nedlac draft agreement makes it plain that this is simply not on. The forum is also putting forward a call for an efficiency audit of Eskom and for current and future pricing policies to be tabled at Nedlac for consideration before they are applied.

While the Nedlac representatives agreed that there should be a “move towards an economic tariff for electricity”, it was felt that necessary pricing levels should first be accurately ascertained. And any finally agreed price rises “should be phased in over five years”.

This would, as Erwin told parliament on Wednesday, “smooth the increases out”. But while it was the labour movement that apparently tabled the five-year suggestion at Nedlac, all parties seem to have agreed with it, apparently after some haggling about a three-year period.

A major reason for this was the recognition that Eskom tariff increases “could have significant negative socio economic consequences, particularly on the poor”. The labour movement should today spell out in some detail suggestions as to how the Nedlac call for “special arrangements to protect the poor” can be made a reality.

While there should be some debate about this issue there is likely to be none on the demand that load shedding — and consequent “rolling blackouts” — should be a last resort applied only in emergencies and then only under a protocol “negotiated with stakeholders”.

There is also no question of the blame game being played. The union federations have already made clear that they regard mismanagement at Eskom and governmental tardiness as being responsible for the power crisis. How to deal, here and now, with the crisis is now the sole priority.

Which is why, significantly, the unions, which have strongly resisted any moves to privatisation, have not dismissed private sector involvement in the future generation and supply of electricity. However, the draft Nedlac agreement does state that “public sector leadership in electricity provision” should be maintained.

There will also be a touch of sadness on the labour side at today’s summit: Federation of Unions of SA deputy general secretary Koos Bezuidenhout will stand in for general secretary Dennis George who is in Cape Town at the bedside of his father, Jimmy.

James John — “Jimmy” — George, leatherworker, trade unionist, shop steward, community activist and ANC councillor has been waging a long battle with cancer. An avid reader of this column, his comments have always been greatly appreciated.

A POLITICAL TSUNAMI AND ITS AFTERMATH

08.05.2008
A tsunami is a dangerous and almost entirely destructive event, a wave that sweeps all before it, damaging and destroying. Which is why it seemed unfortunate that Cosatu general secretary Zwelinzima Vavi chose, before the last Cosatu congress, to refer to the the growing groundswell of support for the country’s then sacked deputy president, Jacob Zuma, as “an unstoppable tsunami”.

Tsunami seemed an inappropriate term. Especially since Vavi and others who enthusiastically joined the groundswell, claimed this as something of a cleansing agent, a tide of renewed democracy that would sweep away dead wood.

But, with hindsight, Vavi’s choice of words seems quite appropriate. Certainly in the sense that this political groundswell has, like any tsunami, left a trail of damage in its wake including considerable harm to the fabric of worker solidarity.

This wave has also not retreated to allow for reconstruction and rebuilding. Destructive currents continue to swirl, maintained by a high tide of emotion which even Gwede Mantashe, who was swept into the post of ANC secretary general by the same forces, has been unable to tame.

This is hardly surprising, since there exists a multitude of human agendas, including often naked self interest and a desire to settle old scores behind those who encourage the ongoing currents of destruction. It is the same mix of motives that energised the tsunami which hit the political shore in Polokwane in December.

It deposited Jacob Zuma safely on the high ground of ANC leadership and is no direct reflection on him. But it, and the currents it generated, certainly reflect none-too-favourably on many of those who whipped up that wave and who continue to promote the rip tides and whirlpools that threaten still more damage.

This week’s fracas at the SABC and the rumpus that passed for the recent congress of the ANC Youth League are all evidence of the aftermath of the political tsunami. So too was the brief but bitter outbreak of infighting within the National Union of Metalworkers and the current rumblings of disquiet among elements of the labour movement.

Much of this disquiet is focussed on the currents that are attempting to undermine sacked Cosatu president Willie Madisha in his role as unsalaried chair of the Job Creation Trust (JCT), which he has held for most of the nearly ten years of the trust’s existence. Yet the JCT, under the stewardship of Madisha, is one of the labour movement’s greatest social achievements.

Working with the Development Bank, the JCT has created, on average, nearly 4 000 jobs a year, most of them sustainable. This is probably a better record than any other single agency, public or private, in the country.

Community and co-operative job creation was financed by a fund of R89 million created when organised workers donated one day’s wages to the JCT in 1998. So far, R53 million has been disbursed. But, courtesy of shrewd investments and protected by properly audited accounts, the JCT, at the end of last month, still boasted a fund of R89 million.

Celebration of these facts was dampened when Vavi demanded that Madisha be dismissed as JCT chair and as a trustee. But the demand was dismissed unanimously by a board meeting which included trustees from all three founding union federations.

It was a small sign that the tide of often blind emotion that created the Polokwane tsunami and sustained its aftermath is now in retreat; that reasonable assessment of established facts may be taking the place of blind emotion, often fuelled by misinformation.

One important fact is that a united labour movement created and funded an independent trust that has an enviable record of job creation and financial accountability. The bulk of the labour movement would almost certainly see this as a beacon of hope and not a target to be undermined.

SIGNIFICANT MAY DAY FOR SWAZILAND

24.04.2008
As May Day 2008 looms, the army of the working poor and the legions of the unemployed are being force marched to still greater hardship. Nowhere more so than in Africa’s last feudal monarchy, Swaziland, which is impacted directly by rising inflation in South Africa..

This year, the May Day celebrations in the tiny landlocked kingdom will take on a special significance: they should provide the first indication of whether the long-promised unity of the fragmented labour movement has been achieved. In recent years the country’s two labour federations and the two large independent unions of civl servants and of teachers have staged separate May Day events.

However, all, certainly at a rank and file level, tend to support the demand for democratic reforms. Signs of greater unity on the labour front should, therefore, provide a significant boost to the pro-democracy movement.

It would be a move welcomed by unions throughout the region and especially among Cosatu affiliates which have staged protests, including border blockades of Swaziland, in support of the pro-democracy movement.

“We, of course welcome any move to greater unity,” says Cosatu spokesperson Patrick Craven. Cosatu was also aware that the new constitution introduced two years ago by King Mswati III — and hailed by governments in the region as a “step in the right direction” — had merely provided a flimsy democratic facade for what remains an absolute monarchy.

The fact that the king retains the right to appoint the prime minister and several ministers as well as the right to veto any decisions of parliament makes a mockery of any democratic process.

“Even if we had a legitimate, free and fair voting procedure, it would still be meaningless,” says Mario Masuku, president of the officially illegal Peoples’ United Democratic Movement (Pudemo).

Pudemo is also currently in talks, not only with the labour movement, but also with other pro-democracy groups in an effort to establish a united front before the next Swaziland elections, scheduled for October. In order to highlight what it terms the “farcical nature” of the elections, Pudemo has announced a boycott.

At the same time, repression within the country does not appear to have eased. Even the generally supportive United States state department has noted that the Swazi regime’s human rights record is poor.

The repressive nature of the state and the signs of growing unity among pro-democracy forces, together with the promised electoral boycott raise the spectre of turmoil along the lines of that in Kenya and Zimbabwe.

This is something that has been spelled out by Pudemo to various governments in the Southern African Development Community (Sadc). Because of this awareness by Sadc of the situation in Swaziland, and the regional organisation’s demands for democratic processes, there were no protests at President Thabo Mbeki’s official visit to the kingdom earlier this week.

In their post meeting public statements neither Mswati nor Mbeki made mention of the thorny issue of democracy; they talked instead of closer ties and trade. But this did not overly concern the pro-democracy movement which tend to see this as an example of more “quiet diplomacy” at work.

“Given the Sadc guidelines and against the background of Kenya and Zimbabwe, we are sure the matter must have been raised with the king,” says Masuku.

Not that the local opposition is looking to South Africa or the region for salvation. “We say, as we always have, that the struggle must be won by the Swazi people themselves,” says Masuku. But, he adds, “with the solidity and support of others”.

That solidarity and support has been pledged by the regional and international trade union movement. May Day should reveal whether Swaziland’s pro-democracy forces are starting to achieve the unity necessary to take full advantage of such support.

Because there will be no column next week, I take this opportunity to extend May Day greetngs to all readers.

PLAYING THE BLAME GAME

17.04.2008
The government and the Eskom bosses screwed up. Therefore we, the consumers, have to pay and the country as a whole — besides those with private generators — will have to suffer.

Now, to add insult to injury, the army of the working poor have been told to turn themselves into micro farmers.

“Feed yourselves,” is the advice proffered by finance minister Trevor Manuel to those whose meagre wages can no longer feed, let alone clothe, adequately house and educate their families and themselves. Whatever spare time they have should apparently be spent trying to scratch sustenance from whatever soil they can find.

It’s part of the blame game. Like Eskom’s insistence that load shedding is our fault because we, the consumers, have not sufficiently reduced our electricity usage. In the same way, the victims of starvation wages can be said to be hungry because they have not grown their own food.

It’s not as if Manuel and other ministers have offered up the manicured lawns surrounding their official residences as vegetable gardens for the hungry. Any more than the government has devised a national strategy for co-operative food production.

Yet the government agrees with the labour movement that what we face now is a growing crisis with potentially horrendous consequences for millions of men women and, especially, children throughout the country. But, through various statements, those in government generally wash their hands of any responsibility.

Blanket blame for the causes of the problems is given to “external factors”, which obviously do have a bearing. Then there are the more subtle implications that it is consumers and others who are causing, or adding to, the problems because they are not pulling their collective weight.

But as Cosatu congress resolutions 12 years ago warned, government’s then unilaterally imposed macro-economic policies would result in precisely what has happened.

If predictivity is any test of truth, Cosatu has been proved totally correct. And Cosatu’s conclusions were supported by the other federations as well.

It is for this reason that unions affiliated to both the Federation of Unions of SA and the National Council of Trade Unions will support and possibly initiate campaigns aimed at trying to stem the tide of economic depression threatening to engulf so many families.

How dire the situation has become was illustrated this week by human resources specialist Daan Groenveldt. He pointed out that families could, and did, manage a reasonable standard of living with 25 per cent of disposable income budgeted for infrastructure such as bond redemption or rent, with pension contributions accounting for a further 8 per cent and medical aid, which generally provided full cover, accounting for 3 per cent.

Today, only the 8 per cent pension contribution remains at roughly the same level. Medical aid, once a condition of employment, has virtually disappeared to be replaced by vastly more expensive medical insurance, often offering only partial cover.

Interest rate increases over the past two years have meant soaring bond repayments. A skilled worker on above average wages would now find it difficult to buy a reasonable, three-bedroom house even in the low-cost township ghettos inherited from apartheid.

A bond of R300 00 now costs R3 842 a month. A simple hospital plan for self, wife and two children would add at least another R2 000 to monthly outgoings. On Groeneveldt’s calculations for a reasonable lifestyle therefore, such a worker would have to have at least R18 000 in disposable income.

Since few skilled workers, earn more than R8 000 a month unions, whether affiliated or independent, are right to demand that, rather than telling workers to become micro farmers, government should put in place policies that provide decent jobs at decent pay for all.

GETTING TO THE ROOTS OF CRISIS

10.04.2008
One of the great problems with the politics of protest is that it all too often targets the symptoms of an ill rather than the cause. In other words, much protest aims to prune the possibly poisonous twigs and branches of a noxious plant, without getting to the stem, let alone the root.

This is something Cosatu and other trade unions should bear in mind as rolling mass action again looms.

Farmers, price-rigging producers and profiteering retailers as well as Eskom are clearly in the sights of the promised protest action. Deservedly in several cases, especially where there has been collusion to fleece consumers.

But the roots of the malaise of joblessness, rising prices and interest rates lies beyond such overt manifestations of greed; these merely sprout from a core of national policy that encourages rapid acquisition and accumulation.

This was clearly outlined at a three-day seminar in Cape Town last weekend. Hosted by the left-wing magazine, Amandla, it featured a range of high-powered speakers including KwaZulu-Natal’s Ashwin Desai and Patrick Bond and Ben Fine of London’s School of Oriental and African Studies.

There were very few trade unionists present, perhaps because this was advertised as a “Colloquium on the Continuity and Discontinuity of Capitalism in the Post-apartheid South Africa”. However, it could just as readily have been signposted: “The Facts about how post-apartheid South Africa is being ripped off.”

Most speakers underlined the fact that the natural wealth of this country still lies within the soil, in platinum, coal, iron ore, gold and other minerals. It has long been argued within the labour movement that such wealth, when extracted, should benefit largely the people of the country and, eventually, the region and continent.

It has also long been argued that a considerable portion of that wealth should also be ploughed back to encourage the growth of more sustainable and renewable wealth. After all, once the minerals are mined, what we are left with are holes in the ground.

Instead, we have a situation where vast riches continue to be extracted, mostly to disappear beyond our borders. Patrick Bond produced an interesting sum: if the value of exported and non-renewable mineral wealth is factored into calculations of economic growth, South Africa is going backwards. We are losing wealth, not gaining it.

Ben Fine was one of the economists roped in by the ANC 25 years ago to assist that organisation’s Macro-economic Research Group (Merg) headed by the late Vella Pillay. Soon after the 1994 elections, he and Merg warned of the consequences that could result if “business-friendly” economic policies were pursued.

They were castigated by ANC-supporting “pragmatist” economists who maintained that required investment, growth and sustainable job creation had to be underpinned business-friendly economic policies. Last weekend Fine would have been justified in crowing: I told you so.

Because business-friendly policies were introduced — and continue in place. Yet the investments have not come. But high interest rates, while harming most of the local populace, have encouraged fickle portfolio capital onto the JSE which, for the moment, precariously balances the burgeoning capital account deficit.

As Witwatersrand University economist, Siraj Mohammed pointed out, capital poured into major conglomerates, such as Anglo, Old Mutual, Sasol and SAB when they listed abroad. But this mostly resulted in further outward investment and acquisitions. He also pointed out that local economic growth is “debt driven, consumption-led and mostly jobless” with inequality growing.

These are the reasons that Cosatu has listed as justification for mass action. But instead of only strikes and protests about profiteering, the labour movement could perhaps dust off and update the Merg proposals — and put forward a coherent set of alternative policies as well.

POWER BLUNDERS THE PUBLIC PAYS FOR

03.04.2008
The blundering mismanagement and incompetence of Eskom management and the government have together caused the current energy crisis which consumers are now expected to pay for via massive tariff increases. Yet, at the same time, this situation has ironically highlighted another factor: that a state-owned utility can efficiently produce the cheapest possible electricity.

For, as the labour movement has already pointed out, Eskom’s problems stem not from its original ownership structure, but from the fact that this was changed. What was a public service utility is now a profit-driven, dividend paying entity.

Along with this transformation came hefty salaries and bonus payments to a new breed of fat cat bosses. But, at the same time, in order to make Eskom more attractive to the private sector, the debt necessary for the building of needed new power stations was not entered into.

Eskom was “corporatised” on the road to once hoped-for privatisation. Then, as it sallied forth into the anarchy of the marketplace, it also gave up its tied coal supply deals which had guaranteed a steady flow of low priced fuel.

Instead, a “liberalised” Eskom started buying coal on the spot market. Now the coal price has soared and, with it, Eskom’s costs.

As many in the labour movement see it, this is not so much a case of bad planning, but of a move away from planning for people into the casino of private profit.

These are among the factors that the unions intend to bring out if an when an energy summit is held. Cosatu has has launched an urgent call for such a summit, along with a demand for a moratorium on tariff increases until there is greater clarity about the energy situation.

Says Cosatu spokesperson Patrick Craven: “First we are told Eskom needs an 18 per cent price increase. Now it’s 60 per cent. We need to know what the situation is and why.” The unions also want clarity on the various excuses advanced for power outages, from wet coal to generator maintenance.

To get the debate underway, the Federation of Unions (Fedusa) has arranged a high-powered panel discussion on this issue and the wider economy to coincide with the Reserve Bank’s monetary policy committee meeting next Thursday.

Says Fedusa general secretary Dennis George: “The questions of price increases, economic growth, price stability and the prospect of further interest rate rises have got to be dealt with.”

Among the issues the unions will canvass is the possibility that minerals exporting companies that have been making huge profits out of the current commodities boom should face an “energy levy” of 5 per cent (or more) of their profits to pay for Eskom’s recapitalisation.

Says Craven: “We agree with the principle that the rich should pay and this is something we will be looking into.”

The unions are acutely aware that this week’s biggest-ever petrol price increase will also have a dramatic impact on consumer prices across the board. Coupled with any large rise in electricity charges and a possible interest rate hike, large-scale job losses are in prospect.

Transport and food should also remain the main drivers of inflation which now stands, officially, at 9.4 per cent. What this means is that, once again, it is the poorest who will be hardest hit.

According to the tally of food prices monitored by this column, the overall increase of the price of a basket of basic food bought at an urban supermarket has risen by 24.5 per cent since June last year. This is less than half the level of operating profit recorded by Anglo Platinum last year when this leading platinum producer posted a $1.299 billion profit.