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The relationship between the democratic state, the working
class and private capital: The key challenge towards and beyond the Growth
and Development Summit
By Blade Nzimande, SACP General Secretary
On Saturday
7 June 2003, the long awaited and spoken about growth and development
summit (GDS) will take place. The last few weeks and days in the negotiations
towards an agreement a number of issues have come to the fore. One of
those issues relates to the attitude and approach of the democratic movement
and the democratic state towards private capital, and the role that such
capital should and can play in the overall developmental challenge in
our country.
One acid test for the GDS and post-summit processes will be the extent
to which the democratic movement is able to collectively pressurise private
capital to act in a manner that addresses the developmental challenge.
In concrete terms this means the mobilisation of large volumes of domestic
private capital towards job creating investment. One critical lesson over
the past 9 years is that one of the key obstacles to growth and development
is the unfettered market economy and lack of decisive transformatory measures
of our capitalist economy towards meeting the needs of the majority of
our people. Indeed it is obvious that in the last instance no capitalist
economy can ever be able to overcome underdevelopment. But the question
remains as to whether we have pushed private capital hard enough, albeit
within the constraints of a capitalist economy, to address some of the
key development challenges we face? A related question is whether we do
have a state that objectively has the capacity to do that? Also has the
working class mobilised enough towards an offensive to pressurise private
capital towards our growth and development objectives? It is to some of
these questions that we must turn our attention to as the context within
which to locate the challenge of the GDS and the post GDS processes.
Relationship between Growth and Development
It should be admitted upfront that despite the major gains
made by the working class since 1994, both the democratic state and the
working class have not managed to pile enough pressure on the question
of the mobilisation of domestic private investment towards a job-creating
economy. Progress made in bettering the lives of our people has largely
been as a result of state initiatives and mobilised pressure by the working
class (eg. water, electricity, housing and struggles around the transformation
of the financial sector, jobs and poverty eradication). In the main we
have not succeeded in grounding our interaction with private capital around
our Reconstruction and Development (RDP) perspectives and objectives.
This, amongst other things is illustrated, by the attitude of business
towards the relationship between growth and development: a fundamental
relationship and defining feature of the RDP. For instance in its initial
submission to the GDS, private capital completely inverts the RDP paradigm:
The GDS can help to develop consensus around the primacy
of growth in the hierarchy of objectives for South Africa. This is essential
if we are to achieve an economic growth performance that will result in
increased job creation, enhance the countrys ability to compete in a
global economy and succeed in attracting both domestic and foreign investment.
Economic growth is a precondition for development.
From this premise South African business has therefore continued
to prioritise global competitiveness at the expense of domestic investment,
thus creating an accumulation regime premised on a trickle down approach.
It is no wonder that in its GDS submission private capital expects government,
labour and communities to make definite commitments. For business all
it has to do is to expect an even more business friendly policy environment,
in order to be globally competitive and continue to exploit the working
class, as a precondition for development. Yet in the RDP growth is premised
on addressing the national developmental challenges of our country. In
other words business wants more of the same, instead of a radical break
with the current accumulation regime.
It is indeed disturbing though expected that all that business
is offering at the moment is some kind of expanded, voluntary corporate
social responsibility types of interventions without a fundamental transformation
of the formal economy. More of the same will not set our country on a
growth path. Evidence to this is the fact that despite rising productivity
and fewer days lost through strikes since 1994, the share of income by
the working class has declined significantly. Despite the fact that large
South African companies are awash with cash there is no increased investment
in the domestic economy, and this is the crucial challenge for growth
and development. Despite the welcome increased commitment by government
to invest in infrastructure in the medium term expenditure framework,
there are no similar commitments by private capital to match or even better
these investment commitments. All these are manifestations of inadequate
state and working class pressure on private capital towards job-creating
investment.
Balance of Class Forces
A number of other examples can be cited to illustrate what is increasingly
becoming an arrogant attitude by private capital and a growing culture
of entitlement to accumulation without investment and addressing the development
challenge in our country. The arrogant resistance by white agricultural
capital to implement the sectoral determination of a minimum wage for
farmworkers is one illustration of the extent to which there is not enough
pressure by the state and the working class towards the transformation
of land and agrarian relations in favour of the workers and the poor.
Again we are now seeing once more resistance to community
reinvestment legislation, particularly the outlawing of redlining, by
the financial sector. This matter is yet again going to be a test on the
capacity of both the state and the working class to pressurise capital
towards investment in housing. It is a matter of serious concern that
the South African Reserve Bank seems to be consistently positioning itself
as the defender of the big banks with hardly a whisper about the financial
services needs of the overwhelming majority of our people. The position
of the Reserve Bank on the Community Reinvestment Bill is another case
in point where an important state institution seems to be more concerned
about concerns of private capital at the expense of working class concerns.
Frankly, even the progress realised towards the transformation of the
financial services sector to serve ordinary people and the drawing up
of a financial services charter is largely a result of the SACP-led mass
campaign in this regard.
The mining bosses not so long ago threatened less investment
if the state and the NUM were pushing for a more stringent mining charter.
Currently the mining bosses are threatening to retrench more than 50 000
workers if the NUM pursues its demand for a 20% wage increase, and yet
with a weaker rand mining houses had raked in huge profits. But at the
same time a positive lesson that can be drawn from the current transformatory
struggles in the mining sector is that it is indeed possible for the state
and workers to push private capital even more towards investment and transformation.
Where the state and the working class have collectively and decisively
taken a stand to push private capital towards developmental challenges,
positive results can be seen.
One the whole, despite the many gains for the working class,
the balance of (class) forces currently stand in favour of the capitalist
classes over the working class, hence capital can arrogantly demand more
of the same from the growth and development summit, whilst practically
offering very little. This cannot be allowed to continue. At the same
time the working class needs to be realistic about what the GDS can achieve
this coming Saturday. What we have not won on the ground through mass
and organised working class struggles, cannot be won on the GDS table.
At best we should seek to achieve at the GDS a minimum platform and set
of measures that will give the working class further leverage to wage
major struggles towards the transformation of our economy in favour of
the workers and the poor.
However we must also frankly admit that the hand of the
democratic movement at the GDS has been weakened by a lack of a prior
agreement on a common strategy and approach towards private capital. This
has also been exercebated by a lack of agreement on a common economic
strategy within the alliance and therefore its common approach to private
capital. The lesson out of this is that a precondition towards growth
and development in our country principally rest on a common approach and
consensus between the state and the working class over the direction of
economic policy. It is only on this basis that we can collectively seek
to impose our own advanced alternatives on private capital. To achieve
all this a common alliance approach is of absolute necessity. This is
the basis upon which we should approach the GDS and post GDS processes.
Driving a Growth and Development Strategy
The fundamental task of driving a growth and development strategy beneficial
to the workers and the poor rest on an organised, politically conscious
working class, able to drive a socio-economic transformation programme
to benefit our people and fundamentally transform the current accumulation
regime. This will also be the locomotive for a common alliance strategy
and programme. This means, amongst other things, significantly increasing
the capacity of organised workers to drive sector summits towards job
creation and poverty eradication. This means putting as much effort on
transformation of the key sectors of our economy as we put into collective
bargaining. As a matter of fact some of the key sectoral transformation
challenges should be forced onto the collective bargaining table, as powerfully
as wages and conditions of service.
This also poses some fundamental challenges to the SACP,
tasks that have increasingly been made even clearer by the processes surrounding
the GDS. For the SACP, this means we need an escalation of our effort
of building a politically conscious working class and strengthening ourselves
so that the working class can act with a clear political purpose. Our
own medium term vision should be that of ensuring that no site of power
and influence in society can exercise that power and influence without
centrally taking the interests of the working class into account. The
struggles around the post-GDS processes should provide just such one critical
platform through which we can pursue our overall medium term vision and
goals.
On the eve of the GDS we need to reiterate some of the key
elements of this minimum platform:
Insisting on labour absorbing projects in both the private
and public sectors, and transforming the procurement strategy of the state
as well as investments in infrastructure as a crucial lever in this regard
Commitment towards the creation of a large social sector
for sustainable livelihoods, including co-operatives, as crucial instruments
in building a working class driven momentum for socio-economic transformation.
Such a social sector should not be seen as a substitute for transformation
of the formal economy, but in itself should be a lever for the further
transformation of the formal economy. To this end we welcome what appears
to be a consensus in the run up to the GDS on building a large co-operative
sector and support mechanisms for other local economic initiatives
Increased investments in infrastructure not only by government,
but by private capital as well, with a commitment to joint supervision
of such investments, and increased labour absorption capacity with such
investments. Such commitments should lay a basis for working class driven
sectoral summits towards job creation and poverty eradication. The financial
sector agreement has already laid a sound basis towards this goal, and
therefore should be incorporated into the GDS main agreement.
Such agreements should not foreclose ongoing struggles and
debates about overarching appropriate macro and micro economic policies
These minimum commitments (and they should be regarded
as such) should lay the basis for the bigger struggles towards the development
of an overarching industrial strategy and progressive transformation of
the accumulation regime in favour of the workers and the poor.
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