22 January 2022

As a movement and society, we are in the midst of a crisis. This is characterised, among others, by the aftermath of the global COVID-19 pandemic, and the persisting high levels of unemployment, poverty, inequality, and the associated crisis of social reproduction, which involves the millions of the affected working-class and poor households struggling to support their lives. Like the global economic crisis that broke out in 2008, the end of the global mineral commodity super cycle in 2011, and other global shocks, the aftermath of the global COVID-19 pandemic has worsened what were already crisis-high levels of unemployment, poverty, inequality, and the associated crisis of social reproduction.

The structural nature of our economic crisis and its implications

During our input to the last ANC NEC Lekgotla held in 2021, we drew attention to the systemic and structural nature of the crisis we are facing. Some facts merit stressing in that regard. Let us take unemployment, for instance. The lowest unemployment rate in our democratic dispensation was in 1995. That was, however, a whopping 16.5 per cent in terms of the official definition of unemployment, which excludes discouraged work-seekers. That rapidly increased to crisis-levels above 20 per cent starting in 1996. Ever since then, unemployment on the narrow definition never came down to below 20 per cent. The expanded unemployment rate that includes “discouraged” work seekers and presents a more accurate picture has been significantly higher throughout the period.

Taking this into account, we have a population of approximately 12.5 million active and discouraged work seekers who are unemployed, according to the Statistics South Africa’s Quarterly Labour Force Survey for Quarter 3, 2021. If we consider the impact of poverty, inequality, and the crisis of social reproduction, which go together with unemployment, the number of the people affected is much greater than the 12.5 million active and discouraged work-seekers. This means that we have a major unemployment, poverty, inequality, and social reproduction crisis.

Regarding inequality, it is worth stressing, as we also did before, that many commentators focus almost only on the undesirable wage or income inequality. We ourselves want to see that radically reduced, and eventually overcome. The shift we adopted towards the legislated national minimum wage was an important step. Despite that, we still have a lot of distributive and redistributive policy work to tackle income inequality. That said, focusing on income inequality alone will not overcome overall inequality, broadly understood, because wealth inequality in our country is even higher than income inequality. Six years ago, in 2016, it was estimated that the top 10 of the population owned approximately 95 per cent of all wealth in our country, while 80 per cent of the population owned no wealth at all.1

In overall terms, the race, gender, and spatial or geographical development dimensions of inequality, poverty, unemployment, and the crisis of social reproduction reflect the persisting legacy of what we characterised as colonialism of a special type. Overwhelmingly African, the black majority are the worst affected in terms of all three dimensions. However, a new dimension has emerged and is growing in our post-1994 reality, in addition involving rising levels of inequality also within population groups. For instance, inequality has been rising within the African/black population group. Elites are rising, while the overwhelming majority remain impoverished and endure varied forms of exploitation, as it is the case in the traditional private sector, in outsourced or privatised functions of the state.

Elite empowerment programmes will not resolve this situation, especially inequality. Such programmes continue to exclude millions of the working-class and poor from wealth and ownership in our economy. They simply cannot take forward the Freedom Charter’s clarion call—“The People Shall Share in the Country’s Wealth!”

Not unrelated to the high levels of racialised and gendered unemployment, poverty, inequality, and the crisis of social reproduction, are the persisting high levels of general violence and gender-based violence. Criminality and gangsterism are ravaging many households and communities. This scourge includes drug dealing and related substance abuse, theft, housebreaking, hijacking, and vandalising and looting of our public infrastructure. The affected infrastructure includes railways, schools, electricity transmission and distribution networks, paved roads, to mention but a few. Linked to this is a gathering general decay and increasing lawlessness. When you look at the affected areas, you see South Africa falling.

We highlight these realities not because we think a complete revolution or fundamental change was possible at a stroke, either at the time of our 1994 democratic breakthrough or at a later point along the line. We do not think so at all, because we believe a revolution is a thoroughgoing process. Our aim is to draw attention to the rising consequences of the persisting high levels of inequality, unemployment, poverty, and the crisis of social reproduction.
1 See Orthofer, A. (2016) “Wealth Inequality in South Africa: Evidence from Survey and Tax Data.” Research Project on Employment, Income Distribution & Inclusive Growth, 1–50.

Unfortunately, the format, composition, and focus of this ANC NEC Lekgotla, and the time it has at its disposal, as well as its outcomes, are not those of a joint Alliance process designed to unleash ruthless yet constructive self-criticism with no detail spared towards a joint way forward. It is therefore essential to strengthen our joint Alliance engagement platforms to tackle the situation comprehensively, including its organisational, ideological, and political aspects, such as the maladies of factionalism and internal divisions—which have escalated, now reflecting the characteristics of internal rivalry, organisational self-destruction, and political suicide, with the ANC as the epicentre of this unpleasant situation. These are among the problems that characterised the context in which the failed July 2021 counterrevolution unfolded.

Electoral decline

For instance, the most significant feature of the November 2021 local government elections was the extremely low voter turnout. While the impact of the COVID-19 pandemic would have been a factor, we should not fool ourselves. Amid crisis levels of unemployment and poverty, of municipal dysfunctionality with communities living without clean water or reliable electricity for months, and sometimes years, with corruption levels having shot up and a long litany of corruption cases involving politicians, increasing numbers of South Africans are simply losing faith in the democratic electoral processes.

Against the background of the government reneging on the public sector wage deal and retrenchments in public entities, as it has been the case in the private sector, there was notable apathy in election campaigning, notably from key public sector unions. This has influence on the perceptions of the affected workers about the ANC-led government and consequently about the ANC itself.

The declining electoral performance has been directly connected to the lack of principled unity and cohesion within the ANC. Factionalism, infighting for positions, gatekeeping, and the marginalisation of Alliance partners also contributed to the electoral decline. At this stage, it is crucial to underline the following reality. The incremental split-up of the ANC and consequently its splinter groupings organising themselves as political parties that contest elections are among the contributors to the decline in its electoral performance. From this those who are arrogant and think that the ANC will thrive alone without the Alliance will cause more problems.

Arrogance, which is destructive, remained intact in many areas. Linked with this, the emergence of a parasitic petty bourgeoisie who are preying on municipal budgets to pursue their private wealth accumulation agendas compounded the arrogant attitude. The parasitic petty bourgeoisie established connections with corrupt officials mainly, but not only, in supply chain management or tender processes. Some of these elements are within our own broad movement. Similar tendencies exist in upper spheres of the government and state organisation.

What seems to be an electoral decline only might as well be more than that, a political decline. To turn the tide against the decline and reposition ourselves for the next elections, we need to use the rare opportunity of having all Alliance formations this year holding their National Conference (ANC) and National Congresses (SACP and COSATU). The key task facing these highest decision-making bodies of the Alliance is to conduct a comprehensive policy review and emerge policy outcomes that will help our country to overcome the crisis-high levels of unemployment, poverty, inequality, and the crisis of social reproduction, in line with our shared strategic perspective of the necessity to advance, deepen and defend a second radical phase of the national democratic revolution. The rare occurrence of all Alliance formations holding their highest decision-making bodies this year also means that we must guard against the destructive tendencies of opportunism, populism, and factionalism asserting themselves.

In renewing the ANC, we must tackle these tendencies and disrupt the corrupt connections between public sector officials and the parasitic and bureaucratic bourgeoisie. Besides the renewal and unity of the ANC, the ANC needs the Alliance reconfigured and more united onwards, together with all other motive forces of the national democratic forces.

The energy crisis

That said, please allow us also to highlight that we are facing a two-fold crisis in energy. On the one hand, we have been exposed to frequent load shedding because of insufficient energy production capacity and supply unreliability. It cannot be denied that this is a major constraint on our economy and national employment creation effort, and by extension, on poverty eradication. On the other hand, we are facing the impending crisis of climate change because of the long global history of profit-driven fossil fuel-based energy production and related consumption patterns. This has serious implications for life on earth. There are economic implications as well. Among other things, we are on the cusp of an accelerated transition to a lower carbon economy. While we are among those who doubt that the decisions of the recent United Nations COP-26 will be sufficient to save humanity from the effects of the impending catastrophic crisis of climate change, there is no doubt that they will hasten disruptive changes resulting from a transition to a lower carbon economy.

Our country is considered being among those that have a high carbon footprint based, among others, on our fossil fuel energy production and import dependency. This is a strategic risk in the context where there is an emerging movement globally in trade and investment against products produced from high carbon footprint production processes.

We need to recognise that there is much in the global capitalist world economy that is uneven, unequal, and unjust, and that the polluters who caused the current planetary crisis are monopoly capitalists based in the imperialist heartlands. This means that the default position for many workers and the poor in Africa and South Africa might be a transition that is highly unjust and that any kind of “just transition” in the energy sector and more broadly will have to be planned for, be at scale and be properly resourced.

Confronting divergences in the policy space

In the past, we tended to emphasise general agreement on implementation in policy areas we characterised as the so-called “low hanging fruits”, while referring areas of disagreements or divergences to processes that eventually did not take place.

Similarly, the last NEC Lekgotla noted that there were disagreements within the Alliance in key economic policy areas, including regarding the Economic Reconstruction and Recovery Plan. In the period preceding that ANC NEC Lekgotla, among others it was clear there were divergences in our strategic and tactical positioning regarding the International Monetary Fund (IMF), the World Bank, and the problematic role that they have been playing through among others their neo-liberal conditionality since the crises of the 1970s. This remains one of the unresolved areas, as the latest developments suggest.

At that ANC NEC Lekgotla, it was resolved that the Alliance should engage to resolve the disagreements. This resolution built on an earlier Alliance Political Council statement to seek a unifying economic strategy that will help us achieve structural transformation and overcome our economic problems, by means, among others, of measures that will move the national democratic revolution into a second radical phase.

Unfortunately, and partly because of the challenges experienced by the ANC, this engagement did not take place either. Whenever we seem to come closer to doing something, perhaps after some initial promising effort, we end up going nowhere. Hence, we believe that there has been no progress since last year’s ANC NEC Lekgotla, on the one hand, while the problems we faced have worsened, on the other hand.

A comprehensive policy review and change

It is clear if we continue in the same old way, we will not achieve different, especially desired, outcomes. In the same vein, no amount of policy tinkering will help us overcome our economic and broader social transformation and development challenges. We need a comprehensive policy review with no major policy areas spared. This must include:

• Engagement to seek an alternative macroeconomic framework that will support inclusive economic recovery, growth path and structural transformation, reduce unemployment, create employment, eradicate poverty, and systematically eliminate inequality and uneven development. It is a fact that the systemic problems of crisis-high levels of unemployment, poverty, inequality, and the crisis of social reproduction not only persisted under the macroeconomic framework that the government has followed since 1996 but have also worsened.
• Trade and industrial policy review to correct weaknesses and build an environment that will help us achieve structural transformation and build national productive capacity through, among others, industrialisation, manufacturing, and localisation development, diversification, and expansion.
• A review of the employment impact of sectoral policies, including master plans, to correct their weaknesses and strengthen them, their resourcing and implementation of the policy outcomes of the review.
• Strengthening our immediate tasks, short-term, medium-term, and long-term measures to overcome our energy crisis and drive public investment in the energy sector in pursuit of a just transition, with employment protection and alternative employment creation as a key aspect. This should include renewable and cleaner energy as a strong element, and in the same vein, research, development, and innovation in pursuit of cleaner coal technological solutions.
• A process to seek consensus on the broadband spectrum. As the SACP, for example, we do not agree with the idea of a wholesale privatisation of the broadband spectrum. We strongly believe in having adequate state and public set-asides in view of national security concerns and to meet national development imperatives. Also, we are against strengthening the duopoly that dominates our ICT sector. In the same vein, we disagree with forging private monopoly in the sector. As part of eliminating uneven development, we are of the view that epically working-class and poor areas need free Wi-Fi hotspots. We think this will unlock access to other opportunities. Access to connectivity in our country is uneven. With profit-driven interests dominating the ICT sector, it is reproducing the patterns of colonialism of a special type, in which rural areas were marginalised, neglected, or under-developed. This must end. The state and public investment have a key role to play.
• Supporting the effort by the Department of Employment and Labour on Employment Policy, understanding that employment and unemployment are the subjects of other policy areas, such as, for example, the macroeconomic framework, and which must be supportive, as well as trade and industrial policy, sectoral policies, provincial development policies, and local economic development.
• Centring the state as employer of last resort, by among others scaling up public employment programmes, which must also be a key site of skills development and our drive for the decent work agenda.
• Review of social policy given the glaring evidence of persisting and growing unemployment, poverty, inequality, and the associated crisis of social reproduction. It is important to highlight one of our proposals from the onset. Our proposal is that the COVID-19 Social Relief of Distress Grant must be extended beyond this financial year. As we progress, it should be increased progressively towards building it as a foundation for a universal basic income guarantee coverage for unemployed persons from the age of 18 to the pensionable age. This should also form part of our 2019 manifesto commitment to advance a comprehensive social security system. We need to mitigate social consequences of unemployment on a serious note, to avoid any further related problems, including political problems.
• Dismantling the networks of state capture and clamping down on other forms of corruption. Studying the entire State Capture Inquiry Report, once completed, and producing a comprehensive response as a movement to ensure that state capture does not rear its ugly head again is a crucial imperative. The response should include priorities for organisational renewal and principled unity based on a revolutionary programme. In the same vein, we need to support the work by state organs responsible for law enforcement and public prosecution to play their part.
• Building a capable developmental state to serve the people diligently and move our democratic transition into a second radical phase is both a key national development imperative and, judged by the text of Part 1 of the State Capture Inquiry Report, a more urgent necessity in response to the report.
• Public infrastructure development, maintenance, care, and security is a key national development and employment creation imperative. As we did previously, we wish to underline our warning against financialisation in public infrastructure development and unsustainable financing regimes. Our proposal is that we must scrutinise the so-called blended financing, as there are legitimate concerns about it.
• A comprehensive approach to the land economy or the political economy of land and fast-tracking of land redistribution through constitutional and legislative measures. Taking note of what happened in Parliament on the proposed amendments to the constitution regarding expropriation, in the intervening period, we need to press ahead with legislative measures to take forward and fast-track land redistribution as a key national transformation and development imperative.
• Turnaround and adequate support for state-owned entities to thrive, and growth of the publicly owned sector.

Thank you.