"Unleashing the power of enterprises through entrepreneurship and cooperatives"
Address to NAFCOC AGM, 4 October 2007 - Durban International Convention Centre
Blade Nzimande, General Secretary, SACP
1.0 Introduction
Thank you for inviting us once more to your National Conference. For us NAFCOC is a very important component of our struggle to transform our economy for the benefit of the overwhelming majority of our people. Particularly relating to one critical subtheme of your conference - financing of SMEs and co-operatives, NAFCOC has been a critical partner in this regard, the struggle for the transformation of the financial sector to respond to the needs of the overwhelming majority of our people.
I also wish to congratulate NAFCOC for not only picking up on the theme on co-operatives, but for committing itself to concrete actions to be part of building a co-operative banking sector in our country.
As the SACP and the FSCC, together with NAFCOC, we are proud that we have been part of the struggles for the creation of a co-operative banking sector in our country, which, we strongly believe, will best able to respond to the financial needs of the workers, the poor and the SMEs sector in our country. You must use this conference to take forward this struggle, for the sake of our economy, of co-operatives, of the SME sector, and our country.
The topic under which I have been asked to speak essentially calls for identifying tasks in the following key spheres, and to specifically address what is to be done, in each of these sphere and collectively in all of them: government (developmental, interventionist state and the legal dispensation we need); the economy (colonial character of the economy, and its monopolization - including concentration of finance in four big monopoly banks, and need for diversification and strengthening of the co-operative sector); building co-operative sector, especially in financing (something that we control, challenging the dominance of the big four banks, an independent, vibrant, people-controlled banking sector and not just an appendage or parasitic to the big four, and this we must not treat as something new as stokvels and mogodisane are things that have built our families, our small enterprises and our communities over decades, the deregulation of the payment system and state support in this regard, the state cannot just be regulator but an active agent to change the architecture of the financial system in our country in favour of workers, the poor and SMEs); mass mobilization and solidarity actions between workers, the poor and SMEs (including using of workers` investment funds to promote the co-operative and SME sectors).
2.0 Political power without economic power
The biggest challenge we face in this country at this moment is that the majority have access to political power, but economic power still remains colonial; the economy is still in the hands of the same old white capitalist class.
The single biggest obstacle to empowerment and growth of the co-operative and SME sector is the high level of monopolization in the South African economy. Monopoly capital continues to throttle any possible growth of the SME and co-operative sector. The pre-condition for the growth of this sector must be the demonopolisation of the South African economy. The highest expression of this monopolization is the concentration of finance capital in the hands of four big banks. It is for this reason that we must together wage a struggle to have economic policies that must break the hold of this white monopoly capital over our economy. Without this there can be no growth of SME and co-operative entrepreneurship.
Therefore it is a falsity that we can develop what is called the `second economy` without a fundamental transformation of the so-called `first economy`. This basically illustrates that we do not have two economies, but a single economy with two poles, with the dominant economy reproducing the dominated economy.
We therefore need a massive offensive to transform the mainstream economy in order to create conditions for the growth of the co-operative and SME sector.
3.0 A developmental state with and for the co-operative and SME sectors
In order to achieve the above, we therefore need what we call a developmental state, with a government that is interventionist, decisively acting in the interests of the co-operative and SME sectors.
We therefore need to work together to ensure that we have a legal dispensation that forcefully supports the development of the co-operative and SME sector. We must therefore continue to campaign for legislation and government policies that deliberately protects and advances the SME and co-operative sectors.
4.0 Building a transformed financial environment to support co-operative and SME development
The single biggest obstacle to the development of the SME and co-operative sector is the lack of finance. In the South African context we have a financial sector that is structured and geared towards supporting white monopoly capital.
One of the biggest problems we have is that the current South African state is largely geared towards the regulation of the financial environment for the big four banks as well as the insurance companies. What we need is a state that promotes effective people`s financial institutions geared towards competition with the big financial institutions, rather than subjecting the latter to the logic of the former. Through our stokvels and mogodisano our people have very vibrant institutions, except that these are subjected to the big financial institutions, instead of seeking to create them as independent instruments to finance co-operatives and SMEs in general.
We need to build a vibrant, people-controlled co-operative banking sector, not as an appendage to the established sector, but as an alternative able to finance the co-operative and SME sector. This requires decisive state intervention aimed at creating such an environment, and this must include the deregulation of the national payment system.
5.0 Building a mass movement for the transformation of the financial sector
If we are to achieve all the above it is imperative that the workers, the poor and generally the SME sector need to mobilize in order to bring about a dispensation, including a financing environment, that will realize these objectives. It is precisely these objectives that our financial sector campaign and its coalition seek to achieve. NAFCOC needs to be part of this overall mass offensive.
This mass mobilization must include targeting the manner in which the investments of the more than R1,3 trillion of pension and provident funds in promoting job creation and deliberate support for co-operative and SME development.
Now that we have legislation to build co-operative banks, let us go and mobilize all our people to build these, as they are the main vehicle through which we can transform the financial sector to serve the needs of the overwhelming majority of our people. Let us use our own savings to build what is our own!