Jai,
let me be
auto-critical, after looking again at my artificial distinction
just above -
profoundly dualistic and mistaken, I'm sure Peter Waterman would
have pinged
back - between liberty and poverty as motivation for protest.
The U.S. rightwing rebellions against lockdowns - the "reopen
rallies" - are very complicated, since as usual there are
elements of
'populist' class politics. You can obviously find the hardcore
protofascistic
orientation at the usual-suspect websites -
https://www.breitbart.com/tag/lockdown-protests/ or
http://drudgereport.com/ - or https://www.infowars.com/ - or a
new
especially Sinophobic site spawned by Alex Jones:
https://cantcloseamerica.com/
But there's no denying that economic suffering - not just hatred
of perceived
state authoritarian rule (even if it is deemed necessary for
pandemic-control
reasons) - is bringing people out on the streets in the U.S. and
the Paris banluie and no doubt
many other places, not
just South African townships.
As for ideologies motivating the Western Cape protests
documented by journos,
it's really hard to say what's going on. I've taken a new job at
the University
of the Western Cape but as an armchair academic I don't have any
clue about the
ground-level buzz, sorry. I'm guessing my students know far more
than me about
this, as usual, but it's hard to stay in touch.
There are a few more powerful critiques of SA state management
from reputable
networks, organisations and trade unions, which I'll append
below in case
they're of interest.
Of critical importance is what happens to trade union
consciousness, as there
appears to be a distinct split - much more pronounced than ever
- between class
struggle and class snuggle strategies. The latter approach is at
the very end,
below, from the Congress of SA Trade Unions, reflecting the
largest labour
federation's proximity to power; the SA president and ruling
party chairperson
were both leaders of the National Union of Mineworkers which,
until the
Marikana Massacre of 2012 where that union was seen to be
complicit with the
power structure, was the centre of gravity in the SA organised
proletariat, and
Cosatu still has 1.3 million affiliated members. Meantime in
2013-14, the
largest single union - the metalworkers - split off and the SA
Federation of
Trade Unions emerged to become, now after 3 years, the second
largest
federation with 800 000 preCovid-19 affiliated members. The main
development in
this split over the past few days was Cosatu's largest member
union,
representing nurses and teachers, voicing tough opposition in
part because of
their front-line danger status, in penultimate statement below.
Also, to remind of the mistrust of the SA security apparatus,
the magazine Amandla
offers this graphic reminder of Marikana in a poster issued
when Ramaphosa
increased the army deployment from fewer than 3000 to more than
70 000 a few
days ago, too.
Perhaps this is the way things will go, when the neoliberal
clampdown
associated with relatively tokenistic welfare handouts - as
confirmed this week
- requires massive securitisation, to contain the food
rebellions we've been
seeing rise, so predictably, across the Western Cape, with
potential to keep
spreading...
***
Cry
of the
Xcluded Press Statement:
We refuse to celebrate our hardship and your relief
22
April, 2020
Nearly
one month
into South Africa’s lockdown, the vast majority in society faces
tremendous suffering
and hardship. We have no income, we are scrounging for food, we
are harassed by
the police and SANDF, we are subjected to violence in the home.
And only now
the government responds with a social and economic policy.
The
opinion
makers, mainstream media, comfortable academics, the NGO crowd
and centrist
trade unions all tell us we must welcome R350 – a loaf of bread
a day. It is
too little and too late. This R350 will not be able to buy food,
electricity,
toiletries and pay the expenses that we have as the unemployed.
By
closing our
schools while not putting in place an alternative to the school
feeding scheme
you made our children go hungry. You belatedly realise the
suffering this has
caused by now increasing the Child Support Grant by R466.66 on
the average for
6 months. Must we thank you for recognising the flawed approach
of the token
food parcels you distributed, many of which were gobbled up by
your comrade
ward councillors and other officials?
Let’s
be clear,
there are over 700 informal settlements in Gauteng alone. 25
years of business
as usual policies have led us to a point when the distribution
of 250 000 food
parcels within two weeks will be a far cry from what is needed,
even if all of
these food parcels reach a destitute family. What is needed now
is a move
towards true food sovereignty, to achieve this requires the
radical
redistribution of land from the few for the many. Agribusiness
and major
retailers are the biggest opponents of such a drive as it would
cut right into
their profits and ability to exploit workers and the land. But
we must put
people’s livelihoods over the profits of a minority.
The
aged, who are
physically cut off from the support of their children, who in
turn are being
retrenched in their droves and robbed of an income, must now
make do with an
additional R250!
These
new R50
billion in grants represent just 10% of your “stimulus package”
but we, the
poor, the destitute, the unemployed constitute more than two
thirds of the
population.
2
And
another R200
billion is a loan guarantee to SA’s big banks. This will not
involve real
government money, except when the banks cannot get back their
money from the
businesses they lend to. And no doubt, these loans will be
profitable for the
banks – through the magic of compound interest.
So
in actual
fact, in the face of 40 million people who are facing the fear
of death, either
from the pandemics of poverty or coronavirus, the government is
providing a
stimulus of between R170 and R200 billion. This represents just
over 3% of the
size of our economy – not 10%. This 3% fiscal stimulus still
leaves South
Africa at the low end of the world war against coronavirus –
even though our
frontlines are among the bloodiest given our world-leading
inequality rate.
And
what of our
brothers and sisters with jobs, the ones now in the firing line
of businesses
which are abusing their power in this time of crisis? You have
promised them
R40 billion in wage support but you provide no details. Will
this be channelled
to the UIF? The UIF, which is currently so overwhelmed by the
hardship the
bosses have caused, that they cannot deliver timely relief? And
what about
women in the care economy, those that have and continue to keep
households
going: domestic workers, community health workers, the
informalised child
minders?
How
will they
prove loss in wages and be able to obtain your wage support? Why
could you not
do what other countries have done and guarantee the wages of
workers, even at
80%, like the right-wing Tories in Britain?
So
must we
celebrate the boldness, decisiveness of this government? Has it
done what has
become a neoliberal cliché in time of great distress “never let
a crisis go to
waste”?
Ominously,
what
comes with this package is the promise of “structural reform” –
homegrown of
course, because the IMF, World Bank, the African Development
Bank and the New
Development Bank will supposedly not seek to impose their own
versions of
structural adjustment. We are told, “don’t be ideological –
these loans will
come with few strings attached.”
Let’s
see if they
are loans made in local currency to be repaid in local currency;
let’s see the
genuine interest rates; let’s see the conditions. Will it be
like the World
Bank’s massive Medupi loan, to overcome our electricity crisis?
See where that
has led us. A loan that is so odious the current President of
the World Bank
has himself labelled it corrupt! And if we now take World Bank
funding, will
this make it impossible for the government to repudiate this
Odious Debt?
And
as for the
structural reforms President Ramaphosa and Finance Minister
Mboweni are
promising? Are they not what business has been calling for?
Deeper wage
reductions, already imposed this month when the government
reneged on the
current bargaining agreement with public sector workers (who now
take an actual
4%+ wage cut, depending on the rate of inflation this year). The
President and
the Minister of Finance should be honest with the nation and
tell us how many
public sector workers must join the ranks of the unemployed in
order to reduce
the public sector wage bill by R161 billion over the next three
years.
Does
anyone
imagine that the IMF, World Bank and credit rating agencies like
Moody’s which
downgraded the country in the midst of the COVID-19 pandemic,
will not enforce
these disastrous budget decisions of this government?
Perhaps
the
public sector workers numbering tens of thousands that will be
retrenched this
year to reduce government’s wage bill will have less to worry,
now that they
can get R350 relief as part of the unemployed. Oh, but that is
just for the
next six months! And then it is back to normal for the army of
unemployed now
in excess of 11 million: zero, nothing
3
And
do these
structural reforms not entail using the crisis of the SOEs to
privatise them?
SAA, for all intents and purposes is history. ESKOM will be
unbundled and
private corporations will be allowed to make profit in the
electricity sector,
speeding up ESKOM’s death spiral. And followed by more
retrenchments.
While
the poor,
working class, and unemployed are presented as the main
beneficiaries of this
package, the big banks are well looked after through the R200
billion loan
guarantee. Absa, Nedbank and Standard Bank paid R17.4 billion to
the rich in
April in profits even though the Reserve Bank Governor asked
that they do not
do this and drain vital foreign currency reserves.
They
did not
care; clearly, the economic order of the rich must not be
touched. Our
government could do what Denmark and Poland have done by
refusing to give any
Coronavirus support to companies that put money in tax havens to
avoid paying
tax, but this is nothing for South Africa; the state refuses to
disturb the
economic order of big capital!
What
Ramaphosa
and Mboweni are doing is tossing out a few crumbs from manicured
fingers, while
taking back much more with a clenched fist, using a police and
army already
well practiced in the art of brutality. Those who celebrate this
“historic”,
“momentous” “unprecedented” package in the belief a new future
awaits, should
be a lot more cautious! The struggle continues but the momentum
is not with the
dispossessed and Xcluded!
Issued
by the Cry
of the Xcluded, including:
SAFTU,
AMCU,
Assembly of the Unemployed, Abahlali BaseMjondolo, Inyanda
https://thexcluded.org.za/about/
For
more
information or comment:
Zwelinzima
Vavi
(SAFTU)
Nonhle
Mbuthuma
(ACC)
Pinky
Langa
(SAGRC)
Joseph
Mathunjwa
(AMCU)
Khokhoma
Motsi
(BUM)
Ayanda
Kota (UPM)
***
President Ramaphosa
supplies mainly
smoke and mirrors, while the society and economy starve
The
SA Federation
of Trade Unions (SAFTU) has consistently and repeatedly
condemned a government
ruling the world’s most unequal society, where more than 60% of
our citizens
barely survive below the simple measure of R50/per person/day
poverty and where
four out of every ten are unemployed.
In
addition to
this this existing state of extreme injustice, we have suffered
more than two
months of economic chaos and nearly a month of Covid-19 lockdown
– with severe
police repression and utter incompetence by a government
incapable of
supporting its poor and working people.
Yet
President
Cyril Ramaphosa well knows that these contradictions present a
life-and-death
situation. His April 21 speech is worth both praise where it is
due, and
condemnation for the illusory benefits promised, especially
where these will be
hijacked by the country’s corporate sharks and political elites.
This
response is
broken down into several sections, addressing the main concerns
that SAFTU
workers have with a state that has so often acted against their
interests. We
especially want to warn our members and society about two clear
and present
dangers:
·
“A risk-adjusted approach to the return of
economic activity, balancing the continued need to limit the
spread of the
coronavirus with the need to get people back to work” – which
judging by the
mining industry fiasco now underway, will benefit irresponsible
capitalists at
the cost of workers’ lives; and
·
Commits to “speedy implementation of economic
reform” and to “accelerate the structural reforms required to
reduce the cost
of doing business” – which is code wording for the neoliberal
roll-back,
attacks on workers, and higher cost-recovery regime for state
and parastatal
services.
1.
New 3.33%/GDP
fiscal commitment is too small and must be seen as only a
start
We
are pleased
that, finally, President Ramaphosa is expanding the state’s
extremely weak
fiscal and financial commitment. As he pointed out, the R500
billion “social
and economic support package” consisting of both new grants and
loans is nearly
10% of the 2019 GDP currently at R5.1 trillion, which is itself
a vast increase
from prior commitments (estimated at less than 1% of GDP).
The
R500 billion
will take many by surprise, since the establishment strategy has
been much stingier.
For example, notwithstanding the obvious desperation and growing
social unrest
due to hunger, last week a major bank called for merely a R100
billion
stimulus, while Moody’s was still demanding that Mboweni pursue
such high
budget cuts as to achieve a primary budget surplus! At first
blush, Ramaphosa
looks extremely generous, in comparison.
It
was on
February 14 that – replying to Ramaphosa’s State of the Nation
Address – SAFTU
called for a R500 billion fiscal stimulus, before we knew the
extent of the
economic crisis lying ahead. We suggested it be paid for by a
wealth and
solidarity tax, a halt to Illicit Financial Flows, higher
corporate taxes and
more progressive personal income tax. We called for a different
monetary
policy, genuine land reform, and robust industrial policy, as
well as public
works financing of infrastructure.
On
March 15 we
demanded urgent implementation of an inward-oriented
re-industrialisation
strategy – also to support the African continent by generating
more locally-made
basic-need commodities – in advance of the continental free
trade deal. We
called for many other healthcare and social policy reforms,
financially
supported by the “Quantitative Easing” central bank strategies
used in many
Northern economies. We insisted on tighter exchange controls, to
protect the
Rand from what was then beginning in earnest, a speculative run
that dropped
the currency from R14/$ on 1 January to the current R19/$. And
on March 19, we
called for a 5% cut in the main interest rate (to 1.25%), as a
kind of CPR
(cardiopulmonary resuscitation) to get the economy out of the
crisis, and
especially to get relief to all our countries’ now-desperate
borrowers.
Although
most of
our demands have not been heeded, Ramaphosa has at least offered
some important
state relief. But we must look more closely, because the shiny
outside of this
vehicle disguises serious problems under the hood. For example,
a massive R200
billion (40%) of the support is not actually state-supplied
grants in the form
of a budget allocation, but instead, loan guarantees, so
these do not
properly qualify as a fiscal stimulus – and Treasury’s record of
monitoring how
more than R500 billion in guaranteed credits to parastatals is
simply abysmal,
no one would dispute.
Officials
in
Treasury had earlier said they would fund the budget increases
entirely from
reallocations, so Ramaphosa’s turn to a much bigger budget
commitment is
welcome, even if the question of financing the larger deficit is
unsatisfactory, a point we return to.
However,
Ramaphosa announced that R130 billion had already been committed
within the
existing R1.95 trillion budget announced on February 26. (That
budget included
a R160 billion reduction in civil service wages compared to what
had been
agreed in 2018) The total new fiscal stimulus of R170 billion is
therefore just
3.33% of GDP. That is a vastly inadequate amount compared to
what is at stake
in terms of social and economic survival.
2.
Who wins and
losses from budget reallocations?
It’s
not yet
clear where the R130 billion fiscal reprioritisation will come
from, because
austerity will hit elsewhere in the budget, usually where our
people are
weakest in defending their allocations. We expect to learn more
details on
Thursday.
But
there are
many vulnerable parts of our budget, such as water and
sanitation
infrastructure which Minister Lindiwe Sisulu has already
revealed to be so
inadequate that 19 000 new emergency water tanks have had to be
produced and
distributed; although fewer than 8 000 have actually been
installed so far.
These tanks compel many residents in poor areas – especially
women and girls –
to collect water at central sites that create dangers of
Covid-19 transmission.
Yet
Parliament’s
Portfolio Committee on Human Settlements held a virtual hearing
this week where
it was revealed that the vital public works component of water
and sanitation –
i.e., building new permanent infrastructure – will be hit with a
massive R1.1
billion cuts. This is something Treasury has been planning even
though
Ramaphosa has just announced, “R20 billion will be made
available to
municipalities for the provision of emergency water supply,
increased
sanitisation of public transport and facilities, and providing
food and shelter
for the homeless.”
We
will be
watching for these sorts of utterly irrational, destructive
budget cuts by
Treasury, which for years has been chopping vulnerable parts of
our budget:
especially health, housing, municipal subsidies and social
grants (which have
fallen steadily in real terms since the 1990s, especially since
poor people’s
inflation rate is higher than the rest of the economy’s). For a
dozen years,
Treasury has been guaranteeing Eskom’s debt while the National
Energy Regulator
has allowed the utility to increase tariffs especially affecting
poor and
working people, by more than 300% above the inflation rate,
resulting in more
cut-offs and worse service.
So,
our trust in
Treasury is very low and we must all watch closely to ensure the
water and
sanitation permanent-infrastructure budget cuts are not carried
out or
repeated. There are many areas of infrastructure which benefit
the rich and big
business, and there are vast sums wasted on outsourcing of
construction and
other activities that could be done 35-40% less expensively if
they were
insourced.
There
should be
major budget reallocations, such as the tens of billions of
rands of tax
benefits going to private health insurance companies, thereby
slowing the
introduction of the National Health Insurance. But water and
sanitation
infrastructure should not be part of these.
3.
Still-inadequate income grants and food support
A
temporary R300 and
later R500/month income boost (from June-October) will go to
nearly 13 million
Child Support Grant recipients who are very poor (with a single
parent earning
less than R4000). This will more than double their spending
power for children
(currently R445 per month), which is very welcome.
However,
given
that the Upper Bound Poverty Line is R1300 per month per person,
the improved
child grant leaves the recipients still 25% below the poverty
line. There are
also 3.7 million elderly people and others who have disabilities
who receive a
R1820/month grant that will temporarily rise just R250 – far too
little.
Likewise,
the
R350 per month that will be on offer to the unemployed millions
is truly just
tokenistic, at just 62% of government’s own measure of the R561
per month food
line, and 27% of the overall poverty line. There are all manner
of
complications in assessing who can qualify for this, as well.
With only 2% of
the Unemployment Insurance Fund reaching those who qualify after
being laid off
in recent weeks, our faith in the administrative capacity of
this state is
extremely low.
Far
better would
have been a generous Universal Basic Income Grant, which would
eliminate the
administrative costs and means-testing errors (and corruption),
and which could
be clawed back through the tax system with a more progressive
structure, as
well as through Reserve Bank financing support (as is
increasingly common
elsewhere, e.g. in Britain).
As
for food
support, the state cruelly forced poor people into the Covid-19
lockdown,
within overcrowded ghettoes and barren rural areas, without a
proper survival
system. The water and sanitation shortages were one indication
of state
failure, but the food system is just as broken.
We
are relieved
that Ramaphosa has admitted many problems in the Department of
Social
Development’s implementation of food aid. Although 250 000 food
parcels are
going to be distributed over the next two weeks, he seems to
recognise how
inadequate this is, given the corruption in his own party – with
shocking
reports of political patronage in food distribution – and the
state’s
incompetence at serving poor people.
But
the private
sector is also flawed as a vehicle for food sales. Having heard
that social
grants will be increased, the monopoly food retailers could well
increase their
prices and pocket the grant increases, given how weak state
oversight is now. A
good government would take charge of the food supply chain and
give equal
allocation of food, fruit and vegetable rations to every
citizen, and then
issue food stamps which people use to access these essentials.
This
will be an
opportunity to engage genuine grassroots farmers and progressive
allies – e.g.
the C19 People’s Coalition – to identify how to restructure food
and
agriculture during this crisis, in a manner that builds
appropriate state
support and community producer capacity, and that replaces the
junk and rotten
food we get in working-class grocery ghettoes with good and
affordable
nutrition. The model for improving food allocation and ensuring
a proper
balanced diet is that of the Cuban and Venezuelan governments.
The
one grant
that Ramaphosa announced, that does appear to be sufficiently
generous, is to
the public health sector. Indeed, the unspecified R20 billion in
new funding to
healthcare will hopefully be used to restore the capacity after
Treasury’s R3.9
billion cut in the February 2020 budget. However, be aware that
the Department
of Health issued a recent scenario in which, in spite of a
potential 5.8
million South Africans testing positive for Covid-19 by
September, the
additional resource needs from May-September (five months) were
only R5.5
billion.
SAFTU
support the
call made by the Young Nurses Indaba Trade Union (YNITU) that
the frontliners
be given a Covid – 19 danger allowance, income tax break and
other benefits to
motivate them to keep battling against the marauding
coronavirus.
4.
Bank bailouts
costing R200 billion – will the loans and guarantees be wisely
used?
Unfortunately,
R200 billion of the amount announced by Ramaphosa will come
through unspecified
lending and loan guarantees, largely through the private sector.
This component
is definitely not to be added to the fiscal stimulus, though it
could help save
jobs if the interest rate is to be subsidized, since market
rates are so
expensive.
Currently,
the
South African prime rate of 7.75% is among the very highest
interest rates within
the world’s fifty leading economies (where SA ranks with Turkey,
Pakistan and
Venezuela as most expensive to borrow).
But
when it comes
to the state providing loan guarantees, our first concern here
is that, like
Eskom, SAA, Denel and other badly-run parastatal agencies which
have benefited
from the granting of R500 billion in loan guarantees, the
Treasury was
asleep as vast corruption crises emerged.
Will
such
corruption affect the new R200 billion in loan guarantees that
taxpayers will
be expected to pay for if the companies go bankrupt? Our faith
in Treasury’s
ability to monitor corruption is very low, as a result of its
own procurement
chief (Kenneth Brown) admitting in late 2016 that 35-40% of
state payments made
to outsourced activities (in turn about 40% of the budget) was
overcharged due
to corruption. But nothing has been done since that revelation.
Relatedly,
our second
concern is that South African companies will use their renewed
access to
credit, to continue their record of Illicit Financial Flows
(IFFs) and other
corrupt activities. The IFFs from South Africa estimated by the
Treasury’s
Financial Intelligence Centre in October 2019 amount to between
$10 billion and
$25 billion annually (i.e., R190 to R475 billion). There appears
to be no
attempts by Treasury to halt this looting.
Indeed,
PwC
recorded the South African capitalist class as third most prone
to such
economic crime (behind only China and India) in its February
2020 poll.
If
Ramaphosa was
serious about identifying a patriotic bourgeoise deserving of
these loan
guarantees, he would follow other countries such as Denmark: no
company
registered in tax havens (as many in South Africa are, through
Mauritius), or
that pays out new subsidies and loans in the form of dividends
or share
buy-backs, will be considered eligible for state support.
On
this point of
bank bailouts, recall that we have been down this road before.
The world
financial crisis of 2008-09 could most immediately be traced to
irresponsible
banking in the U.S. But the Federal Reserve’s Quantitative
Easing, low interest
rates and explicit bailouts of banks, followed by similar
measures in London,
Brussels and Tokyo, did not solve capitalism’s underlying
problems.
Instead,
the
pro-bank policies followed by central banks and treasuries from
2008-14 simply
offloaded the financial market crisis into a series of fiscal
crises. In the
case of South Africa, this was one reason the vast public debt
rose, as well as
foreign debt (which soared from $60 billon in 2007 to $185
billion in late
2019).
Poor
people
across the world have been compelled to pay for this generosity
through cuts in
public spending, including non-payment of South Africa’s public
servant wage
increases and cuts in public health budget in 2020. These have
left us more
vulnerable to the virus than we would have been as a society,
thus making a
brutal lockdowns we are having inevitable. The additional R4.5
billion in
funding that Ramaphosa promised to the security apparatus is, in
this context,
a profound tragedy of state priorities.
5.
Corrupt
financing sources must be avoided, so as to declare default
against same
lenders
It
is truly
shocking that the world’s most notorious bankers will be lending
South Africa
vast sums to cover the financing of the stimulus, instead of
using the SA
Reserve Bank which has both huge reserves and nearly unlimited
capacity to
print money for fiscal stimulus.
Should
billions
of dollars be borrowed from international financiers, when those
same bankers
owe South Africans for eroding our state, society and economy
due to their
funding of official racism prior to 1994 and of post-apartheid
corruption?
Ramaphosa mentions four: the International Monetary Fund (IMF)
and World Bank,
the closely-related African Development Bank, and the supposedly
different
BRICS New Development Bank. Each should be charged with imposing
Odious Debt on
a society that had no say in past lending, for which billions of
dollars are
still due to be repaid – and instead should be audited and then
declared as a
lender liability.
·
The IMF was a prolific apartheid lender just
after system-delegitimising crises such as the Sharpeville
massacre in 1960,
the Soweto uprising in 1976 and the gold price crash in 1981.
Its role was to
prop up the apartheid regime financially, even though the UN had
long declared
Pretoria’s policies a “crime against humanity.” During the
transition to
democracy in late 1993, another IMF loan was responsible for
that era’s extreme
neoliberalism that made it impossible to default on apartheid’s
odious debt and
to implement the Reconstruction and Development Programme.
Conditions on a $850
million loan included a variety of Washington Consensus policies
that wrecked
the new democracy’s chances to share our wealth. The IMF’s role
in recent weeks
in relation to Venezuela’s request for $5 billion in funding –
which was
refused on the orders of the Trump regime – and its continuing
commitment to
neoliberalism, mean it cannot be reformed, and should be avoided
at all costs.
·
The World Bank’s $3.75 billion loan to Eskom in
2010, to build the Medupi coal-fired power plant, was the Bank’s
largest ever,
but its then-president Robert Zoellick knew fully well that the
boilers Hitachi
was constructing followed directly from a bribe to the ruling
party through its
Chancellor House fundraising arm – for which Hitachi paid a $19
million fine
(to the U.S. government in 2015) after Foreign Corrupt Practices
Act
prosecution. The Bank should not be rewarded for this corrupt
and
climate-catastrophic loan, and the debt should be declared
Odious, for lender
liability instead. Medupi was such a notoriously corrupt
project, that when
he was U.S. deputy finance minister in 2017, the current World
Bank President
(David Malpass) testified to the U.S. Congress that South Africa
was his ideal
case to show how the Bank itself was profoundly corrupt.
·
The African Development Bank made similar loans
to Eskom for Medupi and Kusile and should also face a creditor
“haircut” (as
should the China Development Bank and other bilateral and
commercial lenders).
·
The BRICS New Development Bank (NDB) followed in
the same spirit, by offering Eskom CEO Brian Molefe and Transnet
CEO Siyabonga
Gama massive loans in 2016 (for transmission expansion) and 2018
(for Durban
port expansion), respectively. Both had to be halted due to
corruption, as even
the NDB has admitted. Then in 2019 the NDB lent to Eskom for
Medupi in spite of
massive corruption that had subsequently been revealed to extend
far beyond the
initial Hitachi bribe, and to the Lesotho Highlands Water
Project in spite of
the persistent role of a key Lesotho official (Masuphe Sole) who
had spent nine
years in jail after being caught with Swiss bank accounts
stuffed by the prior
set of corrupt multinational corporations building earlier
Lesotho dams.
The
financing of
not just the R170 billion in fiscal stimulus, but the use of tax
breaks and
payment relaxations as proposed, should be rethought. Worker
pensions should
definitely be used under certain conditions to avoid them being
looted too, and
paid a fair return (since the Johannesburg Stock Exchange and
various other private
sector investments have proven to be riddled with volatility and
corruption).
The companies that are benefiting from Ramaphosa’s largesse need
social audits,
because many have not only engaged in illicit and licit outflows
of funds to
overseas tax havens (especially London and Amsterdam). They have
also
contributed to the R1.5 trillion in idle corporate cash sloshing
around,
instead of reinvesting profits in plant, equipment and
employees. Government
has so far including through this package refused to tax this
R1,5 trillion
through the introduction of a solidarity and wealth tax.
There
are plenty
of sources of financing available, if exchange controls could be
immediately tightened
to prevent the offshoring of South African capital. The most
important that
Ramaphosa doesn’t mention, is the Reserve Bank itself, which can
engage in
monthly purchases of around R20 billion per month according to
former Treasury
official Andrew Donaldson. Indeed, there are vast sums that the
Reserve Bank
can create, to pump funds into every South African households,
according to the
tenets of Modern Monetary Theory which many governments are now
using during
this emergency. John Maynard Keynes himself had suggested
massive state
‘pump-priming’ to get economies going in times of economic
depression.
The
sorry state
of the economic policy debate in South Africa today is reflected
in the fact
that Ramaphosa dares not mention these Reserve Bank
interventions, much less
the long-overdue taxation increases on the rich and corporations
(which in 1995
paid a 55.5% tax rate, compared to 28% today – even prior to
loopholes).
6.
The social
tensions will continue rising: a socialist programme is more
necessary than
ever
South
African
society is in pain, with many of our most desperate members of
the precariat
and proletariat moving from despair to revolt.
In
this context of
unprecedented suffering, the 3.33% fiscal commitment is a great
improvement
over the 0.1% that Treasury initially offered. Nevertheless,
according to the
Overseas Development Institute, this is less than a quarter
of the
fiscal commitment made by a conservative government in Britain
with social
deprivation problems that are a tiny fraction of South Africa’s.
We
still call for
at least the level that the Boris Johnson regime has offered the
UK, namely
16.3% of GDP as a fiscal stimulus (new commitments) to
rebuild our
economy and society: at least R830 billion.
And
we still call
for a much deeper cut in the interest rate, which at 5.25% (the
Reserve Bank
repurchase rate) needs to be cut by our original request of 5% -
i.e., another
4% - to make a dent in the enormous interest burden that the
society, state and
business cover. President Ramaphosa’s claim that the 2% interest
rate cut will
boost the economy by R80 billion appears far too generous, given
the collapsed
state of so many firms which can’t repay lenders already. Edcon,
the Land Bank
and SAA are just the latest to default, plunging tens of
thousands of workers
into what may be long-term unemployment, and many more firms and
parastatals
will follow, with a cascade of bankruptcies likely to threaten
our banking
system.
But
we also know
from the Rand’s crash, especially after the slight SARB
loosening, that our
unpatriotic bourgeoisie now needs very tight exchange controls
to reign in
their Illicit Financial Flows – as well as the Licit Financial
Flows going to
multinational corporations and banks which need to be paid in
local not
increasingly scarce foreign currency. Above all, we need to
avoid being put
even further into global financial circuits, which squeeze us
and eventually
impose the kinds of neoliberal constraints for which the credit
rating agencies
are notorious.
These
are the
big-picture problems with the Ramaphosa government’s handling of
Covid-19’s
socio-economic catastrophe. The micro-scale problems are worthy
of much more
discussion, especially with committed social activists.
That’s
why we
must, in conclusion, strongly condemn this statement by
President Ramaphosa:
“Our economic strategy going forward will require a new social
compact among
all role players – business, labour, community and government –
to restructure
the economy and achieve inclusive growth.”
Ramaphosa
makes
this promise: “We will forge a compact for radical economic
transformation that
ensures that advances the economic position of women, youth and
persons with
disabilities, and that makes our cities, towns, villages and
rural areas
vibrant centres of economic activity. Our new economy must be
founded on
fairness, empowerment, justice and equality.”
We
condemn this
not because it is undesirable or impossible, but because we
know from bitter
experience that the ANC government is not serious about
consulting much less
compacting with progressives in civil society. The
government is only
consulting the yes Sir of society.
Both
SAFTU and
critical social movements have been shut out of consultations on
the major
state policies since the time of the Growth, Employment and
Redistribution
strategy in 1996, when a neoliberal programme was simply imposed
from above.
Even today, the National Economic Development and Labour Council
continues to
exclude South Africa’s second largest union federation – SAFTU –
including the
country’s largest union (the metalworkers, NUMSA), as well as
critical forces
within civil society. The voices of poor communities who are
representing our
most desperate citizens continue to be suppressed.
In
contrast, the
ongoing neoliberal agenda – the “structural reform” that the
state has long
established working closely with big business, especially
white-owned companies
which long ago relocated their head offices and financial
functions to London –
is completely contrary to the interests of the masses. The lack
of consultation
with most progressives and the failure of any social contract
since the
mid-1990s to include core labour and social movement
constituents, will be a
guarantee of this strategy’s failure in the days, weeks and
months to come.
In
short, the
most important question society must consider, now and at all
times, is who
benefits from these measures? And who pays?
SAFTU
demands:
•
Allow all who can to work from home, with special
leave without loss of pay for others, except workers providing
health services,
food and other necessities, who must have safe working
conditions, protective
gear, anti-transmission training and regular testing.
•
Build a single, public national health care
service for all.
•
Mass employment and training of health assistants
and community healthcare workers to contain the spread and
ensure treatment and
services at point of need.
•
Support the immediate shutting down of schools,
pre-schools, universities and colleges to limit the spread;
provide special
childcare for essential services workers.
•
Roll out free testing at temporary stations in
all communities; quality medical services and medication for
all.
•
Free soap, water and sanitisers in every public
space, workplace and poor community.
•
Stop and reverse all water and electricity
cut-offs and supply water to all households.
•
Basic income grant and free basic food supplies
for precarious workers, the unemployed and others forced to stay
home and in
need.
•
Stop all retrenchments.
•
Nationalise
all private health-care sectors and pharmaceutical companies
•
No profiteering from the pandemic
•
Suspend payments of rent, rates, water and
electricity tariffs.
•
Emergency loans to small businesses in need.
•
No
evictions.
•
Set up import-substituting industries to ensure
continuous supply of all essential needs for which the country
currently
depends on imports.
•
Permanent, secure and decent-paying jobs and
training for all workers including those in community health
care, home-based
care, food production, distribution and retail.
•
Massive public works programme to overcome
backlogs in housing, schooling infrastructure, hospitals and
clinics, piped
water supply and safe public transport.
•
Reorganise the economy on the basis of public
ownership of all key resources (banks, mines, big businesses)
and a democratic
plan to prioritise health, education, housing, work, water,
sustainable food
and energy production.
•
No restrictions on workers’ democratic rights to
strike and organise.
•
Fight racism, tribal division and narrow
nationalist chauvinism.
•
Fight against gender based violence and protect
our children
•
A more human approach by the SAPS and the SANDF
as it enforce the lockdown regulations
The
statement issued by South African Federation of Trade Unions
SAFTU
General Secretary | Zwelinzima Vavi
Contact
details 079-182-4170
zweli...@saftu.org.za
***
President
completely disregarded nurses in his announcement of the
relief support
packages for COVID-19
Sibongiseni
Delihlazo, DENOSA
Communication Manager, Wednesday, 22 April 2020
The
Democratic Nursing Organisation of
South Africa (DENOSA) is saddened to note that the President, in
his
announcement of relief packages, completely forgot about nurses
who are on the
ground and in the coal-face of the COVID-19, which has left a
bitter taste as
many of them fight this war bare hands.
The
announcement has cemented nurses'
long-held view that they are not appreciated despite their great
contribution,
most of which has seen many patients recovering from COVID-19.
The
announcement has left nurses with the
message that says they are on their own, because they are
enduring the
following hardships as a result of COVID-19:
a)
Nurses' salaries have not been
adjusted as of 1 April as per the collective agreement, and
DENOSA and other
unions had to declare a dispute at PSCBC (which has been set for
28 to 30
April) against government not honouring the agreement;
b)
Transport expenditure has doubled for
them because they often have to take longer and connecting
routes to their
places of work with no support with transportation from the
Department of
Health;
c)
Nurses have to endure a decreased
disposable income now as a result of the lockdown at the time
when their
salaries have not been adjusted, when countries like Ghana have
given tax
breaks for four months to assist health workers as a gesture of
appreciation
for their work of selflessness during this period;
d)
Many nurses still work without
Personal Protective Equipment (PPE) in facilities and are
exposed to the danger
of contracting the virus - and many others already have - and
their calls for
payment of Risk Allowance for COVID-19, like other essential
workers are
getting, has fallen on deaf ears so far.
e)
Nurses' Uniform Allowance, which
should have been paid to them for this financial year (which
began in April),
has not been paid to them when other essential service workers
are getting
multiple pairs of full uniform. And it normally takes up to July
and boycott of
wearing uniform before they are paid this Allowance;
f)
Still there is no counseling support
for them at this time of need in facilities as more COVID-19
patients are
admitted and no additional staff is hired.
Therefore,
DENOSA would like to highlight
that nurses are extremely disappointed that not a single one of
the above
challenges has been acknowledged and addressed by Cabinet. This
has deflated
their morale to extreme low, and it is not unreasonable to feel
the way they
do.
DENOSA's
message to President and
Minister of Health is that it is still not too late to address
this oversight.
As a matter of urgency, DENOSA national leaders are currently
seeking an
audience with both the Minister of Health and President over
these urgent
matters.
Overall,
DENOSA welcomes the various
relief packages that the President announced because poverty as
a result of the
lockdown was threatening to create a new health crisis for many
patients who
are on chronic medication and would not be able to take their
medication on
empty stomachs.
We
welcome the setting aside of funds to
address staffing, because the reality is that South Africa has
far too few
health workers to handle COVID-19 if it were to rise to
catastrophic levels. We
will continue to make noise in this area, because it is in the
best interest of
communities to have enough health workers.
We
acknowledge the commitment to procure
PPEs, but we will not dwell much on this because these should
have been
provided long time ago as it is expected of every caring
employer.
End
Issued
by the
Democratic Nursing Organisation of South Africa (DENOSA)
***
(This
is Cosatu's
biggest union if I'm not mistaken, with 235 000 members: even
larger than the
mineworkers. It's the largest public sector union:
"We
are
disappointed and underwhelmed by the timid stimulation package
announced by the
President which falls short relative to the necessary amount
required for
employment-creating and robust positive GDP growth rate. This
is on top of the
government’s failure to reverse its decision to disrespect and
renege on the
2018 public service wage agreement, which is a frontal attack
on the hard won
gains of workers, particularly those who continue to make
sacrifices providing
front-line services to our people in saving lives, delivering
essential
services and enforcing law and order... It is strange that
amidst massive
capital outflows out of emerging economies and South Africa in
particular,
government and the South African Reserve Bank (SARB) fails to
impose capital
controls to stem the unfolding devaluation of the domestic
assets. We note the
increases in the public health expenditure, but unfortunately
this is still
inadequate given the persisting disparities in terms of the
clinical personnel,
beds, medical devises and other infrastructure compared to the
private health
sector. The South African public health system has been
neglected for many
decades, such that massive resources are still needed if we
are to accelerate
the implementation of the National Health Insurance (NHI)."
Below,
find last
night's Cosatu statement. Eish.)
|
NEHAWU
National Education Health & Allied Workers Union
OFFICE OF THE SECRETARIAT
E-Mail: Secret...@nehawu.org.za
|
NEHAWU House
33 Hoofd Street
3rd
Floor, Forum iv
Braampark
P.O. Box 10812
Johannesburg, 2000
Tel: (011)
833-2902
Fax:(011) 833-0757
Website: www.nehawu.org.za
|
MEDIA STATEMENT - FOR
IMMEDIATE RELEASE
NEHAWU
RESPONSE TO THE STATEMENT BY PRESIDENT CYRIL RAMAPHOSA ON
FURTHER ECONOMIC AND
SOCIAL MEASURES IN RESPONSE THE COVID-19 EPIDEMIC
Wednesday
April 22, 2020
The
National Education,
Health and Allied Workers’ Union (NEHAWU) notes the economic and
social
measures announced by President Ramaphosa to the nation last
night.
The
impact of the
combined global capitalist crisis and COVID-19 pandemic is
likely to plunge all
regions, including Africa, into recession as forecast by the
International
Monetary Fund (IMF). In the last few months since the outbreak
of COVID-19 the
developing economies, including South Africa, have witnessed
massive capital
outflows.
In
South Africa,
we are in a worse predicament as our economy was already pushed
into a
technical recession when the Coronavirus outbreak was announced.
This is the
third technical recession since the start of the implementation
of the
misguided austerity programme in 2015 - that has failed to
achieve its targets
in terms of reducing the budget-deficit and public-debt. The
Treasury’s current
Medium Term Expenditure Framework (MTEF) announced during the
Budget Speech by
Tito Mboweni disgracefully departed from the macroeconomic
framework outlined
in the 2019 ANC election manifesto.
With
deep fiscal
cuts particularly singling-out the public service workers under
the Public
Service Coordinating Bargaining Council (PSCBC) and other social
cuts such as
in public railway transport, Mboweni MTEF was destined to plunge
the economy to
even deeper depths of recession – and thus creating yet another
round of a
vicious cycle of economic contraction, followed by revenue
shortfalls and then
more borrowing at rising premium. In the event, the price of
this austerity
programme was the junk-status downgrade of the country’s
sovereign rating by
Moody’s, which effectively put paid to the Treasury’s MTEF.
We
are
disappointed and underwhelmed by the timid stimulation package
announced by the
President which falls short relative to the necessary amount
required for
employment-creating and robust positive GDP growth rate. This is
on top of the
government’s failure to reverse its decision to disrespect and
renege on the
2018 public service wage agreement, which is a frontal attack on
the hard won
gains of workers, particularly those who continue to make
sacrifices providing
front-line services to our people in saving lives, delivering
essential
services and enforcing law and order... It is rather bizarre to
seek to
stimulate the economic growth through borrowing from the (IMF)
and some budget
reallocations on the one hand, whilst continuing to do the
opposite in cutting
the public sector wage bill. This can only serve to depress the
township and
rural economies as many public servants rent accommodation in
townships due to
their exclusion from housing mortgage lending by the banks. In
this regard, we
call on the Minister of Finance to prioritise the issue of the
payment of
salary increases for frontline workers who are busy fight the
pandemic when he
revises the budget and he must reverse the decision to cut the
public service
wage bill with immediate effect.
The
immediately
implementation of the pension-backed Government Employee Housing
Scheme would
create more than half million new home owners without any
additional borrowing
by government and a concrete catalyst for the revival of the
labour-intensive
construction sector. Simultaneously this would have induced
other
multiplier-effects or spin-offs in the interconnected sectors.
It
is strange
that amidst massive capital outflows out of emerging economies
and South Africa
in particular, government and the South African Reserve Bank
(SARB) fails to
impose capital controls to stem the unfolding devaluation of the
domestic
assets. We note the increases in the public health expenditure,
but
unfortunately this is still inadequate given the persisting
disparities in
terms of the clinical personnel, beds, medical devises and other
infrastructure
compared to the private health sector. The South African public
health system
has been neglected for many decades, such that massive resources
are still
needed if we are to accelerate the implementation of the
National Health
Insurance (NHI).
The
multiple
crises we face as a country require innovative, bold, decisive
and courageous
stance on the part of our government. Unfortunately, the
persistent religious
adherence to neoliberal orthodoxy, even in the face of such an
unprecedented
scale of socioeconomic catastrophe, represents a missed
opportunity in spiking
up the economic growth curve whilst driving the flattening the
Coronavirus
curve.
Issued
by NEHAWU
Secretariat
Zola
Saphetha (General Secretary) at 082 558 5968; December Mavuso
(Deputy General
Secretary) at 082 558 5969; Khaya Xaba (NEHAWU National
Spokesperson) at 082
455 2500 or email: kh...@nehawu.org.za Visit NEHAWU website:
www.nehawu.org.za
***
From:
Sizwe Pamla <sizwe....@gmail.com>
Subject:
COSATU welcomes
the announced R500 billion incentive and relief package to
stabilize the
economy and give relief to the poor
Date:
21 April 2020 at
10:28:52 PM SAST
To:
COSATU Press Group <cosatu-pr...@googlegroups.com>
COSATU
welcomes the
announced R500 billion incentive and relief package to
stabilize the economy
and give relief to the poor
21
April 2020
COSATU
welcomes the President’s announcement of a
R500 billion incentive and relief package to stabilize the
economy and save
jobs during this lockdown and as part of fighting the Covid-19
pandemic. At a
time, where we are struggling because of shrinking resources,
this drastic
effort by the government is welcomed and laudable.
Unemployment
Insurance Fund: The
R40
billion that has been put aside to assist workers who have been
retrenched or
put on unpaid leave is a commendable intervention, but it is
unacceptable that
less than 2% of these funds have reached workers. We need more
decisive
action to ensure that the UIF systems work and deliver on time.
The
government must equally use the full force of the Disaster
Management
Regulations to ensure that employers apply for the UIF relief
funds on behalf
of workers. We also welcome the R100 billion amount allocated to
save jobs.
Further announcements to increase income guarantee to informal
workers are
welcomes and must be used as an instrument to formalize the
informal economy.
COSATU
hopes that the issue of nonpayment of salary increases for
public servants will
be resolved at the Public Service Co-ordinating Bargaining
Council (PSCBC).
These workers deserve better, especially now that they are
carrying the nation
on their backs. We also would like to see government working
with the GEPF to
mobilise some of the worker's retirement savings to fund the
Government
Employees Housing Scheme (GEHS). This will go a long way to
helping the
hundreds of thousands of workers with no access to housing.
Social
Grants: The
decision of
social grants adjustments is welcomed because social grants are
currently the only
income stream to millions of families now. The topping up of
social
grants provides the fastest poverty relief measure for over 18
million
recipients.
A
R350 income grant for the unemployed will go a long way in
saving the
unemployed from unnecessary hardships. This is in line with
COSATU’s long
standing call to increase the social security net to unemployed
individuals
between the ages 18-59 through the Basic Income Grant (BIG).
Health:
We
are happy with
the allocation of R20 billion to the fight against Covid-19.
The
allocation must be used to enhance health systems and facilities
as the
building blocks towards the implementation of the National
Health Insurance. To
date approximately 120 000 persons have been tested. This is
woefully inadequate. The government must ensure that over the
next two weeks
measures are put into place to test all workers at the places of
work starting
with workers currently on duty.
Measures
need to be put in place to ensure all transport, workplaces and
educational institutions
are sanitized and kept safe for workers and learners now and
post-shutdown.
This includes the urgent provision of PPEs for essential
workers.
Economic
Measures:
We
welcome the commitment to infrastructure spending going forward.
We
agree and support the principle of the gradual reopening of the
economy, as
long as proper protocols are developed to keep the workers safe
from the virus.
Workers and employers must begin a process of consultation in
the bargaining
councils to conduct risk assessments in the sector and adapt
workplaces.
Big
corporations need to free their own resources and come to the
party. Big Business needs to match the amount that the
government
has placed on the table. The banks need to do more than what
they have
done so far. Nothing less than a R1 trillion stimulus plan will
be
sufficient to turn our already bleeding economy around and save
workers from
the pain of skyrocketing unemployment levels.
What
we also want to see, going forward, is that every cent goes to
serving its
intended purpose. Therefore, corruption of any kind must not be
tolerated. The
ANC led government must lead decisively to root out all forms of
corruption that
might rear its ugly head as we endeavor to raise funds to fight
the spread of
the dreaded Covid-19 virus.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794
--