Umsebenzi Online, Volume 20, No. 3, 16 February 2021: Red Alert: State of the Nation calls for implementation of a second, more radical phase of our democratic transition to overcome the systemic crises worsened by the Covid-19 pandemic—unemployment, poverty, inequality, and growing incapacity to support life

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Umsebenzi Online, Volume 20, No. 3, 16 February 2021

Voice of the South African Working Class

In this issue

·       State of the Nation calls for implementation of a second, more radical phase of our democratic transition to overcome the systemic crises worsened by the Covid-19 pandemic—unemployment, poverty, inequality, and growing incapacity to support life

Red Alert

State of the Nation calls for implementation of a second, more radical phase of our democratic transition to overcome the systemic crises worsened by the Covid-19 pandemic—unemployment, poverty, inequality, and household incapacity to support life

On Tuesday, 9 February 2021 the South African Communist Party (SACP) released a statement summarising its expectations from the State of the Nation Address that President Cyril Ramaphosa delivered on Thursday, 11 February 2021. Several helpful questions arose after the State of the Nation Address, including from parts of the commercial media. However, despite asking for detailed answers to more questions, they would only cover one or two truncated answers in isolation from the rest. This Red Alert focuses on the censored answers and sheds light on the other related positions adopted and articulated by the SACP including in open public statements.

Scope of priorities

Did President Ramaphosa cover all the priority areas that the SACP expected?

Some priorities that the SACP wished to hear are covered, albeit partly, while others are not covered at all.

For example, the SACP called for the Covid-19 Social Relief of Distress Grant to be extended and for the extension to serve as the foundation to move towards a minimum income guarantee covering the unemployed in the wider context of building a comprehensive social security system. The grant was extended but the extension was limited to three months. The extension will cushion the recipients of the grant against falling deeper into destitution. It is a welcome step, but the three months duration requires further engagement.

The SACP also called for measures to build national production and tackle the crisis-high levels of unemployment, poverty, inequality, and the related crisis of social reproduction—the widespread problem of growing incapacity affecting working-class and poor households to support themselves. The Party attached great importance to the following priorities:

·      Expansion of the agriculture combined with manufacturing through agro-processing development.

·      Radical land redistribution to ensure equitable access to land and related natural resources, and to support sustainable livelihoods through fostering productive land use.

·      Rural development and an end to unequal development between rural and urban areas.  

·      Social and economic infrastructure development at scale.

·      Transformation of the mining industry to support minerals beneficiation and local manufacturing of finished products towards ending the persisting colonial legacy of dependency on raw materials exports and imports of finished products.

·      A comprehensive, high impact industrial strategy, including adequate support for research and development, to guide the above and other national production development initiatives.  

·      Building domestic capabilities to seize the opportunities associated with the digital economy, thus making it one of South Africa’s priority sectors.

·      Transformation of the financial sector, and, related to it, radical restructuring of the Covid-19 state guaranteed loan scheme.

·      Tight regulation of our capital account, cross-border capital transactions, and clamping down on illicit capital flows.

·      Immediate implementation of the National Health Insurance principles in the face of the Covid-19 pandemic.

·      Increased support for public employment programmes, as part of our unemployment reduction strategies, and the transformation of the public employment programmes in line with the decent work agenda.    

·      Advancing ownership transformation towards the goals of the Freedom Charter.  

While the President did not cover all the measures that the SACP wished to hear, he nevertheless correctly emphasised the importance of building domestic productive capacity.

In addition to whether the measures contained in the State of the Nation Address are sufficient to build national production, the key question is whether they are backed by adequate fiscal and monetary policy support.

As things stand, that question can only be answered through the forthcoming budget. President Ramaphosa made a progressive statement previously. Our national response to the Covid-19 pandemic should be commensurate with the extent of its damage, he said. In addition, the SACP said national policy should not aim to return us back to the crisis prior to the Covid-19 pandemic. Therefore, the stimulus package that South Africa needed had to help us progressively yet decisively overcome the combined damage of the two interrelated capitalist crises. This is the yardstick against which we should judge both the forthcoming budget and related medium-term expenditure frameworks. However, that does not presuppose ignoring our fiscal challenges. In the ultimate analysis productive public investment and investment in social development supported by a favourable review of our fiscal and monetary policies and measures to clamp down on corruption will play a key role towards overcoming the crisis we find ourselves in.   

Related to the above, an underlying problem remains unaddressed.

Under the macroeconomic framework that South Africa has been following up until now, the country has starkly failed to overcome its high levels of unemployment, poverty, inequality, and the related crisis of social reproduction. This is the context in which the employment drivers enshrined in the New Growth Path (NGP) adopted in response to the 2008 global economic crisis did not see the light of the day, particularly in terms of a supportive macroeconomic framework.

The NGP was anchored in an employment creating growth school of thought, although this was only nascent in our national economic policy. The National Development Plan (NDP) adopted shortly after the NGP reinstated the trickledown economics ideology imposed under the economic policy of Growth, Employment and Redistribution (GEAR) adopted in 1996. The GEAR class project led to the government arguably uncritically following the neoliberal shock therapy. The results included deepening deindustrialisation, especially in severely affected productive sectors. This underlined the importance of adequate protection that an underdeveloped country should consider nurturing its productive base, with a focus on strategic sectors until they can thrive in the globalised atmosphere dominated by multinational behemoths.

In 2012 the philosophy introduced under the NGP seemed to be reasserted, following calls to that end. However, together with the Industrial Policy Action Plan (IPAP), the NDP was subordinated to the logic of the trickledown economics ideology reintroduced through the NDP.

On 1 September 2013, the Alliance adopted a declaration at its National Summit recognising the reservations expressed by the SACP and COSATU about the NDP, particularly its economy chapter. However, an agreed upon review of the NDP to address the concerns raised did not see the light of the day. 

Meanwhile, the endemic crisis of capitalism continued to complicate South Africa’s economic and consequent social and political problems. This is the context in which President Ramaphosa delivered the State of the Nation Address under the devastating Covid-19 pandemic having worsened the country’s economic crisis. 

State capture and neoliberalism—two sides of the same coin?

The measures that the SACP called for are supported by a shared strategic perspective, that of the strategy to place our economic and broader social transformation and development into a second radical phase towards the goals of the Freedom Charter. Two key tendencies, state capture and neoliberalism, have caused a major setback against the Alliance’s shared strategic perspective to advance, deepen and defend the national democratic revolution.

So far history shows that the relationship between the two resembles that of the two sides of the same coin. The one tendency is characterised more by brazen smash-and-grab tactics, while the other is characterised more by using the policy space to legitimate its agenda. Despite their differences in approach, in the ultimate analysis they both involve using state power to feed private wealth accumulation interests—others more corrupt, and others justifiable but only in the realm of the legally established norms of the exploitative capitalist system. However, the brazen smash-and-grab tendency is not corrupt only in the sense of corruption as an end in itself but also comprises elements that seek primitive accumulation, or a precursor to the accumulation of wealth based on legally established capitalist norms.

The neoliberal tendency blames the brazen smash-and-grab tendency, and often legitimately so. But it uses that more as a blame game to advance its own neoliberal agenda. The two tendencies do not seek to advance the Freedom Charter’s clarion call to build ownership of our national wealth by the people as a whole. They both substitute the elite of black individuals often networked in BEE dealings for the people as a whole. The associated privatisation and tenderisation regimes share one thing in common—the conveyance of the targeted public resources and/or related infrastructure to control by private profit interests.

For the national democratic revolution to succeed, the working class must confront both the state capture and neoliberal tendencies on all fronts, including in the policy space.

Broadband spectrum

The SACP has strongly cautioned against wholesale privatisation of our national broadband spectrum. Managing the control of the broadband spectrum must therefore be fair in all respects. This is the basis upon which the SACP called for a sufficient set aside for the people as a whole—for the state to support access to education, healthcare awareness, other information, and justice.

We have already seen that, in response to the Covid-19 pandemic, wireless and mobile communication took the centre stage as schools, colleges and universities shifted learning and teaching to online platforms. The government itself increasingly used wireless and mobile communication in response to the Covid-19 pandemic. The courts and the Commission of Inquiry into State Capture also did the same. The importance of wireless and mobile communication as well as its political economy is entrenching, and the broadband spectrum, also known as the fuel of wireless technology and mobile communication, is its foundation. Auctioning off the broadband spectrum, thus automatically excluding democratic control and the millions of the workers, the unemployed, the poor who do not have any capital of their own from participating in its control will be unfair.

The state’s set aside of the broadband spectrum is also key for ensuring our territorial integrity, defence, national security, and responding to natural and other disasters without censorship or a reap off by self-enriching commercial interests. The state must draw lessons from the prevailing high cost of mobile communication data in South Africa, dominated by the private monopolies. It must manage the control of the entire broadband spectrum in ways that will de-monopolise the telecommunication industry, deliver a fall in the cost of mobile communication data, and ensure connectivity across the country, including in rural areas. This must include providing access to free Wi-Fi, with historically disadvantaged areas prioritised as part of the national imperative to end uneven development.   

It is also important to pay attention to the issues raised by Telkom in its court challenge against the process to auction off the broadband spectrum. Telkom is a significantly State-Owned Corporation, with a significant stake held by the Public Investment Corporation (PIC) which manages and by that virtue represents workers’ pension fund interests. The working class should therefore be more interested in this matter.

Anti-Corruption Advisory Council

The President announced the creation of an Anti-Corruption Advisory Council. Is this helpful, given the billions of rand already spent in investigations by the Commission of Inquiry into State Capture, the Special Investigating Unit, and the Directorate for Priority Crime Investigation also known as the Hawks?

People from across different walks of life called upon the President to be firmer against corruption. This means his announcement to strengthen capacity by creating an Anti-Corruption Advisory Council should be commended. The outcomes of the work from the Commission of Inquiry into State Capture will require implementation, as commissions of inquiry often conclude their reports with recommendations. The Special Investigating Unit and the Hawks will have to play their role, and so will the National Prosecution Authority, as well as the courts. But the executive arm of the state as led by the President will also have to play its role, as called upon by the overwhelming number of South Africans.

State capacity

The overall direction articulated in energy policy should result in the state fixing Eskom, ensuring the security of energy supply, and building state capacity in cleaner and renewable energy production. This is one important way in which Eskom can reduce its carbon footprint with the state still playing a key role in energy production, including through investment in clean coal technologies.

In the same vein, the state should invest in democratic public control, in addition to the telecommunications and energy sectors, in other network infrastructure industries, such as rail, water, and roads.

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