• BEE News

POLITICS: Neoliberalism to blame for our economic predicament - SAFTU


Federation says ANC leaders surrendered economic transformation for democracy in 1994

SAFTU statement on the real State of the Nation

Image - Web. Zwelinzima Vavi

The State of the Nation address used to be the time when the people of South Africa assessed what we have achieved, discussed what problems and challenges lie ahead and how we are going to confront them.

This year all the media has been concerned with is who will be delivering the address, and even whether it will take place at all.

The South African Federation of Trade Unions however insists that we must still debate the State of the Nation, given the magnitude of the problems facing the workers and the poor black majority.

The economy

The word now most often used to describe the South African economy is ‘junk’, a word used by credit ratings agencies for economies which they urge investors to shun, because of their low profit potential, instability and mis-governance.

For the poor, black majority of South Africans, who have no money to invest, the economy can even more accurately be seen as ‘junk’. They have been sidelined by a society in which they now have no wealth, no shares and no hope.

Millions of the poor live an endless struggle for survival - to find and keep a job, a safe and affordable home, money for food, access to schools and healthcare for the family, and, above all, a hope that their lives will improve and that their children will have a future.

In reality however they have no reason for hope for a better life, regardless of who delivers the State of the Nation address.


The job-loss bloodbath continues daily. The latest news is that 2,863 construction workers are to be retrenched by Aveng. They will join the 9.4 million unemployed, of whom 3.3 million are under 35.

These millions have no source of income except hand-outs from employed family members, money from piece jobs or begging in the street.

The most serious job losses are in manufacturing industry, which not only hits those directly affected, but has a knock-on effect on other workers and the future of the whole economy.


30.4 million South Africans are living in poverty, with almost 14 million living in extreme poverty, says StatsSA. Black Africans remain the majority of the poor, with 46.6% affected, followed by coloureds at 32.2%, with less than 5% percent of Indians and 1% percent of whites living in poverty.

In 2015 one in three South Africans lived on less than R797 per month, or half of the country’s 2015 mean annual household income of R19,120, with more women affected than men, and children and the elderly hardest hit.


South Africa holds the unwanted distinction of being the most unequal society in the world. It takes 4.5 days for the best-paid executive at Shoprite to earn what temporary farm workers earn in their lifetime, if they live up to 50 years, says an Oxfam report on inequality.

Yet seven Cape Town Shoprite workers were charged with theft after being caught on video accepting tips from satisfied customers, as a way of supplementing their meagre income.

Oxfam also revealed that “about two-thirds of South Africa’s wealth is held by the top 1% and about 90% is held by the top 10%”. In 2017, 82% of all growth in wealth went to the top 1% and the bottom half saw no increase at all.

This is the real state of the nation.


The most shocking statistics of all are that unemployment, poverty and inequality have all got worse since 1994. The official unemployment rate, which excludes those not looking for work, was at 20% in 1994, the 18th highest in the world, but 27.7% in 2017, the 6th highest in the world.

The number living in poverty increased from 27 million in 2011, to 30 million in 2015. Inequality as measured by the Gini Coefficient has risen since 1994

The main reason for this disaster is the ANC government’s neoliberal economic policies which, as Professor Sampie Terreblanche has written, were agreed upon at “secret meetings between the ANC and big business — behind the high walls of Harry Oppenheimer’s estate and at the Development Bank of Southern Africa” These meetings, he wrote, “laid the foundations for the continued beggary of the majority”.

There was a trade-off under which the ANC leaders surrendered economic transformation for democracy and human rights, thus leaving economic power in the hands of the white monopoly capitalists who had captured the state in the days of colonialism and apartheid and still have it in its grip today. This is the true state capture about which we hope organisations like SAFTU will be allowed to make a submission to Deputy Chief Justice Zondo’s State Capture Commission of Inquiry.

This deal led first to the misnamed Growth, Employment and Redistribution Strategy of 1996 followed by the National Development Plan.

These free-market, pro-business policies led to the exact opposite of what they promised - slower growth, less employment and redistribution from the poor to the rich. It has disastrous consequences in every of area of the life of the majority.

This is the real state of the nation.

At work

As well as soaring unemployment, the workers’ share of national income, - the gross value added by workers’ labour - was 57% in 1993, but declined to 49% in 2008 and remained just below 50% up to 2013.

This has been been made worse by the casualisation of labour, outsourcing of work, use of labour brokers and replacing full-time jobs with part-time. More employers are using so-called ‘self-employed contractors’ like the Uber drivers to avoid any of their responsibilities under the labour laws and many are trying to limit or even scrap sectoral collective bargaining.

New amended labour laws threaten to undermine workers’ constitutional rights to withdraw their labour by dictating how unions must consult their members and even allowing for compulsory arbitration which could be used to force striking workers back to work, and treat them as little more than slaves.

Worst of all workers still have to endure the exploitation, abuse and violent assault of employers like the Springs farmer and his son who forced a worker to swallow faeces, beat him, racially insulted him and attempted to drawn him in a septic tank.

Far too many other employers still imagine they live in the years of apartheid and can treat their workers as slaves, transport them herded on to the back of trucks and evict their families from their homes when they retire.

At school and university

Of the 1 185 198 learners who were enrolled for Grade 1 in 2006 only 651 707 sat for Matric exams in 2017, meaning that 533 491 (41%) in just one year’s intake, either left school with no academic qualifications at all or had to repeat one or more times.

These young people, and those who failed Matric, have virtually no chance of getting anything but the most insecure, casual and underpaid employment. Most will swell the ranks of the 3.3 million young people who are not in employment, education or training.

The crisis has its roots in the heritage of colonialism and apartheid, when the white ruling class saw no need to provide education and training for the African majority.

The scandal is that after 24 years of ANC rule, so little has been done to change this two-tier education system. They have abolished the formal racial segregation of schools and there has been a big growth of no-fee schools. Yet the gulf between conditions in the under-staffed, ill-equipped and under-funded public schools for the overwhelmingly black poor, and the private schools with their beautiful buildings, spacious playing fields, laboratories and libraries is even wider, and the racial divisions remain.

A survey in which students, reading skills were tested in the language with which they are most familiar, show that 78% of Grade 4 students in South Africa failed to meet the lowest literacy benchmark of the study. Out of 50 countries around the world, South Africa ranked lowest

In the hospitals and clinics

The murders of at least 143 mentally ill patients, whose care was outsourced from Life Esidimeni to private establishments, gave us a horrific glimpse into the inhumanity of the two-tier heath service delivery. Those with money can buy top-class medical care, while the poor majority risk their lives in under-funded, under-staffed and squalid hospitals and clinics.

Three years after the long-promised national health insurance scheme was announced, we have only pilot projects and they are threatened by budget cuts which may lead to insufficient funds to pay their staff.

On the land

After the legalized plundering of African people’s land under colonialism and apartheid, one of the 1955 Freedom Charter’s main calls was to reclaim the land stolen from its rightful owners. It remains a central demand of the people today.

This is why it is such a scandal that 24 years after the ANC came to power in 1994, its leaders have done virtually nothing to implement the transfer of stolen land. In 1994, 87% of the land was owned by whites and only 13% by blacks. By 2012 however, land reform had transferred only 7.95 million hectares into black ownership, equivalent to just 7.5% of formerly white-owned land.

In 2012 Minister for Agriculture, Gugile Nkwinti, told Parliament that only around 10% of commercial farmland has been redistributed or restored to black South Africans since formal apartheid ended. So whites still own most of the country’s land.

Crime & drugs in the communities

Angry protests in poor communities have become so frequent that they are often only referred to on the radio in traffic reports, warning motorists to avoid areas where residents are burning tyres or throwing rocks. They have been mainly over poor or non-existent service delivery, though more are now about the terrible levels of crime, gangs and drug abuse.

In many poor townships like Marikana in Cape Town, criminal gangs are terrorising the neighbourhood and killing any who get in their way. The main victims are the youth, who, with no chance of employment or higher education, are attracted to drugs and gangs to try to escape from the despair, only to end in a deeper trough.

This is the real state of the nation.

Crime and discrimination against women

For 16 day towards the end of every year we discuss the appalling levels of violent and sexual abuse of women and children, then largely forget about it for the rest of the 349 days.

One in five women have suffered physical attacks. The figure is even higher in the poorest communities. This reality was tragically brought home by the brutal murder of our NUMSA comrade Thembisile Yende while working at Eskom.

21% of women over 18 have been violently abused by their domestic partners, 25% have experienced gender-based violence. More than 100 people are raped every day and the Medical Research council estimates that half of South Africa’s children will be abused before they reach 18.

Yet, in 2009, according to the police’s own statistics, the conviction rate for for rape was 11.5%. Other estimates in 2014 put it is as low as 10%.

This has perpetuated a culture of impunity. Too many men feel justified in using violence to enforce their will against partners and children, and women in general.

Corruption and crime in the boardrooms

The biggest crime in the nation is the corruption, fraud and racketeering which has spread to state-owned enterprises, public officials, government ministers, private businesses, government minsters and the president himself.

That is why is would be such an outrage if such a dishonourable figure as Jacob Zoom, facing hundreds of counts of corruption, fraud, money laundering and racketeering, were to deliver the State of the Nation address. He must be removed, prosecuted and jailed.

While SAFTU welcomes the steps by the Hawks and Assets Forfeiture Authority in the Free State and the new Eskom Board, far more needs to be done before we shall see public money being used for the public good and not to line the profits of the corrupt.

But the fight against corruption and crime must not be confined to just one president, one family and a coterie of cronies., or just in the public sector, but against those involved in all the private companies who are now being exposed as fellow-culprits and accomplices.

Action must also be stepped up against business crimes like price fixing, tender collusion and money laundering.

This is the real state of the nation.

In the trade unions

The state of the trade unions a year ago was of great concern. The leaders of what should have been a mass fightback by the workers were heavily compromised by their closeness to government and employers. This was proved by their acceptance of a R20 an hour minimum wage at Nedlac, which legitimized a poverty wage level on which no-one should be expected to live.

The workers’ movement is also fragmented and only organises 24% of the workforce. Millions of informal and vulnerable workers remain unorganised and unprotected.

That is why the birth of SAFTU in April 2017 was such a breath of fresh air. It offered all workers, especially those most vulnerable, a force which could unite the working class into a fightback, bring those 76% of workers into the fold and fight against all the evils of our society outlined above.

The new federation has already won big victories for its members and workers as a whole, but is well aware of the magnitude of the tasks ahead and will be mobilising mass action in defense of workers’ rights.

Way forward

Regardless of who eventually delivers the State of the Nation address on Thursday, it will make no difference. SAFTU has no confidence that when Cyril Ramaphosa becomes President we shall see any significant change in economic and social policy.

Those who have welcomed his win most enthusiastically are leaders of big business and their friends in the media and universities. They see Ramaphosa as ‘one of them’ - an incredibly successful and rich multi-billionaire member of the monopoly capitalist ruling class who will promote their interests.

He served on the boards of around 100 companies, including MTN, SA Breweries, MacSteel Holdings, Standard Bank, and of course Lonmin, where he was implicated in the police action which led to the murder of 34 mine-workers. When he was chairing MTN’s Board the company was alleged to have been involved in illicit transfers of capital to tax havens.

He now talks about fighting corruption, but for three years as Deputy President he said nothing about the corruption going on under his nose. He continued to back government’s neoliberal economic policies which were designed to protect and promote the interests of the very companies he had just left.

He favours policies to bring us into line with the World Bank and International Monetary Fund, based on a free-market economy for monopoly capital, and austerity for the working class and the poor. In the short term his first job will be to try to convince credit ratings agencies that South Africa is now open for business and a safe haven for multi billionaires to invest their money.

His ‘solution’ for South Africa is for a ‘social compact’ between government, business and labour, to collaborate in the imposition of policies that will lead to more job losses, lower real wages and austerity budgets to cut the already low levels of spending on social services.

This compact will be a chicken and pig partnership to make a breakfast. The bosses will offer to be the chicken and lay the eggs while the workers will be asked to be the pig - to be slaughtered to provide the bacon.

The only way to bring about any real change is to take the fight on to the streets, and mobilise workers in major demonstrations throughout this year for a genuine and fundamental transformation of the state of the nation.

SAFTU is focussing on job creation, ending the transfer of money out of the country and reinvesting it into reviving manufacturing industry, beneficiation of minerals, nationalisation of the mines, banks and land, ending all corruption and other economic crimes in both public and private sectors, and speeding up the introduction of free education, the national health insurance scheme and compressive social security.

As SAFTU said in its end-of-year statement:

“It is more vital than ever that we have a strong, militant SAFTU to lead the counter-attack and fight for a socialist South Africa and a socialist world in which the key monopoly industries are owned and democratically planned and run in the interests of the people as a whole, as envisaged in the Freedom Charter.”

We call on all workers, students, youth, women and all progressive organs of people’s power to unite and fight these battles so that 2018 sees mass acton against the status quo that has condemned the majority to poverty and despair.

Statement issued by Zwelinzima Vavi, SAFTU General Secretary, 6 February 2018


LINK : http://www.politicsweb.co.za/politics/neoliberalism-to-blame-for-our-economic-predicament

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

26 views0 comments

© 2019 BEE Chamber (PTY) Ltd, All Rights Reserved