- South African trade union leader Zwelinzima Vavi expressed optimism on current economic trends and new government policy tendencies. The failed policies of the late 1990s - which led to unemployment and privatisation - now seemed reversed, Mr Vavi said.
Mr Vavi, the General Secretary of South Africa's leading trade union, COSATU, today expressed hopes and fears in a major speech made in Pretoria. He was addressing the 7th congress of the South African Municipal Workers' Union (SAMWU), one of COSATU's leading affiliates.
The COSATU leader criticised the ruling ANC party for giving into business lobbying in the late 1990s and having adopted an economic policy of privatisation and free trade. Although a small class of black businessmen was created, the black majority working class had only been further marginalised by these policies.
The so-called GEAR policies - the Growth, Employment, and Redistribution programme - of the 1990s were designed to increase economic growth by orthodox macroeconomic means. Growth however remained far below targets as a result of fiscal contraction and excessively high interest rates, according to a scientific analysis by the British economist John Weeks.
The ANC government is now slowly backing down on these policies, to the relief of trade unions. According to Mr Vavi, South African working people "suffered a major setback with the adoption of GEAR in the mid-1990s." GEAR policies had "brought misery to our people in many forms, including massively increased unemployment and slower delivery of services."
Unemployment rose from 16 percent in 1995 to over 30 percent today and South Africa now has unemployment far above that of any other middle-income developing country. In the late 1990s, three factors had contributed to job losses, according to MR Vavi: "The downsizing in the public sector and construction, the increased competition with imports that cost us hundreds of thousands of jobs in manufacturing, and low government spending combined with high interest rates."
GEAR's restrictions on the budget had meant that "government could not improve services or housing in black communities as fast as we hoped and expected," Mr Vavi told SAMWU delegates. Although one had developed a black capitalist class, the total picture did not fulfil the expectation of a liberation of the black masses after the apartheid oppression, the trade union leader held.
- Certainly there were big improvements, Mr Vavi recognised. "Many more of our people now get piped water, sewerage, electricity and refuse removal. But the pace of change was slower than we hoped, the level of service worse, and the cost often much higher," he added, referring to the commercialisation of these services, which had led to price hikes.
Finally, held Mr Vavi, GEAR's free-market approach had fuelled the pressure to privatise local government services as well as parastatals. "We as COSATU have fought long and hard against this process. That struggle, supported in large part by SAMWU's militancy, was critical to prevent the wholesale privatisation of our national assets."
A COSATU analysis had suggested that, since 2000, government however had retreated from GEAR to some extent. "This retreat, which is clearly a victory for workers, appears in the real growth in the budget in the past three years," said Mr Vavi. "We can see it also in relatively low interest rates and the commitment, although very limited, to ensuring affordable services for the very poor."
Government recently had backed off some of its proposals on privatisation, including on the controversial sectors of water and rail. Even more important for the trade unionists, government was now seen to have "at least a general commitment to an active development strategy that can restructure the economy to create jobs."
- We do not want to overstate the change, Mr Vavi however warned. "Government still faces a great deal of pressure from business here and abroad to privatise, cut taxes, and generally roll back the gains to workers. But the government has also recognised that it cannot manage continued growth in unemployment."
Even some sections of business had now come to the same conclusion and a recognition that unemployment now forms a national crisis. "Since this progress is still heavily contested, however, we cannot relax," Mr Vavi told SAMWU delegates. "We must continue to take forward the struggle to ensure that state power is used to restructure our society to benefit the majority."
SAMWU has been in the forefront of trade unions' fight against privatisation of public sector utilities in South Africa, as the union organises most of the country's municipal workers. SAMWU member have been affected by both job losses in the sector and - being medium or low income consumers - by price hikes in privatised service providers.
COSATU has had a long lasting alliance with the now ruling ANC party, dating back from the fight against the apartheid dictatorship. Although ANC has turned significantly less socialist while in power, the COSATU leader today strongly reaffirmed his union's alliance with the party, urging workers to vote ANC in the upcoming elections.
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