Policies+do+not+benefit+the+poor,+Zwelinzima+Vavi,+The+Star

The Star, Johannesburg, July 05, 2006 //Edition 1//
=Policies don't benefit the poor=


 * //The main demand is that the state must prioritise unemployment, poverty and inequalities wrought by apartheid//**


 * Zwelinzima Vavi**

A llister Sparks, in The Star (Opinion and Analysis, June 28 2006), claimed that Cosatu has not published its proposed alternatives to current government policies on the economy. This argument shows a disappointing lack of effort, since a single visit to our website (www.cosatu.org.za) would have demonstrated its falsity.

The website lists a host of detailed position papers and submissions to both parliament and Nedlac on specific policies. It contains our congress resolutions on socio- economic and political challenges, with concrete proposals ranging from the electoral system to import-parity pricing and fiscal and monetary policy. It also has Cosatu's detailed critique of the government's Asgisa (Accelerated Shared Growth Initiative of South Africa) proposals.

In addition, it publishes the documents from the 2005 meeting of Cosatu's central committee, the second most powerful constitutional structure, at which close to 500 union leaders and shop stewards deliberated on proposals for systematically transforming the economy in order to accelerate employment creation, equity and growth.

Since it seems some columnists can't surf the Web but are eager to mislead their readers, we here summarise the proposals from last year's meeting and outline the implications for our engagement with government policies.

Perhaps the core demand is that all government programmes must prioritise unemployment, poverty and the huge inequalities in power and wealth left by apartheid.

Some government departments and agencies tend to emphasise other goals at the cost of this central task.

For instance, we have heard variously that national policies should focus on growth of any kind: high-tech exports; cutting the cost of doing business; controlling inflation; introducing markets in historically state-run sectors; empowering black entrepreneurs; and cutting the budget deficit. Such policies do not improve the lives of the majority of South Africans.

When the government makes narrow economic policies an end in themselves, it may adopt solutions that worsen the situation of workers and the poor.

Efforts to cut government spending in the late 1990s slowed employment creation and the expansion in government services.

Supporting black entrepreneurs has sometimes become an excuse for outsourcing and privatisation at the cost of workers.

Similarly, the current emphasis on holding inflation below the inflation target could strangle employment creation and put brakes on economic growth. Sometimes it seems the Reserve Bank would prefer 0% inflation and 0% growth to 10% growth with 10% inflation.

Cosatu welcomed the new emphasis of the need for shared growth in the Asgisa strategy.

In particular, it calls for unemployment and poverty to be cut in half. True, the targets are too modest. Even if we achieve them, 20% of workers would be unemployed and a third of households would still be in poverty. But at least Asgisa points to a renewed commitment to ensuring that economic policies meet the needs of the poor, though we have expressed serious doubt if all this will occur in the current policy framework.

Agreeing on priorities is just the first step. The second is to define how the problems will be addressed. That, in turn, depends on the factors identified as causing persistent joblessness and poverty.

Cosatu has consistently argued that two core structural elements cause mass unemployment and poverty.

On the one hand, apartheid policies explicitly sought to prevent the majority of black people from engaging in the economy, except as underpaid and oppressed workers. To that end, they were deprived of land, education and formal training, loans and retail outlets.

On the other hand, the economy has long been dependent on mining for exports, as well as energy and heavy chemicals based on coal production. These industries cannot provide employment on a mass scale.

Declining gold production has led to mass job losses. Growth in other mining sectors prevented a fall in exports but did not create much employment. As a result, mining products contribute two-thirds of exports but only 10% of jobs.

In the past decade, the government only intervened to support the auto sector. But that is a capital-intensive industry that won't provide employment on a mass scale.

Cosatu has argued that we need to transform our economy away from this structure inherited from apartheid and colonialism. We remain concerned that Asgisa does not address these structural problems.

Strategies for the economically marginalised tend to be add-ons to a largely market-driven strategy that does not seek to change the capital-intensive nature of our economy. That's our principal problem.

Cosatu's central committee meeting called for a far more transformatory strategy. First, we need to see systematic support for sectors that can create employment, not as small enclaves in the economy but through restructuring the core drivers of economic growth. These sectors include light industry, retail, public and private services, and agriculture.

That, in turn, requires development of sector programmes that consistently target employment creation and meeting basic needs affordably. In contrast, most sector programmes still focus just on expanding exports.

Transformatory sector strategies require adequate resourcing from the state, and the redirection of trade policies to support new activities.

Second, we need to revive the Reconstruction and Development Programme's vision of shifting demand and production more consistently through government programmes. The RDP was expected to improve social services and land reform to help ordinary households engage with the economy as well as raising their living standards directly.

Finally, effective economic policies require that the government maintain a relatively expansionary fiscal policy and adopt a much more sensible monetary policy. Cosatu has long opposed inflation targeting as it tends to prioritise inflation above broader social objectives. As a minimum, however, inflation targeting must be interpreted to remain within the maximum level of 6%, rather than seeking to stay far below it.

All these strategies require a strong state. That does not mean a state that imposes its policies without consultation. Rather, it means a state that can build a coalition in support of its strategies, and then implement them consistently.

A concern in recent years has been that the government seems more willing to engage with business than with representatives of its own constituencies of working people and the poor. Unless officials have to listen to the majority of our people, we cannot expect the policies they propose to reflect our needs. Cosatu's Jobs and Poverty Campaign aims precisely to give our people a voice to influence policy debates.

The likes of Allister Sparks won't listen, but are ready to condemn us.


 * Zwelinzima Vavi is Cosatu's general secretary.


 * From: http://www.thestar.co.za/index.php?fArticleId=3323527**

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