Theory+of+the+Transition,+COSATU,+Feb+2002


 * THEORY OF THE TRANSITION**


 * COSATU PAPER FOR COSATU/ ANC BILATERAL 9/10 FEBRUARY 2002**

COSATU and the ANC leadership have both agreed in the bilateral of Jan 12 2002 that there is the need for frank and rigorous discussion on all issues where tension has developed during the transition. In particular it was agreed that we needed to carefully interrogate differences in our perspective on the transition, and develop a shared theory. While the main task of the last bilateral was to begin to repair the damage created by recent conflict in the Alliance, there was no intention to paper over the cracks. Therefore a frank and open debate was called for, with all pertinent issues needing proper examination, without fear or favour.

It is in this spirit of political honesty and constructive debate characterizing the last bilateral, that COSATU is presenting this contribution. We hope this will assist in getting to the root of persistent differences in the Alliance over the last 5 years. We hope that comrades will approach the issues raised in this spirit, even though some of them may be awkward or sensitive, and rather than shying away from them, confront the questions posed head on. This we believe is in the interests both of our movement, and our country, which cannot afford to allow these unresolved issues to drag on for another 5 years.

1.1 In the bilateral of Jan 12 2002 the lack of a theory of the transition was stated as one of the key problems blocking forward movement. But we would argue that COSATU has developed a fairly clear, explicitly articulated, analysis of our transition over the last 7-8 years (see for example, COSATU’s 1996 and 1997 Discussion documents, Secretariat reports to COSATU Congresses, ‘Accelerating Transformation’, and the 2000 and 2001 political discussion documents). Given that theory is itself dynamic, and that the transition is unfolding, this is obviously a developing and incomplete project, rather than a static dogma, which persists regardless of material realities. 1.2 However, what is clear is that we lack a shared theory of the transition that articulates the role of the masses and the organs of people’s power in changing the balance of power and effect fundamental transformation in the Alliance. What is more, in certain important respects, it is difficult to establish what the ANC’s theoretical perspective is on important elements of the transition, a point we will return to later. Perspectives on key national issues relating to the transition often appear to emanate from government, or even a government department, rather than from the ANC itself[1]. 1.3 This contribution will therefore attempt to identify core elements of what would constitute a theory of the transition where there appears to be no cohesion, the emergence of a new strand of thinking in the movement after 1990, and COSATU’s key concerns with the trajectory taken by the transition since 1994. 1.4 This is obviously a massive area of debate to attempt to capture in one section of a discussion document. Therefore for the purposes of this discussion, we focus in on three major areas, which arguably constitute the cornerstones of any attempt to achieve a shared theoretical perspective:
 * 1. Do we have a theory of the Transition?**


 * Debates on the NDR in current conditions;
 * Some formative perspectives of our movement, post-1990.
 * Theorisation of post-1994 balance of forces;

This analysis will not rehearse in detail the arguments, which have developed on these elements of the transition. Rather, in most instances, we will merely highlight the key points of debate, and refer to the relevant documents, which unpack the arguments referred to in this paper. In some cases, where new points are being developed, we go into slightly more detail.

2.1 A detailed analysis of debates around the NDR is contained in the discussion document for the Alliance Summit, August 2001. A summary of the essential points follows below: 2.2 Our national liberation movement’s historical vision of the NDR is a radical one. This vision was the product, firstly of our rich history of struggle; secondly of the objective material conditions of an interlinked national oppression, capitalist exploitation and gender oppression; and thirdly, insight gained from observing aborted national revolutions in other parts of the world. 2.3 As a mature revolutionary movement, the ANC has never presented the NDR as being class neutral, or the simple deracialisation of apartheid capitalism. Key documents of the movement reflect the understanding that the class and national questions, while not identical, are closely intertwined, together with the issue of gender oppression; and that it is not possible to resolve the national question without shifting the balance of class forces in society, or beginning to address key elements of the oppression and exploitation of the working people, or the oppression of women. Therefore these issues cannot be addressed separately or sequentially in the NDR, but have to be addressed simultaneously. 2.4 Documents from the Freedom Charter in the 1950’s to the Morogoro Strategy and Tactics document of the 60’s, to the strategy documents of the 80’s and 90’s consistently reflect a class bias towards the working people, and the landless peasantry[2]. The commitment to the liberation of the African majority in particular is not in contrast to this class perspective, but directly connected, because of the recognition of the economic plight of the vast majority of the African people. The movement’s vision of thoroughgoing social transformation also reflected the relatively advanced character, both at the level of forces of production, as well as organisation of the South African working class, when compared to other anti-colonial struggles. 2.5 This class perspective of the South African revolution was in sharp contrast to many of the earlier anti-colonial movements, some of which had tended to be dominated by middle class forces seeking to replace the colonial bourgeoisie. The ANC and the South African democratic movement as a whole always remained conscious of the need to avoid repeating these aborted revolutions, which resulted in little improvement, and often deterioration in the lives of ordinary people. Thus while the ANC was never a socialist movement in the strict sense, it had always maintained a strong working class orientation, and an approach which understood the need for a national democratic state to pursue a programme of social transformation, which would also require the tight regulation of capital. 2.6 To the extent that the liberation movement sought to deracialise the capitalist class, and promote the emergence of a black middle class, this was seen as an objective, which was subordinate to addressing the plight of the working people and the poor. The movement, drawing on its observations of other experiences, sharply warned against the danger of promoting the interests of a new elite over and above that of the majority who stood to benefit from national liberation. 2.7 Having sketched these key features of our movement’s theory of the NDR, the Alliance Discussion Paper then quotes from numerous policy documents of the movement from the 1960’s to the present to demonstrate the continuity of this perspective, including: the 1969 Strategy and Tactics adopted at Morogoro; the 1994 Strategy and Tactics document adopted at the Bloemfontein Conference of the ANC; and the 1997 Strategy and Tactics document adopted at the ANC’s Mafikeng Conference. The Discussion Paper then argues that the radical strategic orientation of the South African National Democratic Revolution has also been embodied in the programmes of the movement since the 1950’s, including the Freedom Charter of 1955, the RDP of 1994, and to a large extent the ANC Manifesto’s of 1994, 1999, and 2000. 2.8 Since the democratic breakthrough in 1994, and more particularly in the last couple of years, a number of significant shifts have begun to emerge in certain quarters on perspectives on the NDR. These shifts have tended to reflect perceptions around the changing balance of forces, locally and internationally, rather than clearly theorised, coherent alternative perspectives to the historic thinking of the movement on the NDR. While those articulating this shift pay homage to the historical documents and perspectives of the movement, practical realities are seen to dictate a different path for the NDR, even if this is not explicitly counter posed as an alternative strategy. A significant strand of thinking in the movement, particularly dominant amongst those active in government structures, is that globalisation, and the domestic power of capital, leave us with no alternative but to advance a far more limited vision of the NDR than those contained in the official policy documents of the movement. Another strand of the movement argues that the historic vision of the NDR entailing radical transformation remains as valid today as ever before, and that material conditions confronting our people, if anything make such transformation more urgent[3]. In this view, the essential character of NDR transformation remains the same, even if international and local conditions at any particular point require dynamic strategies to achieve these objectives of the NDR. 2.9 These divergent perspectives have in part led to two inter-related results: a disjuncture between the perspectives of the movement, and policies pursued by government; and the increasing co-existence of contradictory or seemingly incompatible perspectives in key documents. Discussion documents have begun to be placed on the table, which introduce qualitatively different perspectives on the NDR. At a recent Alliance meeting the view was raised that objective conditions dictated the need for a paradigm shift, and that the Freedom Charter was no longer directly applicable under today’s conditions. 2.10 If it is believed that we need to make strategic shifts, it is necessary for us to honestly debate these, and put them to our people. That is, such shifts need to be made consciously, as a deliberate strategic choice, after thorough political debate. Alternatively, if our political practice has begun to stray from what we agree is the strategic objective of the NDR, then this equally needs to be debated and corrected. 2.11 Recent political discussion documents reflect the emerging tension arising out of the co-existence of competing perspectives on the NDR. While relatively nuanced, this tension is becoming increasingly clear, particularly as a strand of theorists in the movement attempt to reconcile the transformatory strategic perspectives of the NDR, with market-driven socio-economic policies. The 2001 Alliance discussion paper quotes extensively from these documents, outlining different perspectives on the NDR (see 2.16-2.26), and we won’t repeat that exercise here. There are however two extracts which are particularly worth quoting, because they lay the basis for potential consensus in the Alliance. Firstly, the 2001 ANC/SACP bilateral emerged with a number of conclusions, including that: “There is a very substantive agreement on the broad character of the NDR programme …include(ing) a commitment to the creation of a united, non-racial, non-sexist, democratic SA; the creation of a democratic state, a major “reconfiguration of property relations”, the significant “pooling of resources” in the hands of the state/parastatals, and the fostering of social capital. The NDR builds a progressive, mixed economy in which capitalism is not eliminated, but there is the recognition that, amongst other things, there is the need to regulate market forces. The relationship with private capital is a dynamic of “unity and struggle”. We agree, therefore, on a relatively radical version of the NDR, it is a NDR with social content…” 2.12 Secondly, the COSATU General Secretary argues that the NDR represents a qualitative shift in the balance of class forces, which laid the basis for a more radical transformation: “The NDR … envisaged a radical change in property relations in favour of the formerly oppressed. It is in this vein that the state has to play an active and developmental role. To rely on the markets … would perpetuate such inequality but with a change of complexion. … Attempts to (merely) ‘deracialise’ apartheid capitalism would fail to alter the balance of class forces in favour of the working class; it is more likely to alter the balance of class forces in favour of capital. “The NDR will not eliminate the market but would seek to roll back the market by strengthening the social sector – including the public sector and other forms of collective ownership. The market will also be transformed to ensure wider participation in the economy in terms of ownership, employment and access to basic necessities. This would entail changing the structure of ownership in the economy by breaking the stranglehold of big capital and creating new forms of ownership … The RDP represents the programme to attain the basic goals of the NDR… a radical national democracy in which the state will play an active developmental role by inter alia using the resources under its control to roll back the legacy of apartheid and to discipline capital and transform the market to ensure broader participation[4]. … The implication for political strategy is that the path to socialism would be built within the NDR- contrasted with a radical rupture similar to the Bolshevik and other revolutions.” (Political Input to the COSATU-SACP Bilateral 26 July 2001 Zwelinzima Vavi – COSATU General Secretary) 2.13 The review of key Alliance documents dealing with the NDR reflects some significant areas of convergence, but also some fundamental issues requiring further debate. Greater clarity is required on the elements outlined below:
 * 2. Theories of the NDR**


 * The NDR is aimed at the national liberation of the historically oppressed majority, and although inclusive of various strata from this majority, biased towards the masses of the working class and the rural poor, and paying particular attention to the position of women. This is the context within which the national question and racial and gender inequality is tackled;
 * The NDR requires far-reaching transformation, going well beyond attainment of formal political democracy;
 * It requires the creation of a developmental, interventionist state;
 * While not socialist, it does not aim to simply deracialise existing structures of apartheid capitalism, which would leave the majority in a position of continued subordination;
 * While co-existing with private capital and the market under transformed conditions, it seeks to roll back the market, create new centres of economic power, and to discipline and regulate capital;
 * It is not about the creation of a new black elite, whether situated in private capital, the bureaucracy, or elsewhere.

Development of the black middle class and black bourgeoisie are a by-product, and at most a secondary objective of the NDR. The NDR is primarily aimed at addressing the plight of the overwhelming majority of the most exploited and oppressed- the working people and the rural poor, only a tiny proportion of which can hope to commit class suicide and become part of the black bourgeoisie. 2.14 Having outlined this as a possible basis for consensus on the NDR, there remain a number of debates contesting the interpretation of the NDR, some may be about nuance, and some may reflect a fundamental difference in perspectives. Important debates, which need to be resolved, include: § //Relationship to capital//-whether the central focus on ‘attracting capital and investment, foreign and local’-allows capital to dictate the policy agenda, or whether an interventionist developmental state can channel capital, including through regulation and discipline. Whether growth and expanded investment, regardless of the trajectory it follows, is now regarded as the key good to pursue, and is somehow class neutral; or are the questions of redistribution, equality, and development still priority issues for the movement? § Whether //expanding a black bourgeoisie// now becomes a primary objective of the NDR, the cultivation of a ‘small elite’ (ST 1969), or whether this remains a secondary feature, and by-product of the NDR, subordinated to the task of addressing the core legacy of national oppression and super exploitation, poverty and inequality in society. § //Is it time for a ‘paradigm shift’//: Whether current conditions, locally and internationally dictate a ‘tactical retreat’ (temporary?) from the objectives of the NDR or whether this retreat in fact constitutes a fundamental strategic shift, which requires us to honestly reopen the debate on the fundamental tenets of the NDR; alternatively is this shift to a certain extent self-imposed, and do the policies reflecting this shift require re-examination. § Whether pursuit of a radical NDR somehow constitutes an attempt to //smuggle socialism in through the back door//. Is a radical, developmental NDR, which curtails capital problematic because it lays the building blocks for socialism? Is it somehow ‘irresponsible’ because of the perceived fragility of the transition and the need to pacify capital? § Whether //government programmes and policies// are driven by the strategic thrust of the NDR as outlined above, or is there a radical disjuncture between the philosophy permeating government and the policies and perspectives of radical transformation elaborated in programmes of the NDR, including the RDP and The Freedom Charter. Are these programmes still relevant in today’s conditions?

3.1 A question, which for obvious reasons is difficult to answer, is to what extent the strategies and perspectives of the movement, post-1990 are responsible for the trajectory of the transition. In other words, within the limits and possibilities imposed by material conditions, whether alternative strategies and perspectives would have resulted in a fundamentally different trajectory from the one we have experienced. 3.2 It is important to interrogate this question in the context of the early 1990’s. While much of the open contestation about policy direction took place in the post- 1994 period, a number of analysts have argued that the essential thrust of current policy was largely determined in the pre-1994 period, after 1990. There seems to be merit in this view. Lack of emphasis in alliance policy debates on the pre-94 period may be partly explained by the (mistaken) belief that with the adoption of the RDP in 1994, the key policy debates had been settled, and that different perspectives from those reflected in the RDP only emerged in the post-94 period. This excessive focus on post-94 also explains why many comrades were so mystified, even outraged at what they perceived to be the ‘sudden abandonment’ of the RDP perspective, with the announcement of GEAR in 1996. 3.3 This is not to deny that there were major strategic shifts during this period. Rather we need to look to the earlier period to see the roots of these shifts. In fact in strict terms, whether they were ‘major shifts’ depends on your perspective. For those who took what we can call a ‘cautious’ view of the transition, the balance of forces, and possibilities for transformation, it is very likely that the post-94 trajectory far from representing a fundamental shift from their perspective, in fact reflected an appropriate strategic orientation, given what they had believed from the ‘beginning’ (i.e. 1990), was required by the situation. In other words there were serious contradictions of perspective in the movement, and the ‘RDP perspective’ (to use a term) was only one perspective in the Alliance, even if at a public level it appeared unchallenged. In reality, as we show below an alternative perspective developed within an important segment of the Alliance leadership in between 1990- 1996, which was to prove very powerful. 3.4 In reality therefore, there was the coexistence of two competing perspectives in the movement. This is in itself is not necessarily problematic. The problem is that there was a masking of these differences, particularly on socio-economic questions, and therefore they were never openly debated. This hypothesis outlined above is the only possible explanation for the course of events, unless one takes the view that there was ’an overnight abandonment’ of agreed perspectives once comrades went into government. 3.5 The 2001 Alliance Discussion Paper on the Alliance and the NDR (in Section 3.12) hints at some of the factors which underlay the emergence of a very significant perspective in the movement which was never openly acknowledged, let alone debated:
 * 3. Perspectives of the Movement post 1990- a ‘strategic shift’?**


 * “The coexistence of different political cultures, experiences, and perspectives within our movement;
 * A fear that components of the mass movement may not grasp the new realities facing the NDR, or appreciate the strategic and tactical shifts which may be required;
 * The need for tight management of the CODESA process;
 * At an economic level, it may have been believed that global realities dictated a different economic agenda from the one which had been traditionally embraced;
 * Particular types of strategies were required to diffuse the threat of counter-revolutionary violence against the new democracy[5].”

3.6 These conditions led not only to a failure to openly articulate and debate these strategic perspectives at the time, but left a lasting legacy in the way in which debates were handled during the transition: a tendency to avoid confronting the real issues, which meant that broad theoretical and strategic discussion in the Alliance avoided confronting underlying differences, which were only dealt with in ad hoc crisis management, when the underlying differences in perspectives manifested themselves in concrete confrontations on policy questions. 3.7 There were significant differences, and some criticism, over the way negotiations were handled in the early 90’s, the demobilisation of the masses, and the lack of adequate involvement of structures of the movement in giving mandates on strategic issues, such as the sunset clauses[6]. But to a certain extent there was open debate on these political questions. When it came to //critical questions of socio-economic transformation and the role of the state//, however, there was no such public discussion, and it appears that the real debates were taking place behind closed doors, involving only one element of the movement’s leadership. 3.8 As indicated above, the extensive discussion and ultimately adoption of the RDP as both the election platform and programme for governance of the Alliance, created the impression that the key policy questions on the transition had been largely settled in the run up to our first democratic elections[7]. It has become apparent, however, that the real situation was far more complex, as has been confirmed by subsequent developments. It is difficult to comprehensively analyse the development of what we can call the ‘alternative viewpoint’, either in terms of its content or genesis, because it was never openly articulated or debated in the Alliance. Ultimately however it was to be far more powerful than the RDP perspective, since the alternative viewpoint dominated the direction of government policy. To complicate matters further, unelected technocrats and outside experts played a disproportionate role in its formulation, leading to a double inaccessibility to the democratic movement in terms of its development. 3.9 Up to at least 1990, and perhaps later, the transformatory vision of economic policy was still articulated by organs of the movement. The ANC DEP ‘Discussion document on economic policy’ 1990, stated that “The engine of growth in the economy of a developing SA should be the… satisfaction of the basic needs of the impoverished and deprived majority of our people. We thus call for a programme of Growth through Redistribution in which redistribution acts as a spur to growth, and in which the fruits of growth are redistributed to satisfy basic needs.” Tito Mboweni, a leading member of DEP, in commenting on this growth path in 1992, stated that “major changes will have to take place in existing power relations as a necessary condition for this growth path.” This vision of Growth through Redistribution was soon to fade, with the emergence of the alternative viewpoint within the movement. 3.10 Although the alternative viewpoint remains something of a mystery, certain clues help to uncover its development and underlying logic. While only those responsible for developing and driving this perspective can fully detail it in all its elements, the following areas provide important indicators: the 1993 IMF loan and other negotiations with multilateral institutions; the reorientation of ANC economic policy and isolation of MERG; contestation around the RDP White Paper and closure of the RDP office; the 1995 ‘six-pack’ and privatisation; the National Growth and Development Strategy (NGDS), and GEAR; and various socio-economic policies. 3.11 The first major signal of a potential shift in ANC economic policy emerged with the negotiation of an IMF loan in October 1993 by the TEC, with the participation and endorsement of the ANC. This was done in secret, and the details of the loan only leaked to the press in March 1994. The loan, not huge by international standards, was to reschedule the debt inherited from the 1985 debt standstill imposed by PW Botha at the peak of international financial sanctions. The initial amount loaned from the IMF was $500 million. While the financial terms of the loan were reportedly unfavourable, and the secrecy and lack of debate about the morality of unconditionally repaying the apartheid loan worrying, the implications for the country’s sovereignty of the loan’s conditions (or commitments made at the time) were the most disturbing aspect[8]. According to Bond, these commitments included the rapid lowering of tariffs, cutting the budget deficit, a drop in public sector real wages, and wage decreases across the board. Further, the IMF’s Camdessus was reported to have pressurised the ANC to reappoint Finance Minister Keys, and Reserve Bank Governor Chris Stals[9]. Greta Steyn in an article in Business Day at the time pointed to the contradiction between the TEC statement of policies to the IMF, and the RDP (30 May 1994). 3.12 The Macro Economic Research Group (MERG) was set up by the ANC and MDM in late 1991 to advise the movement on economic policy. “In December 1992 the ANC leadership requested…MERG to accelerate the process of producing the macro economic framework, as negotiations at the World Trade Centre suggested that a political settlement was close at hand”. The result of MERG’s research was presented in December 1993. “The MERG Report was widely acknowledged as being an important contribution to the formulation of an alternative macro-economic strategy for post-apartheid development, a challenge to the previous governments’ Normative Economic Model…Despite this, the MERG macro-economic framework and recommendations were dumped by the ANC almost before it was launched…the ANC leadership, under pressure on many fronts, had by this time all but abandoned the idea of developing an alternative progressive macro-economic framework…”[10] Even before the MERG launch the ANC Department of Economic Planning had issued a public statement repudiating the MERG proposal to inter alia nationalise the Reserve Bank. The perception of Padayachee and other analysts is that the ANC Department of Economic Planning (DEP) had taken a right turn during this period. 3.13 The process of drafting the RDP White Paper saw the contestation of these two perspectives. The Green Paper was drafted by officials in the Department of Finance and DBSA, and was heavily criticised within the Alliance. New authors were brought in to work on the White Paper, at the initiative of Jay Naidoo and others. The competing perspectives were still maintained however, with drafting involving a combination of progressive economists and businessmen (Rudolf Gouws and Bobby Godsell were involved in finalisation of the WP)[11]. According to Padayachee “Eighteen different drafts were circulated within the state (by the beginning of September 1994) but social and labour movements only saw versions of it towards the end of September. A careful reading of the WP reveals significant departures from the underlying economic framework and thrust of the RDP itself. Despite reassurances from new Ministers that only the language of the WP had changed to reflect a wider constituency of interests, it has been argued that the WP represented a significant compromise to free-market principles and to the economic preferences of the old regime.”[12] According to Bond, one of the drafters of the RDP WP, the end product was ‘a tasty menu for governance’ which: “satisfied the appetite of big business for conservative economic policy, added a bit more meat to centrist bones, and saved only some rather sparing side dishes for the Left…”[13] The White Paper received glowing praise in the business press, with one editorial stating that “The central government has realised that a business like approach is needed at all levels of the RDP if the private sector is to play its willing part.” (B Day 8/9/94) 3.14 The contestation and reinterpretation of the RDP, including by business and conservative technocrats, was coupled with what many saw as its growing marginalisation as the centrepiece of governance. The sudden closure of the RDP Office in the Presidency in March 1996, without debate in the democratic movement reinforced this view. Concerns about the significance of this were only deepened with the announcement of GEAR in June 1996. Even if the RDP Office hadn’t been closed, there were still concerns about the extent to which the logic and letter of the RDP was integrated into all government programmes and Departments. In the event, the closure of the RDP office was justified on the basis that government didn’t want the RDP to be an ‘add-on’ but that it needed to be integrated at all levels of government. However, there wasn’t a vehicle to drive this. There was a failure to develop a central planning Ministry[14], which drove economic and social planning politically, rather than leaving it in the hands of technocrats. 3.15 Before the introduction of GEAR the government announced, in late 1995 a ‘six pack’ of measures mainly aimed at reducing state spending, the size of government, and reduction of the debt. This ‘six pack’ included inter alia a privatisation strategy, and a plan to cut back the public service. The dispute over this announcement led to negotiation of the NFA on restructuring state enterprises. The NFA only happened as a result however of COSATU’s threat to embark on mass action. The ‘six pack’ itself was not the product of discussion in the Alliance. 3.16 The announcement of GEAR in June 1996, after the ditching of the NGDS[15], was therefore the logical culmination of the dominant strand of policy, particularly within government, and its status as a radical and sudden departure from policy should perhaps not be overstated. From the above analysis of important policy shifts since 1993 it becomes clear that by 1996 the trajectory of socio-economic policies and broad transformation strategy had been firmly established, but this had been achieved in a largely covert way. As we will see below, this was done out of fear of the backlash which would otherwise follow, and that negotiations on the issues would yield a very different result- thus the ‘non-negotiability of GEAR’, and the unilateralism of other processes outlined above. It is not necessary therefore to go into COSATU’s analysis of GEAR, or its critique- this has been done extensively elsewhere[16]. 3.17 Aren’t these issues raised above just a matter of historical debate/record, which we can leave to the historians? The reality is that the strategic perspective underlying these interventions continues to determine the trajectory of the transition, which needs to be subjected to the scrutiny of the movement. 3.18 It is impossible to have an intelligent debate with someone, if they refuse to disclose the basis of their argument. This points to why there has been no meaningful engagement on the ‘alternative perspective’ outlined above. Government has at best presented the conclusions of this viewpoint (eg announced Gear) or at worst concealed it (e.g. IMF loan); but in general refused to submit their assumptions to scrutiny, nor to interrogate possible alternatives. This has been the case with a range of socio-economic policies, which have based themselves on the conservative macro-economic framework. This is an ongoing problem since these (untested) assumptions continue to inform government policy. 3.19 Nor has this perspective been tested in any coherent way (beyond superficial rubberstamping) by any structures of the Alliance, including the ANC[17], or its experts. The ditching of MERG preceded a broader abandonment of our own intellectual cadres, and a growing reliance on experts/ technocrats outside of or even hostile to the movement. Those from the ranks of the movement have been expected to comply with this new orthodoxy. 3.20 Without the champions of this alternative perspective openly articulating their underlying strategy it is difficult to know whether they themselves are engaging in post facto (after the fact) rationalisation of policies which have been foisted on them by powerful interests, and to what extent they own policies in a proactive way. (Gear for example was initially presented as a revolutionary intervention to implement the RDP, but is now presented as a tactical retreat or ‘detour’ in response to the 1996 markets crisis.) There does appear to have been a great degree of passivity, and preparedness to allow policy to be driven by conservative technocrats. The role of the Department of Finance in this regard has been particularly noteworthy. Their point of reference has not been the transformation mandate of the democratic government, but rather an incrementalism based on policies of the previous regime, and a subordination of policy to demands of ‘the market’ (particularly financial markets). This has been used to systematically rule out radical interventions required to effect transformation.[18] An amusing illustration of the mindset of these technocrats, was the statement by the current DDG of Finance[19] (who served the previous regime) that he didn’t understand why such a fuss was made about GEAR, since it wasn’t really a change in policy from the previous policy of the Government, the Normative Economic Model![20] 3.21 If the advocates of the “Alternative Perspective’ in the movement were so convinced of its merits, the question obviously arises as to why they didn’t openly engage the structures of the Alliance, and advance this perspective as the general perspective of the movement. The answer, it seems clear, is that they feared a backlash, and ultimately a defeat of this perspective. It is not clear whether this was because they felt that there was lack of maturity in the movement, an inability to understand the issues, or an ultra-militancy, which meant that comrades were unable to appreciate the limitations of the period we found ourselves in. Or whether their understanding of the transition was that it required a top-down tightly managed process of driving through compromises (the classic model of ‘elite transitions’)[21]. Either way it meant closing off the option of serious engagement in the Alliance, or society more generally- the main groupings, which had to be engaged were those who were perceived to have the power to disrupt the transition-in particular big business.[22] 3.22 The possible existence of a long-standing (pre-1994) plan to impose unpopular measures, and the fear of the resistance this may provoke, helps to explain much about the political culture of the post-1994 period, and the apparently irrational paranoia about enemies from within (with less concentration on our main strategic opponents). It also explains the use in certain instances of militant sounding jargon and rhetoric to mask the shift to conservative positions. It is in this context that documents, which would otherwise be difficult to explain, can be more clearly understood. 3.23 As early as August 1994, a document from within the ANC leadership titled ‘Unmandated reflections’ or ‘Tasks of the ANC in the new epoch of democratic transformation’ mysteriously predicted a conspiracy against the ANC leadership. ‘Opposition forces’ are credited with enormous powers to create divisions within the ANC, and possibly reveals more about the fears of the author than the (imaginary?) opposition the document describes. In particular the paper predicts that, this opposition will inter alia aim to: § Split the ANC into 3 parts: the ANC in government, portrayed as ‘having betrayed the interests of the masses’; the ANC in parliament which will present itself as the ‘revolutionary watchdog over the treacherous ANC in the Executive; and the ANC outside government which will be projected as the ‘true representative of the soul of the movement’; § Convince the movement that there is competition between two centres- the ANC in Cabinet on the one hand, and the NEC on the other;


 * Split the ANC around the issue of leadership;
 * Encourage the SACP “publicly to project itself as the left conscience which would fight for the loyalty of the ANC to the cause of the working people, against an ANC leadership which is inclined to over-compromise with the forces of bourgeois reformism”;
 * Encourage COSATU to “project the pursuit of political and socio-economic objectives different from those that the ANC has set itself as a governing party”;
 * Encourage COSATU to interpret the transition to mean that “the ANC has an obligation to ‘its electorate’, namely the African working class, to support it in all its demands or face denunciation as a traitor”;
 * Encourage the launching of mass action which “while addressing various legitimate worker demands would, at the same time, pose the spectre of ungovernability”;
 * Encourage the unions to be suspicious of the intentions of the government on the basis that it is “likely to act in a manner intended to appease the domestic and international business world and the multi-lateral financial institutions”;
 * Use will be made of “the legitimate demands of the people to demand of the government that it delivers change at a pace that is practically impossible”.

3.24 The author(s) of the document goes on to link this strategy of ‘the opposition’ to the network of counter-revolutionary forces, which it implies is behind this radical strategy of destabilisation. Barely three months into the new democratic government, after an overwhelming election victory behind the hugely popular RDP, it is remarkable that the author(s) is so convinced about the susceptibility of our movement to this scenario; so suspicious about the inclinations of the parliamentary structures of the ANC and Alliance; and so confident that the material conditions would emerge which could either make such a strategy possible or lead to such anger and resistance in the democratic movement. Did the author possess privileged knowledge, which the rest of us had no access to? 3.25 A remarkable feature of the claims made in the 1994 document (outlined in 3.23 above) is how similar the logic is to the analysis in the ANC ‘Briefing Notes’ of 2001. Far from being ‘prescient’ or predicting things planned at the time by faceless forces, which came to fruition 7 years later, the analysis of forces allegedly hostile to the NDR- the so-called ‘opposition’ (1994) or the ‘tendency’ (2001)- rather reflect insecurity that the authors have about being able to impose perspectives which have not achieved a broad buy-in in the democratic movement. The similarity in the logic of the two documents is the use of scare mongering tactics in an attempt to deligitimise and demonise valid opposition to policies, which lack popular support. 3.26 The debates, which we never held in the 1990-94 period, will continue to haunt the transition until we lay them to rest.

4. **Material Conditions Post 1994** 4.1 The most vexed issue confronting the democratic movement after 1990, and more critically after 1994, was how we assessed the local and international balance of forces, the limitations and possibilities for manouevre, and how to use social power and ultimately state power to tilt this balance decisively in favour of the NDR, in the face of countervailing power exercised by our strategic opponents. 4.2 The democratic forces never elaborated the theoretical framework necessary to guide our approach to the transition on the above questions. In the first period of the transition (1990-1994) there was a tendency to concentrate on the immediate challenges confronting us in negotiating the transition to democratic rule, particularly on domestic realities, which impacted on the negotiations. In the second period of the transition (Post April 1994) there was a tendency to focus on the imperatives imposed on our transition in the era of globalisation. Both of these responses were essentially reactive and defensive, rather than a proactive strategic perspective aimed at advancing the goals of the NDR on the terrain in which we found ourselves, in a way, which shifted the balance of forces decisively in our favour. The latter mode of revolutionary analysis- as a guide to action and struggle- was more typical of the traditional theoretical approach of the movement, than the ad hoc reactive analysis, which now seemed to dominate our discourse. This went hand in hand with a change in our political culture, which we dealt with in the last Section of this document. This adhocism has been accompanied by a degree of organisational paralysis, and a process of demobilisation of our people. The mobilisation of peoples power, not just by the Alliance, but the MDM formations as a whole seemed to be relegated to the period of struggle against apartheid. It is ironic that after the 1994 breakthrough, it was the reactionary forces who were dominating the streets. Critical questions posed in the last section raise the issue of whether this demobilisation was a problem of lack of direction, or whether it was the result of a conscious choice to manage the transition in a particular way. An important part of this approach was the perception of what was possible given the limits of the international environment, and the perception, particularly in some quarters of the ANC that there was a legacy of ultra-militancy which may “lead to the temptation to fiddle dangerously with the ever-present explosive material for intense class confrontation.” [23] 4.3 There is general agreement in the Alliance that the international environment for our transition has been relatively unfavourable. By ‘relatively unfavourable’ we presumably mean that if the transition had taken place in an earlier decade, the international balance of forces would have been more favourable, not that some of the features characterising today’s global order would have been totally absent. So for example if our transition had taken place before the 1990’s it still would have taken place in a dominant global capitalist (and imperialist) reality. Nevertheless it is generally accepted that momentous international developments in the late 1980’s and early 1990’s had important implications for our transition. 4.4 In particular the collapse of the Soviet Socialist bloc had decisively shifted the international balance of forces in favour of the major capitalist powers, with growing domination by the USA. Further, the ‘new world order’ was characterised by the dominance of neo-liberal economic programmes. While the significance of this should not be underestimated, it should also not be overstated. The ‘unipolar’ world still contained significant alternative centres of political and economic power, in particular the Peoples Republic of China (no matter what we may think about their trajectory) and different growth paths in the South, with some less captive to the neo-liberal model than others. Further the imperialist powers continued to be concentrated into different regional blocs, with a degree of competition and secondary contradictions between them. Conversely, we should not forget that the history of the twentieth century from the Soviets to the Sandinistas, even before the ‘globalisation era’ of the 1990’s, has been dominated by imperialist globalisation in various forms. 4.5 To assert this continuity is not to deny the qualitative shift in the recent period. Our transition has been taking place in the context of important changes in international political and economic realities. In particular, the growing economic integration (and domination), yet marginalisation, of the developing countries, under the increasing assertiveness of the neo-liberal international agenda. This has been facilitated by the development of new forms and forces of production which are increasingly global in character, in particular the new technological revolution which itself helps to dissolve national borders, and the growing domination, mobility, and volume of international speculative capital. These factors have posed serious challenges to those countries attempting to assert a sovereign path of national development. 4.6 At the same time, we should not buy into the ‘end of history’ model. The era of globalisation since the 1990’s has not been characterised by a smooth linear process of uninterrupted development. In fact the trajectory of this period has been quite volatile, and characterised by different phases. This can be schematically and crudely periodised as follows: The initial part of the 1990’s was characterised by extreme confidence and arrogance by the G8 bloc, as well as the aggressive resurgence of the structural adjustment agenda of the Bretton Woods institutions, and the World Trade Organisation. This phase was followed however by the growing crisis of neo liberalism, in the face especially of the East Asian crisis. The disastrous results of following the IMF prescriptions in those countries, led not only to the widespread discrediting of this model, but also serious internal fractures in the multilateral institutions themselves. Conversely, an alternative, far more successful approach to the problems of globalisation was demonstrated by countries which resisted IMF prescriptions, including in the Asian context Malaysia, India, and China, each of them demonstrating different aspects of independent development. 4.7 This was followed by the development of a global social movement mobilised particularly against the multilateral institutions. Significantly, this was the first serious crisis of legitimacy facing capital in its heartland for several decades. This international social crisis for globalisation was accompanied by the development of a structural economic crisis which threatened to plunge the world into a major recession as the IT bubble burst, financial speculation spun out of control, and the irrationalities of global inequalities began to weigh down the logic of accumulation. The focus on this crisis has of course has to a large extent receded into the background in the post- September 11 era where the US military-industrial complex has assumed an openly aggressive form to deal with some of the contradictions outlined above. 4.8 The question in the context of the South African transition has been what space this changed international situation leaves us to shape our own destiny. In addressing this we need to avoid two extremes: on one side, arguing that an independent path is impossible until there has been a total (more just) reconfiguration of the international situation- a Trotskyism of a special type[24]. The other extreme is to argue that we can completely isolate ourselves from international realities, and forge an independent path without any regard for these realities. 4.9 Strategic choices made during our transition, before and after 1994, with regard to the international situation were never seriously debated in the ranks of the democratic movement. It is questionable whether this was done in any serious way in government either. Rather the tyranny of the TINA (There is no alternative) perspective seemed to take over by stealth. For example the liberalisation of the financial markets and lifting of certain exchange controls, was never pitted against the option of imposing certain capital controls, together with a rigorous analysis of the costs and benefits of these different options. It was assumed that the international community, ‘the markets’ etc would tolerate only one option, and to even debate the issue would be dangerous. This was despite the fact that different options were being pursued internationally, let alone the obvious dangers of liberalising when our economy was so vulnerable to speculative investment, combined with the threat of large-scale relocation by monopoly capital from South Africa[25]. 4.10 Subsequent developments, including the current currency crisis, and the flight of capital, has demonstrated that a serious error of judgement was made, which could have been avoided, if alternative policy options weren’t ruled out. The ability of other countries, who regulated capital, to protect themselves against the vagaries of the financial markets demonstrates the self-destructive character of the TINA approach. The greatest indictment of our failure to assert our sovereignty was the decisive action taken, in the midst of the Asian crisis, by the Malaysian government which rapidly moved to impose capital controls, and saved their society the untold hardships experience by their neighbours (in the midst of an international ‘uproar’ that what they were doing was unthinkable and could never work). We seem content to appeal to the ‘strength of our economic fundamentals’ as the markets continue to punish us. 4.11 A similar analysis could be made in relation to tariff and trade policy, fiscal and monetary policy, industrial policy etc. The issue was never whether we could avoid a degree of integration into the globalised economy. Rather than the opting out of participation in the globalised environment, as alleged by some, the question was on whose terms, and what policy options would enable us to maximise our national interests, and minimise the downside. The very trajectory of economic philosophy within government appeared to exclude options, which would allow us to integrate gradually and on our own terms. Obsession with a particular vision of competitiveness entailed a rapid and unprotected integration into the world economy. Part of this vision was a neo-Thatcherite philosophy of exposing our ‘overprotected over-regulated economy’ to the chill winds of competition. While this would have certain inevitable costs, particularly in terms of jobs, and deindustrialisation of certain sectors of our economy, this was regarded as a necessary price to pay for ‘getting our prices right’, which would it was argued create a lean, effective and competitive economy. The costs we have paid for pursuing this policy approach are enormous[26]. 4.12 The idea of ‘taking the pain now’, imposing structural adjustment on ourselves before the international community does, is equivalent to the psychology of beating yourself up before the bully gets hold of you. COSATU’s perspective has been that the difficulties of transforming in an environment of globalisation, required a more active, and not less active, state consciously embarking on measures to assert national sovereignty particular in areas of socio-economic development. The alternative route was to open ourselves up in a way, which made us completely vulnerable to the dictates of globalisation. 4.13 What about the balance of forces on the domestic front, and their implications for radical transformation? Some in the Alliance have argued recently that the potential for a far-reaching NDR project is far less favourable today than at the time of Morogoro (1969) when the Strategy and Tactics document was adopted. This argument relies completely on the changed international situation, and ignores the changed domestic situation. The 2001 Discussion Paper on Strategic Challenges facing the Alliance argues that this is a one-sided focus: “it is important not to lose sight of the domestic South African context in which our democratic breakthrough was achieved, one in which the balance of forces was very different, and far more favourable, to that obtaining at the time of Morogoro. 1969 saw the end of a decade in which organisations had been banned and resistance brutally repressed, the apartheid military apparatus massively expanded, and the intensification of apartheid social engineering, pass laws, mass removals and bantustans. The underground, armed struggle and international isolation of the regime were in a relatively embryonic stage, and mass formations virtually dormant. The domestic balance of forces was extremely unfavourable. This was the context within which the 1969 Strategy and Tactics document was formulated”. “The democratic breakthrough in 1994, however, took place in the context of a domestic balance of forces far more favourable to the liberation movement. The decade from the mid-80’s had seen the comprehensive international isolation of the regime on a number of fronts; the emergence of a huge array of mass structures broadly aligned to our movement and structures of peoples power throughout the country; the intensification of the armed and underground struggle, and its rooting in an embryonic people’s militia. Massive repression by the apartheid regime, unlike the 60’s had failed to fundamentally reverse the revolutionary momentum. Indeed, the trajectory of struggle had the real possibility of intensifying into an all-out peoples war. It was in this context that the regime was forced to concede power.” “It is important not to lose sight of this reality, that even in the context of negotiated compromises made in the run-up to 1994, and the unleashing of a wave of counter-revolutionary violence by the regime, the factor that made the democratic breakthrough both possible and sustainable, was this accumulated mass power (in all its forms). The threats to forward movement with Boipatong, the murder of Cde Chris Hani, bantustan repression, invasion of the World Trade Centre, and the delaying tactics of the regime at CODESA, were all met with the exercise of mass power, to remove the obstacles to progress. The development of the tactic of ‘rolling mass action’ dramatised the strategic perspective of the continuous mobilisation of our people to maximise their power, and to limit the power of the regime and its allies.” “The question was whether the movement, post-94 could mobilise this mass power for reconstruction and development, to drive the transformation process, and to counter … those opposing our transformation agenda. Clearly, the character of the tasks pre and post 1994 were qualitatively different. There is in principle, however, no reason why this mass power, albeit in a different form should not be equally important in the post-94 period to tilt the balance of forces in our favour.” 4.14 The deployment of our mass strength however couldn’t be done into a vacuum. It required a programme, based on an assessment of the tasks of the NDR in the immediate period, and its limits and possibilities given the local and international balance of forces. In the absence of this shared perspective and programme, our key strategic advantage would be severely hobbled if not totally paralysed. An important element of this was an analysis of our opponents- the motive forces against transformation- and a strategy to isolate and neutralise their agenda; as well as the key task of transforming the state, which would allow us to combine state power and social power-mobilisation from above and below, without which neither strand could succeed. 4.15 It has been agreed in a number of Alliance documents that the key strategic opponent of the NDR is capital and their allies, and their attempt to impose a neo-liberal agenda. This is spelled out in the 2001 Alliance Discussion paper: “the real threat to the NDR was not a counter-revolutionary militaristic agenda, narrowly construed, which aimed to overthrow the constitution, and reverse the wheels of history. In fact this agenda of the far-right, to reimpose a political order of white minority rule through the use of force, was the one which we managed to isolate and defeat most effectively. It was rather another, more complex, anti-transformation agenda which threatened to derail the NDR.” “The new constitutional order and the government based on the will of the people express both the immediate and long-term interests of the overwhelming majority of South Africans. …But the balance of forces both within South Africa and internationally is such that these interests can be subverted by capitalism's rapacious license. In this sense therefore, the basic framework of our democratic achievement in South Africa is irreversible: but it can be derailed, leaving us with a shell of political rights without real social content.” (ANC Strategy and Tactics 1997- our emphasis) “…the main strategic threat to our NDR does not come from forces that are seeking to go backwards to a pre-1994 situation. It comes from forces that seek to use the democratic platform of 1994 for their own neo-liberal project. The key strategic threat lies in the hollowing out or re-routing … of the democratic breakthrough…”. (The “minimum” programme of the Alliance in the current phase-SACP 2001) 4.16 While recognising that this agenda of capital sought to derail the NDR, one strand of analysis in government and the ANC seemed to suggest that we were powerless to do much about it, because of the enormous strategic leverage of capital, through their control of resources, and we therefore had to reach an accommodation with capital. This perspective was best captured in “The State and Social Transformation” (1996) whose departure point was that “capital is principally in private hands, the economy is subject to various objective laws of development, and the globalisation of the world economy reduces the sovereignty of each national economy… the objective reality… is that the bulk of capital, as investible wealth, is in private hands, both domestically and internationally… (Further) capital operate(s) internationally, unconstrained by questions of boundaries of national states or the sovereignty of these states… Consequently, the democratic state has an obligation to harness this driving force to ensure that the democratic state and capital act in concert… the democratic state must establish a dialectical relationship with private capital as a social partner for development and social progress… In the event of the failure of the democratic state to secure co-operation and necessary delivery from capital… the door shall have been opened to the forces of reaction and counter-revolution…The democratic state… has to attend to the concerns of private capital if it has to ensure industrial stability, sustainable economic growth and a secure political democracy… private capital must recognise that the democratic state offers the best possible environment for the realisation of the interests of capital… The alternative is an environment of social and economic dislocation which is not conducive to the interests of the two parties.” 4.17 While it must be accepted that as long as the national democratic state operates in a mixed economy, there will be the need for a strategy entailing some form of //‘accommodation’// with private capital[27], this should not be confused with a strategy, which entails //subordination// to it. An academic journal analysing the South African situation, in particular the transition from the RDP to GEAR, argues that this change in policy represented a shift from the former (accommodation) to the latter (subordination)[28]. 4.18 Obviously the terms of such an accommodation will be determined by the relative power of private capital versus the democratic state and the progressive forces, both economically and politically. The question is whether our strategies strengthen capital’s hand; or harness the leverage of the democratic state and popular forces in a way, which progressively shifts the balance of forces in our favour, and limit the capacity of capital to dictate the terms of the transition. 4.19 Factors, which will play a key role in determining this balance of forces, include:


 * Progress in transforming the state;
 * Mobilisation of the popular forces around a programme for transformation;
 * Countervailing measures to regulate and discipline capital, (or conversely measures which increase capitals leverage);
 * The degree of cohesion or fragmentation within capital and its political representatives as well as its broader legitimacy in society;
 * A strategy to harness and channel investment from a range of sources- state, parastatal, social and private.

4.20 Extensive attention has been given in Alliance documents to debates around transformation of the state, as well as the issue of the need for an Alliance programme. But the big blockage to progress on these issues appears to be different conceptions of the role of capital in the transition, and the fear that such interventions will not meet the ‘concerns of capital’ and will therefore ‘open the door to reaction and counter-revolution’ (State and Social Transformation). The alternative view is that socio-economic transformation has to be driven by the state, and that a strategy of endless incentives for capital to co-operate has not, and will not work. The historical character of South African capital, rooted in an oppressive minority, and without commitment to the country, militated against a project premised on capital’s willingness to co-operate in national reconstruction without a significant degree of state regulation and compulsion. 4.21 The recent Alliance Discussion Paper (August 2001) also warns against overstating either the willingness of capital to act as ‘partner in development’ if it is given sufficient market-friendly incentives, or the idea that its strength is overwhelming: “Recent developments have… continued to raise questions about both the cohesion and strength of South African capital, and the belief that they respond positively to promotion of a ‘market-friendly investment environment’. After 5 years of the adoption of macro-economic policies, investment incentives, privatisation initiatives, skills strategies, state restructuring etc aimed at creating this investment environment, the rate of Gross Domestic Fixed Investment[29], instead of increasing dramatically has slowed down. The main focus of big capital in South Africa has been on its international diversification strategy. Further the expected Foreign Direct Investment has not materialised… Foreign capital flows still remain largely focused on short-term speculative capital, which only serves to increase economic volatility, and does little for economic development or employment. At another level, capital in South Africa appears increasingly divided and uncertain about its direction. While wanting to resist transformation, an important section of big capital is beginning to realise that it is untenable for things to continue in the old way. In particular, the future of capitalism itself is seen to be in jeopardy, with continued mass unemployment, and high levels of poverty and inequality, potentially leading to a social explosion. This was an important dimension in the recent bilateral negotiations between labour and the representatives of big capital in the Millennium Labour Council. The fact that organised labour was able to use its power, in the context of these concerns, to ‘discipline’ capital into substantially moderating its short-term demands, is a significant development which bears examination. Subsequent divisions in organised business demonstrated the need for labour and government to act decisively to lock capital into a new agenda.” 4.22 The Alliance paper then argues that there is a need for the Alliance to interrogate and reconceptualise our understanding of what constitutes a holistic investment strategy aligned to our socio-economic objectives. The reconstruction of our economy ‘will be driven by a range of different capitals’, which are differentiated by the extent to which they are in state, social or private hands. The question is whether we have a strategy to leverage capital directly or indirectly under our control for purposes of social development; the role of social capital; and the extent to which we are able to use discipline, regulation, and ‘crowding in’ strategies to marshal private capital for the same objectives. Such an investment strategy is a critical element, but only one part of, of a broader growth path. 4.23 In terms of this investment strategy we can differentiate six types of capital, which are potentially available:


 * Publicly owned fiscal resources, and public borrowing, used directly in the form of the budget to invest in both social capital and infrastructure, to leverage further investment, and to promote particular types of investment e.g. through procurement policies. Measures to release state resources including through restructuring of the state debt could be implemented;
 * Publicly owned resources in the hands of parastatals, who are massive investors in infrastructure, and potentially could drive greater investment in underdeveloped areas, if subjected to the appropriate developmental framework;
 * Public sector financial institutions- the channelling of investment and credit via expansion of existing institutions, such as the Post Office Bank, DBSA etc and the creation of new ones, using mechanisms such as differentiated interest rates to allow communities access to affordable credit;
 * Socially controlled resources in the hands of the relatively embryonic social sector, which can be promoted and leveraged through various public and social policies, in terms of credit, union investment, promotion of co-operatives etc;
 * Semi-social financial sector/retirement funds- theoretically investment by these institutions, in the private and public sector are controlled by their members, but in reality various interventions are required to give members meaningful control. Further the introduction of Prescribed asset requirements of say 20% would enable government to channel many R billions into social development;
 * Private Capital, foreign and domestic- this is obviously the most difficult sector in terms of directing investment, but various strategies have been proposed, ranging from direct intervention to indirect measures to channel private capital[30]. These include the ‘crowding in’ effects of large-scale public infrastructural investment, and growth strategies; supply side measures; incentives for productive investment and disincentives for speculative investment; capital controls etc. The role of measures to expand domestic and regional demand has also been raised. In relation to private finance capital various possibilities of regulation to ensure provision of affordable credit have been mooted, as has the introduction of Community Reinvestment Legislation to compel lending to the historically excluded majority.

4.24 Such an investment strategy would have to form one pillar of a broad transformation programme. It could only be successfully implemented as part of a new approach to dealing with the problems of the transition, addressing the obstacles we have encountered, and reversing some of the strategic errors we have made. This would need to include:


 * A coherent Alliance strategy or programme for implementing the RDP, and stamping our authority on governance;
 * Counteracting the influence of other forces contesting the direction of the government bureaucracy, and other organs of state, and their impact on key areas of policy and legislation;
 * Harnessing the popular energy characterising the 1980’s and the early 1990’s, to drive a popular transformation agenda, and to deepen the participatory character of our democracy[31];
 * Developing a counter-strategy to that of capital and other forces from the old ruling bloc who have sought to direct the transition to advance their own interests.

[1] Differences on policy, while often presented as clear differences between COSATU and the ANC are usually differences with Government or Government Departments. ANC policies tend to be closer to ours, or undefined. On issues such as privatisation, economic policy, industrial policy etc, the ANC either has no clear policy or there are significant disagreements with government- this policy confusion has emerged in Alliance meetings. [2] The claim was made in the last bilateral that COSATU comrades are relying in a one- sided way on pre-1970’s documents, when the international balance of forces was totally different. As is indicated below this is completely incorrect. The Alliance document confirms that the radical historical perspective continues into the 1990’s. While lip service is sometimes paid to this perspective, in reality there is a major disjuncture with many of the government policies and programmes adopted post-1994 [3] The issue is not so much as some claim that there is a ‘radical version of the NDR’; but whether a limited or conservative version which is being advanced in the name of the NDR, without fundamentally transforming social relations, qualifies for the name- National Democratic //Revolution.// [4] This approach is similar to that of Pallo Jordan (1993) who argued for a strategy, which establishes “a number of //strategic bridgeheads// which enable you to empower the working class and the oppressed, and from these bridgeheads you begin to subordinate the capitalist classes to the interests of society in general”. [5] On this point Przeworski (1991) argues that in transitions from authoritarian rule “the pressure to stabilise the situation is tremendous, since governance must somehow continue. Chaos is the worst alternative for all.” [6] One supporter of the neo-liberal theory of ‘elite transitions’ writes approvingly of the SA situation “Elite coalescence has been the hallmark of SA’s transition…Elite concluded accords do not work unless elites are able to demobilise their own constituencies.” (Sisk 1995) [7] The main reservation expressed in the movement including COSATU, particularly in the post-94 period was that there was inadequate strategising on how to //implement// the policies of the RDP in the face of anticipated resistance. There was also insufficent detail on some issues in the RDP document, and others such as macro-economic policy fudged the issues to such an extent, that they were open to contradictory interpretations. It was not realised that influential elements with the Alliance harboured serious reservations either about the correctness or viability of RDP policies. Their silence on this score however may have reflected the overwhelming popularity of the RDP perspectives; and/ or a belief that the RDP was an effective mobilising platform for a comprehensive elections victory. [8] Obviously these weren’t the only discussions held with international multilateral institutions such as IMF World Bank and the then GATT. But as with the 1993 loan, commitments made during these discussions were often unclear, and not generally preceded by proper consideration of the implications of a particular approach, or its alternatives. The growing role of some of these institutions, such as the World Bank, in advising the government, or seconding technocrats, was also a cause for concern. [9] Patrick Bond ‘Elite Transition’ p178. Although Jay Naidoo publicly endorsed the loan at the ANC’s request, there was never any debate in the Alliance on the terms proposed for the loan. [10] V. Padayachee “Progressive Academic Economists in SA” ROAPE No. 77. Padayachee was involved in MERG, the RDP, and was appointed to the board of the Reserve Bank in 1996. [11] P Bond ‘Elite Transition’ p98 [12] V. Padayachee op.cit [13] Bond p99 [14] The issue of the need for a national co-ordination and planning centre has been raised a number of times in the context of the successful deployment of this approach in developing societies undertaking reconstruction, particularly in East Asia, Japan etc. [15] The National Growth and Development Strategy, supposed to take forward macro economic and other elements of the RDP, was drafted under the supervision of the RDP Office, in early 1996. The NGDS process which was being discussed in structures of the movement (including the ANC NEC) was abandoned. It was later replaced by GEAR, which had not been drafted under the political oversight of any of the Constitutional structures of the movement. [16] See e.g. various discussion papers of the COSATU Executive, Accelerating Transformation Chapter 6, and COSATU’s proposal to the cancelled Alliance Summit on the Jobs Crisis, August 1999. [17] The ANC itself has not been involved in the formulation of critical aspects of government policy. The NEC, famously, only discussed GEAR itself, after it was announced in parliament. On some issues the ANC clearly has no policy, such as privatisation, as was revealed in the Alliance 10 a side in 2001. In other cases the input of ANC constitutional structures e.g. on Industrial Policy appears to have been largely ignored. [18] E.g. in terms of accessing finance for reconstruction, prescribed assets, restructuring of the GEPF, and renegotiation of debt, have all been ruled out as unacceptable to the market. [19] This comment was made by Andrew Donaldson in a Black Sash organised debate with COSATU in late 1996. [20] The NEM was the neo-liberal economic model adopted towards the end of the apartheid regime, designed in part to deny the democratic government access to the resources required for far-reaching transformation. [21] See also the notion that reform managed from above needs to give capital certain guarantees: Larry Diamond (1993) writing on liberal capitalist democracy in the 3rd world argues “If reform is to be adopted without provoking a crisis…(there must be) sufficient overall effectiveness, stability and guarantees for capital on the part of the democratic regime so that privileged economic actors will have a lot to lose by turning against it”. [22] This would go a long way to explaining why there has been such a reluctance to engage: whether on the substantive issues in alliance summits and other alliance processes; on the proposal for an alliance programme for governance; on implementation of the elections manifesto and RDP; and on proposals for an Alliance political centre. These would all be incompatible with the ‘arms-length’ approach used to manage policy discord. Presumably it was hoped that this would ultimately lead to the weakening/ marginalisation of radical/ ‘dissident’ viewpoints. [23] “Common objectives of the Tripartite Alliance” ANC March 2001 [24] Trotsky argued that it wasn’t possible to prosecute a revolution in one country- there had to be an international socialist revolution. [25] John Saul (Monthly Review 1997)- questions the ANC’s “claims to be powerless in the face of the market place…(This has a disingenuous ring when) measured against the fact that the movement has itself… thrown away so many of the instruments that might have been useful in crafting a more assertive strategy towards capital”. The type of instruments referred to here include an expansionary budget, tax and fiscal policy, capital controls, financial measures such as prescribed assets etc. [26] The issue is not so much whether in the strict sense, this set of policies is ‘neo-liberal’ in character, although many would argue that it qualifies for the label. The real issue is whether they are the appropriate policies for us to adopt. Further one has to question why parties, which openly support neo-liberal economic policies, such as the DA and NNP, appear to be largely in agreement with these elements of government economic policies. [27] To the extent that capitalist relations of production continue to dominate our social formation. The issue however is the terms of this accommodation, and the ability of the popular forces to reconfigure these social relations, through the use of social and state power to discipline and limit the power of capital. [28] Review of African Political Economy 1997 [29] The 6,1% growth rate recorded in 1996 dropped to 3,1% in 1997, then plunged to negative growth of 0,7% in 1998. The private sector’s share of total fixed investment has fallen from 73% to 68% between 1996 and 1998. Source: ‘Ngqo!’ 1999- bulletin of the NIEP. [30] Capital is of course not homogenous, and secondary contradictions between fractions of capital – black business vs. white business, manufacturing capital vs. financial capital, large conglomerates vs. SMMEs – are also apparent. None of these are absolute dichotomies – black managed businesses are often backed by predominantly white financiers, manufacturing and financial capital tend to be highly integrated in the South African conglomerate structure, and so on. [31] We need to take seriously the commitment in the RDP that “requires fundamental changes in the way that policy is made and programmes are implemented. Above all, the people affected must participate in decision-making” (p7) and “Trade unions and other mass organisations must be actively involved in democratic public policy making” (p131)