The Global Transformation Charter and the Financial
Services Charter: Spaces for Workers and the Poor?
By Blade Nzimande, SACP General Secretary
The developments surrounding the adoption of a
Mining Charter in 2002 have created a new momentum on sector charters.
This includes the government-proposed global transformation charter, and
financial services’ charter. While these developments should be
welcomed, there has been little public discussion or debate around the
whole charter process, except regarding the mining charter. The "charter
processes" are a result of two interlinked developments: on the one
hand, increased pressure for meaningful black economic empowerment and,
on the other, the struggles waged by the working class for economic transformation,
poverty eradication and job creation.
Some sections of the bourgeoisie are bowing to pressure
and would like to transform this process into an opportunity to promote
and hopefully co-opt new black sections of the capitalist class, thereby
consolidating a market economy. Other sections of the bourgeoisie, particularly
medium and domestic capital, see these processes as part of creating a
cushion against capitalism, by reducing the high levels of poverty which
are a threat to any future sustained process of capital accumulation.
On the side of capital, it is therefore not an act of generosity nor a
process that will automatically lead to the transformation of the economy
in favour of the mass of the people of our country. It cannot be a process
driven by private capital alone nor a process that is overwhelmingly dominated
by the interests of the capitalist class.
As we point out in the political programme of our 11th
Congress, market forces are fundamentally incapable of promoting anything
more than a highly distorted and stunted development of productive forces.
This is a result of prioritisation of profit maximisation under capitalism.
Private capital by its own volition is incapable of planning, investing
and leading economic infrastructure projects that are critical to promoting
investment in productive enterprises.
For the above reasons, the SACP wants
to build momentum to transform this into an important component of the
generalised struggle to transform the current growth path in our country
in favour of the workers and the poor. It is a process that must be driven
by heightened working class mobilisation in order to ensure that the primary
beneficiaries are the workers and the poor. It is a process that is both
an expression of the class struggles in the current period to shape a
post-apartheid economy, as well as a site of class struggle in itself.
Unless the working class approaches these processes in a strategic manner,
other class forces will seek to shape these processes to favour
their own narrow class interests.
Black Economic Empowerment
Underpinning such charters must be a struggle
to ensure that they do not become instruments of a black elite economic
empowerment (‘BEEE’), instead of broad-based economic empowerment
(‘BEE’). In theory, there is a broad agreement within our
Alliance, as well as by the BEE Commission that the point of departure
of any empowerment in our country should be poverty eradication, job creation
and the empowerment of the mass of our people. In practice, however, there
is a tendency to equate black economic empowerment with the empowerment
of a small elite.
We must constantly inject a race, gender AND class perspective
into the debate about the character and direction of economic transformation.
Emphasis in BEE must be placed on the aspirations and crises confronting
workers and the urban and rural poor, who are overwhelmingly black. It
is for this reason that we need to ensure that the black economic empowerment
advisory council announced by the President in his state-of-the-nation
address on Friday is constituted such that it represents all sectors of
South African society, principally those who stand for the interests of
the workers and the poor.
The Charters must be driven by a Growth and Development
Of particular concern to the SACP about these
charters is that there seems to be no concrete connection between the
drawing up of these charters and an integrated growth and development
strategy. It is essential that these processes be directly linked with
the forthcoming growth and development summit, otherwise we run the risk
of these charters operating in parallel and even in contradiction to any
growth and development strategy.
Two issues are critical in linking the drawing up of these
charters to a growth and development strategy. The first is that both
these charters and the growth and development strategy must be underpinned
by the theme of pushing back the frontiers of poverty, through job creation
and creation of wealth through redistribution of economic resources. Secondly,
these charters must principally address the five key themes already identified
by the Alliance as the foundations of a growth and development strategy.
In other words, underpinning any economic empowerment charter must be
the question of how to increase investment in our economy, particularly
the mobilisation of domestic resources for job-creating investment. In
addition, such charters must include clear measures and targets for social
equity, particularly the empowerment of working and poor women, job creation,
a clear strategy for local economic development and measures to support
strategies for sustainable livelihoods for our people. We hope these linkages
and perspectives will underpin the government-driven overall economic
empowerment charter. These charters must feed into, and be informed by,
the evolving perspectives on a growth and development strategy.
Of fundamental importance for both a growth and development
strategy and economic empowerment charters is transforming our economy
in an integrated manner. There is a danger at the moment of a dual and
disjointed strategy emerging in attempting to transform our economy and
address poverty. The otherwise correct emphasis and measures envisaged
to address the poor and those on the periphery of the economy are sometimes
seen in isolation from the need to transform the mainstream of the economy.
For instance, the SACP has embarked on a programme to make a major contribution
to the building of a co-operative movement in our country, including the
building of a viable sector of financial co-operatives. We are acutely
aware that these should not just be survivalist activities aimed solely
at containing the worst forms of poverty, but should be built to become
major players in the economy. In other words, co-operatives should be
seen as a central component of an overarching industrial strategy. To
relegate them to the margins, together with other poverty alleviation
strategies, runs the danger of leaving the mainstream economy intact,
thus reinforcing the enclave nature of South Africa’s capitalist
The Financial Services’ Charter
While the SACP welcomes the drawing up of a financial
services charter, this must not be a secretive and board-room process
driven solely by finance private capital with no mass involvement, as
it currently is. It must be an open and transparent process. It is not
enough for the banks and insurers to say they are quietly consulting with
the government without public debate and the involvement of the mass of
our people, who should be the primary beneficiaries of any transformed
financial sector in our country. One main obstacle to the transformation
of our economy in favour of the majority of our people is the inaccessibility
of finance and credit for development, including housing finance and support
for small and medium enterprises. The process of drawing up the financial
services charter must be directly linked to the growth and development
strategy and the summit.
To this end, over the next few months, and culminating
in Chris Hani month in April this year, the SACP will be convening no
less than 40 public meetings throughout the country to re-energise our
struggle for the transformation of the financial sector. The aim of these
meetings will be to inform our people as to where we are since the NEDLAC
agreement of August last year. We will also be soliciting the views of
our people as to what they would like to see included in a financial services
We will be embarking on these activities as part of taking
forward the agreements reached at NEDLAC. We believe that any charter
in the financial sector must build upon and not subtract or detract from
the agreements reached at NEDLAC, and its focus should be the speeding
up of the implementation of these agreements. It is therefore important
to remind ourselves what was agreed upon at NEDLAC. The first and most
important agreement was that we need to ensure access to basic and affordable
financial services, including promoting savings and improving the quality
of life of the majority of our people.
Another important agreement was that there is an urgent
need to increase overall investment in particular projects that strengthen
infrastructure, create jobs, meet basic needs and stimulate economic activity
in the poorest regions and communities. In particular, we agreed at NEDLAC
on establishing a system to identify such projects and engage on the establishment
of realistic targets and monitoring mechanisms. The NEDLAC agreement also
includes establishment of a code to end unfair discrimination, changing
the patterns of ownership in the sector, and ending unfair discrimination
against people with HIV/AIDS. With regard to the latter we further agreed
that appropriate financial services for people living with HIV/AIDS must
be developed, and their access to housing finance and other services must
be ensured. It is urgent that we move fast on this front as the HIV/AIDS
pandemic bites deep into the social and economic fabric of our communities!
A critical agreement at NEDLAC was on the regulation of
the credit bureaux and the need for an urgent investigation into the regulation
of micro-lending as part of addressing the very high levels of indebtedness
of the working class. This indebtedness to loan-sharks is directly related
to the inability of the banks to provide accessible micro-credit to the
majority of South Africans. We welcome the proposed new legislation on
co-operatives, including financial co-operatives, as well as the Village
Banks summit to be convened by the Department of Land Affairs and Agriculture
next month. We believe that these will go a long way towards addressing
the time-bomb of high indebtedness of the working class and lack of micro
credit for development, particularly in the rural areas.
The other danger of a financial services’ charter
driven primarily by the private sector is that it might not put enough
emphasis on public financial institutions like the Post Bank. In fact,
one important agreement reached at NEDLAC was that proposals around the
developmental impact of these institutions will be developed. As we mobilise
around a financial services charter, we expect these agreements to be
firmly incorporated into any charter on financial services and carried
through to the growth and development summit.
A related matter that is of fundamental importance to any
financial services charter, global transformation charter and a growth
and development strategy, is that of workers’ pension and provident
funds. We are quite concerned for instance that the Public Investment
Commission, in charge of investing the Government Employees’ Pension
Fund, is happening outside of a growth and development strategy, and with
no visible engagement with the trade union movement as a whole. It is
absolutely critical for the trade union movement to have an effective
say over how these funds are invested, including the role of union-linked
investment companies. It would be a travesty to allow any new investment
criteria without involving the trade union movement and its investment
vehicles in setting up the criteria and in directly participating in the
management of these assets. Despite its weight and strength, the South
African trade union movement has very minimal say and control over one
of its most important assets. The SACP has been engaging COSATU and Solidarity
around the importance of taking up this issue as a critical campaign in
the overall transformation of the financial sector. Workers must mobilise
around this issue.
Of fundamental importance to all the
transformation and empowerment charters must be the leading role of the
state. All these developments need to be strategically driven by the state
as part of a growth and development strategy. We must not buckle to neo-liberal
pressure to turn the state into a mere referee or regulator. The working
class must continually be mobilized to ensure that these charters
are peoples’ charters, for the people and by the people, as is the
case with the Freedom Charter. In some way, the Mining Charter has set
Most South Africans
have sat seemingly unaffected by the machinations, dithering and vacillations
of organised business in South Africa over the last few years. NAFCOC
has had repeated leadership coups, resulting in different individuals
and groupings claiming leadership of the once proud Black business chamber.
SACOB, the mainly English speaking business chamber has slowly disintegrated,
the final nails been driven into the coffin by the lately departed CEO
Kevin Wakeford. His other claim to fame was to allege a conspiracy when
the market drove the value of the Rand down to unprecedented levels. Strangely,
he says no conspiracy in its current , seemingly inexplicable rise in
value! AHI, the Afrikaans business chamber has positioned itself as a
non-racial (read Whites and Coloureds) chamber. Apart from the bizarre
notions of the chamber as being a cultural activist group for the preservation
of Afrikaans, its role seems unclear. BSA, the umbrella body of White
business has entered into unity talks with the BBC, the umbrella body
of Black business. A host of other organisations, the NBI, the Business
Trust, the South African Foundation, all compete for relevance, position
and media profile. We need to understand all these gyrations, for underneath
them there is a great deal going on.
Historically, big or finance capital in South Africa has
been controlled by White people. Before the formal introduction of apartheid,
the whites who controlled it were mainly immigrants from the UK, although
some came from other countries. Afrikaners were mainly farmers and Black
business people mainly operated as small business owners, shopkeepers,
traders etc. The key strategic objective of the Afrikaner nationalist
movement was to get control of the economy. It therefore launched a strategy
that saw the creation of Afrikaner capitalists. Sanlam had been founded
earlier in the century as a mutual fund that was central to the task of
making Afrikaners self-reliant. It was also a fund to finance Afrikaner
entrepreneurs. The Ruperts, Wieses, Venters, Ferreiras of today are a
product of this subsidisation policy.
At the end of 50 years of apartheid, the scorecard was
still overwhelmingly in the favour of the original Randlords. The Oppenheimers,
as a prime example, continued to dominate the mining industry and through the
conglomerate Anglo-American, many other sectors of the economy. Old Mutual,
the first mutual fund, had grown to be the largest stock of capital
and a key financier of many entrepreneurs.
Fast forward to 1990 and the unbanning of the ANC and the
SACP. This period saw a process of empowerment aimed at creating the same
opportunity for Black South Africans that had been given Afrikaners in
the apartheid era -one that would create Black capitalists. Black Economic
Empowerment was all the rage. Nail, Rail, and many other companies were
formed to take advantage of this opportunity.
While all this took place, small business people continued,
to run spazas, taxis, hair salons, laundries, funeral parlours, butchers,
etc. They ran these where they lived, spatially segregated as White, Coloured,
Indian, and African. Pension funds, medical aids, funeral schemes, stokvels
or savings clubs have been run on the same lines.
All this makes for an enclave economy but one in which
there are many players who see opportunity in all this. Each duplication,
each additional loop on the supply chain, each rentier, takes a cut. In
terms of organised business the dynamic is the same as in trade unions.
While the interest of workers is one industry one union, the interest
of functionaries is one functionary, one union!
Central to any capitalist system is the relationship between
the state and capital. Afrikaner capital grew mainly as a result of the
apartheid state. Contracts from Spoornet, the SADF, Eskom. etc. built
companies such as Altech. Mining companies were built to rival De
Beers (Trans Hex). Central to the vision of the former ruling bloc of
colonial capital (Afrikaner capital and increasingly international capital)
for the transition in South Africa was and still is the notion
of creating a deracialised capital, a deracialised bourgeoisie, who run
SA INC. on their own terms and for themselves.
Unfortunately, capital is, by its nature competitive. The old
(colonial, English, SACOB) money can't agree with the newish (White Afrikaner,
AHI) money. Both don't trust the new (Black, NAFCOC/FABCOS/BBC) money.
The Black capitalists, whether in NAFCOC, FABCOS, or all together in BBC,
have to compete with one another and so constantly fight factionalist
battles. In the meantime, the former bourgeoisie, have relocated to London,
the old imperialist centre. Not only have the Oppenheimers left, but the
managers of the biggest mutual fund, Old Mutual, left, with the money
that belongs to South African workers!
What does all this signify? Is the ship sinking? Not at
all! This is life in a semi-peripheral, post-colonial society. It is the
rocky road of primitive accumulation and the consolidation of capital.
Since the (old) bourgeoisie have left, and the newish bourgeoisie are
about to leave (watch this space-Vermaak had to resign over the listing
of Sanlam off-shore!), the emerging bourgeoisie must fight, tooth
and nail, paw and claw, to accumulate. Is it any wonder that there is
no unity in organised business? Now that the President has opened up the
debate on the transformation of specific sectors of the economy, it will
get worse and not better albeit with some lessons in order to protect
For example, reflecting on developments at BHP Billiton,
the Business Day (January 22) conceded its earlier enthusiasm for offshore
listings by major South African corporations had been badly misplaced.
"The coup against Gilbertson…graphically illustrates the naivete
with which the SA establishment…has given away the family silver."
However, Business Day´s uncritical support for the Telkom share-offer
suggests that the need to nuance ideological zeal has not been fully digested.
All these point to one thing – South African private capital is objectively
incapable of planning, investing in and leading economic infrastructure
projects ahead of profit maximisation. The disinvestment strategy and
active encouragement of privatisation form part of the capital strike
by business to influence the South African transition in the direction
The key issue is what should poor and working people do
in this period to use this situation to advance their interests?
If you belong to the great majority of poor South Africans,
you might look at the South African economy as a citizen, seeing in the
economy opportunities for publicly-owned infrastructure (managed and legally-owned,
on your behalf, by a democratically-elected government), enterprises collectively
owned by workers, or communities (in the form of co-operatives, burial
societies, etc.). From this perspective you are likely to insist that
private capital must be directed and disciplined towards playing an active,
developmental role in overcoming the crisis of poverty that is choking
off sustainable long-term growth in our society.
Clearly, not all capitalists are the same. Some are bigger
than others, some are older than others, all must compete to survive.
That´s where the difference ends. Where they are all the same is
in terms of the dictates of the logic of the capitalist system. There
can be no patriotic bourgeoisie in the era of capitalist globalisation.
A patriotic bourgeoisie is a bourgeoisie that will fail and be eaten up
alive by predators. What counts is the strength of the working class,
to be able to organise itself to face these fractions of capital, negotiate
with them and extract the most for itself as a class. The Growth and Development
Summit is critical in this regard.
In doing so the working class must organise its own funds,
its own capacity and it must engage with capital whatever its colour with
a single purpose in mind. It must lead capital and ultimately defeat it.
The gyrations are amusing. The key issue is control of the economy.