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February 1996

Restructuring state assets


In spite of a lot of talk about the "restructuring" of state assets in South Africa, few people seem to know exactly what it means. Some say "restructuring" means "privatisation" (that pleases capitalists and their supporters), while others argue that it doesn't. Some argue that "privatisation of assets" doesn't mean that assets will be sold off, but they don't explain what they think it does mean.

At its meeting of 20th January, the Political Bureau of the SACP finalised a statement that casts some light into the darkness.

Statement of the Political Bureau

At the beginning of December, Deputy President Thabo Mbeki announced government's negotiating positions on restructuring Telkom and the state-owned transport sector. Most of the media has since buried the whole issue in a thick fog. It has been virtually impossible to understand what is going on.

The government's plans are presented in the media as simple "privatisation". COSATU is supposed to be rejecting "all restructuring". Some journalists have said the SACP supports the government against COSATU. Others have claimed the exact opposite, saying the SACP and COSATU stand together against the ANC. According to these latter reports "the ANC government must now break with mindless left-wing radicals in the Party and unions".

Confusion is heaped on confusion. So what on earth is going on?

Restructuring does not have to mean privatisation

For many years, the SACP, COSATU and the ANC have argued that the large public sector built up during the apartheid years has to be restructured.

Eskom, Telkom and other state corporations have been used to foster the interests of the white minority. They have provided sheltered employment and artisan training for white workers. They have served as a nursery school for aspiring white entrepreneurs. The services they have provided were directed to the white suburbs and the industrial needs of apartheid capitalism.

For us, restructuring has always meant transforming the public sector to meet the interests of the majority. No-one in the alliance has ever argued against restructuring!

The critical question is:

What kind of restructuring?

In the past five years there has been a wide-ranging debate within our alliance over how to transform the public sector. At times, some within our broad movement have been influenced by views that the SACP does not accept:

  • "selling the family silver" - some have argued that we need to sell off some or most of the public sector to "raise money for the RDP". They argue that the present public sector is bloated and inefficient, and that it is a financial burden on our new democratic government. The SACP has described this argument as a call to sell the roof to pay the rent.
  • "the Malaysian route" - other comrades have also tended to present restructuring as a selling-off exercise. But in this case the emphasis is on "black economic empowerment" -meaning selling state assets to help a previously disadvantaged, aspirant black bourgeoisie.

It is very important that these views do not become dominant views within our ANC-led alliance. Indeed, Comrade Mbeki's GNU announcement in December explicitly rejected the family silver approach. As for "black economic empowerment", we need to support the broad-based economic empowerment of the great majority, and not just the narrow "empowerment" of a few. Once more, this was the GNU announcement's basic approach.

Affordable, good quality services for all

The SACP and COSATU have consistently argued that the main function of state owned enterprises is to drive the RDP process. Central in this role is the provision of affordable, good quality services to all South Africans. Our starting point is social needs and not profits. Privatising Eskom or Telkom will mean that electricity or telephones will be provided according what is profitable, not what people desperately need.

This does not mean that the private sector has no role in the RDP. Overcoming poverty, creating jobs, providing housing - these are not the sole concern of an overburdened state, while we allow the private sector to conduct business as usual.

Part of the role of the public sector is to spearhead a growth and development process that draws in private sector resources towards our priorities. On its own, the market will never do this.

This developmental (as opposed to welfarist) approach to the public sector, means that we may need to look at strategic partnerships with the private sector.

So what did the Government of National Unity say?

Comrade Mbeki's announcement agreed with all of the above. It approached the question of restructuring from the perspective of the RDP and the provision of services. Contrary to many press reports, the GNU position actually calls for the basic retention of Telkom, Transnet, SAA, etc. in public hands, while allowing for some minority strategic partnerships with private companies to bring in technology, capital, or other advantages (eg. SAA co-operating with one or more international airlines on routes and schedules).

The SACP has welcomed this basic, developmental starting point. We see in it a rejection of mindless privatisation that simply takes the resources of the country out of the hands of the people. We also welcomed comrade Mbeki's very clear statement that the positions were a point of departure for negotiations, in particular with labour.

So why did COSATU object?

COSATU does not oppose restructuring. But it has had several concerns with the GNU announcement:

  • the GNU announcement leapfrogged over ongoing alliance discussions;
  • the (largely) white management in some of the key parastatals is proceeding unilaterally with major restructuring, regardless of what our comrades in government intend;
  • the GNU announcement made proposals, for instance, on restructuring Telkom without first developing an overall national telecommunications policy. Amongst other things, this has meant that the Telkom proposals do not take into account other major telecommunications resources in public hands - Transtel (a subsidiary of Transnet), in Eskom, and in the SANDF.
  • there are a number of specific proposals that COSATU does not accept. For instance, the GNU proposals to sell off some smaller corporations.


Job creation is one of the central objectives of the RDP. There is concern in COSATU and the SACP that the restructuring process is not accompanied with enough clarity on a job creation strategy.

This is not to say that every job in the public sector can be retained at any price. A simple defensive struggle of this kind, without a clear longer-term job creation vision, will be self-defeating. On the other hand, there is no way that labour, or our country at large, can accept major retrenchments on the basis of some vague promises about future growth and jobs.

A much clearer, multi-pronged and systematic plan for job creation must be negotiated. This is a collective responsibility throughout the alliance.

What is happening now?

Much of the media has, of course, presented the debate and the worker actions by COSATU and affiliates as "the end of the alliance". This is their usual wishful thinking.

More recently, as it has become obvious that the alliance is not about to split, the same media has accused the ANC-led government of "caving into COSATU and its communist allies".

Yes, there have been real debates, real disagreements, and real concerns. But over the last weeks, in ongoing bilaterals between government and labour, a deepening strategic consensus is being consolidated.

The SACP will play its role in struggling for a clear strategic consensus within our alliance. That consensus must be based on restructuring state assets to ensure that we have a dynamic public sector capable of spearheading the RDP.


Dear Comrade

It would be better for me if I were at least a novice in the sphere of economics and government. Unfortunately, I am just a simple comrade, who argues on an ideological basis. My concerns need to be addressed by comrades who have been following economic developments more closely.

The RDP document mentions privatisation of assets if proved necessary. The Government of National Unity talks about restructuring, which, to me, does not differ from privatisation.

I find four problems:

  • The Alliance should convene a symposium, so that we, as the majority both in and out of Parliament can reach a common understanding on the restructuring of the assets of the 62% of voters who voted for the Alliance.
  • The Cabinet is dominated by the ANC. As leader of the National Democratic Revolution, the ANC should seek some way of ensuring that the joint ventures include COSATU and other unions.
  • Would it be possible for COSATU provident funds to be used in a joint venture with the government, so that the assets in question will be owned 60% by government, 25% by labour and 15% by business? Otherwise, the National Democratic Revolution will be privately owned. When and how will future democratic governments be able to nationalise?
  • I am told restructuring is necessary because some parastatals are not profitable to the state. People say private individuals would make them efficient. This tells me that government has a problem. Why is it not empowering itself to have the same administrative skills as private individuals?

I think the Government of National Unity led by the ANC is failing to move towards socialist democracy and a mixed economy. I feel we should not argue for privatisation, but encourage nationalisation. We cannot say we are suspending our ideological beliefs in situations that benefit the few.

Maybe we need to convene a policy conference or workshop, as was suggested at our 9th Congress.

Nhlanhla Buthelezi

(We hope our main article will clarify some of these problems - Editor.)


The SACP in Southern Natal sees as useless the Commission of Enquiry to be appointed by the KZN Premier and MEC of Safety and Security, Dr Frank Mdlalose of the IFP. What is needed, the SACP says, is for the perpetrators of violence to be brought to justice.

On January 4th, the Southern Natal Region of the SACP issued a statement, saying:

"The commission would not focus on individual incidents, but would look at the full cycle of violence. It therefore serves no purpose at all.

"We, the SACP, believe that the South African people know that the violence was between the pro-democracy forces, who stood up to fight oppression, and the pro-apartheid forces, who committed themselves to promote tribalism, racism, sexism, anti-unionism and anti-freedom of association. These pro-apartheid forces are linked to activities of former general, Magnus Malan.

"If the Commission won't tell us who burned down houses in Ulundi in 1993 and who killed people in Empangeni, Estcourt, Port Shepstone and other parts of the province, the commission is a joke."

A spokesperson for the Southern Natal region says that the local press ignored this statement, and only Radio Zulu gave it publicity. This is what commonly happens, he says.



Vishwas Satgar of the SACP Political Secretariat looks at a relationship that he believes will be harmful to the growth of the new South Africa.

The role of the World Bank in South Africa was a contentious issue at one time. Positions in the debate polarised: there was hostile opposition, and a perspective that argued for constructive and open dialogue.

The former position was supported by arguments describing the destructive role Structural Adjustment Programmes (SAPS) of the World Bank have played in Latin America and, more impor-tantly, in Sub-Saharan Africa - in countries like Malawi, Tanzania, Zambia and Zimbabwe. The thrust of this position argued that borrowing from the World Bank produced an imperialist situation which kept the borrowing country in a debt trap, opened its economy to the dominance of foreign capital, failed to contain inflation, and, most importantly, brought about very discreet structural shifts.

There was also a position that favoured constructive dialogue with the Bank. It was based on an assumption that the World Bank could be co-opted; that a lending relationship with it could be favourable to South Africa. This point of view has prevailed.

During the past six years, the World Bank has tried hard to gain a presence in South Africa. Now, Roberto Gonzales Cofino, an official of the World Bank, has produced a document entitled, "A Successful Approach to Participation: The World Bank's Relationship with South Africa". He presents the World Bank approach to South Africa as a successful model for interventions in other countries.

In practice, World Bank participation in South Africa has amounted to the production of "informal discussion papers", focusing on a range of topics from trade and industry to agricultural policy. Research on issues like poverty has been done in collaboration with certain NGOs, South Africans have been taken into the Bank on interneship programmes, and the Bank is providing technical assistance in planning and costing the RDP.

Besides legitimising its presence in South African civil society, the World Bank has, according to Cofino, influenced policy-making. Cofino describes the extent of the influence by saying: "During the formulation of ANC economic policy in 1992 and 1993, the ANC's exposure to the Bank's policy work was evident in the party's political documentation that emerged."

The World Bank's presence in South Africa has given it a strategic advantage. Constructive dialogue, with the hope of securing a "preferential" lending relationship, has failed. Any finance obtained from the World Bank would be on policy terms dictated by it.

The usual neo-liberal conditions - privatisation, liberalisation of trade, monetary restraint or high interest rates, deregulation, cutting state subsidies, and so on - would be imposed.

The challenge to the left is to disengage from the World Bank, and actively oppose its presence and influence within civil society.

This would mean mass action: for example, pickets outside the World Bank office, calls for scrapping the apartheid debt. Regarding the new government, there should be resistance from below to prevent a lending relationship with the Bank.



Howard Yawa is SACP provincial secretary in the North-West. He is also regional organiser for the National Union of Mineworkers. He spoke to Umsebenzi about the political situation in his province.

What are the particular problems? One serious problem has been the 3,000 recent retrenchments at the Buffelsfontein gold mine, once owned by Gengold and taken over by Randgold when Gencor "unbundled". Some of the workers retrenched came from Lesotho, some from Mozambique, some from the Eastern Cape, some from the North-Western Province itself. Comrade Yawa says there was negotiation between management and unions, but it was "hasty," and the resultant retrenchment package was "controversial": one fortnight's pay for every year worked.

At present, he says, the major focus of Alliance activity is on education. The overcrowding in township schools has been serious, and there is a need to equalise class size with the schools in the white areas. Enrolment has gone ahead, while comrades from the Alliance are involved in monitoring the intake, and helping to redirect children from overcrowded classes to schools where there are places to spare.

Most of the Party comrades are involved in this work.

The Department of Education in the province has been co-operative, and is working hard to accommodate all the children. They hope for a maximum class size of 40.

In the meantime, more schools are being built, and this will provide jobs.

Comrade Yawa has a word of criticism and of warning. "I'll be very frank," he says. "What we need to be critical about is that there is, in essence, no co-ordination within the Alliance at the level of provincial leadership."

However, he hopes that this will be put right. An Alliance leadership summit meeting is planned for 2nd-4th February, with the aim of launching a joint RDP structure in the province. He hopes that this structure will be in place by the end of February, and will have begun focusing on the progress of the RDP in the North-West.


Party branch aims for local transformation

The SACP branch in Tembisa on the East Rand in Gauteng sees the ANC majority in the local elections as an opportunity to drive through a creative plan for democratic transformation of the two apartheid cities of Tembisa and Kempton Park.

The plan was approved in principle by the branch annual general meeting in December, and the new branch executive has begun to work out the details.

The aims include:

  • Transforming the apartheid budget for Tembisa and Kempton Park into an RDP budget.
  • The branch says that the budget has been "heavily skewed in favour of the whites," and suggests, for example, that work on Kempton Park roads should be suspended for five years to allow work on Tembisa roads.

  • Transforming the local civil service and police.
  • More than 90% of senior management posts in Kempton Park civil service are held by white male Afrikaners. Of the police stations, the branch says, "Racism and sexism are pervasive ... many black people continue to be harassed, assaulted and racially insulted." The branch will insist that these structures are democratised.

  • Making the RDP a people-driven programme in the area.
  • Tembisa branch says: "Popular and working class participation is the key to transformation." It wants to establish development forums to strengthen its efforts.

  • Transforming the role of local capital.
  • The branch says: "We must challenge the local private sector claim to support the RDP. We must ensure that they invest in bulk infrastructure, houses, community projects, not in shopping malls. We must resist any mindless privatisation of public resources."

    The new local council is already putting a plan into practice for the electrification of Tembisa.



Russians went to the polls on December 17th, to elect MPs for the Duma, the parliament. Of 450 seats, 225 were contested on party lists, and 225 in single-seat constituencies. Only parties winning 5% or more of the vote on the PR lists gained entry into Parliament.

The Communist Party came first in 70, and second in 13, of the 89 regions and republics of the Russian Federation, and now holds 34.6% of the seats. The comments we print here are from two Russian citizens living in Moscow.

The contending parties

Vyatcheslav (Slava) Tetyokin describes the line-up of political parties before the elections.

The multi-party system, advocated by the West and its spokespersons in the USSR, acquired a grotesque character in Russia, with over 40 parties taking part in the elections. They can be placed in several main groups.

The Left and patriotic forces were represented by the Communist Party of the Russian Federation (chairman: G Zyuganov), the Russian Communist Workers' Party (G Tyulkin), the Agrarian Party (M Lapshin) amd the "Power to the People" bloc, led by the former prime minister of the USSR, Nikolay Ryjkov.

There were outright pro-Western, pro-capitalist parties representing the new bourgeoisie, such as "Our Home - Russia", led by the prime minister, V Chernomyrdin; the "Democratic Choice of Russia"; the "Apple" bloc, and the "Forward Russia" movement, this last headed by the former IMF director for Russia.

Emerging national capitalism was represented by such figures as Vladimir Zhirinovsky of the Liberal Democratic Party, and General Alexander Lebed of the "Congress of Russian Societies", a hard-line nationalist who enjoys a lot of friendly attention in the West, and the "Women of Russia" bloc.

There was no great difference between the second and the third groups, though they all used patriotic terminology in an effort to attract a mass following. They introduced new personalities, but mainly represented different approaches to maintaining existing policies.

There were numerous "sofa parties", so called because their membership could be placed on one sofa. They were formed by politicians without a mass following, and driven by personal ambition.

Practically all parties, including those who had been backing President Yeltsin until a short time before, declared their opposition to him and his economic and social policies.

Before the elections, it was becoming clear to the electorate that the new "political freedoms" (highly questionable after the shelling of the Russian Parliament in October 1993) were masking the introduction of the present economic system. This has enriched a tiny minority of bureaucrats and criminals, while impoverishing the overwhelming majority of the people who, until the destruction of the USSR, enjoyed modest but secure lower middle class prosperity.

The results and after

Vladimir Shubin discusses the implications of the election results, the Communist gains, and prospects for the future.

The elections showed that the verdict of the working people was clear enough: they reject IMF-inspired government "reforms." The data published by the Central Electoral Commission clearly indicated major changes in the balance of political forces.

The failure of the ruling alliance, "Our Home - Russia", founded some months ago by prime minister Victor Chernomyrdin, was a striking feature. It got 11.2% of the vote at national level; that is, 50 seats. The results of its individual candidates were even worse. Nothing helped it; neither a biased coverage by TV and other mass media, nor glossy posters all over the country, nor efforts of the state administration at all levels.

The performance of another right-wing bloc, openly pro-Western, "The Democratic Choice of Russia", headed by former prime minister Yegor Gaidar, the "architect" of the "free market" reforms in Russia, was even more dismal: 9% of the votes.

The moderate "free marketeer", Grigory Yavlinsky, who is seen in the West as the best replacement for Yeltsin, retained his share of the electorate: 6.9%; 31 seats plus 14.

Finally, support dropped for the ultra-nationalist Liberal Democratic Party of Vladimir Zhirinovsky.

The shift to the left is obvious: the Communist Party of the Russian Federation, headed by Gennady Zyuganov, became a majority party, with 22% of the votes: twice its showing at the last elections. Besides, 57 communist candidates won elections in the constituencies. Altogether, communists have 34.6% of the seats.

As in other countries, communists didn't have money for TV shows or glossy posters; they attracted people by their programme, by tireless efforts of their activists.

However, the unity of left forces in Russia is still lacking. Although the leading role of the Communist Party of the Russian Federation (CPRF)is not questioned, some other left and patriotic groups stood for election on separate platforms, and failed to gain the 5% necessary for getting into parliament. These included the Communist Workers' Party, the Agrarian Party, "Power to the People", and "Party of the Working People's Self-rule".

The election also demonstrated the weakness of the major trade union grouping, the Federation of Independent Trade Unions of Russia. Its leaders, preaching "social contract", joined the Union of Industrialists and Entrepreneurs, to form an electoral alliance, but got only about 2% of the vote.

Strange as it may seem, the electoral collapse of Chernomyrdin's "Home" doesn't mean his resignation. It has already been announced that the Prime Minister will retain his post, even after becoming "Mr Ten Per Cent". Business as usual? Looks like it, because the present Russian Constitution, pushed through a referendum two years ago, prescribes the prime minister's resignation only after the election of the president.

It will hardly be possible to avoid changes, though Yeltsin has declared: "The old policy can be conducted with the new composition of the Duma." The authority of Parliament is limited in Russia today, but MPs can restrain the government's actions, especially when the government line is explicitly rejected by the vast majority of the people.

The balance of forces in Parliament is likely to be determined by about a hundred "independent" MPs, and there is a very good chance for a left-centrist majority. Gennady Seleznev, former editor of Pravda, who was in South Africa in April 1994 to monitor the elections, has been elected chairperson of the Duma, with the support of the Agrarian and People's Power grouping, as well as the Communists.

A reshuffle in the Cabinet is taking place; the pro-Western (and pro-De Klerk) foreign minister Andrei Kozyrev has resigned. Observers believe that Yeltsin is getting rid of his most notorious cabinet ministers, in preparation for the presidential race; one of these has been Anatoly Chubais, responsible for a disastrous privatisation programme.

One of Yeltsin's aides even spoke about communist participation in the government, though in unimportant posts, but the Communists have announced that they would be ready to serve in the government only after a radical change in its course.

Many people regard the 17th December election as just a rehearsal for the presidential election, in June 1966. Zhirinovsky and Yavlinsky say they intend to stand, and so does the Communist leader, Gennady Zhuganov. Yeltsin has promised to announce his intentions in February.