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Umsebenzi Online

Volume 13, No. 42, 9 October 2014

In this Issue:


Red Alert

Mobilise people's power to transform the financial sector and build a People's Economy!

Together with our allies and other progressive organisations we have scored important victories since the launch of our 'Make the banks serve the people' campaign in 2000. This campaign has now developed into our broader Financial Sector Campaign.

We have notched up, amongst others, the following victories:

  1. We fought for access to banking services and achieved Mzansi Account for the millions of our people.
  2. We fought for financial service regulation and institutional enforcement and we achieved the National Credit Act and the National Credit Regulator.
  3. We fought and achieved regulatory legislation for the establishment of Co-operative Banks, and for the Co-operative Banks Development Agency to support the development of Co-operative Banks.

In fact without the foresight of our campaign and its victories the South African banking system would not withstand the global financial crash in 2008!

The banks and the financial sector, however, would not let go on their own accord, of their exploitative and parasitic agenda. The predators have been doing everything in their capacity to undermine and erode the gains we have achieved, and to find new ways of deepening and subordinating our people to financial-economic exploitation. Yes the poor do need access to affordable micro-credit, but not the predatory type of some of our banks and omashonisa [micro lenders].

The SACP calls on all our people, especially the workers and poor, to join forces and use our Financial Sector Campaign as a platform for change in our economy, politics and social lives. In particular the success of this campaign will contribute invaluably in raising the quality of life of our people.

Let us wage a relentless struggle against the highly monopolistic nature of our banking system and build a more diversified banking sector, especially the state and co-operative banking sector. We cannot afford to have a banking sector dominated mainly by four oligopolies - Barclays-ABSA, FirstRand-FNB, Standard Bank and NedBank. These have now been joined by Capitec Bank, and a number of other private financial predators, including micro-lenders such as African Bank which has recently imploded. In addition, we are facing a multitude of small, plus fly-by-night loan sharks that only impoverish our people.

Certainly this is not a financial sector needed for a democratic developmental state we are seeking to build and also to drive a second, more radical phase of our transition!

The SACP will do everything in its capacity to mobilise support for the establishment of co-operatives and co-operatives banks, and the establishment of a state bank, and the transformation of the Post Bank to offer full banking services. Unlike the private monopoly banking sector which is interested only in profit, the State, co-operatives, and Post banks must prioritise the people, support production and development. We need to disrupt the logic of profitability first if we are to build a financial sector for the people.

Let us continue the struggle against the ever-rising exorbitant bank charges and high interest rates; let us prioritise production, economic and social transformation and development; let us combat consumerism and the selfish individualism imposed by neoliberalism.

Let us intensify the struggle to bring to an end the '20 year death sentence' payment period unjustly imposed on our people on mortgage housing by the banks. The compounded interest rate regime which underpins this death sentence must be abolished along with it. It is this imprisonment of the people by the banks in debt that makes them pay far more than the price of a single house on housing finance.

Let us intensify and continue our just fight against reckless and unsecured lending practices that sink our people, especially the workers and the poor, into unsustainably high levels of debt which cause many social problems that are currently devastating the household.

Let us push forward with our just fight to achieve access to financial services which take into account the plight of poor communities.

The credit bureau regime has proven to be dedicated to the super-exploitation and blacklisting of our people. In addition to the expunging of adverse credit records from the system, which we have brought into effect early this year as the fruit of our Financial Sector Campaign, it is clear that the prevailing credit bureau regime must be further transformed.

The financial sector, including the private monopoly insurance industry, is discriminating against people living with HIV. We must fight against this and advance alternative, caring policies.

We also call upon workers to ensure that trade union investment companies invest in a manner that advances our developmental goals. Let us also defeat business unionism, including the use of monies from the union investment companies for factional and even counter-revolutionary purposes.

Through the Red October Campaign 2014/5 the SACP will intensify the Financial Sector Campaign to:

  1. Roll back neoliberalism in all its facets and policy terrains, including macro-economic policy, and deal with its phenomenon of financialisation.
  2. Review and improve the National Development Plan in line with the outcomes of our last Alliance Summit, based on the principle that the plan is not cast in stone, and that it is subject to continuous engagement.
  3. Break the investment strike that the bosses have embarked upon, and push for taxation of liquid capital above a defined ceiling.
  4. Ensure consistent implementation of consumer and financial education.
  5. Bring to an end the bail-out of the banks that implode as a result of reckless and unsecured lending practices that plunge our people into debt.
  6. Ensure the development of Co-operative Banks with adequate support by the state.
  7. Ensure that our Development Finance Institutions are reoriented towards a transformative developmental mandate.
  8. Abolish the prohibitive cost of, and universalise access to communication; and ensure the immediate implementation of drop call rates reduction.
  9. Push for an end to commoditisation and financialisation of basic services, including healthcare; defend and ensure that the National Health Insurance Scheme is successfully implemented.
  10. Ensure that workers take control of their retirement funds and their investment; these should be directed towards expanding production, sustainable livelihood and access to education.
  11. Linked with this, mobilise against business unionism - this is actually one of the major challenges facing the trade union movement in our country at present and that threatens its unity as some individuals advance unbridled personal ambitions, self-enrichment and private interests which are coded as workers' interests.

We will deepen the work that has been done in our campaign in uniting the broadest range of organisations by building a consumer and broad movement for the transformation of the financial sector.

But also let us not lose focus in confronting all the forces who are actively engaged in sabotage against our struggle to transform the financial sector and to advance the second, more radical phase of our revolution.

Capital outflows and tax haven - the case of Mark Shuttleworth

Last week billionaire Mark Shuttleworth who moved to a tax haven of the Isle of Man announced that he is setting aside R250 million to challenge some of the economic decisions of our government. In particular, Shuttleworth seeks to achieve the exact opposite of what we want to achieve through our Red October Financial Sector Campaign. In the absence of any other alternative or option, we must accept that the war chest that he has set up constitutes a declaration of hostility by him. We must oppose it!

It is equally important to thoroughly analyse how the Court ruling in the Shuttleworth case came about, the material evidence that the Court took into consideration, and the role played by the Treasury in all of this fiasco. We must take what happened seriously with a view to adopting decisive action.

We must push for economic and financial transactions regulation, including control of capital outflows and inflows. We must prioritise investment in production, jobs and employment growth, reduction of inequality and poverty, and protect our economy from capital flight and financial market fluctuations.

This is an edited version of an extract from the Red October Financial Sector Campaign statement presented by SACP General Secretary Comrade Blade Nzimande, Hammarsdale, Durban, 5 October 2014.


The Shuttleworth Verdict - An act of Treason

By Ian Beddowes

Dear Editor, Umsebenzi Online

The Supreme Court of Appeal ruling on the Mark Shuttleworth case has the potential to seriously destabilise the South African economy before the BRICS Bank is established here to the detriment of the U.S dollar and Western monopoly interests in general. This court ruling occurred in the backdrop of the gross mismanagement of financial transactions involving capital outflows, especially capital controls, by the National Treasury.

The mismanagement was not naïve - the National Treasury is not marching in step with our revolution - it is obsessed with neoliberalism, and represents one of the key centres of power that we have to take seriously. It is clear without a major reshuffle in that department that efforts to transform the financial sector to serve the people, and to move on with the second, more radical phase of SA's transition, will be sabotaged and resisted from within the state. This is how Shuttleworth has made murder of the economy become a human right.

Our economy has been severely hit by 'Financialisation', a system in which money becomes more important than production - and eventually and inevitably - useless. The recent collapse of African Bank, a bank which specialised in giving loans for consumption rather than for production, should be a warning.

It is also clear that the ANC Zuma led government, since 2009, has been pursuing a course, despite stiff internal and external resistance, that will focus on production rather than on the creation of fictitious capital based on 'deals'.

It is obvious that those who have benefitted from the economic structure introduced with colonialism and apartheid and after the 1994 democratic breakthrough with GEAR in 1996, most particularly the declining U.S led Western Axis which persuaded South Africa to go on this disastrous and socially destructive road, will do anything in their power to stop this from happening. Thus Julius Malema against whom there are two very damning Public Protector's Reports is now exalted as a hero by the anti-ANC media. While President Zuma is having his life put under a microscope, the plunderer of Limpopo is being forgiven.

Attacks on President Zuma increased recently immediately after the release of information over a possible major nuclear-electric collaboration with Russia. Yet one thing is certain. There can be no industrial growth or job creation without adequate energy supply.

The Shuttleworth verdict in this scenario is tantamount to treason. This will give the green light to the excessively rich to attempt to destroy the South African economy by creating huge capital outflows while it is still in the monetarist mode and prevent it from stabilising itself through industrialisation.

As for Shuttleworth being interested in assisting migrant workers to remit money to surrounding African countries, this can only be regarded as a rich man's joke against the poor. Shuttleworth and his sort are only interested in self-enrichment. And he is not interested in investing in any other African country. He is taking his money to the tax-haven of the Isle of Man.

Yours faithfully,

Ian Beddowes writes from Berea, Johannesburg



By Cde Jeremy Cronin

Last week Woolworths released its annual report. In it company chairperson Simon Susman laments the passing of SA's post-1994 "miracle": "We're now in danger of turning that tide backwards and are beginning to seriously constrain growth." He claims SA's labour regime makes it impossible to provide employment for the millions unemployed. "We need courage to change this", he writes. "Let's have a Department of Employment rather than a Department of Labour and see where that philosophical shift takes us!"

I was reading Susman's call for a "philosophical shift" on the way to Keiskammahoek for last week's launch of the next five-year phase of the expanded public works programme (EPWP).  Working together with non-profit organisations, government has committed to ensuring six million work opportunities through public employment programmes by 2019.

Keiskammehoek was chosen for the national launch because of the exemplary community work programme underway there since 2009. The programme invites us to make a philosophical shift about what we mean by "work" - a shift very different to that proposed by Woolworths' chairperson.

Back in 2006 Brian du Plessis retired from Barlow Rand where he'd worked for 25 years. He and his wife Jeri quit Gauteng for Qoboqobo village in Keiskammahoek. Living out of a caravan in an abandoned sawmill shed, the couple set up a non-profit foundation, Siyakholwa. The intention was to help establish farming cooperatives. After a series of trials and errors - like the bumper crop of cabbages for which they couldn't find a market - Siyakholwa connected up with government's community work programme (CWP), part of the wider EPWP.

Today, 1500 participants in 37 villages scattered across the hills of Keiskammahoek receive CWP stipends for eight days a month of community work. Each village has a committee that selects participants and identifies community work. Schools are repaired. Households in need of home-based care are tended to. There are food gardens in the schools and creches providing free lunch-time meals.

Siyakholwa still operates out of the old sawmill premises. Brian and Jeri have been joined by others as trainers and administrators - among them Odwa Njoba a local villager and now administration director; Bonisile Norushe, an MK comrade I last met in exile; and Lumka Maso, a farmer, also active in the Amahlati hawkers and crafters associations. The sheds have been renovated and are used as work-shops for training in welding and other trades. Out in the grounds there's an experimental vegetable patch, an orchard, an essential oil distillery, and beehives. The Siyakholwa centre acts as a hub where CWP participants are trained in composting, soil conservation, bee-keeping, and even computer literacy. The ambition is to train at least two part-time handymen for every village.

The eight days a month of paid community work provides basic income support to hundreds of village households, while allowing for other days to work in their own fields or pursue other activities. As participants attest, the programme has helped foster personal dignity and rebuild community cohesion. There's now a sense of ownership and shared responsibility for the village school, crèche, or clinic.

Over the 19th century this was a region that suffered the brunt of "frontier" wars. The poverty in today's communities is the legacy of dramatic and prolonged colonial dispossession. It was a process that forced millions out of socially useful, homestead work into distant employment for someone else's profit. It's the latter that Susman holds up as the ideal. In the hills of Keiskammahoek 37 villages are undertaking a very different "philosophical shift", proving valuable work is not necessarily the same as employment.

Comrade Jeremy Cronin is SACP 1st Deputy General Secretary and Deputy Minister of Public Works. This article was first published by the Cape Times 'Left Turn' 8 October 2014.


Ukraine: A battle between two groups of the exploitative class and support for… Westernised, neo-Nazi forces by the "crowd"

By Professor Vladimir Shubin

The events in Ukraine in the last 10 months or so have been widely covered by the "international mass-media", but as in a number of other cases - Libya and Syria in particular - the picture they paint is greatly distorted. Let us try to put the record straight.
The political crisis in Kiev began in November 2013. At that time the Ukrainian government led by President Victor Yanukovich announced it was postponing the signing of a document proclaiming association with the European Union. The idea to associate with the EU was popular in Ukraine, especially in the Western regions of the country. Many people naively thought it would solve the economic problems of Ukraine and lead prosperity. However, at the last moment the Yanukovich government which initiated the process understood that it would bring disaster to the Ukrainian economy and damage its economic ties with Russia.

The decision not to sign the agreement with the EU, coupled with anger at widespread corruption, led to protests and demonstrations, especially in Kiev's Independence Square (Maidan). However, the demonstrations, which were initially peaceful, soon came to be dominated by anti-communist and anti-Russian fascist thugs. Bloody clashes followed. Police, especially the "Berkut" riot police were hit with stones, metal pipes and even shot at with firearms. 15 policemen and soldiers were killed. More lives were lost due to unidentified snipers.

From the very beginning, Washington supported the opposition, and was aware that the militants were seeking the forcible seizure of power. These fascist thugs raised above their heads the banners of those Ukrainian nationalist organisations that were actively used by Nazi Germany in World War II and were responsible for the deaths of many thousands of Jews inhabiting the Nazi occupied territories - including those in Ukraine who were against fascism.

Under pressure from the West, on 21 February 2014, the government consented to sign an agreement with opposition leaders that included a return to the constitution of 2004 and the curtailing the powers of the President. The agreement provided for the formation of a national unity government and an early Presidential election. Both the authorities and the opposition pledged to refrain from the use of force.

But day, on 22 February 2014, as soon as the government forces were pulled back, a violent seizure of power happened in Kiev. An organisation called the Right Sector, and other ultra-right forces, seized the buildings of the Verkhovna Rada (the Ukrainian Parliament), the Presidential Administration, the Ministry of the Interior and the Government.

Under physical pressure from the militants and their supporters, the Rada decided on the removal of the President, its leadership and other officials.

One of the first decisions following the coup was the adoption of a law to ban the Russian language in Ukraine, despite the fact that it is the mother tongue for many Ukrainian citizens. Five posts in the new government, including Defence Minister and Prosecutor-General were initially allocated to the ultra-right party Svoboda ("Freedom"). This despite the fact that, three months earlier, the European Parliament had passed a resolution stating that "racist, anti-Semitic and xenophobic views go against the EU's fundamental values and principles", and appealed "to pro-democratic parties in the Verkhovna Rada not to associate with, endorse or form coalitions with this party"

The seizure of power by the national chauvinist and right-wing radical forces that are the ideological heirs of the accomplices of fascism during World War II was accompanied by a resurgence of anti-communist hysteria. Physical terror was unleashed against functionaries and ordinary members of the Communist Party, and their families. The premises of the Communist Party of Ukraine Central Committee and a number of regional and local committees' were vandalised. The court in Kiev is now considering the demand by the Ministry of Justice to ban the Communist Party.

Active rejection from below

In the East and South of Ukraine there was active rejection of what was happening in Kiev. The people started to adopt measures to protect their own security and future.

This first became clearly visible in the Crimea, which had been transferred from Russia to Ukraine in 1954 without the consent of its population. Even as early as December 2013 and January 2014 the Crimean Supreme Council (local parliament) had repeatedly called on the authorities to "prevent unconstitutional action by revenge-motivated bankrupt political forces who profess extreme nationalism". The people of Crimea then began forming self-defence groups. On 23 February, the day after the coup in Kiev, a rally of 200 000 participants was held in the port city of Sevastopol to express "the people's will against fascism".

On 27 February the Supreme Council of Crimea proposed holding a referendum based on the statement: "The Autonomous Republic of Crimea is an independent state which is part of Ukraine on the basis of treaties and agreements ("for" or "against")". This referendum did not take place.

The Kiev authorities objected to the decision to hold a referendum and tried to disband the self-defence units. On 1 March the new Prime Minister of Crimea, Sergey Aksenov, appealed to Russian President Vladimir Putin asking for assistance in ensuring peace and tranquillity in Crimea. That same day, Putin asked permission from the Parliament of the Russian Federation to use armed forces in Ukraine. This was unanimously granted.

It should be remembered that Sevastopol had always been the main base of the Russian Black Sea Fleet. Further that even when reinforcements were sent to Crimea, the strength of the Russian troops did not exceed the 25 000 prescribed by the 1997 agreement with Ukraine - it had been agreed after the dissolution of the Soviet Union that Russia would retain its naval base at Sevastopol in the Crimea.

Reunification of Crimea with Russia

On 6 March, the Supreme Council of Crimea decided to hold a referendum with new wording. This gave a choice between two possible options:

  1. Are you for the reunification of the Crimea with Russia on a subject of the Russian Federation?
  2. Are you for the restoration of the Constitution of the Republic of Crimea, 1992 and for the status of the Crimea as part of Ukraine?

On 16 March 83.1 % of voters participated in the referendum, and 96.77 % supported reunification with Russia.

The Russian military supported the Crimean self-defence groups with the aim of preventing interference with the voting process and to maintain a peaceful environment in the Crimea. During this process they did not fire a single shot. On 18 March the agreement to reunify the Crimea with the Russian Federation was signed in the Kremlin by the leaders of Russia, Crimea and the city of Sevastopol.

Intensifying resurgence from below

Meanwhile in the East of Ukraine, in Donetsk, Kharkov and Lugansk, rallies began to gather in support of the federalisation of Ukraine. This not only due to dissatisfaction with what happened in Kiev, but also in fear of their fate as Russian speakers. In response, the new Ukrainian authorities announced a special operation against the "separatists". Once the Kiev authorities started punitive action against the "federalists" using heavy military equipment and aircraft the mobilising slogan changed from federalisation to independence from Ukraine.

The sovereign Donetsk People's Republic was proclaimed on 7 April and the Lugansk People's Republic on 28 April. Referendums followed the month after and the absolute majority in both regions voted for independence.

Kiev forces began punitive operations in Eastern Ukraine. Using heavy artillery, including multiple rocket launchers, they attacked not only the armed forces but also residential neighbourhoods, causing hundreds of civilian casualties.

The West's motive

The West continued to support the Ukrainian coup authority in its atrocious campaign. The USA policy on the Ukrainian crisis is motivated by its efforts to implement a unipolar world and to push Russia out of world politics. Washington strongly pushed European countries, Australia, Japan, and Canada to accede to sanctions against Russia.

On 17 July a Malaysian civil aircraft with passengers on board was shot down flying over Eastern Ukraine. Who shot at it has not yet been discovered. In spite of the fact that the self-defence units had no weapons to do it, the Western mass-media and governments immediately put blame on them and "Putin's missiles".

Many believe that the flight was brought down to bring events in Ukraine back to the centre of attention of the United States and its European allies. Indeed it occurred when the West's attention on events in Ukraine had been diverted by the war in Gaza between Israel and the Palestinian Hamas, as well as the advance of militants from the "Islamic State" in Iraq. After this tragedy the mood immediately changed and new and more serious sanctions were introduced by the USA and EU.

More sanctions against the resolution of the crisis is a peaceful way 

The USA has tried to thwart Russia's efforts to settle the crisis in Ukraine a peaceful way. There was no positive response to Putin's decision to withdraw from the previously obtained approval for the use of Russian forces in Ukraine.

On 5 September when a protocol facilitated by Moscow was signed in Minsk providing for an immediate truce, the West's reaction was to impose a new wave of sanctions. In fact it looks like Washington is doing its best to provoke a war with Russia.

From the very beginning of the current crisis in Ukraine, Moscow advocated negotiations for a peaceful solution, while providing the best possible multilateral assistance under the circumstances to those in the East of Ukraine fighting for their rights. In this struggle volunteers from Russia have been taking part, but no Russian regular troops.

The Kremlin's position on the orientation of Ukraine to join the EU has been repeatedly voiced: the choice belongs to Ukraine itself; but Russia will take protective measures for the economic consequences of Ukraine's entry in the EU "which would harm our country".

Unexpectedly it seems that the same forces that criticised the previous government have come to understand some of the problems: while the agreement on the association has been signed and ratified, its implementation has been postponed till 2016 after the talks between Kiev, Moscow and Brussels.

Strategic considerations for the left

The Ukrainian tragedy raises many questions for the left forces. Georgy Kryuchkov, a member of the Communist Party of Ukraine Central Committee put some of them in his article in the publication Pravda:

"Why, when the patience of the ‘bottom' to live in intolerable conditions of bandit capitalism restored in Ukraine ends and the ‘top' has proved unable to further rule, when hundreds of thousands took to the streets, their protests have not acquired anti-capitalist character? Why did the poor masses not oppose the exploitative regime but once again allowed themselves to be used as a ‘crowd' in a fierce battle between two groups of the exploitative class and actually helped the most reactionary, Westernised, neo-Nazi forces to take power?"

The weakness of the left forces can be seen in the South-East as well. Some local Communist Party organisers are among the leaders there but the composition of militia commanders is very diverse. For example a former Donetsk "Minister of Defence" calls himself a Russian "monarchist". Under the circumstances the Communist Parties, both in Ukraine and Russia, face the challenge to counterpoise internationalism to (to use the
ANC term) "narrow nationalism" that often rises even among the left in critical situations.

Comrade Vladimir Shubin is:

The author of ANC: A view from Moscow (1999). He has served for a significant period of time at the Institute for African Studies, Russian Academy of Sciences, and as a Researcher. During the liberation struggle he served as a high level representative of the Communist Party of the Soviet Union and as Head of the Africa Section of the Party's International Department he worked closely with the ANC and attended its first Conference after unbanning. He also worked very closely with Zapu (Zimbabwe), Frelimo (Mozambique), MPLA (Angola) and Swapo (Namibia). He writes from Russia.