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SACP introductory statement at the public launch of a discussion document on the second radical phase of SA`s democratic transition

29 October 2014

"Going to the Root. A Radical Second Phase of the NDR - its context, content and our strategic tasks"

Two decades beyond South Africa`s globally acclaimed democratic transition we are living in a deeply paradoxical reality. We have a progressive constitution that has abolished decades of white minority rule. From a society once immersed in a protracted, low-level civil war, we`ve emerged into a country in which open, multi-party democratic elections have become the norm.

But despite these and many other achievements, our country continues to be afflicted with crisis-levels of unemployment, poverty and inequality, and this triple crisis threatens to undermine the democratic constitutional advances we`ve made. Why the paradox? We are frequently told that the problem is anaemic growth - but from the mid-1990s through until five or six years ago there was relatively strong GDP-measured growth. But unemployment (in the narrow definition), and its resulting impact on poverty and inequality, remained at crisis levels, well over 20%. Clearly our socio-economic challenges are rooted in deep-seated systemic features of our society. They are not just of a cyclical nature.

At the ANC`s December 2012 Mangaung National Conference the imperative of a "second radical phase of the national democratic revolution" was endorsed. It is a perspective that the SACP strongly supports. But what is meant by a "second radical phase"? Why a "second" phase? Is the word "radical" just a cosmetic flourish? Does the idea of a "national democratic revolution" have any contemporary relevance?

Today we are releasing for public engagement an SACP discussion document, "Going to the Root. ;A Radical Second Phase of the NDR - its context, content and our strategic tasks" in which we seek to provide answers to these and other questions. We hope to open up a debate across our ANC-led alliance and among a much broader national public.

The discussion document acknowledges that, over the past 20 years, we have embarked on what might be described as a "first phase" of democratisation. This first phase has been radical in its own way. Politically and constitutionally it abolished a state form associated with white minority rule. Over the past two decades a major redistributive programme has also been underway:

  • Social grants now reach more than 16 million South Africans (nearly one-third of our population); - up from 3 million in 1994;
  • Over 7 million new household electricity connections have been made since 1996. (To put this achievement into context - in the preceding century, successive white minority regimes only electrified 5 million households!);
  • Over 3.3 million free houses have been built, benefiting more than 16 million people;
  • More than 1.4 million students have benefited from the National Student Financial Aid Scheme;
  • Over 9 million learners in 20 000 schools receive daily meals.
  • Over 400 000 solar water heaters have been installed free on the rooftops of poor households in the past 5 years - one of the largest such programmes in the world.

And much more besides.

However, this first phase has had two major limitations:

  1. The progressive socio-economic advances have been largely RE-DISTRIBUTIVE. This state-led redistribution has relied principally on fiscal resources derived from a largely untransformed PRODUCTIVE economy. But it is this productive economy, locked into a problematic path-dependency, that is, precisely, at the root of what is reproducing the triple crisis of unemployment, poverty and inequality.
  2. This massive re-distributive programme has also been conceived essentially as a "top-down", "state-delivery" programme in which citizens are turned into "beneficiaries", "clients", "customers" - and not productive, responsible and active protagonists of transformation. The state is seen (and sees itself) as a "wheel-barrow" responsible for off-loading various "deliverables" into communities. This has had three further negative consequences:
    • As government`s massive redistributive effort is overwhelmed by the scale of problems, or falls behind rising and often legitimate expectations, or fails to "deliver" equally at the same time to everyone - so popular anger turns on government. The top-down redistributive "delivery" model based on always insufficient fiscal resources sets up government as a sitting duck target for anger and frustration - while monopoly capital disinvests and largely escapes blame.
    • The tendency to transform our popular mass base into individual or household "beneficiaries", "recipients", "clients" of government delivery also tends to undermine the potential cohesion of poor communities. Many "township delivery protests" are fuelled by factional rivalries within communities - backyard dwellers versus shack-dwellers for priority listing on the housing list; or competing taxi associations for operating licences on new routes; etc.
    • The effective de-mobilisation of popular forces by the top-down, state "delivery" model of redistribution has also deprived us of an important means of transforming the state itself. The Freedom Charter`s call not just for one-person one-vote representative democracy, but also for "DEMOCRATIC ORGANS OF SELF-GOVERNMENT" - i.e. for various forms of ACTIVE PARTICIPATORY DEMOCRACY has been largely lost. Since 1994 we have nominally introduced a wide range of statutory institutions and practices implying participatory democracy - community police forums, school governing bodies, ward committees, municipal participatory budgeting, etc. However, in practice most of these are non-functional, or are captured either by political functionaries, or by middle-class interests and used to preserve existing privileges. Yet, organs of popular participatory democracy are potentially our best weapon for transforming the state, and overcoming inherently negative features - bureaucratic silos, officiousness and indifference on the part of state functionaries, technocratic aloofness, and, above all, corruption.

From this diagnostic, two key and related perspectives are advanced in our discussion paper:

  1. The problematic path-dependent nature of our PRODUCTIVE economy must be radically transformed;
  2. We need an active citizenry and a transformed relationship between the state and communities.

But what are the systemic problems within our productive economy?

SOUTH AFRICA`s capitalist industrial revolution in the late 19th and early 20th century had several critical features whose legacy continues to lock our economy into a problematic path-dependency:

  • It was an externally-driven (rather than an organically emerging internal process) that established SOUTH AFRICA as a semi-peripheral mining economy within the global capitalist system;
  • SOUTH AFRICA became (and still remains) a commodity exporting economy, with high levels of monopoly concentration across all sectors including mining and finance.
  • Inserted into the global economy as a semi-periphery, SOUTH AFRICA had two key assets - its mineral deposits and "cheap" labour, the latter reproduced through various forms of colonial and racial dispossession, native reserves, dormitory townships and migrancy (whether annual or daily), bantu education, etc.

Although colonial and/or white minority rule no longer exist formally, the legacy rooted in this semi-peripheral, "cheap" labour dispensation is still painfully etched into contemporary SOUTH AFRICA - in our urban and rural spatial inequalities and skewed settlement patterns; in the relative weakness of our manufacturing and small and medium-enterprise sectors; in skills shortage and racialised inequities in schooling; in a huge reserve army of labour; in the high levels of monopoly concentration; and much more.

Post-1994 a massive capital flight and an investment strike - the structural problems get worse

Since 1994 many of these deep-rooted systemic problems have been aggravated. In the latter decades of apartheid rule, a combination of tight exchange controls, prescribed asset regulations and international sanctions meant, paradoxically, that South African mining and finance monopolies were compelled to re-invest their surplus into SOUTH AFRICA. This resulted in the formation of large, multi-sectoral conglomerates and productive investment from mining and finance into agro-processing, manufacturing, logistics and retail. This helped to drive job creation and even increased skilling. It was also the objective basis on which a powerful trade union movement re-emerged in the late-1970s and through the 80s.

Post-1994 with the removal of sanctions and ill-considered liberalisation of macro-economic and sectoral policies there has been a massive process of capital exodus permitted by exchange control liberalisation, dual listings, mergers and acquisitions, transfer pricing, tax avoidance, illegal capital transfers, and a general process of financialisation (in which surplus is increasingly invested in the global casino economy, rather than in labour-absorbing, domestic productive activity).

In the discussion paper we provide a few examples, including Sasol, Afgri and Absa. Absa, for instance, is one of four banking monopolies that dominate South Africa`s financial sector - but who owns it? With its origins in the early mobilisation of Afrikaner capital, Absa itself was formed in 1991 out of a merger between United, Allied and Volkskas. In 1992 it acquired the Bankorp group including Trustbank. In 2005 Barclays UK purchased 56.4% of Absa. In 2013 Barclays increased its share-holding in Absa to 62.3% and the name was changed to Barclays Africa Group Ltd. As at June 2013 three-quarters of Absa/Barclay`s Africa shareholders were located outside of SOUTH AFRICA (with 57.6% in the UK alone).

This means that when the SOUTH AFRICA government engages with Absa (and with most other former major private South African corporations), we are now engaging them as foreign investors. Whatever her own personal patriotic inclinations, when Barclay`s Africa CEO Maria Ramos, for instance, calls for a "social covenant" with government and labour - where does she derive her mandate from?

In general this huge trans-nationalisation and financialisation of formerly South African monopoly capital (including SASOL, Investec, Old Mutual, De Beers, Anglo, Liberty, SAB Miller, Didata and Gencor, amongst others) has seen a massive loss of savings, taxes and investment. According to one academic study, in 2007 more than 20% of GDP was lost through capital flight.

This process of trans-nationalisation and financialisation has resulted in growing de-industrialisation and major job-losses, with an increasing loss of national economic sovereignty. It is in this context that our discussion paper argues that the "national" in the "national democratic revolution" has a deep and, indeed, non-racial, contemporary relevance.

The content of a second radical phase of the NDR

It follows that a critical pillar of a second radical phase of the NDR must be to regain a greater degree of national economic sovereignty. Amongst other things this must mean breaking out of SOUTH AFRICA`s semi-peripheral positioning within the global imperialist system. In practice this will require a "relative de-linking" from the dominant global economic powers - including through sub-Saharan regional development, and the development of alternative economic alliances, as in BRICS. Critical also is the challenge of re-industrialisation so that economically we move up the global value chain.

In practice, this means that we are not waiting for a second radical phase - many of its key pillars are already cornerstones of government policy and programmes - including the New Growth Path, the Industrial Policy Action Plan, and the National Infrastructure Programme, amongst others. However, there is still a long way to go. The effective driving of a second radical phase requires a much higher level of state strategic discipline, a more effective, long-range planning capacity and an active and mobilised popular base.;

Our deep-rooted productive economy distortions mean that any expectation that market-driven growth and ensuing labour market demand will resolve our unemployment crisis is gravely misplaced. High levels of un- and under-employment are likely to be a long-term reality, as the National Development Plan recognises. In this situation the fostering of sustainable (and productive) livelihoods, relatively de-linked from the vicissitudes of the labour-market are absolutely essential. ;

Our discussion paper proposes that we appreciate government`s expanded public works and other public employment programmes in this context - less as hopeful conveyor belts into a private sector labour market, and more as an expansion of our social security net, but with participants involved in productive work by way of providing services and assets to poor communities. Along with cooperatives, micro-enterprises and various forms of self-employment, the public employment programmes can develop into a solidarity economy relatively de-linked from the predations of the market.

The battle of ideas

In a concluding section, the discussion paper considers and briefly critiques a number of alternative narratives about the challenges confronting our society. While not necessarily rejecting issue-specific and sectoral accords between government, labour and business; - the paper is entirely sceptical about the notion of some all-in, long-term "social accord", or "economic CODESA".

The paper acknowledges that some anti-ANC-alliance left radicalism has produced valid critiques of South African monopoly capital. However, the anti-ANC and, above all, the blanket anti-state positioning of these tendencies means that any struggle for leverage over state power and resources is relinquished. Oppositionism becomes an end in itself to the detriment of advancing practical and effective programmes of transformation. The paper also takes issue with DA leader, Helen Zille`s agenda of seeking to divide the ANC, between so-called "constitutionalists" who believe in the "rule of law" and "radicals" who remain committed to a national democratic revolution.

At the heart of our discussion paper is, precisely, the conviction that our important constitutional and broader democratic gains can only be advanced, defended and consolidated with a radical second phase of the National Democratic Revolution that goes to the root of the systemic features of our productive economy that are reproducing crisis levels of unemployment, poverty and inequality.