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Umsebenzi Online

Volume 14, No. 34, 3 September 2015

In this Issue:

Hot Red Alert

Warning to South Africans from Moscow by the Communist Party of Russian Federation: Comrades, be careful!!!


Dear comrades,

We would like to warn you that the infamous swindler from Russia Sergey Mavrodi (born September 11, 1955) is now developing his deceitful practices in many countries including South Africa, India and the Philippines. Sergey Mavrodi is again building yet another "financial pyramid" which may end up in many tragedies.

We consider it our duty to warn our fraternal peoples that this activity may result in bankrupting millions of people. We would like you to know that as a result of such swindles in Russia at least 15,000,000 people suffered and went bankrupt.

Being an MP Sergey Mavrodi was deprived of the parliamentarian immunity and was convicted in 2003 and in 2007 for fraud and forgery.

Please be aware that Sergey Mavrodi combines the features of a criminal with mathematical way of thinking and passion for risk and venture. He is extremely dangerous especially for ordinary people whom he knows how to cheat.

* This piece was received by email by SACP Department for International Affairs on 2 September 2015 from the International Department of the Communist Party of Russian Federation. Umsebenzi Online has identified one financial scheme originating from Russia operating in South Africa, where people have deposited their money, and will submit details to the relevant authorities for precautionary investigation. Members of the public are requested to identify any suspicious schemes such as the ones described in the warning by the Communist Party of Russian Federation and submit the details to the Financial Sector Coalition Campaign for follow ups for precautionary investigation by relevant authorities.

Red Alert

Tim Modise interviews SACP General Secretary and Minister of Higher Education and Training, Dr Blade Nzimande

Factional, corrupt and corporate capture of our movement including the use of money to buy votes and stifle internal processes is dangerous for our democratic transformation. The greed of business and its uncaring attitude are no different. South Africa must intensify industrialisation through beneficiation - transformation of mineral resources, other raw materials and primary goods into high value-added finished products. The private sector must also not simply complain but must open the workplace as a learning space to give the youth productive work experience, scarce and critical skills. SACP General Secretary, member of ANC national executive and working committees and Minister of Higher Education and Training:

SACP General Secretary Cde Blade Nzimande
SACP General Secretary Cde Blade
Nzimande, PIC by Umsebenzi Online

Dr Blade Nzimande thanks very much for talking to me this morning. I appreciate it.

Thank you very much Tim, for inviting me.

Let me start right away with the discussions you seemingly had over the weekend. Apparently, the SACP expressing strong views on the so-called Premier League.

Tim, let me just start by clarifying this. The report I have doesn’t have the names of people, so it’s the Sowetan, which comes to the conclusion that what we are referring to in our report, applies to the comrades that they mentioned. No names have been mentioned there. That report [is internal]… it’s correct in what it’s raising: that we are discussing concerns that we have about some of the behaviour that we see as unbecoming of the ANC and the alliance. We were discussing that because we want to raise the matter with the ANC and the alliance.

What is that you’re concerned about?

Look, we don’t really want to be discussing this in pubic. What we are raising isn’t new. It was raised in the Alliance and even captured somehow in [its last summit] declaration. The problem of getting money to buy delegates in conferences, the problem of premature campaigning for the ANC conference for 2017, and it draws all of us in. All the allies will be affected, one way or another and then there is the attitude of some of the ANC leaders towards the SACP, which is very problematic and against the spirit of the Alliance. These things were discussed, but we were discussing them again because we see them continuing. As I said Tim, I’m very concerned because that matter is not meant for public discussion. It’s meant to be raised within the Alliance and we are quite disciplined about that at the SACP.

Well, the Communist Party itself has been criticised by various commentators and analysts who look at the South African economic situation, saying that the presence of the party in government is confusing the policy choices that the government is making and also, confusing the ideology (if you will) of the ANC.

There is no truth in that, Tim. Firstly, what is the ideology of the ANC? In the first instance, the ANC is a broad movement that believes in a mixed economy where you’ll have the private sector but you’ll have a strong public sector as well. Lately, the ANC has been emphasising where the state needs to play more of a leading role in the process of transforming the economy and we agree with the ANC insofar as those matters are concerned and the ANC takes decisions. These are decisions, taken by the ANC, in its own structure. They are not decisions of the SACP. The fact that we agree on many things doesn’t mean that for us, it’s the SACP trying to manipulate the ANC. That’s an old story Tim, if you remember. That’s a ‘Rooi Gevaar’ story, perceived by the Apartheid government and I’m sure that the people who are saying that, are just people who would just like to see the ANC as nothing but an extension of business, which the ANC is not and it has said so - not because there’s a Communist Party in the ANC.

What do you think of the state of the economy at this time? The criticism arises from the fact that many in business are saying they have no sense of what direction the country/government wants to take with the economy, and that some of the policies are not business-friendly, whilst others seem to be business-friendly.

Tim, we were raising this thing at the right time because at our last weekend’s Central Committee, our main item for discussion was our economy and the challenges [it’s facing]. Firstly, we concluded that one of the biggest problems facing the South African economy originates from outside South Africa. What is it? We are still dealing with the aftermath of the financial meltdown of 2008 in the U.S. that led to the near crash of the global economy, in a manner that had never been seen since the 1930’s with the Great Depression. How is this actually affecting us? We were partly cushioned Tim, around 2009 to 2012 because China was absorbing a lot of mineral resources and South Africa was one of those countries, which benefitted because we’re sending our iron ore, platinum, and a number of other mineral resources to China.

At the time, China was developing its economy, manufacturing, and exporting a lot of the goods they were producing, partly from these resources that they were actually absorbing. Later (around two years ago), China decided to embark on a different economic trajectory focusing on (among others) stimulating local demand. Therefore, this meant that the commodity boom we were having, had come to an end and it would possibly never be back any time soon (if ever) - that we’d be able to sell our mineral resources at such high prices. That is what is now affecting our economy. China’s economy is the second biggest in the world. It’s affecting many countries, including us. For instance, the prices for our commodities have gone down. We were talking about iron ore, coal, and platinum. We counted about four of the commodities that have been affected.

Those commodities actually employ just under 500,000 workers in our mining sector. There is a problem with steel as well. China had produced a lot of steel and it does no longer need it at this stage. The world demand has gone down and so there’s dumping of steel (very cheaply), which is affecting our own economy, too. That are sum of the issues affecting us. They do not arise from South Africa.

Tim, at the SACP, we don’t take kindly to people saying there is no leadership in this country. In fact, that’s trash, to be honest. Who is saying there is no leadership in South Africa? Largely, its businesspeople and some of the media outlets like Business Day. What are businesses doing to provide leadership at this point in time? Even if things are bad, businesses want to maintain high profits. They are paying their executives obscene salaries, even when things are bad.

In other words, all that businesses want is to have higher profits irrespective of the economic conditions. If they don’t get that, they turn around and blame government because they want to turn government into being something that is servicing their profit interests. There is leadership in the country, already. The two ministers for instance, Minister Davies and Minister Patel have engaged the unions and management in the steel industry and they have actually said they’re going to have to provide some cushion but it’s not a freebie, Tim. That cushion is not a freebie. Those companies must commit to creating jobs and even save jobs that are under threat because it can’t be that they just want to be bailed out but then continue the behaviour of retrenching workers, etcetera. Business must come to the party. They have a responsibility.

It can’t just be that all they have to do is eat at the expense of everybody, irrespective of the challenges facing the country.

Doesn’t this offer an opportunity then, for mines to be nationalised given that they are in trouble?

Tim, we do believe that certain key sectors of our economy must be socialised. That’s the language of the SACP. Some call it nationalisation. They must be socialised but we must be careful of when and how we do that. For example, some people are saying they must be nationalised. Well, it sounds nice and good - politically - but why should government nationalise companies that are in a crisis? What we’d also be nationalising - largely - is debt, just like the mining. That call for nationalisation when the mines are down is problematic. We must nationalise them when they are doing well so that as government, we do not actually inherit debt. At the moment, they’ve been having it nice, selling steel in South Africa, produced in Vereeniging as if it was ordered from China or the United States. We are paying international prices, which is affecting all other companies that use steel as their input in manufacturing.

Even Sasol has been selling petrol to the petrol producers in South Africa at international prices. Then, when things are down, these companies rush to government for bailouts and they want bailouts as a freebie. Some of the people (opportunistically) call for nationalisation, as a way of saying the state must absorb debt. No, nationalisation must not actually entail nationalisation of debt.

How do we get out of this difficult economic situation we find ourselves in, at this time, according to you?

A number of things need to be done, Tim. Firstly, this is an opportunity to really, up the game in industrialising our country starting with beneficiation. For example, there is already talk that we need to beneficiate platinum to actually produce energy (for example fuel cells) and other by-products that can come out of that. You know, Tim, the mining industry has been resisting beneficiation. It’s time now, when we have this situation to then push harder for beneficiation so that our minerals begin to produce other products that we can even export. They’re opposed to beneficiation because it would mean selling their minerals at locally determined prices. At the moment, they are selling minerals at international prices, which causes them to make huge profits.

The second thing we’re saying, Tim, is that it’s important for government not to reduce - as much as possible - its investment into infrastructure. You’ll remember that the previous administration under President Zuma, for the five years of office, invested R1trillion into infrastructure. That also went a long way in helping to cushion our economy from what could otherwise have become a huge job-loss bloodbath. We need to maintain that. It’s very, very important because in any case, we do need infrastructure (even for better days) so that our economy is able to perform better. The other thing that the SACP in particular, is calling for is upscaling a National Youth Service so that we’ll be able to absorb many young people into internships and learnerships through public employment programmes. Even if it’s not permanent jobs, but to expose them to work because that may actually give many of those young people an opportunity to be able to do other things once they acquire some skill and get some work exposure. We think that is actually, very crucial specifically as an intervention to be begin to deal with youth unemployment.

If we had appropriate skills being provided and many young people being trained appropriately, they would be able to create employment for themselves. Government has been criticised for not having delivered the goods when it comes to education. In fact, Professor Jonathan Jansen has referred to the quality of education in South Africa as rubbish, and not training or providing young people with adequate skills to create work for themselves.

Tim, I would not like to debate with Professor Jansen. Unfortunately, my gripe with him is that he has become a celebrity professor, rather than someone who is pulling together to say ‘what is he doing to contribute to these challenges’. To say that South African education is rubbish is an insult to this country and many people for the many positive achievements that were made in our education (through our education system). Indeed, we have many challenges but he can speak like that because he’s not affected. The fact that, for instance, in our education today, we have the majority of the students being black and women, is a very important achievement and something we wouldn’t have dreamed of 21 years ago. It has actually happened now.

We have expanded school education significantly. The fact that close to 80 percent of our schools are providing meals for learners from poor households is important, not rubbish, an insult by celebrity professors. Of course, we have challenges. We need to increase the maths and science in our education system. We need to improve the pass rate and the quality of the passes etcetera.

Tim, when people complain and say that there is no leadership… At the same time, every day on television and radio, we talk about unsung South African heroes - people who have decided that they are not going to be critical, but they’re actually going to put in an effort to say ‘let’s move our country forward. Let’s make South Africa a better place’.

That is what we are calling for. For instance, in our post-school education, one of the biggest weaknesses that we face is that many of our students who go to vocational colleges do not get work placement, which is necessary if we are to skill this country. That is why we are saying to employers ‘why are you always complaining that we are producing poor graduates? You know that those graduates from colleges need work exposure. Open up your companies for workplace experience.’ That will actually improve the quality of skills in the country - dramatically. That is what we need: people who are going to say ‘what am I supposed to do’ rather than stand on their high pedestal and be critical. That’s being unpatriotic, to be quite honest.

Now, what is your comment regarding the conflicts taking place on various campuses at the moment, in the country? Student organisations fighting each other these days: what’s happening?

Tim, we are really concerned about this. We don’t want to turn our universities and colleges into battlegrounds for people to attack each other. We have said, to the management of our institutions, that they must really be tough against anarchy. They must really be tough against destruction of property or any type of violence and work closely with the law enforcement agencies so that we are able to do this. Tim, you must remember that to a certain extent, our university campuses are not islands. They are a part of society. Sometimes, they also reflect the levels of violence we see in our townships and many of our areas. We are not saying we should sit back and not do anything, but it calls upon everybody to play a role. On our part, one of the things that we are introducing now, is student leadership training, which we want to roll out to all SRC’s every year (once or twice per year) to better be able to develop our student leadership.

What government is doing, what achievements we’ve made, what difficulties we are facing, what plans we have… Where do we come from and where do we want to go? We hope that, that may actually contribute in producing a student leadership that understands policies better, etcetera. That is part of addressing the many problems that we have. The fact that over the last six years, we have trebled the National Student Financial Aid scheme. As much as it is not enough, it has been the single fastest growing budget item over the last six years - from R3bn to R9.5bn now. We also want to ensure that students who are academically capable and academically deserving, but come from poor families, are not deprived of an opportunity to acquire a post-school qualification. All of those are partly aimed at stabilising our institutions.

Of course, I’m always calling the university summit in October during which, amongst other things, we’ll discuss this matter as part of looking at how we take transformation forward in our institutions. All the key role players will be at that summit, whether it’s management, student leadership, worker representatives, or representatives of lecturers who are teaching so that we can come together and say: “Where are we now? What is it that needs to be done? How do we create (in particular) inclusive institutions?” Part of the challenge is that in quite a number of our institutions, many of our students (especially black students) still feel out of place, in a way.

Thanks very much for talking to us and we hope to talk to you again in the near future about some of the issues facing the nation.

Tim, thank you very much for the opportunity.

This is a slightly edited version of the interview conducted by Tim Modise, a seasoned journalist with Cde Blade Nzimande (Dr), SACP General Secretary, ANC NEC and NWC Member, Minister of Higher Education and Training. The interview was conducted following SACP 13th Congress Central Committee’s 13th Plenary Session held from 28-30 August 2015, and was first published by BizNews.com, Alec Hogg, 1 September 2015.


Let’s advance the second, more radical phase of our country democratic transition and transformation, let’s build co-operatives

By Cde Jerry Thibedi

Last October the SACP publicly launched the first discussion document on the need to place our national democratic revolution on to a second, more radical phase. The central thesis in the discussion document, titled ‘Going to the root’, is that post-1994 we have made massive progress by codifying and engraving human rights, including worker rights, in our constitution and by further streamlining these rights in various pieces of legislation.

Secondly, massive progress has been made through social redistributive programmes benefitting millions of our people, especially the working class and poor. This includes millions of free houses that have benefited over 16.5 million people and the expansion of electricity to over seven million houses - two million more than in the century from 1894 since the first household electricity connection in Cape Town to 1994 when the successive oppressive regimes electrified five million houses on a racist basis excluding the overwhelming majority of our people.

We are now near universal access to education for all children, who, beyond the Freedom Charter, many of them are benefiting from school feeding schemes so that they do not learn on a hungry stomach. This in itself is a major motivation for children, especially from poor households, to attend school.

Access to post-school education and training has been expanded towards the goals of the Freedom Charter on higher education, technical and vocational training. The majority of students in universities now come from the ranks of the historically oppressed. The reform and extension of the Tertiary Education Fund of South Africa (TEFSA) into, and through, the National Student Financial Aid Scheme (NSFAS) has played a crucial role in expanding access to college and university education and training for the poor. Over 1.4 million students have gained access to colleges and universities through the NSFAS.

And there are major social achievements in other areas. Some recent, since 2009; some since 1994. This includes the rollout and expansion of HIV treatment; the massive expansion of social grands; massive expansion of access to potable water; and the installation of solar water geysers on the rooftops of poor households. Many of these and other advances for free!!

There have also been massive expansions of social infrastructure, schools, clinics, hospitals, and so on; as well as physical infrastructure, including better roads, in many areas where there was none before.

The second, more radical phase of our transition must build on these and other democratic achievements in constructing a caring society and prosperous South Africa.

As part of its central thesis, ‘Going to the root’ underlines that this process of transformation will be undermined because of insufficient economic transformation. Since 1994, states the document, there has been insufficient transformation of the base structure of our economy. It is in this context that persisting high levels of social - class, race and gender - inequalities, unemployment and poverty will undermine our programme of social transformation.

The patterns of wealth distribution in our economy remain mainly those conditioned during the colonial era. They remain configured internally in terms of the main characteristics of colonialism of a special type, the last stage of which was apartheid, and externally in terms of imperialism. Accordingly, British and other Western imperialist capital, mainly from the United States, France, Germany, Japan, as discussed in the ANC’s 1968 Strategy and Tactics, continues to control major stakes in the economy our country. Since 1994, the stranglehold of imperialist capital on our economy has penetrated even deeper.

So the overall capitalist and colonial accumulation regime, including dependency on raw material exports has not fundamentally altered, if any at all.

In addition, finance capital has managed to financialise almost all aspects of our economy. The macro-economic policy trajectory imposed in, and under the 1996 Growth, Employment and Redistribution (Gear) strategy facilitated conditions for this financialisation through deregulation and liberalisation, including financial and capital markets liberalisation.

‘Going to the root’ calls for a rupture from the root causes of the accumulation regime we have just briefly outlined. It calls for the transformation of the base structure of our economy and the social relations of production.

So where do co-operatives come in all of this?

Let us look at the very massive progress we have made through our major social redistributive programmes since 1994.

Who has benefited the most from these programmes economically?

In class terms, which class has benefitted the most from, or appropriated the economic proceeds of our post-1994 major social redistributive advances?

It is easy to answer these questions. The single answer is obvious.

The capitalist class and unevenly the various strata within that class, including the black aspirant and emerging bourgeois, have benefitted the most from our 1994 democratic breakthrough. Narrow Black Economic Empowerment (BEE) and various forms of sub-contracting, including fronting, have played a key role with regards to primitive accumulation by the BEE capitalists within the capitalist class.

Where has all this accumulation regime placed the people as a whole, the one defined in the Freedom Charter?

The people as whole, and not some few discrete individuals, are, according to the Freedom Charter, the main and top priority of our democratic struggle!

However, the capitalist accumulation regime that reinforced since 1994 in our country displaced the people as a whole and relegated them from the top priority of the Freedom Charter to the bottom rung of economic empowerment. This accumulation regime places individuals at the centre of its focus, while the people as a whole, or at least the majority of the people, remain economically impoverished and have no ownership and control in our economy.

The workers have increasingly been plunged into insecurity through restructuring, including casualisation and labour brokering despite the rights that are enshrined both in the constitution and labour legislation. The decisiveness with which narrow BEE has been advanced has tended not to be demonstrated when coming to the plight of the workers, especially socialised, collective ownership.

Faced with high levels of inequality, unemployment and poverty, there are in fact people in our communities who are now looking elsewhere for social emancipation - outside the national liberation movement that led their liberation struggle. This despite the rights and the major social redistributive interventions we have mentioned and which many of them have benefited and continue to benefit from.

Co-operatives are clearly an important part of our answer to the situation.

If social delivery is not done through internal state capacity, which must be developed to stand up to the task, it must be done through co-operatives. The economic benefits of this shift will reach more people as opposed to the tenderisation of the state that only benefits a few.

In his The Wretched of the earth, in the chapter titled ‘The pitfalls of national consciousness’ Franz Fanon, one of Africa’s revolutionary writers correctly points to co-operatives as working class nationalisation. Co-operatives are a progressive form of socialisation of ownership and control. In their true form, co-operatives represent economic democratisation.

It is in this preceding context that the calls for preferential treatment of co-operatives and co-operative set-asides by all the spheres of government and state owned entities make a compelling case, as opposed to outright capitalist tenderisation of the state. This must be taken forward as a matter of working class struggle for economic ownership and control and for the fair distribution of the fruits of production and social delivery.

However, co-operatives must not be confined to participation in the production and distribution of public goods and services. To this end, we have already stated that co-operatives have a crucial role in transforming cross-cutting ownership and control in the rest of the economy.

It is therefore important whenever we meet in the name of co-operatives to ask pertinent questions.

Why are co-operative not thriving?

What is to be done?

These are your questions to address.

We have already pointed to the intensified dominance of the capitalist accumulation regime that has entrenched pre- and post-1994. This in itself has weighed negatively against co-operatives, and continues to do so.

But are there, in addition, weaknesses in our economic policies and interventions that hold back the advance of co-operatives?

Yes there were, most probably there are still, and despite the huge improvements that have been made in our legislative and regulatory frameworks which we must welcome.

It is not our intention to review the legislative and regulatory frameworks through this short input, as well as the adequacy of existing forms and mechanisms of support available to co-operatives. We have set our focus on highlighting fundamental issues on a historical and strategic basis.

However, it is important for us to encourage and call on you, as we would ourselves do always when we meet in the name of co-operatives but as well as when we discuss economic and social transformation, to analyse the existing co-operatives legislative and regulatory frameworks and the adequacy of the levels of existing support to co-operatives. It is not wrong to adopt an expansionist approach on the levels of support for so long as this is balanced against other pressing priorities and capacity as derived from the maximum possible public revenue that can be drawn from our economic base. We really need ways by which we can improve on the co-operatives legislative and regulatory frameworks and levels of support. We need to continuously build an enabling environment for co-operatives to thrive.

It is important that we also pay equal attention on other forms of co-operative support, such as policy, market, product and production process research and development; capacity building, training and incubation; etc.

But let us build a vibrant co-operatives movement!

In building thriving co-operatives, we need a strong and vibrant co-operatives movement. It is not our intention to assess through this input the state of this movement save to say there are currently serious challenges and weaknesses that need to be addressed. In particular, we must consolidate national co-operatives apex body that meets all the requirements and is on a par with the quality that it needs to take forward the purpose of its existence!

Let us go back to basics, but back to the root!

‘Going to the root’ calls for industrialisation through the development of local production and the expansion and diversification of manufacturing as part of the strategic tasks of our way forward - the second, more radical phase of the national democratic revolution, our road to socialism!

We are therefore not talking about industrialisation without transformation of the patterns of ownership and control. We do not want, in this democratic transition, to reinforce the capitalist accumulation regime, in particular, its class property relations. Without co-operative development, therefore transformation in class property relations, especially the goal of socialisation, in addition to public ownership, is inconceivable!

There is therefore a lot of work that still needs to be done to build and develop co-operatives than almost everything we have said here today. We hope that you will reflect in detail about this gigantic task.

Cde Jerry Thibedi is SACP Central Committee member, this is a slightly edited version of the message, delivered to Nehawu Annual Co-operatives Conference on Saturday, 29 August in Johannesburg

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