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Volume 1, No. 4, 4 December 2002

In this Issue:


Red Alert: On what accumulation path are we currently located? Socio-economic transformation - progress or regression?

By Blade Nzimande, SACP General Secretary

We are now less than a year-and-a-half away from completing the first decade of democracy in South Africa. We are justifiably proud of the gains made in democratisation and in the consolidation of political peace and stability. But what about socio-economic transformation? Are we on the right track? Have we begun to make an impact on the dismal apartheid legacy of racialised poverty and inequality?

The answer is both yes and no. In some respects we are beginning to make a significant impact, in other respects poverty and inequality have worsened.

In mid-November the government agency, Statistics South Africa, released a major report comparing household earnings and spending for October 1995 and October 2000 ("Earnings and spending in South Africa: Selected findings and comparisons from the income and expenditure surveys of October 1995 and October 2000").

The Report finds that, in terms of income, the average South African household became significantly poorer between 1995 and 2000. In October 1995 the average household's income was R37,000. When inflation is taken into account, the value for 2000 was projected to be R51,000 if average income were to remain constant. But the survey found the actual average income for 2000, at R45,000, was well below that.

Deepening income inequality

These are average figures. When households are divided into five bundles, each representing 20% (or "quintiles"), ranging from the poorest to the richest 20%, then an even more sobering picture emerges. In 1995 the poorest 20% of households received a mere 1,9% of the total income in our country. In 2000 this pitiful share had dropped still further to 1,6% of total income. But the slipping back in share is not only confined to the bottom 20% of households. The poorest 50% of South African households also slipped backwards in these five years relative to the richer half.

Racialised inequality

Perhaps the most depressing statistic to emerge from the mid-November Stats SA report is that the average African household experienced a 19% fall in income, while the average white household experienced a 15% increase!

In 1995 the average white household earned four times as much as its average African counterpart. In 2000 the average white household was now earning six times the average African household.

In its 1995 survey of household earnings and spending, the Central Statistical Office (as Stats SA was then known) warned that income was distributed "in a highly unequal manner", and that in this respect SA was comparable to the other most unequal countries in the world, like Brazil and Ecuador. It also noted the obvious, in SA this inequality was not only racialised, but also gendered and geographical - households headed by African women and rural households were the poorest. The 2000 survey shows that little has changed, the same basic patterns persist. Income and expenditure are still distributed "in a highly unequal manner", with race, gender and geography being strong determinants.

Deepening class exploitation

But when it comes to class, deepening inequality is even more stark. According to the recently released statistics for the second quarter of this year, operating profits (accruing basically to a small minority of capitalists and the corporations they control) exceeded the entire wage bill going to labour as a proportion of our GDP!

Ann Crotty, Business Report correspondent observes bitterly:

"For those who had any doubts, the figures provide unassailable proof that ANC policies have been much more supportive of capital than labour…You have to go back 21 years to find another period in which capital did as well. That was in 1981 when, for reasons quite beyond the control of any South Africans, the gold price shot up to $800 an ounce…The situation in 2002 is entirely different. It represents the success of policies designed to achieve such a result. The return on capital has been significantly enhanced while the return to labour has been mercilessly squeezed. In real terms labour costs in South Africa have fallen exceptionally fast in the last decade, which is why our productivity has recorded the fifth biggest increase of the 46 largest economies in the world." ("Capital makes a mint as labour takes the knock", Business Report, November 20, 2002).

Taken all together, we believe that these statistics indicate that, despite our best intentions and expectations, our present accumulation path remains stubbornly dominated by patterns of growth and simultaneous under-development typical of a semi-peripheral capitalist economy. We have not succeeded (nor is it easy to succeed) in breaking out of the apartheid-era accumulation path.

The social wage

Does this mean that everything is getting worse? That all government socio-economic policies are failing to redress the apartheid legacy? The answer is no.

The Stats SA report comparing households for 1995 and 2000 shows very significant progress in the impact of "social" wage measures - things people get for free or at subsidised rates, such as basic services, health care and schooling.

The proportion of people with access to clean water climbed from 79% to 83%. Those with access to electricity for lighting rose from 64% to 72%. Those with access to telephones rose from 29% to 35%. People living in formal housing rose from 66% to 73%.

So why are we succeeding on some fronts, and failing on others?

The lessons are very clear - "the political economy of labour versus the political economy of property"

Back in 1864, Marx warmly celebrated what were, on the face of it, relatively modest reforms of the dominant capitalist system in Britain at the time - the passing of the Ten Hours Bill, and the building of a workers co-operative movement. These measures had their own inherent, short-term value, but they also imposed, Marx argued, a different, an anti-systemic, a potentially transformational logic onto the dominant accumulation path. He writes of the passage of the Ten Hours Bill:

"besides its practical import, there was something else to exalt the marvellous success of this working men's measure…it was the first time that in broad daylight the political economy of the middle class succumbed to the political economy of the working class."

In similar terms, Marx celebrates the building of a workers cooperative movement as a

"still greater victory of the political economy of labour over the political economy of property."

Here in South Africa the statistics are telling us that where we are simply going with the flow of capitalism ("the political economy of property"), seeking to create an investor friendly climate, we are singularly failing to address the apartheid socio-economic legacy - the emergent bourgeoisie emerges, the established rich get richer, the great majority suffer worsening income poverty and inequality.

On the other hand, where we have tried, even if unevenly, to defend and consolidate the public sector (education and health); where we have, at least until recently, held on to key parastatals and provided them with a relatively clear developmental mandate (electricity and telecommunications); where we have rolled back, to some extent, the capitalist "user- pays" market principle (water and electricity); where we have strategically intervened into the capitalist market with active subsidy policies (housing) - in these cases we have had a tangible transformational impact on the apartheid socio-economic legacy.

Marx put it very well back in 1847:

"The theoreticians of the proletarian class…no longer need to seek science in their minds; they have only to take note of what is happening before their eyes and become its mouthpiece."

Where we have muddled along between these two different strategic approaches, between the "political economy of property" and the "political economy of labour", as in transport, neither privatising whole-sale, nor putting in serious infrastructural or subsidy investments, there has been a slow deterioration. We are going backwards, forwards and side-ways simultaneously.

There are also other important areas where there are arguably positive lessons to be learnt. For instance, without necessarily imposing an alternative "political economy" logic, where we have provided active, industrial sector policies and fostered a collective social-accord buy-in (notably in the auto- and auto-components sector) then actual export-led growth and some job retention and skill training and development has occurred.

Perhaps things have improved since October 2000?

We have been relying essentially on statistics that take us up to October 2000. Some comrades may argue that since then there has been a turn-around, or that deepening poverty, unemployment and inequality have bottomed-out, and that in the relative short-term we should see a significant take-off. We have, of course, been promised an imminent take-off ever since mid-1996. However, we should not just rule out these alternative views.

In the second quarter of 2002 there were indications that job losses had, indeed, bottomed-out (at a very high level of unemployment, approaching 40%). However, the Department of Trade and Industry economists who noted this development were not predicting a sustained bottoming-out, unfortunately. With an annual GDP growth for this year at around 3%, South Africa is one of the better performing economies globally. This is certainly something to acknowledge, and it is, no doubt related, in part, to the "stabilisation" of key macro factors, and the partial "insulation" they have given us. However our relatively better performance is more a reflection of a major global down-turn, than an indication that we are performing radically better than in previous years. Growth, of course, is no guarantee of lessening poverty or inequality, and by common accord the current 2-3% levels are in any case entirely inadequate to make a significant dent in our developmental and unemployment deficits.

The gains themselves are threatened

Even more pertinent and concerning is the fact that in a mixed economy dominated by capitalism (the "political economy of property"), the gains made through imposing an alternative logic (the "political economy of labour") are never secure and are always threatened by roll-back. We have, in fact, to boldly press ahead with an accumulation of transformational measures, or the advances will themselves be engulfed and turned around.

We have made head-way with overcoming resource poverty and inequality, while losing ground on the front of income poverty and inequality. However, income and resources are interconnected, especially when services are increasingly commercialised or privatised. Gains made with overcoming resource poverty can be undermined by income poverty. There is strong evidence to suggest that this is the case with telecommunications, for instance.

Guided by its public sector developmental mandate, and assisted by its temporary fixed line monopoly, Telkom has rolled out an impressive 2,67 million new lines, many to poor communities. However, addressing the telecommunications resource back-log has been conceptualised largely as an interim measure - the roll-out of infrastructure. The sustainability of this developmental measure has clearly not been adequately strategised. Sadly, as Telkom's own 2001-2 financial statement was forced to concede, only 667,039 of the 2,67 million lines delivered were still in service. Over two million lines delivered have been cut-off because the poor communities to which they had been delivered could not pay for the service. This was related to general income poverty, but also to the contradictory restructuring trajectory of Telkom. Getting ready for its own further privatisation and for competition on the fixed-line market, Telkom has brought down the cost of international calls, in the niche market where it is likely to face most competition. However, in the mass domestic market, where there will be little competition, Telkom has hiked up call prices far in excess of inflation. The privatisation and liberalisation objectives of making Telkom more sellable and more competitive, and the developmental objective of sustainable services to the millions of poor in our country have simply collided head-on. The privatisation/liberalisation agenda has won against the developmental agenda.

It will be informative to see what the October 2002 household statistics tell us about telephones. It is probable that some of the cut-offs noted above will be partially compensated by increased cell-phone usage. It is unlikely, however, that more costly cell-phones will completely make up for the 2 million cut fixed lines. Either way, it is clear that the sustainability of a progressive measure, the mass roll-out of telephone fixed line infrastructure, was not adequately thought through, and was not adequately aligned with other policy measures. At the very least, significant public resources have been ploughed into 2 million unsustainable phone line connections.

We suggest that on many other fronts - housing, education, health-care - progressive advances are constantly threatened by income poverty, by policy incoherence, and by the absorption of resources (including human resources) into parallel (and even sometimes foreign) private sectors.

We have no choice - we have to push boldly ahead with ongoing transformational measures that address both resource and income poverty and inequality. There is no short-cut within the National Democratic Revolution, no short-term roll-outs, no simple "market correction", no quick corrective measures that will "normalise" and "de-racialise" our reality.

Unless we deal with class realities within our NDR we will not be able to resolve the national question itself. It is our considered view that both the new phase of imperialism, and the stark challenges posed by the statistical indicators of persisting inequality and poverty, underline the salience of the general strategic positioning the SACP has adopted over the last decade. In supporting the NDR, in identifying the NDR as the dominant task of our present reality, we have also insisted on the validity (and necessity) of independent socialist theory AND independent class-based socialist organisation and mobilisation. Without a systematic socialist approach as a significant current within the NDR, we are doomed to reproducing our marginal, semi-peripheral global status, and to reproducing extreme race and class poverty and inequality.

It is for all the above reasons that the SACP welcomes the commitment by government to hold the Growth and Development Summit during the first half of 2003.

The SACP cannot over-emphasise the centrality of a growth and development strategy in addressing the massive challenges we face. It is important that as we approach the Growth and Development Summit the ANC-SACP-COSATU Alliance reaches extensive consensus and agreement. This will ensure that we approach and engage with and against private capital as a united people's voice.

Where there are trade-offs, they should be not be premised on the current accumulation path, where only the working class is expected to make sacrifices. This should include the review of the very so-called "fundamentals" so that we do not approach this crucial Summit from narrow trenches.

The Growth and Development Summit must not suffer the same fate suffered by the 1998 Presidential Jobs Summit. Concrete and binding agreements and commitments from all sides - labour, community, government and capital - must be reached with clear goals, targets, and workable implementation and monitoring mechanisms.

Building a People-driven and Progressive HIV/AIDS Movement  

The impact of the HIV/AIDS pandemic in our country and on the continent is already devastating; millions of people will suffer poor health; that there are indications that the death rate in our country is rising and that our Human Development Index is declining; women face an increased burden of care and support and are most vulnerable to HIV infection as a result of patriarchal practices and attitudes in society.

In the view of the South African Communist Party (SACP), a fundamental challenge in arresting this pandemic is to bring down the rate of new infections by a mass campaign and public education promoting awareness about the imperative to change behaviour.

The success of such a campaign is inextricably linked to the struggle for human development, including a radical improvement in literacy, housing provision, and the building of a strong, efficient and effective public health system and employment.

An effective prevention campaign needs to be complemented by an appropriate treatment programme that can extend the lives and improve the quality of life of persons living with HIV/AIDS and give hope to millions of infected and affected people. In this regard, as a society, we just fell short of a breakthrough to mark this year's World AIDS Day given the delays at the NEDLAC negotiations on a National HIV/AIDS Treatment and Prevention Plan. These negotiations must continue and reach a decisive conclusion.

These NEDLAC negotiations confirm that since Cabinet released its major statement on HIV/AIDS on 17 April, unity in action between government, civil society and the people is possible and necessary to defeat the pandemic.

The Private Sector

The private sector in South Africa is manifestly failing to contribute effectively to combating this pandemic.

This is shown by the wanton discrimination of people living with HIV/AIDS by the majority of institutions in workplaces and in the financial, medical aid, private health institutions. Only last year, the Financial Sector Campaign Forum had to engage the Standard Bank and the Banking Council because they were evicting HIV/AIDS orphans from houses bonded to their late parents. In many cases, these evictions are compounded by policies of insurance companies which exclude HIV/AIDS cover. These policies are cruel, inhumane and reflect the poverty of private commercial banks and the insurance industry in our country.

Another dimension which the SACP is critical of is the private appropriation of knowledge in the form of patent and intellectual property rights. This dimension is an effective barrier to making affordable medicines available to poor countries.

In fact, the private sector has largely left this challenge to government and community organisations. This is not to paint the private sector as a whole with the same brush. Important initiatives have started including the work led by the National of Mineworkers and the South African Transport Allied Workers' Union in the mining and transport industries.

It is undeniable that the private sector holds massive resources which can be mobilised to fight this pandemic.

The way forward

It is clear to the SACP that the way forward has to be informed by an acknowledgement that the struggle against HIV/AIDS is, fundamentally and essentially, a struggle over the direction, content, trajectory and the direction of transformation of South Africa suffering the legacy of apartheid of racism, gender oppression and economic inequalities. This might sound obvious. However, because many of us find ourselves in air-conditioned offices, well-catered functions and conferences, well-funded organisations, we sometimes approach the challenge of fighting the HIV/AIDS pandemic not from the standpoint of people and communities affected by HIV/AIDS, but from our narrow positions.

Insufficient attention is paid to the struggle against HIV/AIDS discrimination in all spheres of society, in particular in the workplace and in the financial sector. An important dimension in the SACP-led financial sector campaign is a strategy which focuses on litigation, consumer activism and policy reform to end and remove unfair discrimination. The Equality Act and Employment Equity Act will be useful tools in this regard.

Amongst the agreements reached at the NEDLAC Summit (held on the Financial Sector held on 20 August) was a commitment to exploring automatic insurance cover of up to a bond of R150 000 for all, including those of our people who are HIV positive. If this is indeed going to be a path-breaking achievement, an agreement must be reached within the first quarter of next year. This requires that it must be energetically taken forward as a priority in the post-NEDLAC Summit processes.

The mobilisation of our people behind the implementation of an holistic and appropriate government-led strategy to fight the HIV/AIDS pandemic must be taken to a higher level through a focus on the building of a people-based and people-driven HIV/AIDS movement. Such a movement must be part of overall struggles for social transformation.

Such a movement will be the best monument we will ever build in memory of those who have passed away because of HIV/AIDS. Such a movement will be our best weapon in the struggle against HIV/AIDS. Such a movement can give us hope since it should transcend the individualism of the NGO Industry and can really contribute to transform people's lives, deal a deadly blow to ignorance and ready us to be dynamic, portable, flexible and strong in our diverse struggles including the important struggle for affordable medicines. This requires actively strengthening the work of community organisations involved in fighting the HIV/AIDS pandemic

The SACP will specifically focus on the building of such a movement which must intensify the campaign against multinational pharmaceutical companies to provide cheaper drugs, not only anti-retrovirals, but also drugs to combat the many curable diseases afflicting our country and continent.

The SACP is also concerned about the need to unite all organisations on HIV/AIDS front in order to overcome what, in many instances, are petty differences.

Serious attention needs to be paid to consciously seeking to transform gender relations and stereotypes that make women and girls the most vulnerable to HIV infection.

Finally, the above need to be linked to the building of a comprehensive public health system and the transformation of the medical aid industry in favour of on a national health insurance system.

The struggle against HIV/AIDS and the specific issues raised above hold a priority position in the 5 year Programme of Action and the 2003 Annual Programme of Action of the SACP as adopted by its Central Committee Lekgotla held from 28 to 30 November.

A New Phase in Global Imperialism – the Centrality of the Struggle for Common Public Goods  

Over the past year there has been a significant shift within the global reality. In particular, the posture and stance of the US has become more aggressive, more militarised, more unilateralist, more protectionist, less nuanced in its imperialist ambitions. This shift is NOT a rupture with the underlying and persisting realities of a century-and-a-quarter of imperialism, but it does mark the end of a particular phase within imperialism.

The previous phase, lasting just over a decade, began around 1990, with the end of the Cold War and the disintegration of the Soviet bloc. It was dominated by the illusion of “benign globalisation” and two major ideological discourses – an economic discourse of limitless growth through neo-liberal alignment (the Washington consensus); and a political discourse of “transitions to democracy”. These discourses shared a common set of assumptions – they were essentially about “convergence”, the East (i.e. the formerly Soviet bloc) was becoming the West. The “anomaly” of communism and, on a lesser note, the “anomaly” of apartheid had disappeared. It was the “end of history”. The world was essentially now a “normal” place, and all it required was for various formally aberrant and “authoritarian” societies to normalise their economic policies and their political systems in order to prosper.

There were always more conservative intellectual think-tanks and voices within the US challenging this consensus – arguing, notably, about the intractability and “clash” of “different civilisations” (Islam, especially, but also “African traditionalism”). They correctly challenged (but from a right-wing “realist” perspective) the assumptions of a relatively homogeneous world, evolving in the direction of a benign globalisation. These currents are now ascendant, partly because of the many failures of the Washington Consensus and transitions to democracy, partly because of electoral shifts in the US (and in the EU), partly because of a new slow-down in the main centres of capitalist accumulation, and the time-honoured recourse to militarisation to spur profitable growth, partly because of critical geo-political concerns, especially related to the control of Middle East oil, and partly because of active but diverse resistance to US-dominated globalisation (including, of course, the reprehensible terrorist attacks of September 11th 2001).

Quite naturally, the South African breakthrough of 1994, born in the midst of the “benign globalisation” phase, was heralded globally as one of the iconic confirmations of the global trend towards “convergence”. Also, quite naturally, the dominant ideological discourses had a profound impact upon our own movement, and about how we tended to understand our own democratic transition.

Through the 1990s the SACP, perhaps more consistently than most forces within our country, systematically challenged the economic and political discourses of convergence. While supporting the negotiated transition, we systematically critiqued the “elite pacting” models that called for popular demobilisation, and the consolidation of the centre within the incumbent regime and within the liberation movement, while marginalizing the “right” (about which we had no problem), and the “left” (which meant and still means – us). While accepting the need for economic realism, we critiqued the principal illusions of the Washington consensus.

The advent of a new phase, and new globally dominant discourses (notably “the war on terrorism”) has had a contradictory impact on our country and our movement.

On the one hand, the word “imperialism” and the need for an anti-imperialist posture, which had all but fallen into disuse within our movement (as we noted, for instance, at our 9th and 10th Party Congresses), have now begun to resurface more confidently. On a number of key issues the ANC and ANC-led government have increasingly taken excellent and consistent stands (Palestine, Iraq, the critique of unilateralism and protectionism).

The failure of Washington consensus strategies to overcome the crisis of underdevelopment in the South has resulted in several notable outcomes – in particular, the important electoral victory of the left presidential candidate in Brazil. We should not over-burden the new government in Brazil with excessive expectations in a situation in which there a many severe constraints, but the Workers’ Party in Brazil has consistently critiqued the “convergence” economic policies of former President Cardoso, policies which have been much admired within our own government circles. The Workers’ Party has also actively mobilised around and experimented with (in metros and councils it has controlled) revolutionary-reform measures of the kind that the SACP has been advocating.

The “Asian Contagion” crisis in 1997-8 created external conditions in which we were able to constructively raise questions about neo-liberalist assumptions, after more than a year of great difficulty within our alliance. However, when the crisis appeared to blow away, we found less engaged interlocutors within the alliance. The advent of the new phase of imperialism should, in principle, offer even more sustained possibilities for advancing a systematic critique of imperialism.

However, there is still a tendency to hanker after the phase of “benign globalisation” and to see the new realities as “anomalies”, rather than systemic features of imperialism.

On assessing this reality, discussed extensively at the 2nd plenary session of the 11th Congress Central Committee last weekend, the SACP reaffirmed the critical importance of international solidarity. Ours should be a struggle to swim against the tide of imperialist globalisation, whilst simultaneously building on the common struggles of progressive forces across the globe. This requires focus on a number of issues.

The first common struggle around which we need to co-ordinate is that of defending and extending the public sector and protecting the role of the state in the delivery of basic services. This is related to what the Ekurhuleni Alliance Summit in April 2002 referred to as the “struggle for common public goods.” This includes, for instance, the struggle over the current patent regime, where essential medicines become common public patent rights rather than rights owned by multinationals. These are concrete struggles that are already taking place around the globe, as illustrated by the recent anti-privatisation strike by public sector workers in France.

The Central Committee took a decision that over the next five years of its term, the SACP should intensify its contacts and links with progressive forces on the African continent. Given that there are only a few, relatively small communist parties on the continent, these contacts should be broadened to include a range of progressive mass organisations, NGOs, progressive intellectuals and sectoral organisations. The challenge of rooting NEPAD amongst the people and the need to bring to bear the weight of progressive forces in driving this programme necessitates a much more systematic focus on building an even wider network of contacts and engagements on the continent. It is our considered view that the whole issue of peer review should not only be restricted to the governmental level, but its foundation should be building mass based and participatory democracies as the only guarantor of progressive democratic transformations in our continent. It is around some of these perspectives that the SACP will seek to engage with progressive forces on the continent.

One of the ironies of some of the left’s responses to imperialist globalisation has been the tendency not to focus adequate theoretical and practical attention on the place and role of the nation state in the current global order. There seems to be a de-emphasis on the role of the nation state and an assumption that nation-states are no longer that important since their sovereignty has been eroded by globalisation. Whilst there is truth in the gradual erosion of the sovereignty of nation-states in the developing world in particular, the nation-state still remains an important site of struggle. In essence, one of the fundamental preconditions for building international solidarity and the struggle against capitalist globalisation is the reclaiming of the nation-state as a site for implementation of progressive policies responsive to the needs of the workers and the poor in each nation-state.

Embedded in our programmatic slogan of “Socialism is the Future, Build it Now”, is a dialectical understanding of the relationship between imperialist globalisation and the nation state. Globalisation seeks to erode the sovereignty of nation states and subject them to the rule of transnational corporations, whilst simultaneously seeking to strengthen those aspects of nation states necessary for the successful implementation of neo-liberal policies.

Perhaps a better way of understanding the nation state today, particularly in the developing world, is that it is simultaneously weakened and strengthened, thereby being transformed into a site for implementing neo-liberal policies while remaining a bulwark against addressing the social deficit facing ordinary people. Hence, the global neo-liberal discourse of characterising developing countries primarily as “emerging markets” – sites for extraction of mineral resources, capital accumulation for the “metropolis” and financial speculation - rather than as societies inhabited by human beings facing extreme poverty and joblessness. It is for these reasons that the SACP emphasises the absolute need for constant struggles to win space for building developmental states responsive to the needs of the overwhelming majority of their peoples.

Building international solidarity requires, amongst other things, a conscious dialectical link between global struggles and national struggles. This is further underlined by the sheer reality that whilst capital has become globalised and knows no boundaries, the workers and the poor remain domesticated within the boundaries of nation-states, bearing the brunt of marginalisation by capitalist globalisation. Perhaps this also points to the weaknesses of current “global struggles against globalisation” that, important as they are, they bear little relation to progressive struggles and forces within nation states. These global struggles are still largely limited to demonstrations around major international events. One of the challenges is to transform this energy to concretely link up with national struggles around the globe.


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