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Umsebenzi Online

Volume 1, No. 1, 16 October 2002

In this Issue:


Red Alert
The aftermath of the COSATU-led protest actions

The run-up and sequel to the COSATU-led (and SACP-supported) two day protest action against privatisation, poverty and escalating food prices, have reinforced within us one overriding conviction. It is time to stop turning policy debate, implementation and evaluation within our alliance into a continuous trial of strength.

If, as the South African Communist Party (SACP), we have to mobilise and struggle for consistent and progressive policy-making, then mobilise and struggle we shall.

But annual show-downs, easy labelling of each other, point-scoring, flexing of muscles, might make for media entertainment, but these things are having an extremely negative impact on the possibilities of fostering enlightened and sober policy processes. The intra-alliance war of labelling and attrition also impacts seriously on the morale of our shared mass constituency. It is time to show leadership.

There are many dangers in brandishing an ultra-left label, without specific identification of who this ultra left is. Firstly, such labelling without proper specification acts as a substitute to a proper and sober analysis of the challenges facing our movement in this current period. Secondly, such labelling shuts the debate on the very fundamental questions relating to the economic development path to be followed in a democratic South Africa. This is not the time to shut and close this debate, ostensibly on the grounds that all our policies are inherently correct by virtue of being our policies. Instead we need to open the debate on this subject widely, both within our structures as well as in the broader public domain. Thirdly, and much more seriously labelling is factionalising rather than uniting. As the President of the ANC correctly warned in his address to the COSATU Central Committee in 1998, to label one another as “ultra-left” or “right-wing” is to call for a fight, even amongst comrades. To quote the ANC President in full, "But then, we must not fall victim to the easy temptation to label one another as this or that school of thought, and thus close the dialogue among ourselves. Indeed, 1 have noticed that these days some comrades seem to think that the attachment of political labels, like the labelling of different brands of beer, is some honourable revolutionary occupation.
This one is ultra-left. The other is neo-liberal and another is right Wing. Sometimes, when we are supposed to think and analyse, the complex situation we all face demands, we resort to throwing around swear words. And all of us know that to swear at somebody is to look for a fight and not a discussion, even among those who might call one another comrades." Fourthly, such labelling without identifying this ultra-left, in the wake of protest action by allies, actually serves to strengthen and elevate this tiny and marginal ultra-left to be a force that it is not. It also weakens our very struggles to defeat ultra-leftism within our ranks.

At its 11th Congress the SACP took a resolution to support the COSATU protest action against privatisation. Like the ANC and COSATU, we said at the time that our preference was that this matter should be resolved through internal alliance discussions. We still believe that it is eminently possible to resolve differences through discussions and engagement. Unfortunately all initiatives and engagements prior to the two-day protest action failed to resolve this matter. We supported this action because, as our 11th Party Congress political programme says, there has been a serious conflation in practice of restructuring and privatisation.

Our view is that whilst restructuring of the parastatals is necessary, this must not be equated to simple privatisation. We believe that it is important that we discuss and agree as an alliance on which parastatals and public functions should remain in the hands of the state, including the modalities to ensure this. This has not happened. Instead the argument for restructuring on a case-by-case basis is happening outside of this overall strategic agreement and understanding – a matter that is creating enormous problems and misunderstandings.

As a communist party, we are opposed to the privatisation of the provision of basic services and the weakening of the strategic capacity of the state to decisively intervene in the economy in favour of the workers and the poor. Much as we are faced with the reality of the overwhelming dominance of private capital, the harnessing of such private capital must be done through collective discussion on the strategic and tactical approaches to be adopted, such that we strengthen rather than weakens the capacity of the state in implementing a developmental agenda. There is no single corner of our broad national liberation movement that has all the wisdom on how to advance and consolidate our democratic revolution.

The SACP is absolutely convinced that there are (on paper and in principle) no serious differences within the alliance on restructuring. The ANC’s impressively democratic and highly participatory National Policy Conference (27-30th September) once again underlines the point.

The Conference adopted a wide range of draft resolutions for finalisation at the ANC’s 51st National Conference in December. Among the draft resolutions are several dealing with the restructuring of state-owned enterprises (SOEs). While these draft resolutions on SOEs do not depart from existing ANC policy resolutions, they strongly reinforce key progressive perspectives.

What are the key aspects of ANC policy on the restructuring of SOEs?

The National Policy Conference resolutions affirm that “a number of parastatals, including provincial and municipal enterprises are a significant strategic public asset that must be included as an integral component of our approach to building an active developmental state”. Given this fundamental strategic point of departure, the ANC resolutions call on us to

  • strengthen and consolidate existing efforts to redirect the parastatals towards meeting the developmental goals of the country”;
  • continue to involve all social partners in discussions on restructuring of state-owned assets as outlined in the National Framework Agreement, and …ensure the creation of similar instruments at municipal and other levels”, and
  • ensure “these entitites [are] continuously monitored and evaluated against the goals of a developmental state.”

These policy recommendations are all absolutely spot-on, and the SACP warmly endorses them. Of course, it is important to recognise (and the SACP DOES recognise) that the ANC is not a socialist organisation. (It is not an anti-socialist organisation either.) The ANC’s approach to the restructuring of the public sector is informed by a progressive but relatively open-ended, “balance of evidence” approach. The SACP’s long-term socialist strategic perspective favours an extensive and dominant public sector in our society. We make no apology for approaching current policy debates informed by this longer range perspective. However, we accept that the ANC approaches the topic in a somewhat different way. Whether an SOE should be wholly or partially privatised or not, whether an existing private entity should be nationalised, or whether a new publicly-owned entity should be created – from an ANC perspective, these choices depend on the balance of evidence in each case.

The SACP is comfortable with this “balance of evidence” approach, adopted by the leading formation within our tripartite alliance. We believe that the case for a powerful, active and strategic state and parastatal sector is overwhelming in a country like our own, with the developmental challenges we confront.

So why then has there been such intra-alliance turmoil on this front?

The disagreements in the Alliance around restructuring and privatisation are of such significance that our political approach to them cannot simply be determined by the success or otherwise of a single protest action. The cumulative effects of an unresolved working class grievance in the medium to longer term can have very serious repercussions, and therefore bold and decisive leadership on the part of all in the alliance is required in the here and now to resolve such matters.

At its 11th Congress the SACP properly located these disagreements by characterising the current political conjuncture as that which is principally a struggle to deepen the national democratic revolution on a terrain of capitalism. This particular conjuncture is manifested by, amongst other things, struggles to confront the reality that whilst the liberation movement, of which the SACP is a part, has deepened its hold over state power, economic power still remains in the hands of the very same class forces as under apartheid – a white bourgeoisie with deepening links to global capital. Government has indeed over the last 7 years recorded many achievements and progress in tackling the social deficit inherited from apartheid, as well as deepening democracy and bringing political stability to the country.

Deepening the NDR is fundamentally a struggle to confront and seek to address the deeply intertwined national, class and gender contradictions. The difference however between economic power in the current period and during the apartheid regime, is that now private capital has been “liberated” from the global stigma of apartheid and its political contradictions, thus strengthening and deepening the processes of capital accumulation and opening global opportunities for this capital. But this mobility and “liberation” of the white bourgeoisie from an apartheid political order has in turn not liberated the mass of the people of our country from the clutches of poverty.

The neo-liberal restructuring of both the global and domestic economies provides one of the most intractable and hostile terrain on which an underdeveloped country like ours is seeking to address poverty and deepen democracy. Whilst government has made significant advances in tackling the social deficit inherited from apartheid, in many ways neo-liberalism is reproducing and deepening instead of addressing the national, class and gender contradictions that the NDR seeks to resolve. In other words, the consolidation of the national democratic revolution is threatened by the very same contradictions it seeks to address. It is these contradictions that the revolutionary alliance is faced with, and the debates, tensions and disagreements that flare up now and again within the Tripartite Alliance are about how to confront this contradictory reality and challenges. This is the backdrop against which we should understand the unfolding debates within the Alliance.

It is also our view that between stated policy positions and actual practice there are real dangers of serious slippage and confusion. If the balance of evidence is, indeed, measured up against the kind of developmental objectives quoted above from the ANC National Policy Conference, then there should be no serious problems at all. But sober and collective policy development and evaluation is constantly undermined by all kinds of pressures.

There is the role of an aspirant and emergent black capitalist strata for whom privatisation offers a chance for private accumulation, with most restructuring involving a designated “empowerment” stake. All too often what parades as “black economic empowerment” is really personal enrichment at the expense of public property, and effective black economic DIS-empowerment.

Then there is the often close, even incestuous link between these emergent strata, senior management in the parastatals, and some senior government cadres. There is, alas, sometimes a thin line between legal (but problematic) policy and actual corruption. The recent debacle around the forestry privatisation deal has underlined these problems all too well.

At the end of 2000, government added one more pressure onto the restructuring of SOEs. It is pressure that further compromises the possibilities for a sober, balance-of-evidence policy-making process. At the end of 2000, in the Medium Term Budget Policy Framework government, for the first time, projected a massive R40 billion over three years from privatisation proceeds. Until this time government had steadfastly (and correctly in our view) declined to put clear monetary targets on privatisation proceeds. Whether this switch of policy was motivated by the failure of GEAR’s anticipated major flows of foreign direct investment, or by the escalation of costs of the arms procurement package, we do not know. Government budgeted for R18 billion from privatisation in the financial year 2001-2, and came nowhere near. There is now considerable budgetary pressure to sell, to sell big, regardless of market conditions. This, too, does not contribute to a climate in which a sober, balance-of-evidence, discussion can take place.

Finally, government is also continually goaded by the private sector in general, and by most of the mass media to “accelerate privatisation”, “to show the unions who’s really in charge”, to “go”, as a recent Business Day editorial graphically puts it, “the whole hog”. Accelerated privatisation is turned into the litmus test of whether government is “really in charge”. Privatisation becomes the badge by which we prove to potential foreign investors that we are really serious about creating an “investor friendly economy”.

These (entirely ideological) arguments were trumpeted continuously and very loudly in the run-up to and in the immediate aftermath of the COSATU-led protest actions. Interestingly, within days of the October 1 and 2 protest actions, even the more intelligent independent (and even some pro-business) media commentators were beginning to wonder whether they had not over-played their hand.

Of course, most of the commercial media hailed “government’s tough stance against COSATU”, and presented the protest actions as a “failure”. But quite quickly there were many second thoughts. Having goaded government into being “tough” and having mocked the perspectives of the SACP and COSATU, many wondered if they had not gone too far.

“Why debate the issues when a label will do?”, the Financial Mail (October 11th) asks in an editorial. It is not as though the Financial Mail has been an innocent bystander in the labelling of the left, but having encouraged the trend, even it is uncomfortable with the way in which some within the Alliance bandied about the term “ultra-left”. The editorial notes how the label is being used “to cauterise growing and vocal unhappiness in the ruling party’s alliance partners, Cosatu and the SACP – as well as in the new social movement. Ask for a definition of ‘leftist’ and the answer is inevitably woolly.” The Financial Mail worries that this “trend is dangerous…it reduces the intellectual space for political debate and public dissent.”

Even our ideological rivals in the financial press can recognise what should be obvious to all within the alliance. It is time to stop turning intra-alliance policy debate into labelling and brinkmanship. It is time to create the climate within government, within the ANC, and across the alliance, in which serious and complicated challenges are discussed intelligently and soberly, without fear or favour. It is time to ensure that the broad and progressive strategic policies upon which we all agree are, indeed, implemented in practice and not hijacked.


Telkom: The New Pyramid Scheme?

In the immediate aftermath of the two day national protest actions against privatisation led by COSATU (October 1-2), government responded with a high-profile, public commitment to pushing ahead with Telkom’s ongoing privatisation. Government has now set a firm deadline for a massive Telkom share offering on the JSE before the end of next February. There is also the possibility of a secondary listing on the New York Stock Exchange. Government’s announcement of its intention to press ahead with this Telkom initial public offering (IPO) was elaborately stage-managed. Clearly a signal was being sent.

Underlining that this was theatre, as much as anything else, government IPO head, Eugene Mokeyane, boasted: “We have a production which literally has a cast of hundreds”. He was referring to his budget of R43 million that will be used to deploy more than 400 people to schools and communities in a massive “education campaign” to sell the virtues of privatisation and share-holding. The “production” also involves publicity on the public broadcaster, community radio stations, post offices and in Standard Bank branches. There is a heavy sell.

The leading business and financial media are delighted. According to the Financial Mail (October 11, 2002): “Public enterprises minister Jeff Radebe has made it clear to investors and the labour movement that government is determined to go ahead with Telkom’s listing. The way he has couched the initial public offering (IPO) is also a rebuttal of labour’s anti-privatisation stance and an attempt to create a new class of black shareholders.”

The Business Day (October 8, 2002) has a similar analysis: “The recent flurry of activity on Telkom’s listing may have been motivated in part by government’s wish to send a clear signal in the face of the Congress of SA Trade Union’s anti-privatisation strike that it will not be moved.”

In the coming months the South African public is going to be treated to R43 million worth (tax-payers’ money) of hard-sell, under the catchy slogan: “Our strength is our sharing”. Plenty of theatre. Plenty of spin. But, economically and socially, is the Telkom IPO a well-considered move?

The Telkom restructuring track-record

The forthcoming IPO is, in fact, the second major step, in the privatisation of Telkom. Government currently owns 65% of Telkom. 30% was sold in 1997 to Telekom Malaysia and US-company SBC; 3% went to “empowerment” group Ucingo; and 2% was earmarked for purchase by 58,000 current and former employees. The 1997 partial privatisation was largely justified on the grounds of the need for strategic investment and, especially, on the need to acquire new technologies that would not otherwise be available.

Not only was there partial privatisation, but the fixed-line phone market has been ear-marked for liberalisation. However, Telkom was given a “grace period”, a fixed-line monopoly to prepare for liberalisation and, more importantly, to ensure that the developmental objective of rolling out phone connections to under-serviced areas could be achieved. Government set a target of 2,8 million new connections for the 5-year period of Telkom’s fixed-line exclusivity.

What is the record so far?

  • More than 20,000 workers have lost their jobs since 1997.
  • As Telkom has geared up for further privatisation and for competition, the price of profitable international calls has come down, but domestic call charges have escalated.
  • Telkom has rolled out an impressive 2.67 million new lines, many to poor communities. But, 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. The privatisation objective of making Telkom more sellable (hence the increase in the price of local calls), and the developmental objective of sustainable services to the millions of poor in our country have simply collided head-on. The privatistion agenda has won against the developmental agenda.

In the view of the SACP a track-record of re-structuring like the above should be grounds for a sober and thoughtful policy review. Instead, we are now on a path of accelerated privatisation and liberalisation.

Creating a “new class of black share-holders”?

Although the IPO will only ear-mark a small percentage of shares for “historically disadvantaged” individuals and community savings clubs like stokvels and burial societies, it is this aspect of the IPO that is receiving particular attention and media acclaim.

As part of the R43 million promotion of the IPO, a pamphlet (“Your Guide to Shares”) is being distributed free to the public in post offices and banks. “The Government hopes”, we are told, “that you will participate and share in South Africa and Telkom’s future.”

While painting a generally rosey picture of the IPO, the pamphlet does warn potential share-holders that their shares can go up AND down. It asserts that “one of the most important shareholder rights is the right to information – so be sure to keep yourself informed.”

But there is plenty of important information that the pamphlet does NOT provide.

  • It does not tell us that we are selling Telkom at the worst possible time in the world telecoms market. According to Business Day : “In the wake of the recent carnage of telecommunications and technology stocks across the globe, analysts now put Telkom’s valuation at about a third of the R100bn to R120bn estimate of two years ago.” The proposed Telkom IPO before March 2003 will, therefore, be a knock-down bargain-basement fire-sale. Nevertheless, Business Day urges government to “go the whole hog” for what are entirely ideological and symbolical reasons – “key among these”, in the editorial’s words, “is widening share ownership in SA by offering as large a portion as possible to non-traditional investors.”
  • The pamphlet does not tell us that the MSCI World Telecommunication Services Index has shed 78% of its value since reaching a high of 161,11 points on March 6, 2000.
  • The pamphlet does not tell us that we are doing something entirely unprecedented – we are trying, simultaneously, to take Telkom’s privatisation further at the very time that we are also introducing a fixed-line competitor.
  • The pamphlet doesn’t tell us that there is a dispute between Telkom and US systems company Telcordia, which could see Telkom pay out up to R1,5bn in damages.
  • The pamphlet doesn’t tell us that Chunghwa Telecom, Taiwan’s biggest phone company, last week cancelled a $1,6bn share sale because of the depressed global market.
  • The pamphlet doesn’t tell us that Eutelsat, Europe’s number two satellite operator, has just postponed plans to sell shares.
  • The pamphlet doesn’t tell us that Mike Schussler, Tradek economist, has just affirmed (while hypocritically supporting government’s IPO process) that “the global telecom sector will give us the biggest blowout since the railroads”.

Perhaps bargain-basement prices will provide many small potential share-holders with a windfall. But equally possible is that many will be seriously burnt in the process. Analysts are guessing that it will take five years and more for there to be some recovery in the market. Whether small-scale savings societies can weather five years without serious returns is a highly uncertain matter.

Public ownership

Behind this heavy sell is a serious ideological sleight of hand. Before the 1997 partial privatisation Telkom belonged to the South African public, one hundred percent. It was government’s responsibility to manage this asset in ways that benefited all of us, especially those most impoverished.

With the 30 percent sale in 1997, Telkom became 30 percent “proudly” Malaysian and American.

The further privatisation process now proposed will dilute South Africa public ownership and effective participation still more. The special share-offering to historically disadvantaged individuals and communities is designed to sow further confusion. Stokvel members with shares in Telkom will be confused in the future. If a further 20,000 workers are retrenched in the name of improved dividends to share-holders, will stokvel investors applaud or be concerned? If more lines to poor communities are cut off in the name of profitability, will Telkom share-holders in those very communities celebrate or mourn?

Telkom is a critical public asset. It is a strategic resource required for the ongoing growth and development of our society and economy. It is a grave error to put its fate into the short-term, individual profit-seeking logic of the market.

Last week in Palestine, 4 - 10 October

From: The Palestine Monitor

It was a bloody week in Palestine, with 28 Palestinians - including eleven children - killed by Israeli forces in the West Bank and Gaza. The majority of deaths occurred during violent invasions of Gaza during which Israeli troops fired randomly at civilians in their homes and streets.

Heaviest losses were sustained on Monday night when the Israeli troops were withdrawing after attacking Khan Younis in the southern Gaza Strip. When local residents went out in the streets to assess the damage and help injured people, an Apache helicopter suddenly turned around and fired missiles into the crowds - killing at least eight instantly.Maisa Inad Zanun, 12, was studying in her bedroom on Tuesday night when Israeli troops fired at her house with heavy artillery, shooting her in the chest - killing her instantly. Her home is located 800 meters from an Israeli military outpost. Troops at the post had been firing randomly at houses and people on the street when the attack occurred.On Wednesday night, forty tanks and four helicopters invaded the Jibna refugee camp in Rafah. As the tanks advanced into the neighbourhoods, Israeli troops opened heavy fire, randomly hitting homes where people were sleeping. In the panic and chaos that ensued, people tried to flee the bullets and ran into the streets, away from the tanks. Two teenagers were killed in the raid; Thair Salah Al-Hout (12) and Ehab Fathi Al-Muhgaier (18).It is feared that this past week's attacks and invasions are further steps towards a full-scale reoccupation of Gaza.

28 Palestinians were killed in the last week and the total number of Palestinians killed since September 2000 is 1947.

For more information contact The Palestine Monitor on www.palestinemonitor.org

World Communists oppose US war in Iraq

The end of September was the 22nd anniversary of the start of the Iran- Iraq war, which continued for 8 years, devastated two neighbouring countries and facilitated the defeat of the 1979 revolution in Iran, world communists published a statement opposing US provocation in the Middle East.

To mark this historic event, the Tudeh Party of Iran mobilised 34 Communist and Workers parties, representing working class campaigners for peace and democracy across the five continents, to declare their total opposition to war and terror and supported the people's struggle for peace, democracy, human rights and social justice.

The important statement reads as follows:

In Defence of Peace, Democracy and Social Justice in the Middle East

We, the undersigned Communist and workers Parties, express our profound concern about the critical situation developing in Middle East and the danger of a conflagration which no doubt destabilise the whole region. The stationing of massive US military forces, the provocative and hegemonist statements by the Bush administration and threat to use force to change the political map of the region are endangering peace.

We are appalled to witness the hardening of attitudes on the part of the Israel on the Palestinian issue and the criminal behaviour of the Sharon government in brutally suppressing the just movement of the Palestinian people for national rights and self-government.

We are fundamentally opposed to the threats by the US administration to initiate a military conflict against Iraq or any other country in the world under any pretext. We believe that change of the dictatorial regime in Iraq and democratisation of that country is the sole responsibility of the Iraqi people and their political forces.

We call for an end to all provocations and policies and actions threatening to bring about a military conflict in the Middle East. We call on all governments to abide by the UN resolutions and strictly respect the terms of UN charter.

We believe that the ideals of peace, democracy, human rights and social justice are intrinsically interlinked. We support the struggle of the people of Palestine for their national rights. We condemn the use of terror by states and individuals the same. We support the popular struggles for democracy, human rights and social justice in all countries of the region including Iran, Iraq, Turkey, Jordan, Israel, Afghanistan, Pakistan and others.

The movement for world Peace and the struggle for human rights and democracy and against occupation and terror are inseparable. We are supporters of peace and people’s movements.

Signatories of the statement

The signatories to this statement are: Tudeh Party of Iran, CPUSA, South African CP, People Party of Palestine, CP Israel, Portuguese CP, CP Iraq, CP of Greece, CP France, CP of Bohemia and Moravia, CP Chile, CP Spain, IZQUIERDA UNIDA ( United Left of Spain), CP Australia, CP Austria, Socialist Party of Aotearoa (New Zealand), CP Britain, AKEL, CP India, CP Bangladesh, CP Ireland, Workers Party of Ireland, , PDS Germany, CP Belgium, CP Canada, New CP of the Netherlands, CP Catalonia, CP Prue, New Left Movement- Peru, CP in Denmark, Party of Democracy and Socialism of Morocco, Party of Democracy and Socialism of Algeria, Party of Mexican Communists, Israeli Communist Forum.


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