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Umsebenzi Online

Volume 15, No. 37, 20 October 2016

In this Issue:


Red Alert

Annual Augmented Central Committee to discuss papers on state power, review progress and strengthen measures in the struggle against corporate-capture

The annual Augmented Central Committee Plenary Session of the South African Communist Party (SACP) will be convening from 2 to 4 December 2016 in Johannesburg. The meeting will discuss Party Building, its programme for developing vanguard leadership and its relationship to state and other key centres of power. The meeting will therefore consider a draft State Power Commission discussion paper to be publicly launched shortly thereafter for consideration in preparation for the Party's 14th National Congress scheduled to take place in July 2017. Documents to be considered in preparation for the Congress include a discussion paper entitled the Ten-Ten Analysis.  The paper summarises the experiences of the Party, the working class, the national democratic revolution and the struggle for socialism looking at the past ten years to 2017 with a view for the next ten years from 2017.

It was the Augmented Central Committee that, nearly two years ago on 30 November 2014, emerged with a statement declaring that, "unless corruption and corporate-capture are dealt with severely and decisively these problems risk becoming systemic and difficult to reverse". That was when the concept of corporate-capture that would more and more gain currency was first introduced in our national discourse by the SACP, the Party that was consistently attacked by its detractors for allegedly no longer giving theoretical leadership as opposed to what it had done in the distant past. To the disappointment of those quarters, the Party has continued to provide vanguard leadership.

But vanguard leadership is not only concerned with theory, philosophy or political education.  As Karl Marx stated in his 1845 "Theses on Feuerbach", "Philosophers have hitherto only interpreted the world in various ways; the point is to change it". The SACP thus declared in its 2014 Augmented Central Committee statement that there is a two-fold strategy needed in the struggle against corporate capture:

Firstly, a decisive state action including criminal prosecution of those allegedly involved in corrupt and fraudulent activities. This, said the Party, required the capacity of the courts to deal effectively and efficiently with the scourge to be enhanced to avoid situations where legal processes drag long.

Secondly, the Party resolved that anti-corruption state interventions need to be combined with active communities and a united and mobilised working class. In the campaign against corporate-capture the SACP has assumed the vanguard with its Secretariat playing one of the most outstanding roles.

The 2016 Augmented Central Committee will therefore also review progress in the struggle against corporate-capture and associated corruption together with the "Three Harmful Fs":  fraud, factionalism and favouritism - along with their related tendencies such as gate-keeping, distortion of internal democracy, manipulation of membership records, buying of votes and social distance from the mass base, all of which pose a serious threat to our broader movement.  

The concept of corporate-capture describes the influence of private corporations on key centres of power to a point of either direct or indirect capture. It clearly identifies who is responsible for the capture, compared to the narrower notion of "state capture" which conceals the corporate character of this phenomenon and the class force behind it.

In order to make, consolidate and maximise profit, the corporate bourgeoisie relies not only on the daily exploitation of labour but also systematically establishes a super-structure through the capture not only of state institutions, policy space and major decision-making processes but also through the capture of political organisations, trade unions, academic institutions and knowledge production. In addition, it creates non-governmental organisations and structures across the spectrum of social activity that, in the ultimate analysis reinforce their agenda.

Associated with the phenomenon of corporate capture is the emergence of the parasitic bourgeoisie. In our country, while monopoly capital - both old White capital and foreign monopoly capital - remains the strategic adversary of the national democratic revolution, the parasitic bourgeoisie has emerged as the most dangerous class, an immediate internal threat. It is inconceivable that the revolution will achieve a breakthrough against monopoly capital and structural corporate-capture without decisively tackling and dislodging the parasitic bourgeoisie.

Related to both the phenomena of corporate capture and the parasitic bourgeoisie is the all-important question of who controls pricing and determines price composition. This is a big terrain of struggle. It is a struggle, for example, not only against unscrupulously inflated prices but, and primarily, for price setting.

There is a campaign against cost-plus pricing. 

What is cost-plus pricing, to start with?

Basically, the price of a product set on the basis of the cost-plus pricing model is the sum of the cost of production of that product including its indirect "overhead" expenses plus a reasonable or justifiable mark-up. With the cost of production proven, the mark-up should actually be negotiated in the public interest particularly with regard to all or major state purchases and at least in terms of basic services and goods. Unless there are wrong practices that must be eliminated, cost-plus pricing is a reasonable approach compared to market pricing. 

Cost-plus prices should basically be below market prices which are frequently inflated by the so-called supply and demand forces far above the actual value of the products concerned. Let us look at two examples, import-parity pricing and export-parity pricing:

In terms of the important-parity pricing (IPP) that has been destroying our industrialisation potential in many ways, the state and other purchasers pay for products as if those products were imported or originate overseas. For example the coal that is mined in Middleburg or Witbank in Mpumalanga Province would be sold in terms of the IPP model for industrial or domestic consumption within the province and South Africa as a whole as if it does not originate from inside the country. The IPP model imposes international transportation, insurance, tariff and other import related costs largely based on the most lucrative market prices.

The IPP model has been prevalent in many sectors. For example in the steel sector, oligopolistic corporations such as ArcelorMittal have been using IPP to heap up maximum profit at the expense of downstream industrialisation and domestic consumers.

In terms of Export-Parity Pricing (EPP) that has also been destroying our industrialisation potential in many ways, the state and other purchasers pay for products as if those products are sold at an export destination or market - mostly a lucrative one. This model therefore charges export related costs including international shipment and loading costs minus domestic transportation to the local port of shipment to that export market.

One of the effects of EPP is that high quality production inputs end up being exported as if they are not needed locally. It is in this context that low grade products that can cause a variety of production and equipment problems end up being the ones made available for use by local producers - as it happened to Eskom in terms of coal - while high quality product grades are destined for lucrative export markets.  

Umsebenzi Online is an online voice of the South African working class


Be seen actively involved as an organisation in the day to day struggles of the people and fight to solve their problems

Be seen actively involved as an organisation in the day to day struggles of the people and fight to solve their problems

By Comrade Khaya Magaxa

Our Party, the Communist Party, has been waging the class struggle in South Africa for the past 95 years. In the course of the national liberation struggle which ended with the democratic breakthrough of 1994, we identified Colonialism of a Special Type (CST) and the need to combat it through the National Democratic Revolution (NDR). Since 1994 we have led the struggle to advance, deepen and consolidate the NDR against our class enemy - both inside and outside our liberation movement.

Consistent with this proud history, at our 13th National Congress held at the University of Zululand in 2012, we resolved to take responsibility for both the successes and failures of the NDR and to execute programmes which, in the process of consolidating the NDR would take us on the road to socialism

Our detractors, both within and without our own movement, have been engaged in the subversion of the NDR for personal private agendas, self-enrichment and wealth accumulation at the expense of the working class.

We have therefore been waging a relentless struggle against the many variants of the philosophy of self-enrichment. In its internal form, it has occurred as a contradiction in most, if not all, African liberation movements and was first identified in its infancy in 1961 by Frantz Fanon in his book The Wretched of the Earth, in the Chapter entitled "The Pitfalls of National Consciousness". Externally, it has been reinforced by the ascendancy of the neo-liberal agenda in 1980 and the counter-revolution - including internal errors and contradictions - in Eastern Europe which reached its climax with the dissolution of the Soviet Union in 1991 enormously weakening the socialist and progressive camp worldwide and therefore undermining our own democratic breakthrough in 1994.

When analysing our current political situation, we must apply the historical materialist method, the concrete analysis of concrete conditions. We must apply class analysis, both to our internal struggle and to the relationship of South Africa to the rest of the world.

We must take note of the following injunction from the historic leader of the Great October Socialist Revolution that occurred in Russia in 1917, Vladimir Lenin in 1906:

"The task of the advanced class in the revolution is to ascertain correctly the trend of the struggle, to make the most of all opportunities, all chances of victory. This class must be the first to take the directly revolutionary path and the last to abandon it for the more 'prosaic', more 'circuitous' paths".

In the international arena

We have witnessed right-wing takeover of political power in Brazil, our partners in BRICS. This takeover manipulated the constitution in that country to remove a democratically elected, pro-worker, President. The right-wing group used Parliamentary procedures to unseat a legitimate president and install an illegitimate fellow despite the huge resistance from the Brazilian masses. This marked the beginning of instability in political terms, which does not bode well for the BRICS partnership. It should further be noted that corruption affecting the governing Workers' Party internally provided the excuse for the reactionary coup, whose executors were themselves facing serious corruption charges and therefore interested mainly if not only in saving their own skins.

We must also note the removal of legitimate Kurdish mayors in Turkey using the failed coup as a pretext to purge democratically elected leaders. This is nothing but an attempt to weaken the Kurdish struggle for democratic self-determination. As the Party we support the Kurdish people under the leadership of the PKK. We recently held interactions with their representatives in Cape Town.

In Gabon, the opposition candidate Chi Jean Ping contested the result of the Presidential election taking note that observers expressed dissatisfaction with the credibility of the election. Ultimately the courts were probably to settle the matter thus, in a particular way, taking power away from the people. The will of the people must never be compromised or substituted by other means.

Our current dynamics at home in their proper historical context

In order to fully appreciate what is happening now, we must look at our history and understand its connection to the present so that we can envisage what may happen in the future and HOW WE CAN INFLUENCE THAT.  This is THE dialectical approach to analysis.

Let us therefore take a moment and briefly look back 20 years or so ago, with a focus on a tendency the SACP identified by the name of the 1996 Class Project.

The 1996 Class Project was a neoliberal project dressed in social democratic clothing. It used access to state power to subvert the revolutionary content of the NDR and replace it with that reformist content also clothed in "All-Africa Nationalism" or "Pan-Africanism". The architects of the Class Project, notably Thabo Mbeki and his clique adopted the Growth, Employment and Redistribution (Gear) policy. Gear was presented to the South African people as a measure to attract investment, grow and transform the economy, create jobs and redistribute wealth.

In fact, Gear was a neo-liberal programme akin to other "Structural Adjustment Programmes" propagated by the International Monetary Fund (IMF) and World Bank. All such "Structural Adjustment Programmes" preached the cutting of social spending, affecting education, health, social services; they preached the privatisation of state owned productive assets and outsourcing or out-contracting of basic services such as water, electricity, refuse removals, and so on.

The 1996 Class Project sacrificed our national sovereignty to the dictates of the IMF and World Bank thinking. The casualty was the NDR, the political programme of the working class. This onslaught meant that the Reconstruction and Development Programme (RDP) was abandoned despite denialism to the contrary. The consequences of Gear included closing down of teachers' training colleges, agricultural colleges and other essential occupational and technical training institutions.

The roll-out of infrastructure, including installation of Telkom connectivity in rural areas, extending electrification  suffered a decisive blow (the latter through the refusal to drive public investment in new generation capacity). Construction of houses, schools and roads were also compromised. All of this was done under the guise of increasing the budget surplus and attracting foreign direct investment to ultimately achieve the objectives of economic growth, and employment creation and wealth redistribution.

A large scale programme of privatisation of state owned enterprises also led to the outsourcing of the provision of basic services. Not only were public goods and services to be more exclusively procured from private enterprise, but public infrastructure and social delivery programmes were now firmly to be facilitated through private enterprise. The role of the government was almost reduced to that of a mere administration of these processes.

Casualisation and job losses became the order of the day enabled by this reactionary group coming from within the democratic movement but not without external ("technical") support. This was done under the pretext that the pain was only short-term with highly beneficial and sustainable medium- to long-term benefits. Of course this was gibberish.

As a consequence, South Africa had achieved a jobless capitalist economic growth at the same time as unemployment remained structurally high. The gap between the rich and poor widened.  We became the most unequal (middle income) country in the world. Rather than address the legacy of CST, the class project effectively deepened it.

Consequently, the patterns of ownership and control of wealth, land and industries remained in a few White and imperialist hands that co-opted a few black subordinate bourgeoisie. In fact the largest beneficiaries of our hard-won democracy, in economic terms, are historically White capitalists and foreign monopoly capital as well as their Black subordinate bourgeoisie.

The Class Project implemented the narrow Black Economic Empowerment (BEE) under the guise of de-racialising the economy. Note that this was not democratising the economy but de-racialising it.

As a result, BEE merely created a comprador or parasitic bourgeoisie who were mainly interested in getting shares, rent-seeking and corruption through state tenders but also serving as the intermediaries to the established White South African capitalists and foreign monopoly capital.

These challenges cumulatively resulted into serious challenges in our alliance, precisely because the consequences affected workers and the labour movement. Let us forget the wise words of advice from our renowned Party leader, Joe Slovo in 1988, who cautioned that:

"The alliance of the working class with forces which reject its long-term socialist aspirations is never unproblematic and without tension. It requires constant vigilance and, above all, the safeguarding of the independence of the vanguard and mass class organs of the workers".

Together with Cosatu, as our ally, we had no choice but to defend the interests of both the organised workers and the broader working class.

The SACP as a working class Party could not fold its arms whilst the class it represents was being slaughtered in broad daylight through a neoliberal structural adjustment programme which, like all others of its kind has been deliberately used to undermine the gains of the liberation movements not only in Africa but all over the world.

Those who want us to believe that the 1996 Class Project and its leading protagonists were the best thing that ever happened in town are exposing their don't-care attitude towards the working class, our own movement and in particular our Party. We must beware of them ideologically and politically. They might as well be serving as the representatives of factional efforts for the rebound of that agenda disguised as a genuine condemnation of - by the way the continuity of - the wrong things that have been and are still causing problems in our movement. 

It is in fact against all the undesirable developments driven by the 1996 Class Project that the SACP called for a change of policy direction ("change of heart from the leadership") or change of leadership (to ensure a new policy direction) at the ANC Polokwane Conference in 2007.

It was due to the fact that our Revolutionary Alliance reached a state of serious divisions and hostility that affected not only the ANC but also the labour movement and our Party. In order to drive is agenda the 1996 Class Project marginalised our Party, Cosatu and the Alliance and then turned on the ANC itself, causing internal disunity through the manner in which it wielded state power (targeting of comrades, abuse of state institutions, etc.) and handled the affairs of the ANC.

The call by Communists for a change of heart by the leadership or a change of leadership was achieved in Polokwane - but it came with serious consequences. During the reign of terror of the 1996 Class Project divisions emerged within that neo-liberal cabal but also affected those who aspired to be incorporated in it but could not be accommodated. Some disgruntled beneficiaries of the same tendency had been marginalised within its inner-circle while some of the aspirants who looked forward to it were repelled.

These disgruntled elements, including some of the ANC's leagues opportunistically joined the progressive forces inclusive of the SACP and Cosatu when the balance of force was already clear on the wall: "The 1996 Class Project was heading to a defeat". It is these opportunistic elements that have created serious challenges for our movement currently.

The Party identified these elements as the New Tendency.

The followers of the New Tendency continued with their destructive habits inherited from the 1996 Class Project, such as further entrenching looting and sidelining of Alliance partners and even dividing them. Unlike the 1996 Class Project that had the capacity to theoretically decorate their reactionary agenda, the New Tendency was crude with no theoretical capacity and suffered from the poverty of philosophy. They simply wanted ("primitive") accumulation at all costs, their time to eat.

The Post-Polokwane moment and the New Tendency

The followers of the New Tendency made it their business was to attack and dislodge both the SACP and Cosatu and anyone else critical of their agenda. The ANCYL (Youth League) became their tool for tackling anybody who rejected their agenda of using state power for private accumulation. Nationalisation of mines was a major part of the rhetoric used to attract young activists in particular who were not aware of the underlying bourgeoisie objectives.

Some of the BEE elements had acquired mines that were no longer (highly) profitable, which, coupled with their own lack of managerial expertise made it difficult to keep them running. Hence they needed a government bail-out to finance their debts and rescue their collapsing mines, and hence their call for nationalisation at that time, especially during the eruption phases of the 2008 global capitalist crisis. It was the SACP which exposed that agenda, of which the ANCYL informed by BEE elements was used as the main driver.

The Mangaung ANC Conference in 2012 defeated the opportunists. However, similar to what happened in Polokwane, some of their backers still remained within the movement. They supported (also through funding) the destabilisation of South Africa through disaffected youth led by the cynical, wealthy former ANCYL leaders.

It is against this political background that we should understand the outcomes of the 2016 local government elections. Despite the defeat of the 1996 Class Project in Polokwane in 2007 and despite further advances in terms of leftward shifts, the neoliberal discourse remained dominant in government and its paradigm was still maintained by some from within the leadership ranks of ANC.

The adoption of the imperfect National Development Plan (NDP) pre-dating our Alliance's shared perspective of the need to place the NDR on to a second radical phase has not had any serious meaning for most ordinary South African citizens despite that it comprises of a number of progressive elements in certain sections. The implementation of the second radical Phase of the NDR, a shared perspective of the Alliance adopted thereafter, has become invisible. Instead there is a factional war over who will loot state resources. This we must confront.

We have to continue our struggle to defend the NDR against the so-called Premier League that has been attempting to consolidate its control through invasive surveillance of Communists and harassment of other comrades who are either progressive or revolutionary. But we should also remain vigilant to the fact that not everybody opposed to the Premier League is on the side of the working class. There are some who represent a different faction of looters and want the repeat of the undesirable outcomes of both Polokwane and Mangaung whereby they will become a reigning section of the New Tendency. We cannot allow the ANC and our NDR in particular to be sold to the highest bidders.

The Western Cape political reality

The Communists and progressive forces stopped Mr Mostered from achieving a total capture of the ANC in our province. However our poor performance in the recent local government elections can in part be attributed to his group which gained considerable influence but has no idea of how to organise.

Contributing factors to our setback at the 2016 local government elections can be characterised as follows.

Negative perceptions at a national level:

We need to appreciate the fact that these were the most difficult and challenging elections we ever contested since the 1994 democratic breakthrough. Nationally the political environment was polluted by two major developments that put to question the integrity and credibility of the ANC but also adversely affecting the alliance.

The issues around the Gupta family, which is perceived to be unfairly benefiting and enjoying control of sections of the state: Certain ministers and deputy ministers confessed to having been called to submit to agenda of, and others threatened by this family. In addition, some members of the family of President Jacob Zuma, who said he is a friend of the Guptas, have been shown to be in business partnerships with the Guptas.

There is nothing wrong in having friends, but the impression that is created in terms of the saying "Birds of a feather flog together" should not be allowed to cause problems - such as the problems that have impacted negatively not only on the President but the ANC and the ANC-led government as well.

The (friendship) connection between the President and the Guptas and the business ties between members of the two families linked with decisions taken in the state, state institutions or state owned enterprises have been seen as an illustration of the corporate-capture of our nascent democratic state and has provoked serious internal divisions within the ANC-led Alliance.

The movement must be reminded of what Thomas Sankara once said:

"Those who are corrupt and those who corrupt them must be denounced. From now on, failure to expose them will be considered a sign of complicity."

The Nkandla Constitutional Court Judgement:

Another quagmire that faced us during the recent local government elections was the Constitutional Court ruling on Nkandla. The judgement added to the perception already out there, as well as in the Public Protector's report, that our President benefited unduly in the security upgrades at his homestead. This ruling culminated with our President having to make a public apology and having to pay back a reasonable portion of the money he had been refusing to pay saying in the first instance he did not ask for those upgrades.

In this regard, let us remind each other of the words of Franz Fanon when in the same intervention we have already quoted he said:

"No leader, however valuable he may be, can substitute himself for the popular will..."

In addition, let us internalise what Amilcar Cabral meant in "Weapon of theory" in 1965 when he said:

"Hide nothing from the masses of our people. Tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures. Claim no easy victories ..."

Provincial outlook and machinery:

Our structures are still dominated by divisive and destructive factional tendencies that used the local government elections to gain hegemony at all cost. This manifested itself during the establishment of election structures.

List processes were a serious bone of contestation. Comrades from the province to the regions frequently used their positions to claim authority because they were pre-occupied by patronage and personal control. Local Election Team co-ordinators, contrary to directives, in many cases removed experienced comrades from the list.

The Boland Regional Secretary aggressively manipulated the process to the extent of factionally removing legitimate candidates. This ultimately resulted in the non-registration of many wards including in strong support base areas.

We must be resolute that any non-registration of candidates constitutes a gross violation of the ANC's organisational code of conduct and a betrayal to the NDR. Such a gross misconduct should not be left unattended.

The removal of Carl Bartman from number one in the proportional representatives list of Langeberg cannot be left unchallenged, in particular by Communists. The mess that happened in Drakenstein, Bergrivier, Matzikama, Swallendum, Witzenberg, TWK, and so on demands the voice and energy of our Party.

The causes of poor voter turnout:

The poor voter turnout is one of the consequences of spending more time dealing with the list than making voter contact canvassing for support.
Some people were dissatisfied with the outcome felt obliged to spend time mobilising against ANC ward candidates.

The ANC Provincial Executive Committee (PEC) took a progressive stance to investigate all the issues and a report was tabled to the PEC in order to deal with them. However, the execution of this decision remained a task of one or two individuals whilst others are factionalising the process. Further, comrades decided to target the Cape Town metro only and turned a blind eye to regions where problems were sometimes worse.

It is also clear that the ANC became the victim of the impact of the EFF effect while the DA's growth appeared to have reached its peak mainly through the consolidation of support from national minorities and a few votes forming a drop in the oceans of ANC's historical support bases.

As long as our main mass organisation - the ANC (at the head of our Alliance) is not seen to be campaigning and fighting in the daily struggles of our people to solve their problems then our movement will remain weak. The ANC has to find the means to fight in the streets, the courts and the media in order to become a dependable weapon in the hands of the formerly oppressed and economically exploited majority.

Our ANC constituency offices cannot merely be venues for meetings and centres of photo-copying and faxing. They have to be vibrant campaign centres that are vehicles for advising and fighting for the rights of the poor. We must use them to reconnect with all sectors including faith based organisations, professional bodies and NGOs and most importantly workers as a majority class.

The defeat the ANC and in the final analysis the Alliance suffered at the poll is a clear message from the population that the ANC needs to self-correct to restore its image as an organisation imbued with revolutionary morality. We need to address the challenges of corruption, corporate-capture of the state and our movement, politics of patronage and factionalism.

* Comrade Khaya Magaxa is SACP Western Cape Provincial Secretary. This is the edited version of the SACP Provincial Executive Committee Political Report he presented to the last Provincial Council of the SACP in the Western Cape held in September 2016 in Cape Town.


Umsebenzi Online is an online voice of the South African working class