The African Communist - Journal of the SACP

10 November 2002

The combined 2nd/3rd Quarter edition (issue no. 160) of the African Communist, the quarterly theoretical journal of the South African Communist Party (SACP) published since October 1959, is now available or sale from the SACP national and provincial offices. It is also available for downloading from the SACP website – www.sacp.org.za/ac/.

Published below is the full text of editorial notes (entitled "Are we condemned to repeating our own history?") for the 2nd/3rd Quarter edition.

The contents of the 2nd/3rd Quarter are:

1. The 11th SACP Congress – extract from the Political Report discussed by the 1st Plenary Session of the 11th Congress Central Committee held in August 2002
2. ANC Statement to the Global Civil Society Forum of the World Summit on Sustainable Development
3. The Weakest Link as a Theory and as it applies to us – an extensive article by Chris Malikane, an SACP member studying economics in England, which engages polemically with Langa Zita’s article “Is South Africa the weakest link in the imperialist chain?” published in the 1st quarter issue of the African Communist. Malikane argues that Zita has failed to establish the weakest link claim. Moreover, he argues, Zita’s idea of a “long transition” to socialism is guilty of several theoretical confusions.
4. Is the emerging black bourgeoisie part of the motive forces of the National Democratic Revolution? – a short article by David Masondo, an SACP member based in the Limpopo province, member of the NEC of the ANC Youth League and member of the National Steering Committee to re-establish the Young Communist League. The article argues against the notion of defining the emerging bourgeoisie part of the motive forces of the National Democratic Revolution.
5. Class Interests without Class Politics – an incisive and though-provoking piece by Ivor Chipkin he concludes by arguing that “the task of the working class is to advance the democratisation of the public domain” in response to his analysis that “the working class is forsaken as the agent of the National Democratic Revolution in favour of the state and a black bourgeoisie. Chipkin works at the Wits Institute for Social and Economic Research (WISER) at the University of the Witwatersrand.
6. The Solomon Mahlangu Freedom College Revisited – a report on a research visit to Tanzania undertaken by Alpheus Manghezi and Mohammed Tikly. Both comrades had formerly worked at the College.
7. Whither Zimbabwe? Crisis and Democratisation – in this article, Lloyd Sachikonye outlines the depth of the current crisis inflicting Zimbabwe, and traces the underlying trajectory behind it. Sachikonye is an academic and author who specialises on the political economy of Zimbabwe and the SADC. This article is published with the kind permission of the Review of Political Economy (Roape) where it originally appeared in issue 91.
8. International Solidarity with Palestine and the role of Progressive Forces – input by Vera Polycarpou, member of the Central Committee of AKEL (Progressive Party of Working People of Cyprus), to the International Panel Discussion on the Middle East Crisis held at the 11th SACP Congress.
9. The Struggle for Democracy and Socialism: the Balance of Forces in the Middle East – input by Navid Shomali, member of the Central Committee of the Tudeh Party of Iran, to the International Panel Discussion on the Middle East Crisis held at the 11th SACP Congress.
10. Interview with Joseph Stiglitz – conducted by Doug Henwood of the US-based Left Business Observer. Joseph Stiglitz is an economist who worked for the World Bank.
11. Wolfie Kodesh: A Resistance Man – tribute to Wolfie Kodesh by Patrick Tariq Mellet.

The 4th Quarter edition of the African Communist will be available for sale and from the website in the first week of December. Some of the key articles will focus on:

• The Political Report to be discussed by the 2nd Plenary Session of the 11th SACP Congress Central Committee being held at the end of November
• The 51st National Conference of the ANC
• The National Congress of the Communist Party of China being currently held from 08 to 15 November in Beijing

The Editorial Collective of the African Communist will welcome and receive articles with the deadline for submission being 22 November 2002.

EDITORIAL NOTES - AFRICAN COMMUNIST - 2ND/3RD QUARTER 2002

Are we condemned to repeating our own history?

In August 2001, COSATU led a relatively successful two-day national protest action against privatisation. The protest actions coincided with the convening of the UN World Conference Against Racism in Durban, and the timing provoked considerable unhappiness among many in the ANC and government. There was negative fall-out within the Alliance, with heated public polemical exchanges. This year began with the leadership of the Alliance on all sides agreeing that we could not continue to manage the Alliance in such a reckless way, that only the enemies of the national democratic revolution would benefit from a weakened Alliance. After many bilateral and other intra-Alliance engagements, a very successful Alliance Summit was convened in April this year, the Ekurhuleni Alliance Summit.

And now, in the last quarter of 2002, following another two-day COSATU-led (and SACP supported) national protest action against privatisation, we seem to be right back where we were at this point last year.

Those who fail to learn from history, so the maxim goes, are condemned to repeat it. Are we going around in circles? Do we have to repeat ourselves? What lies at the root of this apparent roller-coaster?

In the course of 2001 government announced a major shift in economic policy focus. In his February 2001 State of Nation address, the president, cde Thabo Mbeki, announced a shift in focus form the “macro to the micro”. Accompanying this announcement, and closely related to it, was a commitment to the roll-out of a major infrastructural investment programme, and also to integrated rural development and urban renewal, with dozens of key priority nodes being announced.

The SACP warmly welcomed these announcements. Indeed, as a result of a protracted and often bitter intra-Alliance dispute over government’s 1996 macro-economic policy framework strategy (GEAR), the SACP had been suggesting that we should place much greater emphasis on the “real” economy, by way of a coherent, policy-led, industrial strategy. The SACP argued that, without pretending that the macro debate had been settled, it was much better to be clearer about industrial policy, and then, on that basis seek to develop and agree upon a macro-economic strategy that would be aligned with and actively support our “real” economy strategies.

There was, however, one major catch in the President’s 2001 State of Nation address, it committed government to an accelerated programme of privatisation. The Minister of Finance, cde Trevor Manuel, announced in the Medium Term Expenditure Framework, that government expected to make R40 billion over three years out of privatisation proceeds, with R18 billion to be secured in the first year (2001/2). In the view of the SACP there was a strategic contradiction in the announcements – the major infrastructural roll-out was, in effect, going to be financed by privatising the very parastatals that would be central to the strategic driving of such a roll-out. In our analysis, this contradiction was at the heart of the problems encountered within the Alliance in the course of 2001 and again this year. Predictably they clustered around the restructuring of state assets.

But do we really disagree about the restructuring of state-owned assets?

Emerging from the ANC’s recent National Policy Conference, all Alliance partners have, once more, agreed that, at least on paper, there are no fundamental, principled disagreements on our approach to restructuring state assets. While the SACP and COSATU approach the issue informed by longer-term socialist goals, both the Party and COSATU are, in principle, comfortable with the ANC and government’s more open-ended “balance of evidence”, “case-by-case” approach.

At the ANC National Policy Conference, the ANC re-affirmed its perspective that restructuring should not be simply equated with privatisation. Restructuring could involve extending the scope of public ownership, the setting up of new public entities, nationalisation, and partial or total privatisation. The ANC also re-affirmed that any restructuring should be guided by the strategic objectives of our national democratic revolution, including placing our country onto a growth and development path, overcoming the terrible legacy of underdevelopment, retaining and creating jobs, and building an active, interventionist developmental state.

The ANC Policy Conference re-affirmed the commitment to the National Framework Agreement, which obliges government/trade union negotiations on any proposed restructuring programme. The Conference went further to assert that the NFA should be extended to all spheres of government – restructuring at the local government level has often been less consultative.

Another relatively new and progressive assertion from the ANC Policy Conference was the resolution that there needs to be continuous monitoring of the state owned enterprises to ensure that they remain focused on the key developmental challenges of our society. This resolution reflects a concern that ownership is not the only factor in regard to SOEs. They may be one hundred percent publicly-owned, but still conduct themselves as if they were private corporations focused on profit maximisation.

If these perspectives do, indeed, represent ANC and government policy, again the question arises: Why do we seem to be going around in circles in the Alliance?

Factors that disrupt a sober and progressive policy discussion

In the view of the SACP, a number of factors continuously disrupt the commitment and intention to have a sober, in-depth, case-by-case, balance-of-evidence assessment of how to proceed with the most effective restructuring of state assets. These factors include:

• The class struggle itself, the dominant capitalist class, both in its domestic and international variants, is not sitting idly by, happily observing our efforts at restructuring. The capitalist class and the media it dominates wage a constant struggle to frog-march us into ill-considered privatisation processes. Problems are seized upon, or even fabricated (as in the case of Durban port), in order to panic us into taking hasty measures, without adequate analysis or consultation;
• Then there is the impact of an emerging or aspiring black bourgeoisie. For historical reasons this emerging stratum has little capital, and privatisation involving a designated percentage for the “historically disadvantaged” is increasingly a major means to securing capital (by plundering public resources). The fact that this emergent strata is close to, even within, our movement impacts very directly on policy-making processes. There are often strong ideological and even personal links between this stratum and a senior layer of government and parastatal managers, and this can blur the boundaries between perhaps problematic but still legal behaviour and plain corruption (as the recent blunders in privatisation of forests remind us).
• The budgeted anticipation of R40 billion in privatisation proceeds over three years is itself a factor that weighs heavily on any policy development and assessment. The performance contract of the director general of Public Enterprises is said to be directly linked to these targets. So, while the intention may be to sit down and soberly have a case-by-case, balance-of-evidence assessment within our overall and shared strategic framework, inevitably the pressure of privatisation targets begins to constrain discussion, and may well lead to impatience and impetuosity.
• Also a major factor is the sheer technical and policy-making capacity of external consultants, some of whom have a direct interest in privatisation. This turned out to be the case with the principal consultants to the Department of Public Enterprises on Spoornet restructuring – Rothchilds Merchant Bank and Halcrow. Fortunately, in this case, the SA Transport and Allied Workers Union, government, and the management of Transnet and Spoornet, managed, finally, to muster sufficient technical competence to outweigh and overturn much of the policy advice provided by these private-sector and interested parties.
• Related to the very first factor, noted above, is the more directly political agenda of our class opponents. The breaking of the Alliance is a key strategic objective, and sharpening intra-alliance differences on privatisation has obviously been identified as a useful entry-point. In particular, government is continuously urged to “face the unions down”, to “show who is really the boss”. As a result, there is a real danger that certain policy positions will be adopted to “prove a point”. Government’s announcement, just days after the COSATU two-day actions, that it was going to proceed with the Telkom share-offering is a case in point. Leading capitalist-aligned economists and the main business media in our country all know that now is the worst possible time to be selling telecom shares. But while making this point, they all, hypocritically, welcomed government’s Telkom announcement, purely for its symbolic value.

The combined effect of these influences is that our best intentions for restructuring often result in policy incoherence, in which competing and at times conflicting mandates are all equally imposed on key infrastructural parastatals. The most glaring current example is, precisely, Telkom.

The case of Telkom

The restructuring of Telkom began in 1997 with 30% of the enterprise being sold 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.

While there was partial privatisation, Telkom was also given a developmental mandate, to roll-out 2,8 million new phone connections, mainly to under-serviced areas.

In addition to partial privatisation and the imposition of this developmental mandate, Telkom was also told to prepare for the liberalisation of the fixed-line phone market. However, Telkom was given a “grace period”, a fixed-line monopoly to ensure that the developmental objective of rolling out phone connections to under-serviced areas could be achieved. Clearly, the developmental mandate was assumed to be largely a matter of a once-off roll-out – the challenge of sustainability was not adequately factored in.

Finally, Telkom was identified as one of the main sources for realising the R40 billion from privatisation, with government planning further privatisation of the company, with a massive IPO (initial share offering). The intention to proceed with this IPO before the end of February 2003 was government’s major response to the COSATU two-day protest actions.

What is the record so far?

• More than 20,000 Telkom workers have lost their jobs since 1997.
• As Telkom has geared up for further privatisation and for competition, the price of international calls has come down on average 18%, but domestic local call charges have escalated by 23,9% (Telkom Group Annual Report 2002, p.40).
• Telkom has rolled out an impressive 2,8 million new lines in five years, many to poor communities, thus fulfilling its developmental mandate. But, sadly, as Telkom’s own 2002 Annual Report acknowledges (p.24), the net increase in fixed line connections only 665 819, which means that over 2 million lines have been cut-off largely because the poor cannot afford the costs. The liberalisation and privatisation objectives of making Telkom more competitive and more sellable, and the developmental objective of sustainable services to the millions of poor in our country have simply collided head-on. The liberalisation and privatisation agendas have won against the developmental agenda.

But this “victory” of other agendas is in danger of being hollow itself. Government is now proposing to steam ahead with the IPO at a time when, globally, the telecoms market is at an all time low. The MSCI World Telecommunication Services Index has shed 78% of its value since March 2000. No wonder that Chunghwa Telecom, Taiwan’s biggest phone company, announced that it had cancelled a $1,6bn share sale because of the depressed global market, at the very time that our government was re-affirming that the IPO would happen shortly. No wonder that Eutelsat, Europe’s number two satellite operator, has just postponed plans to sell shares.

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.

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. Given that government has attached a great deal of symbolic weight to proceeding rapidly with the Telkom IPO, it is unlikely that there will be a change of heart. The SACP will, however, continue to raise its concerns and seek to create the conditions in which, indeed, the perspectives affirmed by the Ekurhuleni Alliance Summit and by the ANC’s National Policy Conference can be pursued.

CONTACT
Mazibuko K. Jara (surname Jara)
Department of Media, Information & Publicity
South African Communist Party
Tel: 27 11 339-3621/2, Fax: 27 11 339-4244 Cell: 083 651 0271
Email - mazibuko@sacp.org.za