TOWARDS AN ECONOMIC STRATEGIC PERSPECTIVE

1: Introduction

1: General optimism - The President’s State of Nation address to
Parliament and many other overviews of the present situation in our country reflect a
legitimate optimism. There is the ongoing consolidation of our democratic institutions -
with a successful presidential transition, peaceful elections in 1999, and the virtual
elimination of political violence from our country. While crime, including domestic
violence, remain at high levels, there is no longer a sense that it is all spiralling out
of control, rather there are endemic and deep-rooted problems that require consistent and
long-haul measures. We are making slow but persistent headway on this difficult front.

2: Growth indicators - On the economic front many indicators for the
next few years are also looking favourable. In particular, our economy looks set to grow
by around 3,5% over the next three years. This is clearly a welcome reality, and it offers
us an opportunity to begin to push ahead with economic measures that can ensure sustained
growth and development.

3: But major challenges - What makes a sustained and coherent growth
and development programme imperative are the persisting socio-economic crises we confront:

• extremely high levels of unemployment, levels which have, at best, not been
  significantly dented in the past 5 years
• extremely high levels of poverty, associated with extreme inequalities
• the HIV/Aids pandemic, whose medium-term socio-economic impact is difficult to
  calculate, but which will certainly be significant
• low skill levels; and
• serious infra-structural weaknesses

If we are to assess whether we will be able, with the current upturn, to make serious
inroads into meeting these challenges, then we need to ask:

1: Is the present economic upturn structural or cyclical?

1. A new platform for growth? - Some leading comrades in government argue that the upturn
   is evidence of a structural turnaround, a "new platform" for growth. These
   comrades concede that the last five years have been painful, we have had to introduce
   tough measures to transform an economy that was in serious structural decline. It was not
   competitive, skewed in many ways, unduly and unhelpfully protected, and the fiscal and
   monetary policies we inherited were incoherent. The state deficit was not sustainable
   without drastic measures, and the balance of payments situation precarious. But, so this
   argument continues, thanks to the GEAR-related measures that we have taken, we now have
   the accelerators in place for sustained and higher levels of growth and development. From
   this perspective, the current upturn is just the beginning, a new "platform" for
   a decade or more of development and of growth that begins to reach the 6 percent plus that
   is required to make a serious dent in unemployment. Essentially, this position argues for
   more of the same in terms of government macro economic and other economic policies.
2. Or just a temporary cyclical upturn? An alternative view might be that the present
   upturn is rather more cyclical in character. In this view it might be argued that the
   current SAn upturn is related to the improvement in the general situation in the developed
   economies, "improved sentiment" towards "emerging markets" following
   the Asian 1997-8 crisis, a relatively improved gold price, improved demand in our major
   developed markets, etc. In short, we cannot expect much more than moderate growth, and
   that growth may not be sustained beyond three or four years. A short cyclical upswing will
   not make a significant impact on our major socio-economic challenges.
3. So which is it - cyclical or structural? The reality is probably a mixture of both. The
   medium-term outcome is partly in our hands - much will depend on how we use the next few
   years.

2: What is the engine for sustained growth and development?

1. RDP - growth AND development based on infra-structural programme. At the risk of losing
   some nuances: the 1994 RDP document essentially saw the growth engine as being a major
   reconstruction and development programme directed at infra-structural development,
   harnessing, to begin with, public, parastatal and domestic capital to drive the process,
   with the expectation that FDI flows would then also come into such a process. It must be
   admitted that the original RDP document did not really elaborate, still less did it model
   these somewhat implicit assumptions.
2. GEAR - major flows of FDI - By contrast, the 1996 GEAR document quite explicitly sees
   major flows of FDI to be the principal engine of growth in our economy. The principal
   means for securing such major flows were to be:
   
   
   

• appropriate macro-economic austerity measures; and
• significant levels of privatisation.

3: What has happened to GEAR’s FDI projections

1. No major FDI flows Sadly, expectations of major FDI flows have not been forthcoming. The
   majority of incoming capital flows continue to be hot money. Much of the actual FDI that
   has come in has been by way of mergers and acquisitions, or for partial privatisations
   (Telkom and SAA). In other words, the flows have neither been on the scale anticipated,
   nor have they typically been into new infra-structural or "green fields"
   development. (This is not to deny the importance of actual FDI flows for our balance of
   payments situation, and, critically, in helping with the technological transformation of
   our economy).
2. The relatively modest flows of FDI are despite the fact that most of our macro-economic
   austerity measures have been successfully implemented. These measures may have had some
   impact in terms of favourable global market "perceptions", and in terms of
   enabling SA to escape the worst of the developing economies’ crisis in late 1997-8.
   However, major FDI flows have not been forthcoming. (According to the World Investment
   Report, SA attracted US$380m in 1998, while Chile, Argentina, Australia and Brazil
   drew $5bn, $5,8bn, $6bn and $29bn respectively.)
3. Inherent limitations of privatisation as a source of FDI - While the contested nature of
   privatisation within our country may be one factor that has slowed down massive movement
   on this front (as the DP and other allege), inherent limitations have also played a role -
   the pension debt burden on key parastatals (e.g. SAA and Transnet) has made it impossible,
   in any case, to sell them off lock stock and barrel in order to reap a quick inflow of
   foreign capital. The fate of Sun Air is another salient indicator of the flaws in the
   belief that wholesale selling-off is the "obvious" route to getting major flows
   of foreign capital that could act as a growth accelerator.
4. A buyers’ market - What is more, mass parastatal sales in Latin America and Eastern
   Europe has made it a buyers’ market. Even were whole-sale privatisation a desirable
   option, we would find that it is a bad time to sell.
5. Misplaced expectations - Without for a moment dismissing the importance of FDI for
   growth in our economy, it is surely fair to say that excessive expectations in this regard
   are misplaced. Our argument here needs to be anchored within a deeper structural analysis
   of the major trends within the global capitalist economy.

2: Long wave capitalist contraction

1. Since the early 1970s, global capitalism has been involved in a long-wave contraction
   and a deepening crisis of profitability. A core reason (according to Robert Brenner)
   underpinning this long-wave contraction is the growing disjuncture between the time
   required to realise profits on major and highly concentrated fixed capital, and the
   life-span of the technology. Technological advances in key sectors are now so rapid that
   major fixed capital investments become outmoded and non-competitive long before investment
   costs are recouped.
2. This dilemma results in many features of the current global economy, including:

• high levels of protectionism, especially in the developed countries in which there are
  vast fixed capital investments that are threatened by technological advances; and
• by the growing "financialisation" of investments - capitalists are more and
  more reluctant to move directly into fixed, productive capital, and are looking for other,
  less anchored forms of investment - hence the dramatic burgeoning of speculative capital
  flows.

3. While the 1999 UNCTAD Report notes an important increase in FDI to
   developing countries, this comes on the back of decades of decline. Current levels are the
   same as the 1960s. Moreover, most of the increase is accounted for by a handful of
   developing countries - most notably the People’s Republic of China (PRC), and to some
   extent Brazil and Mexico. The PRC is an exceptional and interesting case, Brazil and
   especially Mexico are much more connected to the US economy than, for instance, SA.
   Indeed, our country’s geographical location is a serious limitation when it comes to
   attracting major FDI flows.
4. In short, we have been pursuing an FDI-as-growth-accelerator path
   in the most unfavourable circumstances.
5. There are, however, some signs that the pursuit continues. The
   Investment Council made up of the who’s who of global capitalism was one of the few
   major new initiatives announced at the opening of parliament this year. Relatively tight
   inflation targeting which might compromise growth is another possible indicator that the
   dream of major FDI flows persists.

3: Greater focus on the productive economy based around clearer industrial strategies

1. The SACP needs to be nuanced in its positions and responses. Clearly we are not opposed
   to fiscal discipline. Clearly FDI flows are needed. Inflation targeting is certainly a
   superior monetary policy guideline than defending the exchange rate of the currency.
2. But all of these considerations need to be subordinated to and aligned with a major
   infra-structural growth and development programme. An inflation target, for instance, that
   chokes off growth will be a disaster.
3. Infra-structural growth and development in our country (and region) will require,
   amongst other things:

• much greater industrial policy clarity and purposiveness in implementation
• fiscal and monetary policies that are better aligned to this objective;
• much greater strategic coordination of public capital resources - state departments, and
  key parastatals. There is still too much turf competition, and key parastatals are
  paralysed and confused by persisting rumours of impending privatisations and a general
  climate of uncertainty.

4. It is in this light that debate on the strategic objective of
   public sector restructuring becomes particularly important. It is also in this context
   that we should note:

• the significant and unfortunate budget roll-overs in DTI - an indication, perhaps, that
  not enough dedicated attention has been given to industrial development as our key growth
  accelerator;
• the commitment, in its budgetary explanatory memorandum, of DTI to an "important
  shift in emphasis" that recognises the "importance of timeous policy formulation
  and development" to be vested in "senior management", and a "review of
  the effect of SA’s macro-economic policies on industrial sectors". The SACP
  should welcome, and to the best of its ability, help to strengthen these latter
  commitments.
• We should also welcome Reserve Bank governor, cde Tito Mboweni’s recent assertion
  that much greater attention needed to be given to sectoral industrial planning for job
  creation, and that macro-economics could not create jobs on its own.

5. It is also in the light of all of the above, that other key items
   for discussion at the Strategy Conference, like the transformation of the public service,
   needs to approached.

4: Strategic role of the public sector

1. If we are to give greater focus to the productive economy around a clearer industrial
   strategy we need to elaborate on the role of the national democratic developmental state
   in the economy. Amongst other things we need to ask: "In what key strategic areas
   should the state be playing a leading role?". Our 1999 Strategy Conference took the
   following resolution (Resolution on the Socialisation of the Economy) -
   
   "This Strategy Conference reaffirms its view that:

1. The public sector and public entities remain critical in the provision of basic
   services at the present stage of the NDR
2. The strengthening of the public sector and public entities will provide an important
   stepping stone to socialism. Therefore declares its view that the state should be the
   preferred service provider in the following sectors – Education; Health; Water;
   Municipal services; Central banking; Development finance; Transport - most forms of public
   transport and communications infrastructure; including roads, railways, pipelines, and
   telecommunications; Electricity supply; Energy, including liquid fuel; Mineral rights; and
   Housing parastatal.
3. Further believes that as a step towards the decommodification of basic service
   provision, a defined range of services should be provided against the payment of a fixed
   percentage of the income of consumers. Recommends that the leadership facilitates
   development of policies in this regard, including a link with social security and methods
   of finance by cross-subsidy; and also on the alternatives for the management of public
   entities as service providers rather than profit seeking institutions."

2. The critical challenge is to develop a strategy to implement this
   resolution in all our work. For instance we need to be directing our entire membership
   wherever it is located – government, mass organisations, Alliance, etc – to
   implement this resolution in the various spheres in which they work. The Strategy
   Conference will have to reflect on this strategy to implement this resolution in all of
   our work, and ensure full integration of this resolution in all our programmes. Of course,
   in our engagement in the COSATU campaign and our year 2000 programme, we have already been
   advancing the perspectives contained in this resolution as part of its implementation.
3. A related issue on the strategic role of the state, which we have
   not adequately debated and considered, is the role of the state in investment in public
   infra-structural projects aimed at stimulating the economy. We have only asserted that the
   state needs to play an increasingly central role in this respect but without providing
   adequate concrete measures. A sure sign of this is that we have not fully considered and
   debated the public works programmes, the role of the transport department in provision of
   transport infrastructure, and the role of other parastatals in this regard, just to cite a
   few examples. As a result we have tended to be reactive to developments on this front. The
   Strategy Conference should begin to focus on these issues which we also need to take up
   when we discuss the restructuring of state assets.
4. The second important strategic question that needs to be
   systematically considered and advanced is our approach to the private sector. The
   Secretariat report to the Strategy Conference last year advanced the perspective that a
   national democratic state should have a privileged relationship to the working class and
   the poor, within which all other relationships are pursued. This means, amongst other
   things, the need to approach the relationship between the state and capital from this
   particular standpoint. We have accepted and acknowledged the fact that private capital, in
   the current period, is a reality and has a role to play and its resources needs to be
   systematically harnessed, within the context of an industrial strategy, towards our
   development objectives. But for harnessing such resources to have national democratic and
   developmental outcomes requires that such a programme be centrally driven by the state.
5. The key question that the Strategy Conference needs to debate and
   refine is whether it is not time now to approach domestic public and private capital
   resources in a new way? Is it not time we seriously consider and propagate the type of
   tactical alliances we need to form with sections of domestic capital (black and white)
   around a developmental agenda? Such an agenda will have to be based on a commitment to
   investment in job-creating sectors of our economy. Of course such an alliance will involve
   regulation, incentivisation and disciplining of such capital towards a development agenda.
6. A related question is whether the current engagement between
   labour and domestic capital through the millennium council is perhaps aimed at achieving,
   consciously or unconsciously, such a tactical alliance with sections of domestic capital
   towards a development agenda? These COSATU bilaterals with domestic capital, the
   relatively successful gold crisis tripartite engagements (which succeeded in halting IMF
   gold sales) and the Job Summit commitment to sectoral summits all need to be located
   within this kind of new approach to our public resources and the role of domestic private
   capital.
7. In some of our interactions with sections of black capital, it is
   clear that one of their major complaints and difficulties is that government economic
   policy is objectively directed towards creating a climate FDI, without adequate attention
   being paid to the role of domestic capital in this strategy. They point out that the
   outcome is the marginalisation of domestic, particularly black, in the unfolding economic
   scenario. However, related to this issue is the question of equating the black sections of
   the capitalist class with patriotism, by virtues of being black, thus overlooking the
   extent to which these black sections of the capitalist class are investing in productive
   economy. Indeed it might be possible that black sections of the capitalist class are much
   more persuadable towards this agenda. But let us rather be specific about the agenda of
   patriotism, rather than to elevate the blackness of capital in some abstract form. The
   Strategy Conference needs to debate these questions and to take them forward for a much
   clearer resolution and programme.

5: Race, class and gender

1. The attempt to transform our society on the terrain of capitalism, but without
   sufficiently analysing the contradictions of contemporary capitalism, runs the risk of a
   restructuring process that leaves the fundamental inequalities of our society intact.
2. For more than two years the SACP has been warning of the dangers of a "30% /
   70%" outcome to SA’s transition. We have expressed concern that we need to be
   vigilant that change is not reduced to the transfer of some power, privilege and wealth to
   an emergent black elite, while the underlying class, race and gender inequalities of our
   society remain largely intact. The danger of this outcome remains very real, but it is at
   least encouraging to find that a wider range of commentators and researchers are now
   beginning to raise similar concerns.
3. A recent and widely quoted study of income distribution by WEFA Southern Africa shows
   that the poorest 40% of black households saw a drop of 20% in income between 1991 to 1996.
   In the same period, according to the study, the proportion of black households among the
   richest 10% of households in SA more than doubled from 9% in 1991 to 22% in 1996.
4. The white "middle class" (defined as those earning more than R72, 000 a year)
   shrank by 3% between 1991 and 1996, while the black "middle class" grew by 78%.
5. Linked to the persistence of deep inequality has been the wide-ranging restructuring of
   the working class over the past decade. The "opening" up of the SAn economy to
   global capitalism has seen more than half a million jobs shed in the formal
   non-agricultural sector since 1994. Between December 1998 and September 1999 another 80
   000 jobs were lost in this sector. In 1997, the labour force (defined as those working or
   willing to accept jobs) was 14,1 million. Only 9 million were in some kind of employment
   and just 7,5 million were in formal employment. Many of those in formal employment have
   been subjected to the intensification of exploitation through casualisation, piecework,
   being contracted out, and many other anti-worker measures.
6. Despite numerous important and progressive changes introduced since 1994, and despite
   our best intentions in the ANC-alliance, the brutal realities of capitalism have meant
   that, in general, it is working people and the urban and rural poor (a majority of them
   women) who have had to bear the brunt of the profound economic restructuring process under
   way in our country.

6: Capital accumulation is not a neutral phenomenon

1. There is a broad agreement within our society that a major process of economic growth
   and capital accumulation is required if any sustainable transformation of our society is
   to be effected.
2. However, what is usually not sufficiently underlined is that capital accumulation is not
   a neutral phenomenon. What bloc of forces is to be the primary beneficiary of this
   accumulation? What class forces are strengthened or even forged in the accumulation
   process? And which are weakened?
3. The neo-liberal position in SA basically envisages a growth and accumulation process
   that consolidates the power and wealth of the present capitalist class, while
   de-racialising that class to some extent. The promise is that "once this process is
   well under-way, we will all stand to benefit, but in the meanwhile the majority need to be
   patient, accepting the inevitable pain of change". But, if unchallenged, a capitalist
   dominated growth and accumulation process will accentuate inequality, and it will
   strengthen class forces that will, in the name of the "market", increasingly
   roll back the democratic gains won thus far.
4. It is for this reason that the SACP’s programmatic perspective of building
   momentum, capacity and elements of socialism NOW is particularly relevant. The
   accumulation and growth process, that we agree must happen, has to be a process that
   strengthens and empowers the working class and other popular forces. This includes the key
   strategic features envisaged in the Party programme:

• building and defending a strong, developmental national democratic state and public
  sector
• rolling back the market - decommodifying basic needs
• transforming the market - changing the balance of forces on the market; and
• generally, deepening, defending and advancing democracy on all fronts - political,
  social and economic - through the consolidation of representative and participatory forms
  of democracy.

7: Neo-liberalism and Africanism

1. Another way of posing these questions is to ask whether, over the last four or five
   years, within our country there has not been a lopsided but dominant partnership between
   two ideological currents - a variant of neo-liberalism and a variant of Africanism?

• the former has spearheaded the "modernisation" and "liberalisation"
  (an opening up to the global economy) of our economy - a domestic structural adjustment
  programme ("it is better that we should self-impose the necessary restructuring,
  rather than have it thrust upon us by the IMF and World Bank");
• the latter has articulated the sectoral interests of an emerging/aspiring black
  bourgeoisie, and has ensured that "black economic empowerment" has been a key
  theme inserted into the neo-liberal discourse. Insofar as the neo-liberal paradigm has
  been adjusted, it has been partially and minimally adjusted to include a BEE dimension.
  Privatisation, the search for strategic equity partners, the deregulation of industrial
  sectors, etc. have been justified partly by invoking the established neo-liberal paradigm
  and partly by invoking "black economic empowerment".

2. There is much that needs to be said about this hybrid
   afro-neo-liberalism - including the fact that the capitalist neo-liberal agenda has not
   even really been able yet to fully accommodate in a sustainable way the aspirations of an
   emergent black bourgeoisie. One measure of this is the rapid increase of "black"
   control of the JSE, from zero to 9,7% in 1997, followed by an abrupt fall off to a current
   6,8%. Many analysts predict further falls. Measured in terms of control over JSE stock,
   the principal ethnic beneficiary of afro-neo-liberalism has been Afrikaner business (from
   24% in 1996 to 35% in 1999)!
3. However, the main point that we wish to make here is that the
   partial (and hopefully temporary) dominance of afro-neo-liberalism has resulted in a
   relative neglect of the need to mobilise, channel and discipline domestic capital
   resources - budget based, parastatal, domestic capital, and domestic savings - for a major
   infra-structural developmental growth programme.
4. With neo-liberalism focusing on measures to reassure and attract
   potential FDI investors, we have seen a greater flow of domestic capital out of SA than
   the incoming flow of FDI. Insofar as we have sought to give strategic guidance and
   discipline to domestic capital resources (public and private) this has, all too often,
   been centred on encouraging it to give a slice of the action to "black economic
   empowerment" deals. Domestic public and private investment in major infra-structural
   development (that would really empower the great majority of black people) has been
   relatively neglected.
5. It is time to approach domestic public and private capital
   resources in a new way. The "patriotism" of the owners/controllers of capital
   resources needs to be measured, not primarily by the colour of their skins, but by their
   capacity and willingness to undertake job-creating investment. Indeed, the justification
   (if any) for the fostering of a black stratum of the bourgeoisie must be based on this
   kind of consideration.
6. COSATU’s recent bilateral with domestic capital, the
   relatively successful gold crisis tri-partite engagements (which succeeded in halting IMF
   gold sales), and the Job Summit commitment to sectoral summits all need to be located
   within this kind of strategic perspective.

8: Social security - a basic income grant?

1. The SACP has consistently focused its prime attention on the productive economy. We have
   argued that sustained growth and reconstruction depends upon much more coherent industrial
   planning and the mobilisation of resources for growth in the productive economy. Although
   our ideological opponents have tried to portray our perspectives as "populist",
   "welfarist" and as being based on a "utopian redistribution" process,
   this has never been where our principal emphasis has been.
2. However, we cannot ignore the plight of millions of people who are unemployed,
   destitute, disabled, or generally marginalised. We cannot simply call upon them to
   patiently wait for job creating growth to kick in. However, two major international
   directions for extending social security to our population are not particularly viable in
   our situation:

• we do not have the resources, and the magnitude of our problem is such that a full-blown
  welfarist state is not a likely option;
• conversely, major land reform, and the creation of millions of self-sufficient small
  peasants - a route pursued in many East Asian societies, as an integral component of their
  industrial growth strategies - is also not a large-scale possibility in SA, where the
  existing small peasantry is relatively small.

3. This is not to say that we cannot incorporate elements of these
   approaches into our strategy. It is in this overall context that the proposal to look at
   some kind of basic income grant - which could be awarded to all families in SA, and
   recouped from the better off via taxes - should be understood. Cabinet is also beginning
   to consider this area. The proposal is based, in part, on positive experience in Brazil
   and Mexico, where a basic grant enables the poorest of the poor to have some survival
   capacity, to educate their children, or to access transport to look for work, or to begin
   some kind of SMME. It also serves to put more money into circulation and can, therefore,
   also have a stimulatory effect on the economy.

9: Government budgets

1. In welcoming Budget 2000, the SACP raised concerns about the eradication of poverty and
   possibilities of a restrictive inflation target. COSATU and several progressive forces
   also raised concerns about the real decrease in social spending and the tax relief granted
   to the rich.
2. We also said that ordinary people must take part and shape the budget in favour of the
   poor and the working class and we committed ourselves to work to ensure that there is
   effective popular participation in the budgeting process.
3. The April 2000 Central Committee meeting resolved that, in a variety of ways, the SACP
   would endeavour to play a much more active role in the budgetary process. We will, in the
   context of our alliance, seek to shape budgetary priorities that are more aligned with our
   vision of infra-structural development and industrial policy programmes as the key
   accelerator for growth, job creation and development.
   
   Such a growth path needs to be powered by a mix of budgetary, parastatal, co-operative and
   domestic private capitals, while seeking to attract FDI at the same time. All of this
   requires an economically active state that is capable of and willing to plan, co-ordinate
   and discipline the capital resources of our society.
   
   Government budgets are not separate from broader economic transformation.

10: The relevance of socialism to the economic debate

1. In recent times the Party has sometimes been asked what we mean by socialism. Implicit
   in the question is the hint that in an era of overweening capitalist domination, socialism
   is more or less irrelevant. A socialist theory and practice, in the present, that imagined
   that capitalism was about to be abolished with a wave of the wand would certainly be
   irrelevant. However, one key dimension of a relevant socialist theory and practice is the
   sustaining of a consistent analysis and critique of the global capitalist system itself.
2. There are, internationally, many progressive aspirations and values embodied in a
   variety of movements (including some of the leading formations in the Socialist
   International, for instance). But between these important human values and the real world
   there is a continuous gap - epitomised by a current SI slogan: "a market economy,
   yes; a market society, no". Of course, this maxim can be interpreted in many ways.
   Its refusal of a total marketisation of society is to be welcomed; but, at heart, it tends
   to embody the illusion that a more humane society can be built by working with (rather
   than dialectically - i.e. with and against) the logic of capitalist accumulation.
3. It is an illusion that, for all the obvious reasons, continues to exert a powerful hold
   on our own broader liberation movement. It is an illusion that is to be found in the
   dominant afro-neo-liberalism in our society. We hope that in all that we have argued above
   the need to sustain and develop a critical analysis of the contradictions of global
   capitalism is underlined to be as important as ever.
4. One crucial role of the SACP in the present is, without theoretical arrogance or
   practical sectarianism, to chip away at the illusion that it is possible to develop our
   country (and therefore empower the majority of our people) simply by going with the flow
   of global capitalism.

11: The international dimension of our struggle

1. It has always been, and continues to be, our understanding and approach that our
   struggle for socialism and a better life for all cannot be isolated from the international
   struggles of the working class and the poor in SADC region, the African continent, and
   indeed globally. Not only is international work a dimension of our struggles, but
   simultaneously a terrain on which to advance the struggles of the South African working
   class and the poor.
2. Reflecting on the struggles of left/communist/socialist forces internationally, there is
   an emerging common experience that needs to be used as a platform for developing new
   international solidarity and struggles. The entire left forces are grappling with, inter
   alia, the following:

• The erosion of public services through massive privatisation of state assets. Every
  sphere of human activity is being turned into the haven for capital accumulation.
  Particularly targeted by transnational corporations in the case of Europe for instance are
  the institutions of the welfare state which provide crucial social cover for the working
  people and the unemployed. In fact the social democrats in power in most of the European
  countries are undertaking a massive privatisation programme that even the conservatives
  dared not touch for fear of an electoral backlash. It seems as if the social democrats are
  using the loyalty of the working class to precisely undertake massive restructuring of
  European economies in a manner that weakens the working classes.
• Related to the above there are huge cutbacks on government spending on social services
  like education, social security, health, etc
• As a result of this there is growing poverty in the world today, with the one recent
  statistic showing that half the world’s population today does not have access to
  clean drinking water. Women are particularly facing a worsening situation because of their
  vulnerability in the capitalist economic order
• In the African continent there is, on average, an absence of progressive mass based
  political parties and organisations. This has reduced the advances on multi-party
  democracy into competition amongst the elites, largely supported by this or that centre of
  imperialism.

3. The above issues, and indeed many others, constitute a platform
   for international solidarity and the struggle against capitalism. There is growing
   restlessness in many parts of the world by the working people and the poor. For instance
   on 11 May 2000 the Indian trade unions are calling for a general strike to protest against
   the issues outlined here and struggling for the defence of public services and the role of
   the state to protect the poor. It is therefore important that in discussing all these
   issues, we simultaneously relate such discussions to our role internationally and the need
   to deepen international solidarity.

 

QUESTIONS FOR DEBATE

Growth and development

• Is it useful to open up, all over again, a RDP/GEAR debate? Are we not going round in
  circles?
• Are the two programmes as different as portrayed above? Is the portrayal of the
  RDP’s growth path accurate? Is the RDP not more based on a "demand
  stimulation" (a "Keynesian") approach to kick-starting growth?

FDI projections

• Is 4.1 not underrating the major FDI flows that will now start to come into the country
  with restructuring of the Big 4 parastatals (Eskom, Transnet, Denel and Telkom)?
• While 4.2 concedes that GEAR measures "may" have helped SA escape the worst of
  the 1997-8 "developing" economies crisis - is it too grudging? Does it fail to
  understand the importance of GEAR as a necessary and largely successful stabilisation
  programme?

Strategic role of the public sector

• What is our implementation strategy to follow up our 1999 Strategy Conference Resolution
  on the Socialisation of the Economy? What steps and structures do we need? For instance,
  how do we direct our entire membership wherever it is located – government, mass
  organisations, Alliance, etc – to implement this resolution in the various spheres in
  which they work? How do we ensure full integration of this resolution in all our
  programmes?
• What concrete measures can we suggest for the role of the state in investment in public
  infra-structural projects aimed at stimulating the economy? What is our assessment of
  public works programmes? What is the role of the transport department in provision of
  transport infrastructure, and the role of other parastatals in this regard?
• Is it not time now to approach domestic public and private capital resources in a new
  way? Is it not time we seriously consider and propagate the type of tactical alliances we
  need to form with sections of domestic capital (black and white) around a developmental
  agenda? Which sectors of the economy? Which industries need strengthening? How? Which new
  industries are needed? How do we mobilise resources? How do we use this industrial
  development to advance socialism?
• Shouldn’t the mobilisation of domestic public and private capital be the basis and
  foundation upon which we seek to attract foreign direct investment, rather than an
  exclusive focus on creating a macro-economic framework for attracting FDI? Wouldn’t
  such an approach also assist in creating a developmental framework that seeks to direct
  FDI towards the productive sectors of the economy? Were such a tactical alliance to be
  built, on what basis, agreements and outcomes should it be pursued?
• Engaging the black capitalist class - Is it patriotism to be black and capitalist or is
  it investment in job-creating and productive activities? Is it not time that the
  patriotism of owners/controllers of capital resources be measured, not primarily by the
  colour of their skins, but by their capacity and willingness to undertake job creating
  investment?

Race, class and gender

• Are the persisting inequalities and growing unemployment inevitable realities, given the
  crisis-ridden character of the economy we inherited? Or could we have done better?
• How do we ensure that working people and the poor do not carry the brunt of the pain of
  change?

• How do we ensure job-creating growth that begins to transform the imbedded structures of
  inequality in our society?

Capital accumulation

• What bloc of forces is to be the primary beneficiary of capital accumulation resultant
  from envisaged economic growth? What class forces are strengthened or even forged in the
  accumulation process? And which are weakened?
• What is the SACP role in this process? How do we use capital accumulation to strengthen
  the working class and entrench working class power in South African society?
• Can we develop alternative forms of capital accumulation, or even alternative forms of
  social and collective ownership of capital? How can we do this?
• What is the role of the state and its resources in capital accumulation?

Social security

• How should the Party approach social security and a basic income grant? Is it affordable
  and sustainable?
• Are there other social security approaches we should look at?
• How would social security contribute to generation of local economies?
• What should be the relation between social security and alternative forms of social and
  collective ownership of capital?

Government budgets

• How should we respond as the SACP to budget roll-overs from strategic government
  departments? What does this mean for our strategic argument for the extension of the
  public sector?
• How do these roll-overs affect poverty eradication, the development of an industrial
  strategy and dealing head on with the HIV/AIDS crisis?
• What are the reasons for this non-expenditure?
• What does a people’s budgeting process mean in practice? How do we achieve this
  process? What are the basic elements of a people’s budgeting process?