The South African Federation of Trade Unions – SAFTU notes the message of President Cyril Ramaphosa delivered on the evening of the 23 July 2020.
SAFTU has been one of the organisations calling for the closure of all schools until the Coronavirus – 19 reaches its peak. SAFTU is pleased that the President has responded partially positively to these calls, by announcing that public schools will take a break of between one and four weeks.
While this is a step in the right direction, SAFTU is disgusted by the drift we are rapidly experiencing away from a united, democratic, nonracial, nonsexist and prosperous South Africa, given that the country has two divergent countries in one. The President has given the country that is still largely black and very poor with dysfunctional educational and healthcare systems what they are demanding, which is the closure of the schools, so that teachers, students and their families do not succumb further to the plague.
But he has given the other country – which is still largely white and rich with private education and healthcare – what they want, which is the continuation of most privileges, including high-quality schools and exclusive health care, without the needed National Health Insurance, much less nationalised facilities, so as to lessen the fatal inequality.
In the announcement there is no logic or attempt at convincing society with scientific statements. The President does not cite the work of epidemiologists who understand when we are reaching the peak of the pandemic, and what that means for decisions to close public schools and not private schools. The President acknowledges that there are differences of opinions without taking the country into his confidence.
And his most disconcerting statement, unveiling the President’s unfamiliarity with what is happening in the collapsed public health system, is that “South Africa continues to have one of the lowest case fatality rates in the world, experiencing far fewer COVID-19 deaths than many countries with similar or even lower numbers of infections. Since the outbreak of the disease in South Africa, more than 6,000 people have succumbed to the virus.”
Yet the Medical Research Council had shocked the nation a few hours earlier, by revealing that “the weekly death reports have revealed a huge discrepancy between the country’s confirmed Covid-19 deaths and number of excess natural deaths,” amounting to around 60% undercounting. An honest President would have not only been frank about this failure, but would commit to fixing the problems – such as lack of tests and the breakdown of so much of our public healthcare system – that are unveiled in these new death statistics.
SAFTU members experience a dramatic increase in death rates across all the provinces. The government is unable to expand its capacity to test rapidly. As a result, more people are dying without being tested and die before the results come back, to confirm that they were positive or negative. The MRC research is consistent with the reality on the ground. The government’s failures are making South Africa not only internationally pitied as the site of the fifth-highest number of Covid-19 cases, but now also untrustworthy, since the enormous under-reporting of pandemic deaths reveals the pathetic, unreliable state of our public health infrastructure. The underfunding of our health system – as witnessed in the R3.9 billion budget cut by the Finance Minister in late February – will be one of the great crimes that this government will be remembered for. It seems that only healthcare worker wildcat strikes and protests is getting the attention of a government whose higher echelon is able to use private medical aids to recover in ultra-expensive private hospitals.
The President’s address today seems to have been motivated by the growing disgust expressed about corruption by many South Africans, using social media, street protests and other means of communication. The rate at which government officials are becoming instant multi-millionaires at the expense of the health and lives of our people is intolerable.
Just hours after arrogant testimony by former cabinet colleague Nomvula Mokonyane (who was appointed by the President as Environment Minister in 2018) that the ruling party gained massive cash plus in-kind support from the Bosasa company – owned by the Watson family – in exchange for tenders, he offered the country yet more beautifully-articulated promises that stern action will be taken against looters of state coffers.
Very few South Africans will believe the assurances that action is being taken. Very few will even believe that the Proclamation he signed will produce any results. The President must look in the mirror, and ask and answer the question: how many Proclamations have been signed by his predecessors, and how many government leaders and officials are in prison as a result?
If honest he will confirm that government is as inefficient in fighting corruption as it is in delivering healthcare, education and jobs.
On the economic crisis
The Coronavirus Rapid Mobile Survey, published on 15 July, exposes an appalling and unprecedented economic and human catastrophe. The report revealed a net loss of three million jobs between February and April. “The impact is colossal and it shocked us,” said Dr Nic Spaull, principal investigator for this survey.
“One in three income earners in February did not earn an income in April, which translated into an almost immediate job loss when lockdown was declared. 47% of respondents reported that their household ran out of money to buy food in April 2020… All of us were numbed. It is devastating and upsetting.”
Yet the President said nothing about this calamity, except to promise once again that he will table a plan in the near future. SAFTU wishes to remind the President that:
He should know that since he was elected, more workers have lost their jobs, more South Africans have dropped deeper into poverty, far worse inequalities have emerged, and the economy has plunged deep into recession.
It is scandalous for a head of state with this pathetic record to still promise decisive action. As our economy stares at the likelihood of reaching a Great Depression, with a decline of more than 10% of GDP, the President still has no plan. He is unable to manage the contradictions within the shapeless alliance of multi-class, amoeba-like parasitism that he pretends to be leading. The hard reality is that the ruling class in charge of the country has no way forward for the vast majority.
At SAFTU we insist the government’s economic stimulus package is wholly inadequate. Though once again he claims a R500 billion stimulus, in reality, at most only R170 billion in new money – a pathetic 3.4% of the GDP – has been released to deal with the pandemic. The rest of the funding will come at the expense of other service deliver priorities.
Further, SAFTU calls for the full transparency regarding all the loans provided by the international financial institutions. We do not understand the rationale for hard-currency borrowing – today another $5 billion from the African Development Bank was announced, the largest-ever loan to South Africa – when the economy’s brand new current account surplus (it is usually 4%+ in deficit) and the $50 billion in Reserve Bank foreign reserves suggest that we are not short of dollars.
The cost of a dollar loan is much higher than a locally-sourced credit from our very liquid financial markets (witness the Johannesburg Stock Exchange’s recovery), since we must repay it in dollars – even though we can expect the South African currency to continue its decline in coming months and years, thus making the loan much more expensive in real terms.
We also remind the President that this same lender, the AfDB, is mainly western-controlled, operates as a proxy for the Bretton Woods Institutions, and already gave Eskom massive loans to pay for the corruption-riddled Medupi power plant – at a time it became well known that Hitachi was essentially bribing the ruling party (through Chancellor House) to get the boiler-making tender worth many tens of billions of rands. Hitachi admitted its wrongdoing to the U.S. Securities and Exchange Commission and in 2015 paid a $19 million (R315 million) fine, which South Africans did not receive a cent of.
Yet while this bank knew of the corruption, and now has the gall to both demand repayment on the Odious Debt at a time Eskom is cutting off millions of township residents, it is now offering the Finance Minister a new loan that the country does not need, and will not be able to afford to repay.
The foreign debt that South Africa owes reached $185 billion at the end of 2019 and is now 61% of our GDP. The only time South Africa defaulted on foreign debt was in 1985 when the debt was just 41% of GDP. Continuing to run to the AfDB, World Bank, BRICS New Development Bank and especially the International Monetary Fund – expected to lend $4.2 billion more in coming days – will end with this presidency and future rulers cracking down with austerity for the masses of South Africans.
We know that conditions are being imposed with this huge increase in unnecessary foreign debt, that will lead to a classical Structural Adjustment Programme, that feeds into the heartless supplementary budget the Finance Minister offered last month. The possibility of Quantitative Easing, higher taxes on corporations and the rich, tighter exchange controls, a crackdown on Illicit Financial Flows and other strategies to address the debt load, will evaporate if the IMF is calling the shots.
What must be done
It is in this context that SAFTU reiterate our demands that the government: