
THE NEO-LIBERAL MACROECONOMIC FRAMEWORK CONTINUES TO THROTTLE THE ECONOMY
The South African Federation of Trade Unions (SAFTU) notes the fractional growth of 0.4% in the South African economy registered in the second quarter. This pitiful economic growth vindicates our long-held position that the economy cannot develop on a neoliberal macroeconomic framework. The 0.4% GDP growth will not halt, let alone reverse, the catastrophic levels of unemployment plaguing the country’s economy. Neither will it alleviate poverty or reduce the inequality that continues to be a lot of the working class.
The 2nd Quarterly Labour Force Survey (QLFS) revealed that official unemployment increased from 8.2 million in the 1st quarter to 8.3 million in the 2nd quarter, while unemployment, including those who have given up looking for jobs, has grown from 12.1 million to 12.3 million in the same period.
Official unemployment among young people (between the ages of 15 and 34) is even higher, at 46,6%. Expanded unemployment among those aged between 15 and 24 is 70%. This reveals that the economy is failing to create jobs for new labour market entrants. On the other hand, in its 2024 World Economic Outlook, the IMF projected South Africa’s growth prospects in 2024 at a mere 0.9%. The Fund further admitted that South Africa’s economy will fail to reduce its high unemployment levels at the projected growth rate.
South Africa’s wealth inequality, expressing obscene wealth side-by-side with extreme poverty, is the highest in the world. With 30.3 million South Africans living in poverty – at a national upper poverty of R992 – while 13.8 million are in food poverty, the measly 0.4% growth assures unemployment, poverty and inequality.
Despite all this, the GNU has committed to macroeconomic policies responsible for the sorry state of the economy. On the 29th of July 2024, Government Communication and Information Systems (GCIS) issued a communique to congratulate the National Treasury for attaining a primary budget surplus – the first time since before the 2008/ 09 global financial crisis.The GCIS further commended the National Treasury for its fiscal prudence, which the latter committed to in the February 2024 Budget Review. Thus, in an economy resistant to growth and chronically high unemployment levels, the National Treasury reaffirmed its unwavering commitment to austerity by pursuing the primary budget surplus.
On monetary policy, governor Lesetja Kganyago re-committed the South African Reserve Bank(the SARB) to inflation targeting and high interest rates. In the SARB’s annual report released on June 25, 2024, the Governor argued for a tighter inflation target range, preferably between 2% and 4%—the surest way to throttle what remains of the economy. He further committed to high interest in court and incentivised currency speculators on the Forex market to retain the rand as the currency of choice.
The GNU notwithstanding, the neoliberal macroeconomic fundamentals responsible for the current socio-economic ills remain intact. As we argued, economic recovery calls for a macroeconomic framework free from an obsession with budget surpluses, inflation targeting, and high interest rates and a move towards state-led economic re-industrialisation.
SAFTU demands that:
a) The South African economy must be overhauled to rid itself of all the vestiges of racism and colonialism that continue to shape the economy.
b) Acknowledge and respect the 1955 Freedom Charter economic demands and place the banks, monopoly capital and those firms controlling our minerals under public ownership!
c) Reverse the debilitating and self-destruction impact of the property relations
d) Reorganise all economic life on the basis of a democratically planned economy!
e) Break up the monopolies!
f) Force firms to invest in the domestic productive economy!
g) Re-nationalise steel!
h) Re-nationalise petro-chemicals, oil and gas!
i) Promote appropriate R&D!
j) Re-establish the vast mineral wealth into society’s hands!
k) Reassert a Move to a non-racial, non-sexist, post-capitalist society!
l) Reverse the damages done by an elitist Black Economic Empowerment and empower the downtrodden of society!
m) Gain sovereignty of land, labour and minerals!
n) Revitalise the organic links between land, labour and minerals!
o) Expropriation Without Compensation should first apply to commercial mines
and plantations!
p) Empower local communities!
q) Empower workers to take control!
r) Replace the current neoliberal macroeconomic framework!
s) The debt/GDP ratio can rise if funds are well spent!
t) Demand patriotism by the wealthiest and prevent their economic sabotage! The introduction of a wealth tax on the top 0.1% is immediately required
u) Halt future job losses!
v) This is the time for a massive public works programme!
w) Jobs must urgently be created to ensure food sovereignty!
x) Regulate workplaces through the employment and training of more health and safety inspectors!
y) Insourcing must commence at long last!
z) Support the Unemployed, Don’t Write Them Off!
aa) SAFTU supports the expropriation of land without compensation. It demands the reversal of the historic land dispossessions and looting by settler-colonialists.