The South African Federation of Trade Unions is again vindicated by the growth statistics released by Statistics South Africa today. The South African economy shrank by 0.3% in the third quarter after registering 0.4% growth in the second quarter.
The main contributor to the drag in the economy has been the Agricultural sector from the production side. This decline in production has been attributed to drought, which is said to have affected the output of maize, sunflower, soya, wheat and some vegetables.
Government expenditures, transport, storage, and manufacturing sectors—particularly the automotive industry—have all registered declines. Finance has outperformed all sectors, indicative of the highly financialised nature of South African capitalism and the bonanza enjoyed by this sector due to the high interest rates administered by the South African Reserve Bank.
Some celebrated the paltry 0.4% growth registered by the economy in the second quarter as proof that the so-called GNU was beginning to work its miracle. Statistics released today, however, not only dash the hopes of GNU enthusiasts but also provide resounding proof that neoliberalism can never bring about growth, jobs, and prosperity. Instead, its outcomes have always been and will always be poverty, unemployment, inequality, and all the social ills these challenges give birth to.
While it appears as though the weak growth registered by the economy is due to exogenous factors outside the control of those in whose hands are the levers of the economy, the truth is quite the opposite. The South African economy will not change its fortunes until the neoliberal macroeconomic policy pursued by the ANC-led government since its adoption of GEAR in 1996, and now, to be intensified by the so-called GNU, is changed. Only a turn away from fiscal austerity, restrictive monetary policy and industrial policy neurotically obsessed with the colonial low-wage export-led growth, will give a reprieve for the working class.
This SAFTU position was ironically confirmed by figures released by the National Treasury, the bastion of neoliberalism. In its Medium-Term Budget Policy Statement, the treasury estimated an average growth of 1.6% in the next three years. With the population growing at 1.3% between 2020 and 2024 and an economy that needs at least 5 to 6% growth to begin breaking the backbone of unemployment, it is clear that even more challenging times lie ahead for the working class.
The SAFTU has consistently called for infrastructure-led development and growth to address the massive underemployment, extreme poverty, catastrophic unemployment, and inequalities inherited from centuries of colonialism and Apartheid. Further, it has consistently argued for the need to overhaul South Africa’s neo-colonialist economic structure based on extractivism and replace it with an economy prioritising human needs instead of profits. Such an economy would have to foreground state-led re-industrialization and the beneficiation of this country’s massive mineral wealth.
With the so-called GNU bent on intensifying the neoliberal project, it is clear that our calls will not be heeded. Furthermore, the working class will continue to shoulder the burden of capitalism while capitalists continue to laugh all the way to the bank. For this reason, the working class has no choice but to mobilise and organise itself in defence of the systematic and coordinated capitalist attacks.
