The South African Federation of Trade Unions (SAFTU) has noted with a deep sense of sadness the capitalist economy’s performance in the last quarter of 2020. Measured as GDP, South African capitalism grew by a mere 1.5% from October-December 2020, resulting in a massive 7% crash, according to StatsSA’s reasoning.
While we acknowledge that this record-breaking 7% decline is a direct result of the coronavirus pandemic regulations that placed the economy on a standstill and locked workers for months at home, SAFTU wishes to remind the country of the economy was in a recession before it experienced the lockdown.
And now, we want to correct StatsSA, 2020 represents what we understand to be a Depression: an economy’s decline by at least 10% in a 12-month period.
Why do we say 10%+ decline, and StatsSA only says 7% decline? StatsSA must one day recognise that the colonial-era measurement of GDP they prefer ignores women’s unpaid work and the depletion of natural wealth, along with pollution and capital depreciation. GDP is an utterly inappropriate measure for South Africa, because our women work so hard – and no one worked harder to ensure both family and community mutual aid pulled us through the crisis – and because our environment is being despoiled at amongst the world’s highest rates.
Last December, when StatsSA claimed the main source of mid-2020 income was mining (an increase of 288%!), we warned the agency not to mislead the society. As we pointed out then, GDP only counts output of non-renewable minerals as a positive in this category; it does not count the depletion of the same minerals as a negative, as would any competent accountant. For mineral depletion means your wealth has gone away forever: it does not grow back the way a crop of maize does. Hence the net benefit of mining to the country’s actual wealth is negative.
How much negative wealth contributes to our mining income? How much pollution damage – from having a greenhouse gas emissions/GDP/person level that is third in the world only behind Kazakhstan and the Czech Republic – should also be subtracted from our income?
The last time we received even semi-reliable (albeit conservative) data was in the 2017 Little Green Data Book published by the World Bank. At that point, the CO2 emissions’ damage, the mineral depletion and the air pollution damage that the Bank calculated was 6.8% of GDP.
In other words, the actual decline in our society’s wealth was 6.8% worse from these factors, which should in turn be subtracted from the GDP accounts as negative factors. And with that sort of accounting – which in 2012 South African Environment Minister Edna Molewa endorsed as the Gaborone Declaration recommendations for recalculating governmental national income accounts (though she never did before her tragic 2018 death) – it is fair to say that South Africa is in a formal Depression. Once again we criticise StatsSA for underestimating the scale of our crisis, due to its neo-colonial way of thinking and bean-counting.
This means we need urgent fiscal stimulus, not Finance Minister Tito Mboweni’s fake stimulus which in 2020, economists now conclude, was only 1/3rd as high, at best, as the advertised R500 billion.
Why does our capitalist economy need a major boost from the state? It is not delivering the goods to the majority, what with a conservatively-estimated two thirds of our society in poverty (measured as the Upper Bound Poverty Line of roughly R50/person/day).
We are still dealing with an economy that has continued to reproduce unemployment, poverty, inequalities, ecological destruction, patriarchy, racism and massive levels of private and public sector corruption throughout 27 years of democracy, 40 prior years of apartheid and nearly 400 years of settler colonialism.
SAFTU has repeatedly called for the economy to be overhauled to address its structural fault lines. The neo-colonial economy’s orientation must be changed from the current domination by parasitical elements in mining, finance, and energy, into an economy centred on addressing the property and land poverty of the majority, with an increasingly decarbonised and self-reliant manufacturing sector and food sovereignty. No economy can grow in a situation where 10% of the population owns 90% of its wealth.
Regrettably the ANC government has refused to listen to this argument and continued to repeat over and over the same failed formula dictated by the rating agencies Standard&Poors, Fitch and Moody’s – which represent international financiers’ predatory interests above all.
For this reason, SAFTU submitted a Section 77 notice to the NEDLAC in a desperate attempt to force a discussion on this critical matter. SAFTU has returned to the streets to mobilise its members and unite organised workers with the rest of the working class formations. We have already signaled our determination to continue to mobilise the working class, as demonstrated by the general strike and specific but limited demonstrations on 24 February 2021.
SAFTU calls on the members and workers, in general, to continue forging unity with the working class formations. Without agreement and sustained mobilisation of the working class, this economy will continue to move from one crisis to the next crisis, leaving on its trail even worse: unemployment, poverty, inequalities, and indeed runaway corruption.
The Depression we have described, which is the 7% GDP shrinkage plus a net wealth shrinkage far in excess of an additional 3% of GDP, must be reversed. The way to do so is with a massive public works and re-industrialisation process – one sensitive to rebuilding society so we do not keep undervaluing women and the environment. One quick and easy way to begin this journey would be shaking out the neo-colonial mentality at StatsSA, so we finally recognise the real scale of this Depression we are still suffering!