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June 5, 2017
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June 11, 2017

South Africa’s economic and political catastrophe

The South African Federation of Trade Unions is alarmed, though not surprised, at the quarterly GDP statistics which reveal that for the second consecutive quarter the economy has not grown at all but shrunk.

 We are not surprised because this recession is the inevitable consequences of a deep, structural economic and political crisis which we have foreseen and which had already led to appalling levels of unemployment, widespread poverty and the widest inequality in the world. This will now get far worse and will have catastrophic consequences for the vast poor majority of South Africans in particular.

What makes the situation even more sinister is that the quarter which saw ‘negative growth’ of -7%, just like the quarter’s equally catastrophic unemployment statistics, covers a period before the credit ratings down-grades which followed the cabinet reshuffle. This is certain to make both growth and employment statistics for the next quarter even more abysmal.

The main victims will once again the poor, whose living standards were falling even when the GDP was growing; now that it is shrinking they face huge additional attacks.

 These will include a new round of retrenchments as employers cut back even further on investment in anticipation of even more bad news about the economy. More jobs will be casualised or made part-time. More workers be unable to repay loans and there will be further impoverishment of families who depend on a single breadwinner.

The government will have less money to spend on education, health and service delivery, as it resorts to austerity budgets in an attempt to balance the books at the expense of the poor.

The underlying reason for this disastrous situation is the highly monopolised mainly white-owned capitalist system which is still rooted in the economic straitjacket we inherited from the decades of colonialism and apartheid. Economic power still rests in the hands of the mining, heavy chemical and banking sectors.

 The economy is still hopelessly over-dependent on the export of raw materials. Trillions of rands worth of money created by the workers’ Labour, that ought to be invested in job-creating, productive jobs is sitting in bank accounts of wealthy individuals.

This has been made worse by the ANC government’s total failure to change the basis of the white monopoly capitalist system which they now demagogically talk about but have done nothing to destroy in 23 years. On the contrary they have eagerly embraced the neoliberal free-market macroeconomic policies dictated by global financial policemen like the International Monetary Fund and the credit ratings agencies.

Now on top of all this, the evidence grows by the day of the wholesale plunder of the country’s wealth by a rapacious elite of crony capitalists led by President Zuma and the Guptas but involving a far wider layer of corrupt individuals, families and companies in both the public and private sectors.

The political crisis has brought us to a stage where no statement by any government minister can be trusted or taken seriously, since so many have been implicated in the email revelations and we do no longer know on whose behalf they are speaking and acting.

This in turn has fueled the factional battles now raging in the ANC and its allies. The SACP has belatedly denounced the Zuma camp despite their own previous uncritical support for his government and their continued presence in it as ministers.

COSATU, which expelled its biggest affiliate and General Secretary for warning about the corruption and political back-sliding gripping the ANC and SACP, has become disfunctional and powerless and is no longer regarded with respect or trust by the workers, more and more of whom are now crying out for an alternative.

All this makes it more urgent and vital to build a new mass movement, led by the organised working class, which can offer hope to all the people of South Africa. SAFTU has set itself that task, and In under two months has already gained momentum and is overwhelmed with requests to join its affiliated unions. They are attracted by our commitment to build a powerful but democratic federation controlled from below by the workers, an independent but socialist-orientated mass movement, which will change for the better the lives of the working class and the African poor so that they can enjoy the benefits of the wealth they sweat to produce.

 Our programme is for a fundamental change in the country’s economic power structure, through the democratic nationalization of the mines, banks and monopolised industries, the redistribution of land to the people and all the other changes promised in the Freedom Charter.