Saturday, October 08, 2011

South African black business should rise above petty squabbles and build a developmental state.

South African black business should rise above petty squabbles and build a developmental state.

Nyiko Floyd Shivambu

The squabbles encountering black business formations and their white counterparts in the aspiring Developmental State of South Africa is a reflection of the class and racial contradictions that continue to underpin South African society as atavistic remnants of apartheid and its ideologies of white supremacy and African subjugation. In the process of squabbling, what is supposed to be progressive black business is missing the point on what should be its role in the aspiring Developmental State of South Africa. It appears that the contentions of the Black Management Forum breakaway are centred on the emphasis of black inclusion into the colonial economy of South Africa.

All honest people, including conservative analysts should agree that the South African economy bears very vivid features of colonial economies. Colonial economies were positioned by the coloniser, now the imperialist, as suppliers of natural, raw and semi-processed materials and insignificant importers of finished goods and services. 17 years into democracy, South Africa’s top 10 exports to the United Kingdom, European Union, United States and China are natural, raw and semi-processed goods, more especially mineral resources and metals. Conversely, South Africa’s top 10 imports from these countries are finished goods and products, some of which are produced out of the raw materials South Africa exports.

Now this is how colonial economies were designed to do and this is what colonial conquest of the African majority meant. It is therefore a responsibility, actually an obligation of emergent black businesses to overturn this situation by decolonising the South African economy. It is only black business that can reliably decolonise the South African economy because those who were empowered by the past system continue to benefit from the status quo. They have then chosen to co-opt some amongst the black majority to rapaciously reap the fruits of the South African colonial economy through Black Economic Empowerment. What BEE has achieved is creation of shareholder capitalists, instead of the industrial capitalists needed for labour-absorptive industrialisation and diversification of the South African economy.

The democratic dispensation has therefore created predominantly two components of black capitalists, whose contribution to the total onslaught against unemployment and poverty is insignificant. It is the shareholder capitalists, who were co-opted into existing capital by those empowered by apartheid and contract capitalists, mistakenly referred to as tenderpreneurs in other circles. The latter group cannot be referred to as tenderpreneurs because such suggests they are entrepreneurial in their efforts to maximise profits, sometimes at the expense of quality services to the people. The term contract capitalists, is more suitable because not all capitalists are entrepreneurs, and contract refers to the un-sustainability of the manner in which they accumulate wealth and profits.

What South Africa needs are industrial capitalists who will not only initiate businesses to manufacture goods and services, but will create workable, sustainable partnerships with established industrialists from the developed and developing countries to invest in South Africa. This will lead in massive transfer of skills, education and expertise on how most of the minerals are beneficiated and industrialised into finished goods and services. In the process, many job opportunities will be created because almost everywhere, manufacturing and beneficiation are highly labour-absorptive and less skill intensive. Most employees in beneficiation and manufacturing do not need three year diplomas and qualifications, and more than 80% of South Africa’s unemployed population does not have three year diplomas and degrees, despite the fact that they are employable.

These are the issues the progressive black businesses should be debating and fighting about, and additionally lobby government to put in place legislations that will enable domestic beneficiation, manufacturing and industrialisation to thrive. This can happen minimally through amendment of the State procurement policies and requirements, and maximally through substitution of imports on areas the State intends to grow and develop through higher tariffs. These can be complimented by the social mobilisation campaigns of buy-local, such as Proudly South African and what COSATU sometimes does. Import substitution is not alien to the politics of developmentalism, because all the countries that massively developed since the end of World War II had to protect their domestic industries and markets from aggressive foreign competition. A Developmental State should in essence play such a role.

In the case of South Africa, the so many trade agreements which our government signs almost every fortnight should almost emphasise the necessity of local beneficiation, manufacturing and industrialisation. Instead of facilitating questionable BEE deals, the South African government should provide practical support politically and financially to entrepreneurs who have viable plans to form massive manufacturing and industrialisation partnerships with established industrialists. In such a way, the State will be playing a developmental role and contributing to creation of many job opportunities and therefore reduction of massive unemployment and poverty. South Africa needs formidable black industrial capitalists, who will supplement public service in the creation of so many job opportunities.

Importantly and because the 17 year old ANC democratic government has learned bitter lessons, such an environment of massive industrialisation and diversification of the South African economy cannot happen if the State is only playing a facilitating role. The State facilitated all the transformation and redress charters in almost all sectors of the economy and none of the set objectives were ever met. Painfully, no one was held accountable that the ownership and management redress targets agreed upon by all sectors were not fulfilled. Why did South African government waste resources and time drafting and establishing consensus on empowerment charters and Acts of parliament which were never implemented nor complied with by anyone? Is the South African State a banana republic that cannot enforce its own laws?

In the proposed strategy, the State should own and control strategic sectors of the economy, particularly those that provide industrial inputs. In such a way, the State will be able to incentivise new industrialists to invest in South Africa, because of guaranteed access to cheaper and easily accessible industrial inputs, particularly minerals, water and energy. The State should continue its ownership and control of transport and logistics services provided by Transnet currently and in a such a way be in a position to prioritise business that will trickle down to develop South African communities though job creation and therefore poverty reduction. This is important because businesses that undermine their commitments to State entities like ESKOM still use South Africa’s harbours to export coal, which legally belongs to ESKOM. Everyday South Africa’s natural resources are drained through our harbours without meaningful contribution to real development of the people.

State ownership and control of strategic sectors of the economy is not only economically sound, but socially, politically and morally meaningful. The reality of mining in South Africa today is that it brings more suffering and diseases to the people than benefits. It is an understatement to suggest Mineworkers are treated like slaves, because slaves had longer life-expectancy and therefore a possibility to be liberated in a lifetime. The life-expectancy of mineworkers in South Africa is reducing everyday due to unsafe working conditions, occupational injuries and massive spread of diseases. The State should make a long overdue intervention and save humanity, before it is too late. 

This is conclusively an economic development model that can rescue South Africa from the high levels of unemployment, therefore poverty, starvation, diseases, crime and many other social ills. This model should be complimented by massive investment in education and training of all people. Post secondary training and education should be compulsory, and this should include the vocational training of those who drop out at Grades 10, 11 and 12. Subsidisation of labourers will not benefit society, because private companies will in the cause of chasing profits, substitute real employees for government subsidised employees and dump them once the subsidy is finished. There are so many youth developmental programmes the subsidy money can be channelled to, instead of provision of free labour to rapacious accumulators of wealth.

In the process of squabbling and throwing mud at each other, those who refer themselves as black businesspeople should think out of the box and begin to create real wealth and not fight over who is co-opted into the existing wealth which the State should ultimately own and control. They should ask amongst themselves of how many people have they employed in new industries, firms and factories. They should ask themselves of where do all the electronics, fridges and so many gadgets that almost everyone owns come from and how many job opportunities would be created if those were manufactured in South Africa. They should ask themselves why South Africa continues to import food, despite massive agricultural capacity. Only when black business begins to ask these questions will they gain our genuine sympathy, but as things stand, they are embroiled in petty squabbles of who is closer to big business than the other.

Nyiko Floyd Shivambu

Monday, February 28, 2011

The SACP Neo Liberal?

The SACP’s inconsistencies deprive it of an opportunity to provide ideological leadership on economic policy.

Floyd Shivambu

The South African Communist Party’s original reaction to the notorious Growth, Employment and Redistribution Strategy released on the 14th of June 1996, was as thus, “The South African Communist Party welcomes the government's Growth, Employment and Redistribution Macro-Economic Policy. We fully back the objectives of this macro-economic strategy and note, in particular, the following key features: Contrary to certain attempts to use the macro-economic debate to shift government away from its electoral mandate, the strategy announced today firmly and explicitly situates itself as a framework for the RDP”.


When the Accelerated and Shared Growth Initiative of South Africa was unveiled in 2006, the SACP welcomed the initiative and said, “ASGI-SA calls for an active developmental state, for a comprehensive industrial policy and for integrated local development planning”. On the New Growth Path in 2010, the SA Communist Party said, “A key achievement of 2010 has been government`s consolidation and public release of a New Growth Path perspective. Minister for Economic Development, Cde Ebrahim Patel, presented government`s NGP document to the CC. The CC warmly welcomed the major paradigm shift represented by the NGP and government`s earlier announcement of the Industrial Policy Action Programme 2 (IPAP2)”.


From these cheerful statements, it is evident that the SACP had genuinely, or rather naively believed that they constituted revolutionary socio-economic developmental programme, which had to be embraced by the entire National Liberation Movement in the course of the National Democratic Revolution. This is odd because the social science the SACP claims to use as tools of analysis and guide to action should assist the Communist Party to foresee the massive inequalities, unemployment and poverty that proclaim growth first (increase profits) and the rest shall follow. It is objective reality that the common and underpinning feature of GEAR, ASGISA and NGP is that they move from a premise of growth first and the rest shall follow.


It was only in 1998 where the SACP believed that “the budget deficit reduction targets are arbitrary, based as they are on macro-economic models derived from a largely unreconstructed Reserve Bank. GEAR embodies, in its core fiscal and monetary policies, a neo-liberal approach that is at variance with our reconstruction and development objectives. Much of GEAR and indeed much of government's evolving economic policy has shifted progressively away from ANC economic policy in the first half of the 1990s, which underlined the interconnectedness of growth and development, which envisaged a major emphasis on growth led by domestic and regional infrastructural development. More and more, there has been a shift towards the assumptions of an export-led growth, based on the myth that deregulation and liberalisation, more or less on their own, will make the South African economy "globally competitive”.


Now these features of GEAR, which the SACP noticed two years after its adoption, was in the original text of the strategy identified as point of departure, “Sustained growth on a higher plane requires a transformation towards a competitive outward oriented economy” and further committed to deregulation and liberalisation of trade in its original intention and programme. The assumption is that if the SACP had noticed this component of GEAR earlier, it would have not welcomed the perspective with the exuberance it displayed on the 14th of June 1996. Since the late diagnoses of the ills brought forth by GEAR, the SACP did not only criminalise those who were associated with its implementation, but became the most aggressive opponents of GEAR, derogatively referred to as the 1996 Class Project. It is apparent that the Communist Party’s opposition to the 1996 Class Project was more aggressive than the opposition to Capitalism.


Despite the exuberance that defined the introduction of ASGISA, it was short-lived due to political developments in the Alliance, particularly the outcomes of the 52nd National Conference of the ANC in Polokwane, which was described as watershed by the SACP. The SACP characterised the ANC 52nd National Conference as “democratic wave [that] must be seen against the backdrop of a decade in which the ANC and its alliance partners have been subjected to attempts at marginalization in the interests of using the state to drive through a pro-big business policy package characterized by a blend of neo-liberalism and a subordinate, paternalistic, top-down welfarism directed to the poor”. Now that is a profound observation, particularly due to the fact that SACP’s reaction to GEAR and the policy packages it deplores were not anti neo-liberalism, they were instead reactionary and lacked foresight.

When announcing the New Growth Path (NGP) in the Medium Term Budget Policy Statement, Minister of Finance Pravin Grodham said that “Our central goal is unequivocal: we have to accelerate growth in the South African economy, and we have to do so in ways that rapidly reduce poverty, unemployment and inequality”. South Africa’s first 17 years of democracy are a perfect illustration that economic growth can simply mean bigger profits for big business, with no plausible sense of sustainable development for the people of South Africa, even when government’s intention was to create jobs. Virtually all developmental indicators, particularly the official 10 and 15 Years Review of Democracy and Freedom in South Africa verified that sustainable development to majority of our people happened where and when the State was playing a leading and more decisive role. This is in recognition of the reality that the private sector (capitalists) does not have developmental interests and intentions for the people of South Africa.

Whilst the New Growth Path and more recently, the 2011 State of Nation Address spelled out clear intentions and programmes to mobilise the private sector (capitalists) behind the noble vision of job creation, including through tax rebates, reality is that capitalists’ interests is not about job creation. The SACP should by now be aware that if it were in the private sector’s interests and wishes, they would admire free labour in the literal sense or government fully subsidised workers with no hope and home. If the NGP identified job drivers will continue to be predominantly in private hands, the decent work agenda will gradually be undermined and perhaps eroded because capitalists thrive on the sweat and blood of the working class. The basis of Marxism is a recognition that in a class divided society, the interests of the two opposing classes are irreconcilable, and they are actually antagonistic. This applies to the South African capitalist State as well.

These are the fundamental political and ideological diagnoses the SACP should notice even when new developmental/growth strategies and paths are being introduced. The enthusiastic acceptance, without robust critique of these interventions does not assist in sharpening their focus. With the pattern that defined the SACP’s approach and response to GEAR in 1996 and ASGISA in 2006, the most foreseeable possibility and practicality is that the Communist Party will after 2 to 3 years be the biggest and most aggressive opponent of the New Growth Path, and possibly give it a new name, “the 2010 Class Project”. This is called hindsight analysis, embedded on a notion of “only if we knew”. This does not do any good in reviving the integrity of the SACP as a Marxist-Leninist formation, whose analysis of society and provision of ideological leadership should forever be grounded on science. If the saying “A wise man always changes his mind” is true, then the SACP is very wise.

On our side, the politics of a New Growth Path are quite simple, i.e. creation of decent work and many jobs in South Africa needs the economy to be labour-absorptive through massive industrialisation, development of infrastructure, agriculture, expanding of the minerals extraction and beneficiation, and various other interventions identified before. This requires the State to be in control and ownership of key and strategic industrial inputs in order to attract industrial investors into South Africa to manufacture goods and services closer to areas of extraction. Tax rebates for big business, like wage subsidies will basically enrich capitalists and not create sustainable jobs. These are some of the systemic and systematic weaknesses of the New Growth Path the SACP will realise in hindsight and like before demonise those who will be its adherents in 2 to 3 years. Maybe that is not surprising for a Communist Party that opposes common ownership of the key means of production like Mines and Land, even when the material conditions for such to happen are existent and the balance of forces in favour of change.

Floyd Shivambu—ANC Youth League Head of Policy, Research and Political Education + Spokesperson

Monday, February 14, 2011

Revolution in Egypt was not caused by Facebook and Twitter:

Revolution in Egypt was not caused by Facebook and Twitter:

Floyd Shivambu

Most social and unseasoned political commentators across the world opine that the revolution that happened in Egypt was caused by social network sites, Twitter and Facebook or any other form of network which Egyptians might have used to communicate with each. This misdiagnoses of what are the real causes of the revolution do not only apply to social and unseasoned political commentators, but was oddly believed by the Egyptian government which shut down the network immediately after the revolution begun. Even after the closure of twitter and facebook access, the revolution/protests in Egypt intensified and succeeded in achieving its most immediate and tangible victory, i.e. toppling of Hosni Mubarak’s kleptocratic regime.

History and well reasoned progressive social science have proven overtime that fundamental change in political, social and economic realities (revolutions) are far much more complex realities than exchange of text messages and updating of status via twitter and facebook. For any revolution to happen, there necessarily should be conducive social, political and economic conditions for such revolutions to occur. These include, but not limited to a society where there is illegitimate dominance of one political elite or clique to the exclusion of others. Other conditions for a revolution are socio-economic conditions of mass poverty, unemployment and starvation of great majority and inequalities between the rich and poor. The third material condition for a revolution could be massive social problem of racism, tribalism, regionalism or any form of social exclusion based on class, colour, ethnicity, place of origin, religion, etc.

In Egypt, the past 30 years have been dominated by single secular political elite (National Democratic Party under Hosni Mubarak) which succeeded through exclusion of other political forces in a country whose 90% of the population is Muslim. For those 30 years, the NDP and political elite in Egypt enjoyed political, military and economic protection of the Western forces, in particular the United States and some parts of Europe. They were then able to suppress political dissent for those years, because they used the cohesive forces of the State to suppress dissent and paraded as a developing economy because of the West’s economic interests in Egypt and therefore economic protection. The Egyptian government even banned a massive political force, the Muslim Brotherhood for many years and justified such by playing with the West’s innate fear of Islam inspired political movements, which they generally believe are terrorist in character.

Now the real material conditions for the Egyptian revolution included but not limited to the growing impatience with political repression by the political elite, kleptocracy (government of thieves) of a political elite that did not want to hand over power to others except themselves and close family members, suppression of political movements which represented the interests of majority, massive inequalities, growing poverty and many other varied interests. Now the confluence of these genuine concerns, challenges and problems in Egypt provided ready material conditions for the political revolution to occur. Like the Iranian revolution in 1979, the revolution was sparked and happened without a commonly defined political or ideological programme on what should concretely happen after the revolution. Such a common programme will not be found anytime soon, and could easily result in an Islam guided, anti-West political force emerging as government.

The spark to the Egyptian revolution was conspicuously the successful protests in Tunisia, which inspired hope, particularly within Egypt’s youth, who realised that with the necessary determination, illegitimate, kleptocratic political elite can be toppled by the people. Now, because the means of communication in the contemporary world include twitter and facebook, the youth who have access to these social networks used them to spread the word that it is possible to topple a regime and all Egyptians should rise to remove the regime of Hosni Mubarak. Twitter and facebook were definitely not the only channel of communications used to spread the word in Egypt; many other channels of communication were employed. These included local media, but most importantly word of mouth. This explains why the revolution/protests continued and actually intensified even after the Egyptian government had blocked access to these social networks, and other forms of media which could spread the work faster than the word of mouth.

As channels of communication, the social network sites were most definitely useful to spread the word because an estimated 55 million out of the 80 million Egyptians have access to mobile telephones and 20 million have access to internet. These were however not the reason why the revolution happened, the reason as illustrated above includes but not limited to the reality of repression of political dissent, social exclusion/non-recognition of religious majority, massive inequalities and growing unemployment (which are relatively lower compared to other countries), and a the kleptocracy of the illegitimate political elite that did not want to hand over power to anyone outside its circles.

Now this is an important observation because social and unseasoned political commentators and some of the political leaders were beginning to believe that just the access to twitter and facebook can lead to a revolution, even when material conditions are not ripened. For example, the causes of a mass political revolution in South African will never be twitter and facebook, but the socio-economic conditions of the people and a growing perception/observation that the political leadership is doing nothing to improve the lives of the people. Now, the ANC government is doing everything in its power to better the living conditions of the people through provision of basic services such as water, electricity, education, healthcare, sanitation, houses and social grants for the needy. Year after year, government provides more and more services, including food for free to indigents.

An acknowledgment is however made within the ANC that South Africa’s biggest challenge is not service provision, but crisis levels of unemployment and therefore poverty. Now the emphasis on job creation is vital and should be adequately accompanied by dedication of most resources to job creation. This should necessarily include government’s increased role in the control and ownership of strategic sectors of the economy in order to stimulate and spur growth and development of labour-absorptive sectors of the economy and regenerate wealth for the benefit of all people. State ownership of strategic sectors will also contribute to reducing the widening gap between the rich and the poor, because majority of those who are getting exponentially rich currently are those who do work which would otherwise be done in a labour-absorptive manner by the State.

Nyiko Floyd Shivambu—ANC Youth League Spokesperson

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