South Africa is paying a heavy price for failing to give the NGP a chance, says Andile Ntingi.
Four years ago, the government unveiled an economic policy it touted as a panacea for South Africa’s post-apartheid woes – an anorexic economic growth, stubbornly high unemployment and hostile industrial relations.
Ebrahim Patel, a veteran trade unionist and minister of a newly established Economic Development Department at the time, was brought into government to be the face of this macro-economic policy known as the New Growth Path (NGP).
The NDP promised to turn the South African economy into a proverbial golden goose that would lay a 7 percent annual growth rate and 5 million jobs between 2010 and 2020.
But the policy, progressive as it was, got nowhere and was quickly ditched after it was shot down by business which perceived it to be laced with socialist undertones and said it was dangerously interventionist.
Today, South Africa is paying a heavy price for failing to give the NGP a chance and taking on board some of its elements that would have placed our economy on an industrial growth path similar to those of successful economies like Germany and South Korea.
We have a limping, jobs-shedding economy and the outlook is not rosy.
The government expects the economy to grow by a paltry 1.4 percent in 2014 and to slowly limp to 3 percent growth in 2017, still far off the pie-in-the-sky 7 percent expansion that NGP promised when it was first paraded in October 2010.
At the heart of the NGP was a proposal to smooth out confrontational relations between business and labour to inject stability in the labour market to enable business to do what it does best – accumulate wealth – in return for labour getting a decent slice of the cake.
However, the relationship between the two industrial foes has remained stuck in the past, colonial and frosty in their nature, whereby white-owned capital has become accustomed to prospering on the back of cheap African labour and low electricity costs.
After the end of white-minority rule in 1994, workers expected to extract substantial gains from the country’s economic riches, owing to the alliance between the Congress of South African Trade Unions (Cosatu), South African Communist Party (SACP) and the ANC.
But how wrong they were.
The manna has not fallen from the heavens and instead the number of formal workers is shrinking and will likely dwindle further with the government’s plans to sell non-core assets to boost its coffers.
Investors who take over the state-owned companies will surely take the axe to their bloated workforces to reduce costs and squeeze out profits.
Patel was part of a throng of communists and left-leaning politicians who had made it into President Jacob Zuma’s first administration in 2009 after they had supported him two years earlier to wrestle power from Thabo Mbeki, who was seeking a third term as president of the ANC.
Patel was Cosatu’s payback for its support for Zuma and the labour federation’s general secretary Zwelinzima Vavi wanted his man to run the South African economy and tilt the balance of economic power in favour of workers.
Indications of a looming fallout between Zuma and Vavi began in October 2009. For more than six months after his appointment, Patel had not been given a clear mandate to set South Africa’s economic policies.
There were also reports of a turf war between Patel and former finance minister Trevor Manuel over economic planning and co-ordination.
Distrustful of Zuma, Vavi launched public tirades demanding Patel be given a mandate to set economic policies, not Manuel, who had assembled a team of academics and intellectuals to develop the NDP document for the country.
In October 2010, Patel finally made public the NGP, the macro-economic strategy that would underpin South Africa’s growth for the next decade.
Vavi applauded but his excitement was short-lived as the NDP became dominant over the NGP, raising the ire of Vavi and some Cosatu affiliates like the National Union of Metal Workers of South Africa (Numsa), who have slammed the NDP as a neo-liberal, anti-labour and potential jobs destroyer.
The unhappiness with the NDP split Cosatu down the middle with Vavi also falling out with the federation’s president S’dumo Dlamini, who is seen as Zuma’s proxy in the battle over adoption of the NDP and the death of the NGP. Right now Cosatu is so fractured and at its weakest that it won’t have the strength to ward off job cuts that will arise from state privatisation.
We should have listened to Patel’s progressive thinking because a lot of what has happened since 2010 could have been averted. Wildcat strikes over wage increases which culminated in 44 people being killed in 2012 at Marikana in the North West’s platinum belt could have been prevented. The long-standing investment squeeze by South African companies, hoarding more than R1 trillion that could be invested to kick-start the economy and create badly-needed jobs, could also have been avoided.
The NGP proposed a brand of social corporatism in which a Keynesian-type developmental state acts as a facilitator of class compromise or co-operation between business and labour.
Patel borrowed heavily from countries like Sweden, Norway, Iceland and Finland where a big welfare state exists in an environment anchored on a social pact between capitalists and workers, resulting in neither of the interest groups acting in a zero-sum game of sabotaging their economies. Scandinavian countries, which pioneered social corporatism in the 1930s and perfected it in the 1970s, have efficient governments, high standards of living and the most equal societies in the world.
A less extensive model of social corporatism is found in Austria and Germany, the so-called Rhine capitalism, where the bourgeoisie and the proletariat have a cosy relationship that has allowed Germany to become Europe’s wealthiest economy and a leading industrial exporter.
Germany’s industrial relations are so mature that during the financial recession which started in 2008, German industrial workers agreed to take wage cuts or reduce working hours to help their employers ride out the worst economic slump since the Great Depression of the 1930s.
Jobs and Germany’s manufacturing sector, the engine of the country’s economy, were saved while its neighbours and the world economy wallowed in a recession.
Unlike in many parts of the world, German companies, particularly small and medium-sized businesses, respect workers and often consult them on key investment decisions and innovative ways of boosting production.
This level of co-operation between employers and workers is unthinkable in South Africa, but there is no reason why we can’t approach problems like the Germans or Scandinavians do.
If the modern corporatists of Europe are not inspiration enough, perhaps the capitalists, socialists, trade unionists, bureaucrats, and politicians of South Africa must heed the pragmatic advice of our country’s founding father, Nelson Mandela, who after his visit to the US following his release from prison in 1990 told a US audience: “I don’t care whether the cat is black or white as long as it catches the mice.”
We need to take Mandela’s advice to heart or else the NDP will just be another expensive document that will go up in smoke without delivering the promised 11 million jobs and a trebled South African economy by 2030.
* Andile Ntingi is chief executive of GetBiz, an e-procurement and online media platform.
** The views expressed here are not necessarily those of Independent Media.
Sunday Independent