Johannesburg - Cosatu believes that developmental policies adopted by the government for more than a decade have been a disaster, and it is time South Africa learnt from its Brics partners how to build a more interventionist state.
In a no-holds-barred secretariat report to be delivered to the federation’s national congress starting on Monday, Cosatu observes that the country is far from the path of radical economic transformation it is meant to be on.
“The most glaring effect of the policy choices made in the last 21 years is that, in almost all the key aspects of development, the policies of the past 16 years have failed to deliver tangible material progress for the working class,” the document reads.
The federation explores a number of reasons for South Africa’s inability to reduce the country’s soaring unemployment and inequality. It believes that a way the country can turn the tide is to follow the “unconventional” policies of the Brics partners to support national development. While South Africa’s economic growth estimates have slumped to 1.5 percent for the year and unemployment stands stubbornly above 25 percent, Brazil, Russia, India and China are forecasting higher growth and maintaining single-digit unemployment rates.
Cosatu says that while it has concerns about what class interests Brics members represent, the group does represent a bloc poised to take on the established powers.
While there has been an outcry in South Africa from different quarters over the state intervening in the economy, some of these countries have established state-owned operations to help drive socio-economic growth.
“They have set state-owned central banks, state banks that operate at the same level of ordinary commercial banks and they use trade and industrial policy instruments that would ordinarily be rejected out of hand in South Africa. Although, like any other country, they claim to be concerned about inflation, this is not their overriding concern,” the document reads.
“There central banks subordinate inflation concerns to employment, industrial development and economic growth. In short, when it comes to policy tools, these countries embody almost everything that South Africa rejects.”
Unorthodox policies include Brazil imposing taxes on speculative capital inflows to raise revenue to finance long-term development, and India protecting jobs by ensuring sufficient supply of credit to its productive sectors through its state-owned banking system.
The congress delegates will discuss a number of recommendations to pursue a South-South agenda. While the secretariat report does recognise that this agenda is critical, there is concern that in its current form it is exclusively determined by states, and not the majority of citizens and their organisations. If this does not change, it warns Brics will be no different from other multilateral institutions.
One of the changes Cosatu wants is that trade within Brics countries is no longer mainly centred on commodities, but is stepped up to value-added goods. Also this trade should be mutually-beneficial, which is not the case at present. It also envisages the new Brics development bank to be solely owned by the member states, publicly funded, taking all decisions on consensus, and promoting trade based on the currencies of its members. Its core focus should be on infrastructure and development.
Labour Bureau