Cosatu’s radical new plan for the economy – Full text

By AMUKELANI CHAUKE and CHARLES MOLELE

Trade union federation Cosatu has blamed the ANC for 16 years of “failed” economic policies, and has demanded an overhaul of the South African economy.
Launching Cosatu’s alternative economic policy in Johannesburg, general secretary Zwelinzima Vavi said the labour federation would push for it to be considered at the ANC’s national general council next week.
He said: “Policies implemented since 1994 have not improved the lives of our people or yielded development. Instead, we have more unemployment, more poverty and more inequality.”
Vavi also called for:
The creation of a state-owned bank to cater for poor working-class South Africans;
The nationalisation of critical sectors like mining, metal and petrochemicals and the creation of a state company to oversee nationalisation;
A progressive tax system, with an introduction of a tax category for the “super-rich” and a solidarity tax that aims to cap the growth of earnings of the top 10% and to accelerate the earnings of the bottom 10%;
Strengthening of the rand against the US dollar and the abolition of inflation targeting; and
The creation of full-time jobs through the government’s Expanded Public Works’ Programme and a ban on labour broking.
Vavi said Cosatu would submit the document to the minister of economic development, Ebrahim Patel, in the hope that he would include it in his final growth path document.

“It is going to be our Koran and Bible and nobody will burn it,” Vavi said.
“We are not necessarily calling for the ‘wholesale or blanket’ nationalisation of all mines in SA. We don’t think that is a realistic proposal. It must be a strategic intervention by the state – not to own the entire construction industry, for example, that cannot be practical.
“We do want a state that can play a more direct role in all the areas we think are strategic on the economy.”
Vavi dismissed concerns that nationalisation would drive away foreign investors: “If everything we do had to be approved by investors then we would be stuck in the current situation for 100 years more.
“In Botswana there is a partnership by the state and the mining industry, a company from South Africa called De Beers which is in 50-50 partnership with the government, and that has not scared investment from Botswana.”
Econometrix chief economist Dr Azar Jamine said that Cosatu’s document addressed the inequalities faced by of the working class, but he was concerned by the “prescription” of relying on the state to “intervene and control everything”.
Jamine said the government did not have the capacity to run a new state-owned entity to oversee nationalised sectors.
He said the proposal for a state-owned bank had merit because banks were reluctant to lend money to the poor because of pay-back risks.
Jamine said Cosatu’s insistence that the government drop inflation targeting might address job losses and create jobs, but “it would just cause the inflation to go up, causing the same working class to suffer even more”.
Analyst Daniel Silke said Cosatu’s proposal on alternative economic policies had enough weight to be considered for discussion at the ANC’s national general council.
“All alliance partners are [in] competition against each other to present alternative economic proposals at next week’s NGC,” Silke said.
The ANC is expected to discuss persistently high unemployment and ways of dealing with the strength of the rand.
Senior ANC official Enoch Godongwana said that the party would review its economic policy.
“I know a number of people have raised the [tax on capital flows] issue . Our view is that we’ve got to look at the multiplicity of variables [to tackle the rand] in the economy.”
“It’s all very well to say we’ve got to reduce interest rates . It’s not an easy question.”