Maravi

(MnG) Vavi wants clarity on economic policy

Vavi wants clarity on economic policy
17 Aug 2012 14:09 - Matuma Letsoalo

Cosatu will lobby for radical policy changes during its national conference next month, including the abolition of land ownership by foreigners. Three months before the ANC's crucial elective conference in Mangaung, the outcome of policy discussions at the Cosatu conference will have a bearing on the ANC's policy resolutions. (M&G)

As well as scrapping of inflation targeting and the nationalisation of key sectors of the economy, such as mines and banks. Other agenda-dominating issues will be the federation's proposals regarding the state ownership of land and the Reserve Bank.

In his socioeconomic report prepared for the congress, which the Mail & Guardian has seen, Cosatu general secretary Zwelinzima Vavi questions the government's failure to provide clarity on the roles of Economic Development Minister Ebrahim Patel and the Minister in the Presidency for the national planning commission Trevor Manuel.

"So far, there has been limited interaction between the national planning commission and the economic development department," Vavi said in the report. "This raises questions about the degree of co-ordination of policy and implementation that is taking place. The roles of the department and the commission in relation to economic planning remain unclarified.

"It therefore remains to be seen how the commission's national development plan will relate to the government's new growth path; whether the new growth path document will constitute the economic plan of the planning commission's 2025 vision, or whether the commission will develop another economic plan for the country.

"It should be noted that the government's new growth path sets 10-year targets, while the commission operates on a 15-year horizon. These two planning horizons are not significantly different, which means that there is a need to interrogate the relationship between the two structures in relation to the economic planning function."

Policy resolutions

Coming just three months before the ANC's crucial elective conference in Mangaung, the outcome of policy discussions at the Cosatu conference will have a bearing on the ANC's policy resolutions, including the burning issue of mine nationalisation.

Although President Jacob Zuma emphasised the need for radical policy shifts during the recent ANC policy conference, the party failed to take concrete decisions, particularly on economic policy issues.

Cosatu has made its frustrations clear regarding the government's current economic policies, which it says are unable to create much-needed jobs. In the report, Vavi criticises the ANC government's apparent reluctance to change policy despite the party's 2007 resolutions in Polokwane.

"Without sounding like a broken record, no shift in macroeconomic policy has taken place and the working class can no longer resolve year in, year out about this," Vavi said in the report. "The question is: What are we going to do next to resolve this impasse, without resolving [again]? The lack of movement on macroeconomic policy should by now be understandable, because the few that control economic activity in this country have a stranglehold over key policy levers and strategic institutions.

"For example, foreign-owned monopolies would resist capital controls because these would limit their ability to expatriate profits. The relaxation of these controls is directly in their interests. They will resist policies that prevent exchange-rate appreciation because that lowers the dollar value of their repatriated profits."

Vavi said the agreed 2009 government document, South Africa's Response to the Global Economic Crisis, had not yielded any tangible results. "This important document called for the maintenance of credit extension to sectors of the economy by banks, management of the exchange rate so that it supported employment, skills development and training of workers in order to ­prevent the increase in structural unemployment [and] support for distressed sectors so that firms are kept afloat and capacity scrapping is prevented during the crisis.

Distressed sectors

"These commitments were not met and most distressed firms laid off workers rather than access the distressed sectors' fund of the Industrial Development Corporation. Even the presidential assessment of progress regarding the implementation of the framework response to the crisis has not produced any tangible results," said Vavi.

"The problems in the relationship between the commission and the department are symptomatic of a bigger political problem. The working class has to take a step back and ask the question: What is the balance of class forces in the new structure of the state bureaucracy?" Vavi said.

"The capitalist state apparatus, while it is essentially a bourgeois institution, is nevertheless contested even within the parameters of capitalist relations of production. It is not clear how the commission is resourced; its budget is not yet finalised and its key programmes are yet to be tabled before the public.

"In its current state, the commission cannot be regarded as a suitable centre for government-wide economic planning because of its skeletal structure and its limited interaction with departments across all spheres of government.

Long-term implications

"On the other hand, departments have already formulated strategic plans for the rest of the term, which have serious long-term implications for the country. This further complicates the planning function of the commission," said Vavi.

Cosatu would call for state ownership of all the land in the country, he said "This will empower the democratic state to break the power of white capital, strengthen its capacity to regulate land use and to abolish speculation. Once the state owns the land, it can decide on a lease basis as to who should use it and for what purpose. Land should be the heritage of all South Africans, owned by the democratic state and shared in use, not in ownership, among those who work it. This is the best way in which the state can secure food security and reduce land underutilisation. Thus, the question of defining property rights regarding land ownership falls away.

"What remains is the administration of land use and allocation, including the determination of rent paid to the state for use. Consequently, Cosatu should consider reformulating its proposals and perspectives on land reform to distinguish between ownership and use. This would require that redistribution of land in Cosatu's perspective should be understood as redistribution of land among those who work it and not redistribution of land in terms of ownership, since to us land ownership should be vested in the state," Vavi said.
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Labels: COSATU, ZWELINZIMA VAVI

posted by MrK @ 4:24 AM