ANC’s “GEAR” Program

            In 1996, the ANC responded to South Africa’s deteriorating economy and longstanding socioeconomic issues by instating a new program that would completely reshape South Africa’s  old economic system.  This program was presented as the strategy for “Growth, Employment and Redistribution,” (GEAR), on June 14^th,  by the Finance Minister, Trevor Manuel.  GEAR is a neo-liberal version of the Redistribution and Development Program (RDP) which had brought the ANC into power in 1994.  GEAR’s main objectives are to create 1) a competitive and fast-growing economy which creates enough jobs for all work-seekers; 2) a redistribution of income and opportunities in favour of the poor; 3) a society in which sound health, education and other services are available to all; an environment in which homes are secure and places of work are productive3msp.  When the program was first launched, South Africa’s annual growth percentage rate was no more than three percent.  By the year 2000, the ANC’s aim was to achieve a six percent annual growth rate and create 400,000 jobs through various incentives such as budget reforms and tax holidays.   This new strategy is a typical structural adjustment program like those that had arisen in other African countries, most likely a product to appease the government’s main benefactors, the International Monetary Fund and World Bank; it is also an attempt to lure the attention of foreign investors, donors and local business interests, in other words,  not the interests of the South African workers and unions.[2msp]  However, on the ANC’s webpage there is a document titled “Understanding GEAR Policy” which outlines the policy and it’s economic intentions to improve South Africa’s situation.  The statement below is discussing its strategy towards investment and redistribution[3msp]:

At the heart of GEAR are two core strategies. Firstly, the framework looks at promoting growth through exports and investments. Secondly, it intends to promote redistribution by creating jobs and reallocating resources through the budget. This core strategy strives to redistribute the wealth of South Africa by ensuring that more and more people have access to jobs and are able to participate in economic activity. This strategy also places an important responsibility on government to redistribute wealth by reforming the budget thereby making adequate provision for essential services like water, housing, education, social services and health. These two core strategies are dependent on one another. The country needs economic growth to increase the amount of resources available for the development of its human potential. The core strategies are also interrelated, because investment in South Africa will promote jobs, and jobs will mean that people have more money to spend on goods and services, which will in turn promote further investment. 

Although the government in this document, claims to be increasing the amount of resources by opening the country to investment (local and foreign) however today it is obvious that GEAR’s neo-liberal policies benefit are only benefitting the old and new elite capitalists, not the majority of South Africans[4msp].  When this document discusses the “addequate provisions for essential services” it means that it will be privatizing such services which, as a result, means government deregulation and a higher likelihood of inequal distribution.  Since the rand had collapsed in 1996, the government became obsessed with stabilizing the economy to foster the fears of world markets, however, an Inter Press news article suggests that what South Africa needs is a formula to counter rising unemployment since Reserve Bank figures showed that an additional 280,000 people had joined the jobless that year.[5msp]  

            What was so surprising about the ANC’s rightward shift with GEAR is the fact that the ANC won support because it was a party with leftist ideals favoring nationalization. Its Redistribution and Development Program[6msp] (RDP) “ had put the ANC into power in 1994, which was a program that followed a Keynesian model, placing emphasis on delivery of services to the poor. It provided for far-reaching reforms as a basis for deeper socio-economic transformation and generated widespread grassroots support. It has also been seen by leftist intellectuals as a good starting point towards social transformation.”[7msp]  This means that the government not only changed its approach to the deteriorating economy and its longstanding commitment to social not economic transformation, but it has shifted its politics as well.   Some believe that the only entity appeasing the poor black South Africans, who continue to suffer from the effects of apartheid, is the ANC’s tripartite alliance with Cosatu and SACP.  This alliance however, is beginning to dismantle and Cosatu began to take a very vocal anti-privatization stance that could be seen in even the 1997 strikes, as well as those of 2001.    

 Cosatu Anti-Privatization Campaign

            On June 2, 1997, Cosatu called forth a one-day work strike in their campaign to put pressure on business and the ANC over labor legislation and workers’ rights.   More than two million workers responded to Cosatu and attended marches and rallies in all cities and towns with the aim of forcing their employers to give into their demands in negotiations on the proposed Basic Conditions of Employment Bill (worker’s rights).  Under this Bill workers are demanding a shower work week (40 hours), even though employers and government refuse to go below a forty-five hour work week, a minimum age of employment at 16, double pay on Sundays and six months of maternity leave where four months is fully paid.[8msp]  Unfortunately, these demands were not met in any way and business remained unperterbed by workers’ ultimatum and hence the strike was put in motion.

            This strike brought on a great fear that the massive strike would mean a break between Cosatu’s alliance with the ANC, since the two had been in increasingly opposite positions over the government’s free-market approach.  Cosatu wants a move toward socialist ideals with more government involvement to eradicate existing inequalities in South Africa.  Though, the strike was not directly focused on an anti-privatization campaign, it quickly turned into one when during the march, Sam Shilowa, Cosatu’s secretary general, began to chant “Down with Gear!”   Cabinet members in government tried to tone down the noises over labor regulations by justifying “their vision of a labor market as one that allows for collective bargaining structures and variable application of employment standards."^21msp   Contradictory to this statement, when GEAR was first introduced, it was declared as “non-negotiable” which is what provoked such protest from Cosatu and SACP in the first place .  Since the tripartite alliance was formed to end apartheid, the ANC assumed that it could win its labor union allies by presenting their structura adjustment program as a strategy that would have a socio-political agend favoring black interests.  The labor strike of 1997 proved that no one was fooled and workers still demanded their rights. 

            By 2001, it became quite clear that GEAR was not only failing to improve the country’s inadequecies and inequalities but there were great signs that it was aggravating those issues.  Over a million jobs had been lost since 1994, “the labor market had become more rigid and racist,  affirmative action legislation was introduced, expensive black empowerment policies were adopted and given spurious economic justification.[9msp]”  By this time, with actual data proving that the government’s GEAR strategy was failing, Cosatu took a firm anti-privatization stance, creating an even bigger strain on the alliance.  They claimed that privatization could not possibly serve the poor South Africa that had just emerged from apartheid, which left massive inequalities in income and devastating backlogs in infrastructure and social servicies in black and working class communities.  Cosatu argues that that if the government privatizes key assets in services such as telecommunications, rail and electricity, the private providers will enstate high prices for competition, making them too expensive for workers and the poor.  In other words, the only ones who will benefit will be the rich, who can afford such services, reguardless.  As a result, Cosatu demanded that all sales of state assets be put on hold while an assessment could be performed of the impact of privatization on poor communities.[10msp]  Of course the government refused and thus began Cosatu’s national anti-privatization campaign.

 Strikes and Social Unrest

            The summer of 2001 in South Africa, marked a state of social disarray and unrest due to a three week automobile labor strike, a collaborative strike that included the Mynwerkers Union-Solidarity (MWU)[11msp] and the National Union of Metalworkers of South Africa (NUMSA)[12msp] and most importantly, Cosatu’s general strike against privatization.  Although each of the strikes were dealing with separate and specific issues, all were a result of government deregulation in labor which meant that employers were no longer being administrated to meet their workers’ rights and wants.  After the government corporatised Eskom in 1998 it refused to support the shift to a progressive block tariff system, which would ensure a free basic amount of electricity for all, cros-subsidized by higher tariffs for larger users, such as factories.[13msp]  These type of tariff systems were the socialist strategies that Cosatu expected the ANC to regulate its original RDP.  Where as Cosatu had called for a single national electrical distributor, under the proposed restructuring of Eskom, there would be six regional distributors (REDs) whcih would be responsible for the distribution of electricity.  With this new structure, Eskom would have to compete with private producers for beter paying customers, big businesses and raleatively rich regions, meaning it will find it more difficult to serve the poor regions. 

            When word of a mass action and a national strike got to the ANC, a government delegation rushed to meet with Cosatu officials to stave off the strike and calm tensions.  This is when they agreed to collaborate on a National Framework Agreement (NFA) on privatization.   Cosatu agreed to hold off on the strike as a tradeoff and the these talks succeeded in slowing down the state’s privatization agend until June 1999, when President Thabo Mbeki appointed Jeff Radebe as the Public Enterprises Minister.   Radebe was cunning in his attempts to win over the unions to speed up the privatization process, by keeping Cosatu on top of changes and evning putting involving some officials with the drafting policy document.  However, his tactfulness could not stave off Cosatu’s unhappiness with the growwing number of job losses in key parastatals especially when the phone company, Telkom, had cut over 17,000 jobs in this time.  Pretty soon, parastatals also began to toughen up against the poor and Telkom cut off service to more than 1.8 million people who couldn’t pay their bills between 1997 and 2000.[14msp]  Even the government’s research revealed that electricity costs would go up from 22 percent to 50 percent forcing Cosatu to reclaim their anti-privatization stance and begin preparations for their mass anti-privatization strike.

            Not surprisingly, the ANC was extremely worried and angry with Cosatu’s plans for a strike.  Radebe even went so far as to say that “the privatization program would continue and that Cosatu has no role in determining national economic policy, and should restrict itself to protecting its members’ interests” (Ibid 2).  Of course, Cosatu, as a labor federation was in fact attempting to protect its members’ interests and rights.  Many critiques argue, however, that by merely being in the alliance Cosatu has helped create privatization and would have much more power and influence if it began a break-away process.  In a sense, this strike was an attempt at separating itself from the ANC.  Cosatu was able to acquire as many as four million workers to strike against the government’s GEAR program.  Cosatu’s Secretary-General at the time, Zwelinzima Vavi stated that “Our national stayaway demands that no basic services or national infrastructure be privatized, and that in any restructuring the state must be open to public input and be accountable to our elected representatives in parliament and city councils.” ^20msp  As the strike plans grew nearer and nearer to the date planned, tensions flew high and the government attempted to distort Cosatu’s intentions by accusing it of staging a strike at the same time as the Racism Conference in Durban.  Although the federation dismissed this misinformation, other newspaper articles have speculated that Cosatu did in fact plan the strike to coincide with the racism conference as a means of expressing the fact that privatization is enforcing the racial inequalities that remain from apartheid.  Of course, no one in Cosatu has actually had been quoted admitting to these allegations. 

            Despite the ANC’s futile attempts, Cosatu was successful in recieving a large amount of support from almost all progressive formations as well as student organizations, civil society organizations, labor movements and the alliance partner, SACP.   The financial newspapers at this time, discussed the Rand’s weakness as a reaction to the series of strikes.  But what had especially affected the the country’s economic weakness, was not necessarily Cosatu’s mass three day strike which had more than anything, but the fears and perception that this meant the government’s tripartite alliance was close to collapse.[15msp]  Unfortunately,  since there had been many other recent strikes before Cosatu’s, most South African companies had adapted to the changed conditions and though they may have suffered, they did not suffer as much as had been hoped.  

            As for Cosatu’s national strike, most industrial areas were effectively closed down but the South aFrican Chamber of Buniess, Sacob, argued that the private sector was not hit very hard.  The worst hit areas were Gauteng and Cape Town where 70 percent of the workers striked, in Por Elizabeth and East London, 25 and 15 percent were recorded.  What had most obviously had curtailed the strike’s immediate effect on South Africa’s businesses, was the fact that Cosatu had publicly announced the date and plans for the strike.  Although the federation gained much support by making the strike public, it also allowed companies to make arrangements with their employees so that some took part in the strike on Wednesday and others on Thursday, thus minimizing the impact.[16msp]   The immediate results that were examined were percentages such as the fact that 70 percent of the the Johannesburg Metrorail trains were reported to be running normally during the strike.  However, months later, the financial newspapers were stating on the contrary, that the privatization programme had come to a standstill; not much had been privatized that year and that the government’s two major restructuring moves had “lost their sparkle.”  Although privatization plans had failed in other sectors of the country, interpreted the failure to privatize telecommunication, transport and power assets whne the market was stronger had played into the hands of the trade unions.[17msp]   This meant that Cosatu’s anti-privatization campaign, although slowly, was finally succeeding. 

Conclusion

            Unfortunately, South Africa continues to struggle and debate over privatization and although the tripartite alliance between Cosatu, the ANC and the SACP remains intact, Cosatu’s anti-privatization campaign most likely has created irreparable damage.  Although the strikes that occured during the summer of 2001 managed to slow down the government’s privatization attempts, it has not created dialogue over what would be best for South Africa to improve it’s socioeconomic conditions.   Cosatu continues to stage or threaten the government with strikes when it is dissatisfied with the ANC’s policies but at this point, to save the South African people from more social unrest, the best solution would be to engage in political formal discussions and get business involved in parliament discussions over the economy.  It’s been suggested that business should be more engaged in discussions with goverment and labor over matters of policy, other than tax and industrial relations.  Some say that this is part of the reason that has contributed to a polarization of interest and detracted from the achievement of a common purpose.  While most believe that privatization is the worst attack on the right to work, others believe it is a small price to pay to improve development issues.  Much to the benefit of Cosatu, it is now very obvious that South Africa’s economy is much weaker today due to the privatization efforts and the government has little control and has done little to improve issues such as high infant mortality rates, high unemployment and elimination of disease.  Of course this is a welfare issue and the country must decide whether or not it believes that it is the government’s duty to take the paternalistic role over basic needs and provide them to everyone or whether it should stand back, attempt to improve existing inequalities and leave it as an individual’s responsibility to attain their own basic needs.  In a country where apartheid forced black South Africans into poverty despite their education and qualifications for work, the existing gaps between races remain and of course existing racist ideals remain.  Therefore, it is impossible for the government to expect the poor communities to subsist on their own when they are already at such a huge disadvantage.