SPEECH BY WILLIE MADISHA, FOR ORGANISED LABOUR AT NEDLAC SUMMIT

27 September 2003

Deputy President,
Leadership of COSATU, NACTU and FEDUSA,
Leadership of government, business and community,
Distinguished delegates,
Comrades.

Normally, at the NEDLAC Summit we take stock of our work over the past year. But first, we need to place that work in context.

Above all, this week the government released data showing that unemployment has, again, reached a new high. Today, unemployment by the narrow definition, which includes only workers still actively seeking jobs, stands at over 31%. If we include workers too discouraged to look for work, the rate rises to 42%. For Africans, the rate is 49%.

What do these figures mean? To start with, there are now over eight million South Africans out of work. That spells immeasurable hardship and pain. As a teacher, I am particularly concerned that the vast majority of the unemployed are young. Workers under 30 years old make up a quarter of formal employees, but half of the unemployed. To put it bluntly, this joblessness is destroying our futures.

Jabu Xulu and Cynthia Gumede have now joined the ranks of the long-term unemployed. They get by on a little hawking, a lot of borrowing, and granny's old-age pension. Hunger is now a constant in the household.

But the worst thing is that none of their children has been able to find a job, and one of them has HIV and can't afford treatment. They are anxiously waiting for anti-retrovirals to become available in the public health system - her life depends on it.

How can we explain such high unemployment to our two old friends? The fact is that apartheid left stubborn structural problems, which only our common action can overcome. These structural problems include the history of deprivation of the majority, which in turn means that many lack the resources, skills and contacts to engage with the economy. That, in turn, is reflected in deep-seated dualism, with many of our people effectively excluded from participation in the rich formal sector. Meanwhile, in the formal sector, we have seen a massive loss of jobs due to restructuring in the public sector, downsizing in gold mining and construction, and the abrupt ending of protection for manufacturing and agriculture.

These factors have also been associated with a fall in investment. On the one hand, in the private sector, major companies have moved overseas. That has led to an outflow of profits on a massive scale, particularly in the past two years. On the other hand, state investment dropped rapidly in the late 1990s, and has still not recovered. Government investment is now lower relative to the GDP than it has ever been since 1946.

In this context, the extraordinary strength of the rand has further slowed growth and led to job losses, as imports have grown and exports shrunk. These job losses may not yet be reflected in the data, but we hear from our affiliates in clothing, metal work and chemicals production about them. For this reason, COSATU's recent Congress adopted a declaration on the rand, noting that it was overvalued and proposing that government should adopt measures to bring it down to a more appropriate level of between R9 and R10 to a dollar.

While speculation as well as high gold and platinum prices contribute to the overvaluation of the rand, there can be no question that the high interest rate by world standards is a major factor. It leads to short-term inflows of funds. That may help with inflation and cut the price of imports, but at the cost of longer-term growth and stability. For this reason, the Reserve Bank must urgently reduce the interest rate. More broadly, as in other countries including the U.S., its mandate should be strengthened further to take development and specifically employment into account.

At the same time, in light of the immensity of the unemployment challenge, employers in both the public and private sector must take a more careful approach to preserving jobs. Today, for instance, the public service threatens to lay off 20 000 workers right after the elections; Telkom is continuing with a massive retrenchment programme; and government has continued to insist that companies charge for plastic bags, leading to job losses amongst producers. We need to ask: have we really reflected on the long term costs and benefits of these measures? Will they really strengthen employment creation in the long run, or will they just bring short-term gains to some while contributing to broader economic and social problems?

Comrades and friends,

In light of these trends, the most important event of the past year - for our interaction at NEDLAC overall, and for the country as a whole - was the Growth and Development Summit. Those agreements should form an important step in overcoming rising unemployment and poverty.

Perhaps most important, at the Summit we all agreed on the centrality of quality employment for sustainable development and for addressing poverty. This challenge lies at the heart of all our endeavours, and must drive both our economic policy framework and our social policy interventions.

Our convenors met all yesterday to discuss how they can accelerate implementation of the GDS agreements. We expect a detailed plan of action from them. But let us here re-emphasise the key elements of those agreements.

First and foremost, the agreements pointed to the centrality of retaining and creating decent work for our people. That is critical both to engage all of us in rebuilding our economy and our society, and to overcome poverty. We must persistently, patiently and consistently redirect all of our policies and engagements to achieve the goal of halving unemployment by 2014. We must assess all our actions against this target.

The agreements include a mix of short and longer term measures and strategies to achieve our aim.

The commitment to working together on Expanded Public Works Programmes, including to provide community services, should provide some immediate relief. So, too, should the agreement to do more to provide basic services for the poor and to strengthen the social security network, especially for the unemployed.

But our agreements also recognise the need for more far-reaching measures to restructure the economy in order to ensure growth. Critical in this context is the commitment to sector strategies, to redirecting procurement to local producers, to building a co-op movement, and to genuinely broad-based black economic empowerment. These elements in the GDS agreements point to the need to lead the market, to drive the economy toward job-creating growth.

As one step on the way, COSATU Congress threw its weight behind the Proudly South African Campaign and has called on retailers and their investors to commit to 90% local content in their sales. This commitment would go far to building up strong local value chains and, as a result, employment. We have decided to mobilise our 2,5 million members, and their families in active support of this campaign to rebuild our manufacturing base by securing from the retail community a commitment to a practical patriotism: a patriotism founded on keeping jobs in South Africa. We call on government to contribute through targeted reviews of tariffs where these can save jobs.

We have introduced in COSATU an annual award for 'most unpatriotic retailer', and the award this year goes to Mr Price retail stores, for its persistent practices of importing large quantities of clothing and other products, and for its collusion with companies who break our labour laws. Mr Price destroys local jobs. We are now placing the sourcing decisions of Edgars, Woolworths, Pick 'n Pay, Shoprite-Checkers, Foschini and others under scrutiny.  We extend a hand of cooperation to the retail sector: work with us to achieve the goal of jobs for all, through your sourcing and buying decisions.

Finally, at the Growth and Development Summit we agreed that financial institutions must seek to invest more actively in developmental areas that can create jobs and meet the needs of our people. As workers, with a degree of control over our savings through the pension funds, we see this commitment as particularly important.

As always at NEDLAC, it is easy to talk, hard to ensure that action follows the talk. But we dare not fail in implementing these agreements. For all of us, the future is at stake. Unless we conquer the inequalities and unemployment left by our apartheid past, none of the NEDLAC constituencies can hope to prosper in the long run. Our only hope is solidarity.

At the Growth and Development Summit, we agreed that issues around HIV would be discussed in a separate task team. We deeply regret the failure to reach agreement there. At the same time, we welcome the decision by Cabinet to roll out anti-retroviral treatment in the public health service. That process should start as soon as possible.

But we still need to strengthen our work together, not only on treatment, but also on education, prevention and work to end discrimination and stigmatisation of those with HIV. This is not only a task for government. It is a job for all of us, and we must use NEDLAC, as our central institution for social dialogue, to make real commitments and build a strong partnership.

We have recently held discussions on folding the Labour Court and Labour Appeal Court into the High Court and the Supreme Court of Appeal, with a specialist panel of judges knowledgeable on labour matters, co-appointed by NEDLAC and the judiciary. That bill is before parliament.

There are rumours of attempts to tamper with a very delicate compromise agreed to by the Chief Justice, the President of the Supreme Court of Appeal, organised labour, government and business, comrade Minister of Labour, and we call on you to ensure that the consensus that was developed is in fact given effect to, especially the role of NEDLAC in the process. The compromise is not first prize for us, but we can live with it. Anything less than that will not be an acceptable basis to move forward.

In conclusion, let us thank the NEDLAC staff, the labour representatives who served our constituency with distinction, and the colleagues from business, government and community with whom we continue to forge groundbreaking agreements. I particularly want to thank the negotiators at the Growth and Development Summit, who spent many long hours, sometimes far into the night, to find constructive solutions to the challenges we face.

Organised Labour also joins the chorus of gratitude to Phillip Dexter. We must thank him for the huge amount of work he put into NEDLAC, including his central role in ensuring we reached agreement on a host of hard issues. He has made an invaluable contribution to social dialogue in this country. We wish him well in his future career.

At the same time, we want to welcome Herbert Mkhize into the hot seat. All of us here know Comrade Mkhize well - in fact, he has served every NEDLAC constituency at some point in the past ten years. We are sure he will play a central role in helping us to translate the words of the GDS into action. Simultaneously, we look to him to maintain the efficiency and effectiveness of NEDLAC as the central structure for social dialogue in South Africa.