Labour input to Nedlac Summit 2005

27 August 2005

Zwelinzima Vavi, General Secretary, COSATU
Leaders from government
Leadership of COSATU, NACTU and FEDUSA,
Leadership of government, business and community,
Distinguished delegates,
Comrades and friends,

This year marks NEDLAC's tenth anniversary, and COSATU's twentieth. For the tenth time, the NEDLAC Summit gives us all the opportunity to ask how the past year has treated our people. Against that measure, we must use this opportunity to review our collective accomplishments at NEDLAC and ask how we can do more to address the enormous challenges we still face.

As always, we measure progress in our country first and foremost against the conditions faced by the majority of our people. We inherited a system that left most of our people in grinding poverty, without decent work, housing, schooling or healthcare. Ten years ago, we vowed to lift our people out of the oppression of apartheid. How have we fared in that task?
This year, more than most, South Africa seems again to be dividing into two worlds.

In one world, the economy is growing, inflation is down, confidence is high, and consumer spending plus a commodity boom are driving the strongest economic expansion of recent history. In this world, rising salaries and stock options combined with soaring house prices and lower interest rates ensure a "wealth effect," while cheap imports - increasingly from China - provide a boon to free-spending consumers.

In the other world, the world where 80% of our people live, poverty, unemployment and AIDS continue their silent, devastating war. In this world, far from the leafy suburbs where NEDLAC sits, unemployment is still destroying a generation of young people, children still go hungry on a daily basis, and parents struggle to raise families in shacks without water or sanitation. AIDS stalks our communities, and the crisis in our schools destroys our hopes for the future.

Certainly we must all welcome the relatively rapid growth of the past quarter, as well as the comparatively strong employment creation enjoyed early in 2004. But the fact is that job creation slowed down, or even turned into losses, at the start of this year. That means most of our people are still not benefiting from economic growth.

In the six months to March 2005, according to the household-based Labour Force Survey, formal employment growth fell to 1,5% at an annual rate - back below the growth in the population. According to the survey of employers, the Quarterly Employment Statistics, we actually lost jobs in most sectors in the first quarter of 2005.

At the same time, the GDP data point to another trend that should concern all of us. In the first half of 2005, the share of wages and salaries in the GDP again declined. In other words, the benefits of growth were again captured largely by companies, not by workers and the poor.

In short, it seems that economic growth has, as in the past, mostly helped out the already rich. That is a worrying trend for everyone. True, a growing economy can lead to higher revenues for the government, and with it welcome improvements in social services and welfare. Without job creation and greater equality in incomes, however, redistribution through the state will not overcome the inequalities left by apartheid.

Academic studies are unanimous in finding that income distribution has actually worsened since 1994. This is true even if we include social grants.

It has become easy to say that growth will not be sustainable if the benefits are not shared, without doing much about it. But the past year has lent new urgency to that message. Our people have been patient for many years. Now, the unrest in our townships and the bitter strikes in our workplaces all point to the only one conclusion: our patience is running very thin. We as union leaders cannot lecture our members on the need to remain patient while others enjoy the fruits of our labour.

We come back again to our little fable about Jabu Xulu and Cynthia Gumede. They too can read the headlines about wonderful growth, a consumer boom and soaring housing prices. But that is almost all the benefits they get. True, Jabu got a job as a security guard for a bit around December - but he was laid off in January. Since then, Jabu and Cynthia are back to relying on charity, unpaid debts, begging and desperate hope.

Meanwhile, in May this year their daughter in Limpopo died an unnecessary and painful death from AIDS because the province has delayed so long in rolling out anti-retrovirals. Like so many thousands of others, her life could and should have been saved.

It is not surprising that Cynthia's older grandchildren have joined the crowds toyi-toying and burning tyres on the township streets. It is not surprising that her brothers and sisters who still have jobs came out in force to support the national strike against unemployment and poverty in June.

Every year for ten years now, we have said that we cannot accept continued joblessness and poverty. We cannot survive as a nation half enslaved and half free - united in our democracy, but sharply divided in our economic fortunes and our daily lives.

From this standpoint, what has NEDLAC contributed to transformation in the past year and indeed in the past ten years?
Certainly the NEDLAC discussions have ensured higher quality policy. The involvement of stakeholders has consistently tested and improved initial proposals for legislation and regulations. Without these often long drawn out, boring and occasionally painful deliberations, we would have only a dysfunctional co-ops policy, weaker labour laws, narrower measures on BEE and more costly trade agreements.

While NEDLAC discussions impose delays, the benefits in terms of stronger and more effective policy, with fewer unanticipated consequences, should never be overlooked. These technical engagements provide crucial inputs in the policy process.

We do not want to underplay these achievements. Still, we have to ask how NEDLAC has contributed to a genuine transformation that will ensure shared growth in the future. The answer, as we all know, is: Not enough.

We have reached some important transformatory agreements. In the past year, we have seen progress in the financial and chemical sectors, in particular. We worked together, too, toward implementation of the GDS.

But the GDS itself points to the shortcomings in our work. We had hoped it would lead to a genuine partnership for development. We expected it would lay the basis for a serious effort to transform key sectors toward job-creating growth, with a qualitative improvement in public works to provide short-run relief and hope for the unemployed.

We have seen, instead, very thick reports that hide a failure to remain committed to transformation. Too often the constituencies have met GDS agreements by merely adjusting existing programmes or even just re-labelling them.

We as labour accept our share of the blame in this regard. But the failure of most of business to accept the need for long-run change has been most damaging. It is reflected above all in the slow and halting implementation of our commitment to increase productive and social investment.
In addition, we are very concerned about the state of our agreements on public works, especially in community services. This was a central proposal to ensure short-run improvements in the lives of the poor. Without doubting the effort and commitment of many in government, the fact remains that we have seen very little practical expansion in the opportunities available to our people.

Finally, the on-going dispute with retailers and mining companies over job losses and local procurement remains an open sore. At our Central Committee meeting last week, COSATU decided to delay mass action for a month in order to provide time for further engagement. Still, we have seen no movement to meet our demands.

Yet what are we asking? Only that business across the economy, and particularly in retail and mining, commit to practical measures to avoid job losses and supporting employment creation.

We have negotiated this dispute now over many months. In the absence of agreement in the coming month, we will have again no choice but mass action. Our affiliates have mandated provincial strikes starting in the Eastern and Western Cape on October 3, moving a week later to Gauteng and Northwest, with strikes in the Northern Cape, Free State and Mpumalanga on 17 October and KwaZulu Natal and Limpopo on 25 October.

Friends and comrades,
In effect, our experience with the GDS and with the disputes over jobs and poverty point to the central challenge that NEDLAC must address in its second decade, as it grows toward maturity. In a transforming society, that challenge is to chart a course toward more equitable economic growth, and then to implement our agreements.

These transformatory efforts cannot be allowed to displace the technical work that now preoccupies the chambers. But we must all accept that technical work on specific policies is necessary, not sufficient, for our purposes.

The current process of reviewing engagements at NEDLAC should make that technical work more efficient. It should identify where we can strengthen administrative systems and capacity for technical support. That should reduce the frustration over long delays, poorly drafted minutes and reports, and inadequate notice of meetings. Hopefully, too, it will spur the parties to improve their representation in the chambers and to strengthening mandating procedures to ensure more consistency and speed.

Still, while these initiatives are important, they will not address the core problems we face. We need as partners in NEDLAC to define a clear agenda to take on the central challenges facing our young democracy - that is, above all, to ensure that economic growth uplifts all our people especially through employment creation and more effective poverty relief. We need to re-shape our high-level engagements to come up with effective answers, plus mechanisms to monitor and drive implementation.

In that context, we still see sectoral engagements as a crucial step toward more equitable and shared growth in our economy as a whole. But they will only work if all the parties really commit to sustainable job creation as the core objective. That means all the parties, including both business and the state, must dedicate serious capacity. Moreover, business must accept that long-term and sustainable growth requires that they think beyond tomorrow's profits.

We are grateful to our partners in the financial and chemical sectors for their participation in defining some genuinely important proposals. But we are deeply disappointed by the uneven implementation of agreements on ICT, and the complete lack of progress in initiating a retail sector summit. In both these sectors, business leaders seem intent on simply opting out of the process. Moreover, the public-service summit appears to have fallen off the table, together with most of the sectors we agreed on at the GDS as crucial for employment creation.

We understand from public announcements that the government is now exploring ways to accelerate economic development. We expect the new strategy to focus squarely on achieving shared growth, and by extension on employment creation. We also expect that it will be discussed in an appropriate NEDLAC forum - not simply as a technical exercise, but as a crucial programme to mobilise stakeholders to meet the needs of our people.

Finally, a crucial weakness in NEDLAC's ability to grapple with the challenges of development remains the reluctance of government departments to bring key social programmes for engagement. The GDS promised a review of housing, basic infrastructure, health and education. These programmes are central to any effective strategy for shared growth. The on-going crises in these areas undermine all our efforts to transform the economy. We simply cannot continue to leave them out of our collective work.

Friends and comrades,
No one should question the gains we have made as a society from the past ten years of NEDLAC. Like any other negotiations, engagements at NEDLAC can seem long drawn out and unpleasant. But the only alternatives are lobbying and contestation between stakeholders based solely on power. That can never bring about the social mobilisation and high-quality, consistent policies needed to transform our society.

Yet the fact remains that the basic challenge to our young democracy has not changed: the need to bring about a qualitative shift toward shared growth. If we do not, we face deepening social divisions over the next few years.

We need collectively to face up to this challenge. The economic upswing of the past few years provides a platform for change, but is not enough by itself. Unless we can ensure that more of our people share in our economy, none of us can hope for sustained prosperity. That is, indeed, the lesson of our history before 1994. As a society, this is one subject we cannot afford to repeat.