Forward to Socialism!! - South African Communist Party

Umsebenzi 9
THE ALLIANCE SUMMIT
And now for the real
Alliance Summit
Delegates struggled to recognise the summit they
had attended as the one reported in the media,
writes Jeremy Cronin
The ANC tripartite alliance along
with Sanco met in a crucial summit
over the weekend of 13-15 November
in Ekurhuleni. The impact of the
global economic recession on our own
country, the loss of nearly one million jobs
this year, persistent, racialised inequality,
and energy sustainability pre-occupied
discussions.
The summit also assessed progress
made in the implementation of our common
ANC-led April election manifesto,
and its key priorities, including rural development,
and the transformation of the
health and education sectors. The challenges
of corruption and of local government
were also matters of key concern.
Unfortunately, the reporting on the
outcome of the summit in much of the
media has often been extremely shallow.
“Manuel KO’s Cosatu” read one frontpage
headline. An eminent political commentator
disagreed. It was the “left” that
had, apparently, “won”. A second commentator
demurred. There was “no policy
shift whatsoever”.
For the delegates present at the summit,
it was hard to recognise the summit
they attended from the reports they read.
It must have been even more puzzling for
comrades who were not at the summit.
Most media commentary has focused
on macro-economic policy, and this is the
matter around which there has been
most confusion. The macro debate has
been with us since at least the unveiling
of the Gear macro policy back in mid-
1996. One of the key problems with Gear
was that (in line with the dominant
global paradigm of the day) it over-focused
on macro-economic mathematics
to the detriment of the “real” or, rather,
the productive and service sectors of the
economy. This was not accidental. The
prevailing global Anglo-Saxon economic
paradigm held that the “real” economy
was best left to market forces, while governments
(and central banks) were meant
to confine themselves largely to creating
investor-friendly macro conditions. Along
with Lehmann Brothers and Dubai
World, that paradigm, hopefully, has been
blown away in the current global crisis it
helped to cause.
But already, in the early 2000s, across
the spectrum of the alliance, there was a
growing awareness that we were neglecting
the productive economy. As the reality
of persisting crisis levels of unemployment
hit home, the ANC at its National
General Council in 2000, for instance, resolved
that “macro-economic stability
was necessary but not sufficient”. Unfortunately,
at that stage, micro-economic
policy tended to be dominated by
grandiose and misguided arms procurement
off-sets and costly vanity projects
like the pebble bed modular reactor.
Since that time, and particularly in the
last two years, considerable collective
progress has been made across the alliance.
The progress is well captured in
the declaration of the November Alliance
Summit, which, amongst other things,
“reaffirmed the commitment to ensuring
the vigorous implementation of the Nedlac
Framework Agreement on SA’s Response
to the Global Economic Crisis”.
The declaration goes on to assert the
need “to link our short-term countercyclical
response with our long term objectives
of transforming the structure of
the economy and moving to a different
growth path”. It proceeds to express support
for government’s infrastructure investment
programme as the “key component
of SA’s response to the crisis”, and it
calls for an increase in the scale, scope
and funding of industrial policy.
It is only then, and quite deliberately,
that the declaration moves to a brief
statement on macro-economic policy –
“the Alliance Task Team on macro-economic
policy must remain seized with reviewing
and broadening the mandate of
the Reserve Bank”.
In short, across the Alliance, there is an
agreement that the question of macroeconomic
policy needs to be aligned with
our key micro-economic objectives – in
particular, transforming our systemically
dysfunctional growth path by placing us
on to a much more labour-intensive trajectory.
Of course, sober concerns around
medium- and longer-term macro-economic
sustainability must always be dynamically
factored in. It is not a question
of one minister (say of Economic Development
or of Trade and Industry) now
displacing another minister (say of Finance
or of Planning) as “the new economic
supremo”. It is a question of fostering
a collegial and coherent alignment
and strategic discipline across all line departments
and other state entities, including
the parastatals.
When the Alliance task team on
macro-economic policy pursues its work
as mandated by the summit, it will be informed
by several important points of
summit consensus. In the first place, it
needs to align its macro considerations
with our infrastructure construction and
industrial policy priorities. Second, there
needs to be a sense of urgency – our
economy is bleeding. Third, the task team
members will know there is a broad consensus
(extending far beyond the Alliance)
that the rand is over-valued. But
how, practically, should or can government
actually intervene to correct this?
(There might not be easy answers.)
Fourth, the task team will need to assess
the current inflation targeting policy
mandate of the Reserve Bank. No-one at
the summit argued that we can simply ignore
the dangers of inflation. But is the
current target band too restrictive? Or is
inflation-targeting itself a problem?
Shouldn’t the Reserve Bank take other
critical indicators (like employment) as
key mandates?
And, finally, as it proceeds with its urgent
work, hopefully the task team and
the media will appreciate that the challenges
we all face cannot be pigeon-holed
simplistically into imaginary “lefts” and
“rights”, or characterised as boxing
matches between personalities.
Cde Cronin is SACP Deputy General
Secretary
December 2009