Economic Development Minister Ebrahim Patel at the Cosatu May Day Rally held in Cape Town. Photo: David Harrison
Economic Development Minister Ebrahim Patel’s uphill battle will be to balance the demands of his trade union colleagues with the expectations of his new employers in government.
The Zuma administration has indicated that the government’s conservative fiscal and monetary policies will not change — yet change is exactly what Cosatu expects from Patel.
Patel has been one of the strongest critics of the investor-friendly economic policies of the past decade, which led to the inflation targeting and fiscal policies that saw South Africa reducing its budget deficit and controlling public spending.
Born in 1962 in District Six, Cape Town, Patel was raised in a working-class family. His mother, a garment worker, was the sole breadwinner. His involvement in the trade union movement started in the early 1980s while he was working at the University of Cape Town, where he unionised fellow workers and led negotiations over working conditions.
He joined the National Union of Textile Workers shortly thereafter. As an executive member of Cosatu he led the negotiations that resulted in the Labour Relations Act and the Basic Conditions of Employment Act.
He was the lead negotiator for organised labour at the 1998 Presidential Jobs Summit convened by former president Nelson Mandela and at the Growth and Development Summit convened by Thabo Mbeki in 2004, both of which resulted in key policy documents. He served as the general secretary of the South African Clothing and Textile Workers’ Union (Sactwu) from 1999.
Cosatu believes a review of inflation targeting and the interest rate policy will minimise the impact of the world recession, save jobs and promote future growth, particularly in the manufacturing industry and labour-intensive sectors.
”There is no reason for us to change our position on the review of inflation targeting, given the continuing decline in manufacturing production,” Cosatu general secretary Zwelinzima Vavi told the Mail & Guardian last week. ”The objectives of creating decent jobs should not be undermined by macroeconomic policies.”
Cosatu spokesperson Patrick Craven said the new administration’s persistent position that there would be no change on inflation targeting would undermine job creation. He said Cosatu expected Patel to move swiftly to review monetary policies.
But Patel was non-committal this week when the M&G pressed him on the point. ”The policy that will be pursued by government will give effect to the manifesto of the ANC that was put to the electorate,” he said. ”We have gone beyond the debate on Gear in that the new framework policy is [about] how to make jobs, decent work and sustainable livelihoods the primary focus of economic policies.”
He expressed confidence that government would accelerate implementation of the framework agreement between labour and business to save further job losses. ”Economic policy needs to respond to changing situations and the global economic crisis has had a serious impact on the South African economy,” he said. ”It required adjustments to specific policy areas and led to the conclusion of a framework for the country’s response.
”That framework was endorsed by government, labour, business and community organisations in February this year and it calls for urgent measures to address the employment challenge. The principles that underlie the approach are first, that we must take active steps to avoid placing the burden of the economic downturn on the poor and the vulnerable, and second, that, as we respond to the crisis, we should also strengthen the capacity of the economy to grow and create decent jobs in the future.
”Government agreed in the framework that fiscal and monetary measures are necessary and should be used aggressively where required to address the crisis, as many other economies have done.”