A summit to be held early next month will have to address the potentially divisive issues of a proposed basic income grant (BIG) and the pace and direction of black economic empowerment (BEE).
A 10-a-side meeting was held last week among Tripartite Alliance members — the African National Congress, Congress of South African Trade Unions (Cosatu) and South African Communist Party — and the South African National Civics Organisation to prepare for the summit.
According to a statement issued after the meeting there was a debate on the development challenges facing the country, particularly on the need for decisive state intervention to overcome the divide between the country’s first and second economy. Although BEE is now being called “broad-based” — indeed, the Act refers to it as such — the ANC’s alliance partners are convinced that in its present form it is doing little more than benefiting an elite.
As recently as last week SACP secretary general Blade Nzimande attacked the notion of BEE. “With few arguable exceptions, we believe that most of the celebrated BEE deals have had a neutral and probably negative impact on addressing the real transformational challenges of our economy. The dominant approach is to implement a narrow BEE, focusing on the advancement of a black minority through equity acquisitions and individual promotion into the senior management ranks.
“BEE must principally be about addressing the needs of the overwhelming majority of our people — black workers and the poor — the basic economic empowerment of millions of our people through access to jobs and through the provision of affordable and reliable electricity, housing, transport, telecommunications and so on,” he wrote in the latest edition of Umsebenzi, an SACP publication.
Cosatu Secretary General Zwelin-zima Vavi told the Mail & Guardian that it aims to raise its concern about “whether what we have on BEE on paper and what it actually translates into is not something else”.
But BEE is central to ANC economic policy, directed at building a black middle class. It was adopted as policy by the organisation at its last congress in 2002, where it resolved that “BEE is a moral, political, social and economic requirement of this country’s future”.
A resolution taken at the congress said BEE should be broad-based and supportive of collective ownership programmes by working people and communities. The ANC’s alliance partners feel that BEE currently falls short of those yardsticks as it benefits the same black faces. ANC spokesperson Smuts Ngonyama said BEE was not a sticking point, but added that there was a feeling that it was benefiting a few people. However, he maintained that many more people at local level were benefiting from BEE.
Vavi said Cosatu is also insisting on the importance of BIG, which the government has continually rejected on the grounds that it is unaffordable and could encourage a culture of entitlement. BIG is a grant of about R100 a month aimed at helping the poorest of the poor.
Last week several economists from across the country published a study, which indicated that BIG was affordable and explained how it could be financed. The government, however, has said it prefers a comprehensive social security system rather than a basic monthly grant.
The SACP straddles both lines, with spokesperson Mazibuko Jara saying the party supports BIG in the context of a comprehensive social security system: “The debate on this issue must not stop because the government is opposed to it.”
Differences about government plans for the Public Investment Commissioners (PIC), which controls about R309-billion in state pension funds, is also a source of tension between the alliance partners.
The government is proposing legislation to commercialise the PIC on the grounds that this will increase the accountability of the commissioners, especially to its biggest client, the Government Employees’ Pension Fund. Vavi has threatened to complain formally to Minister of Finance Trevor Manuel about what has been described as the “contemptuous dismissal” by Treasury director general Lesetja Kganyago of Cosatu’s concerns about the government’s plans for the PIC. The Treasury has not yet received a formal complaint from the trade union federation.
Cosatu fears that the commercialisation of the PIC is the first step towards its privatisation. Cosatu economist Neva Makgetla has commented that the trade union supports the use of PIC for developmental purposes but not for driving the transformation of South African corporations.
Last month Nzimande urged workers to be more proactive in determining what happens to the PIC. “We cannot allow the PIC to be corporatised only to support the creation of a new black elite, and continued accumulation by white finance capital, without benefit to the workers and their communities.”