Lynda Loxton
A leading member of the South African Communist Party has called on the government to take tough action to stop the “investment strike” by the private sector.
African National Congress MP and SACP central executive committee member Philip Dexter told the Mail & Guardian that business seemed intent on pitting members of the ANC-SACP-Cosatu alliance against each other in a bid to break it so that it could play a dominant role in shaping economic policy.
Dexter said this was “extremely irresponsible and unpatriotic”. It was sending a message to foreign investors that “we are not a nation of winners, but people who can’t agree on anything”.
He believes a crunch point is coming. Domestic and foreign capital are not investing “and if they do they are investing in a manner that is short-term, speculative, get-your-money-out-quickly”.
For this reason, the SACP remains opposed to the lifting of remaining exchange controls because it could lead to capital flight.
SACP criticism of the government’s commitment to the gradual easing of exchange controls has led to speculation that the alliance is in danger of splitting, but Dexter denied this, adding that criticism and debate were healthy and normal in the alliance.
“I think the policy framework is a response to the kind of squeeze that the government is feeling at the moment. It was the best response in that it was the least worst choice. It is an attempt to keep sovereignty within our country and not undermine the agenda of the ANC-led alliance.
“But, if we are honest, there are contradictions and those need to be resolved. There’s going to be a bust-up and there is going to have to be some kind of showdown between business, labour and government.
“It requires the government being tough, saying to the unions, right, we agree that your wages are low and we are prepared to make a commitment, but you have got to make a commitment to productivity. Saying to business, if you don’t invest in the areas that we identify, then we are going to penalise you, we are going to tax you.”
This could harm the economy, but the present lack of investment was equally damaging and “one sometimes has to experience a little bit of pain to get better … we have got to keep on reminding ourselves that this is not a normal economy, this is not a normal country and business in this country is not normal. It basically looks after the interests of a tiny white minority and until we break out of that and until we transform…we are going to have to go the hard route.”