Jeremy Cronin
These are the South African Communist Party’s concerns about the government’s growth, employment and redistribution strategy (Gear):
l In the first place, and consistently since June 1996 (when Gear was first unveiled), the SACP has been critical of the process that led up to Gear.
In contrast to the reconstruction and development programme, for instance, which went through seven drafts and months of intra-alliance debate and discussion, Gear was produced in great secrecy by a small team of technical experts.
It was only in the past 10 days before its public unveiling that the leaderships of the SACP and the Congress of South African Trade Unions (Cosatu) were given a general briefing on the broad orientation of Gear.
The African National Congress, as President Nelson Mandela conceded at the Cosatu congress in September last year, was even less consulted.
Obviously the SACP accepts that macro- economic technical skills are required to produce an effective macro-economic policy, and we accept that most of us do not have these skills. But a macro- economic policy is not a politically neutral matter.
The technocrats must do their work within the framework of a broader political, reconstruction and development perspective.
The problem with the process was worsened when, at its public unveiling in June 1996, Gear was declared “non- negotiable”. At least progress has been made on this front.
In September last year, the Alliance Tripartite Summit agreed that “no policy is cast in stone”, and it referred specifically to Gear. In the same month, at the Cosatu congress, Mandela said publicly that “the Gear process was seriously flawed”. This has helped to legitimise debate on Gear within the alliance, but Gear still remains government policy.
l The second concern relates to the overall macro-economic assumptions within which it is cast. Gear was, essentially, based on Reserve Bank economic models, assisted by World Bank economists. Its fundamental assumption is that macro-economic policy should be entirely devoted to stability, and that growth and transformation will come from elsewhere.
We believe this is an unduly restrictive approach, and that in all cases in which developing societies have succeeded in breaking out of crisis, it has involved aligning macro-economic policy actively with developmental objectives, rather than simply pursuing stability for its own sake.
l Thirdly, directly related to this is the core assumption made by Gear that if we get our “fundamentals” right, private-sector investors will drive a growth process. This accounts for the many ambiguities in Gear.
On the one hand, being government policy, it commits itself to the government-union National Framework Agreement of February 1996 on restructuring state assets to prioritise service delivery and job creation. On the other, there is a great deal of rhetorical enthusiasm for privatisation. Gear tries simultaneously to stick to agreements with the government’s key social partners, and yet also please foreign investors.
l Fourthly, there is the concrete experience of two years of Gear. While coming close to meeting budget deficit- reduction targets, Gear is failing to meet just about every other target that it made central to its own model.
In particular, Gear is very much a “growth-driven” model, but we will not remotely meet the 2,5% growth predicted for this year. That is not necessarily all Gear’s fault, but it is senseless in the face of this reality for leading government bureaucrats to declare that “Gear is working”.
Gear, on its own terms, has to be seriously revised. More seriously, its performance in terms of job creation has been dismal. There were meant to be 101 000 new jobs last year, and 84 000 this year. In practice, there has been the net loss of more than 100 000.
l Fifthly, while government debt needs to be taken seriously, and while fiscal discipline needs to be practised, Gear has not explored all options.
Specifically, the SACP is calling on the government to seriously explore returning the Civil Service Pension Fund to a pay-as-you-go scheme. Research conducted by the South African National NGO Coalition suggests that some 40% of present government debt interest payments could be removed in this way.
Our final objection to Gear is that it has forced all of us to spend an inordinate amount of time conducting a macro-economic debate, which is where the neo-liberals like economics to be, and thus paying insufficient attention to critical real economy issues like developing an industrial policy and effective job-creation strategies.