The benefits of negotiation
worm’s eye view
Steven Friedman
There is an “obvious” explanation of the stand on privatisation taken by the Congress of South African Trade Unions (Cosatu). It is agreed by the president and leader of the opposition, commentators, stockbrokers and business people.
First, it is said or implied that Cosatu has no reason for protest. Its key demand, negotiation on the conditions for privatisation, ignores the fact that unions were consulted on this issue. The National Framework Agreement between the government and organised labour commits the government to talking to unions about selling state assets, and this it has done repeatedly. Cosatu has had ample chance to react.
Second, the government is exhorted to ignore the unions because this will be good for the economy. Union influence, in this view, hampers growth; the more the government shows it will not be held to ransom by labour, the more attractive an investment destination will South Africa become.
This is a particularly bad time to take these views at face value.
Last week the Cabinet accepted proposed changes to labour law after exhaustive negotiations at the National Economic, Development and Labour Council and the Millennium Labour Council. Organised business and labour are largely happy with the deal since, as tends to happen in negotiation, both won concessions.
The question is why a union movement so averse to compromise on privatisation should be open to it on labour law.
When changes to labour legislation were first mooted by the government, Cosatu described them as the worst assault on workers since PW Botha. Yet it not only agreed to negotiate but settled for a deal that, while it contains gains for unionised workers, also offers real plusses for employers.
Why should Cosatu be reasonable on these issues but not privatisation?
Perhaps the only possibility that has not been considered is that the unions have not made a bargain on privatisation because they have not been offered one.
It is common cause that privatisation has been repeatedly discussed with unions. Government representatives insist that unions were party to policy documents endorsing privatisation and that, where they asked for changes to them, they were taken seriously. But there is no evidence of an attempt to offer the unions concessions in exchange for their support.
The question of who agreed to what in the African National Congress alliance is less important than the apparent government view that there is no need to offer Cosatu concrete concessions. Indeed, some analyses suggest that offering it anything would be counter-productive: foreign investors, it is said, are interested in buying privatised South African assets, but will not remain so forever. And, if conditions are heaped on the sale, they will go off elsewhere.
This thinking may well have persuaded the government that it cannot negotiate privatisation in the same way as it does labour law. But why is it accepted without further inquiry?
Are state assets being sold to impulse shoppers? If investors are put off by conditions, why insist on black empowerment partners? Why is preventing labour conflict less a priority than ensuring that black business people gain access to the marketplace? And should we sell assets to investors who see union and worker cooperation as an expensive luxury?
Privatisation is being presented as an economic “do or die” issue. The reason growth remains elusive, despite following the recipes we were exhorted to adopt, is, we are told, because we are not privatising. There is no time to wait for union consent.
This view is part of a current economic approach that resembles superstition: as one orthodoxy fails to produce a bonanza, so we are told that the problem is our failure to implement others. We are not growing now because we must privatise. Once we do, the problem will be exchange control or affirmative action or … But what if we do all these things and still do not grow?
Is it not possible that the real obstacle is an unthinking embrace of a standardised economic recipe at the expense of tackling obstacles to the cooperation between economic actors which produces growth?
Ultimately, the issue is strategic: does the government have reason to bargain on this and future rounds of privatisation? The answer is “yes”: no economic growth path is possible in this country without the unions.
Indeed, one of our most important assets may be the ANC alliance with Cosatu, opening up the possibility of negotiating changes a hostile union movement would reject out of hand. Another is our tendency as a society at least over the last decade to negotiate our way out of trouble. That is perhaps why we have a deal on labour law and why one is possible on privatisation.
It may be that our chief goal should be getting the major economic actors to work together and that means finding a growth path with which they all can live. The costs in “market distortions” would be more than recovered in the benefits of cooperation.
And the mantra that unions are part of the problem ignores both the costs of trying to ignore them or the benefits of bargaining with them.
The privatisation dispute may, therefore, be a timely warning to stop frittering away our greatest potential assets in a quest for economic castles in the air.