Thebe Mabanga and Drew Forrest
The government’s Growth and Development Summit will be postponed until at least July and possibly until much later, amid signs that big business has grave misgivings about the event.
There are also indications that the labour movement and the government see the encounter in a very different light. The Congress of South African Trade Unions (Cosatu)has insisted that no aspect of economic policy should be viewed as non-negotiable.
It has said: “A major problem is that the economics ministers seem unwilling to accept that their policies have been problematic Current differences on socio-economic policies are not questions of detail, but reflect fundamental differences that need to be resolved.”
African National Congress spokesperson Nomfanelo Kota this week reiterated the ANC position that South Africa’s economic fundamentals are in place. Minister of Trade and Industry Alec Erwin has suggested there is room for discussion only on refining existing policy.
The summit, touted as an economic Codesa, was originally mooted for next month. Proposed partly in response to tensions in the ruling “tripartite alliance”, it will bring together the government, labour, business and civil society in a quest to raise economic growth above the 3% mark.
However, the ANC’s national executive committee agreed at the weekend “to postpone the summit until a later date”.
Bheki Khumalo, spokesperson for the presidency, confirmed that discussions on the summit were still at a preliminary stage. Marius Louw, spokesperson for South African Chamber of Business, said Sacob was working on the premise that it would not happen before the World Summit on Sustainable Development, scheduled for end-August.
There is also a lack of clarity about the forum, with some arguing that the event should not take place under the auspices of the National Economic Development and Labour Council (Nedlac).
“The problem there is getting quorums of the right people to represent the three stakeholders,” said a top businessman, but indications are that using Nedlac remains a strong possibility.
Cosatu appears to see the summit as a form of negotiation, from which a definite programme of joint action will emerge. Endorsing this, the ANC’s national executive said it would be “an opportunity to achieve implementable agreements among all key stakeholders on steps that can be taken to accelerate the economy, create employment, develop skills, significantly develop the country’s infrastructure and meet basic needs in a sustainable manner”.
However, a key big business source, who asked not to be named, saw a serious danger of “huge and unrealistic expectations” and “a messy compromise” if the summit was conceived as an event with a definitive outcome.
“Given the gulf between the social partners, the chances of reaching a deal are limited,” he said. Based on the 1999 job summit, the government was aware of the risks.
Far preferable would be a “strategic discussion” that would not immediately turn into a bargaining session. Labour and business could have a useful exchange on an issue like training.
The source said business feared the summit would be interpreted to mean “everything was up for grabs”. If labour wanted backtracking on privatisation, market freedom and exchange controls, or expected “patriotic” business people to invest without returns, “it’s not going to go anywhere”.
The source said business was telling the government it was on the right track, but had not gone far enough. “You can’t be half-globalised. By the standards of our competitors, we are a high-tax country.”
The government tended to see low investment as a problem of communication, but did not recognise the role of “issues of substance”, including its policies on Zimbabwe and HIV/Aids.
Meanwhile, Cosatu has revealed it will stage a “people’s summit” on the economy with the South African Council of Churches, the South African National NGO Coalition and its alliance partners to prepare a civil society growth summit platform. It was reported last month that it had shelved the idea as part of its reconciliation with the ANC. An alliance summit will also take place early next month.
A source within black business circles complained that “black business was invited [to the growth summit] as an afterthought”. It would take part, but considered the summit an “ongoing process” rather than a one-off event. Black Business Council (BBC) chairperson David Mashapalo said, however, that the organisation has engaged with government since the conception of the growth summit idea.
Although it has not formulated a formal summit agenda, it appears that some of the BBC’s traditional concerns could set it at odds with the trade unions. It is expected to press for a labour law dispensation which will place less onerous obligations on small enterprise and cut labour costs. The council maintains “the government must continue with privatisation with precision and determination” and see it as a driver of black economic empowerment
The BBC would continue to call for a black economic empowerment Act “for as long as the market does not move to help black economic empowerment”.