The Congress of South African Trade Unions (Cosatu) has called fror “speed bumps” for short-term foreign investors, which would force them to commit a share of short-term holdings to a longer-term investment. It suggests a 5% commitment would be appropriate.
The proposal is contained in Cosatu’s “draft position paper” for the Growth and Development Summit, now scheduled for June 7.
Arguing that the rand is overvalued, it calls on the government to explore ways of ensuring a more stable exchange rate favourable to manufactured exports.
The federation views the summit as a key opportunity to nudge the government and big business towards more employment-friendly policies.
Also controversial is a proposal that “as a start”, 15% of contractual savings — including retirement funds — should be targeted for developmental investment, once suitable investment areas and institutional mechanisms have been identified.
Cosatu contends it would be counter productive to make lower-income workers bear the main risk of restructuring.
It says that in 2000, 80% of households earned under 30% of pension
income, while the top 10% of households earned 40%.
As a short-term measure, it urges the creation of 500 000 person-years of
positions in state-funded public works and community service programmes, at an annual cost of R5-billion.
Calling for an “active” state, Cosatu maintains the market cannot redress an unemployment rate that has grown from 16% of the labour force in 1995 to more than 30% in September 2002.
Job losses, rising foreign ownership and “commercialisation” of state enterprises had deepened apartheid inequalities.
About 47% of people under 30 were workless in 2001, comprising 70% of the unemployed.
The average income from work had declined by 40% between 1995 and 2002.
Highlighting growing economic inequality along racial lines, the federation said the average African household income fell by 19% to R26 000 a year between 1995 and 2000, while for whites it rose by 18% to R158 000.
“Markets in the formal sector tend to leave out the poor entirely,” it says. Mining-based South African capital was inflexible and conservative, and now saw itself as part of international mining and finance, rather than the local economy.
Central to any remedial strategy was the restructuring of the formal sector to support job-creating growth. The overall goal should be “decent work, in the sense of more and better jobs”.
Cosatu urges the government to do more to ensure innovative thinking in sectoral job summits — on the table in chemical, engineering, food and services — rather than the pursuit of narrow self-interest.
Noting that investment by the state and semi-state sectors has istorically “crowded in” private investment, it calls for the government to develop job-creating investment plans as well as targets for parastatals.
The Department of Trade and Industry’s supply-side measures in support of industry should be extended to production for the domestic market and services, Cosatu recommends.
It sees potential for work-generating growth in production to meet the needs of the poor (in, for example, food and housing construction), in the production of generic medicines, in software and Web design, and in downstream and upstream production from the gold, platinum and iron mines.
To ensure jobs enjoy priority, Cosatu suggests all major employers should be required to include in their annual reports an assessment of their progress in creating jobs, both directly and indirectly.