Cosatu’s split is a grave portent for our future economic stability

The protracted divisions within Cosatu and the firing of the labour federation’s general secretary, Zwelinzima Vavi, after it expelled its biggest affiliate, the National Union of Metalworkers of South Africa (Numsa), should concern government and business. A conducive climate for business is essential if South Africa is to achieve economic growth, and stability in the country’s social and economic variables is key.

A strength of democracies is the existence of organised formations in business, labour and civil society, as well as platforms for disciplined engagement on social and economic issues. Cosatu is a critical cog in this machinery as the voice of two million workers. But the Cosatu crisis needs to be correctly understood to deal with its ramifications.

Cosatu’s divisions are based on social and economic factors. Its leaders are at each other’s throats because they differ primarily on how to assert labour policies in socioeconomic matters, and the situation is further complicated by the “cult of personality” and the personalities involved.

A divided Cosatu spells a bleak outlook for economic stability. It opens the gate for union competition, which will be bad for South Africa, Marikana being a case in point. For both the public and private sectors, there will be no winner.

South Africa’s democratic strength and stability is owed to consensus-seeking bodies such as the National Economic and Development Labour Council (Nedlac), where business, government, labour and civil society can interact on the priorities affecting economic growth.

South African markets have proved their resilience over the years, but the dismissal of Vavi and the ongoing battle for union prominence are likely to make business cautious. Such incidents could even slam the brakes on foreign cash injections.

The mining sector has been dogged by instability and is set for continued fickleness as a result of union competition. Collective bargaining across various sectors is the next battleground on which Cosatu may make a show of strength, but South Africa’s political climate is becoming increasingly charged.

Service delivery protests are likely to get more violent, and there is a high possibility of township violence between political rivals. The development of a workers’ party, in the form of Numsa’s United Front, is a guarantee of fierce electoral contestation and battles at shop-floor level.

The question is: Does South Africa have the shock-absorption systems to deal with the effect of such a shake-up? It would seem not. The national legislature is still reeling from the effect of the new entrants – the Economic Freedom Fighters – and their unorthodox ways of demanding the accountability of the executive. Do we have leaders strong enough to handle the consequences of these political and economic risks? The precariousness of Eskom, the SABC, the South African Revenue Service, the Hawks, the National Prosecuting Authority and other public entities paints a picture of a political leadership unable to do so.

The fact is Cosatu has failed to assert its will on several debates – e-tolls, labour brokers and the youth wage subsidy, for instance – because some of its leaders have never supported Cosatu positions on such matters and therefore stifle campaigns related to them.

There has also been a serious element of self-preservation in Cosatu’s leadership spats, though the federation’s leaders consistently deny that their positions grant them upward mobility in the form of becoming members of Parliament or the Cabinet. The “cult of personality” that has arisen is as a result of the battle on these fronts: the policy front, which displays the ideological differences between leaders, and the individual front, which is fuelled by self-interest.

The split in Cosatu is a death knell for the disciplined regime of labour discourse with the government and the private sector. It signals the start of a season of labour unrest in South Africa. It’s a split that could realign South African politics.

Is South Africa ready for such a realignment, given the many challenges it is confronting? And how will business confidence in South Africa be affected by the impact of such a realignment?

Azania Matiwane is a business-person, philanthropist and social commentator based in Cape Town. He chairs the South African Economic Forum

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