SARB must be protected from state captures, but... – SACP

Party also calls for inquiry into PP Busisiwe Mkhwebane's conduct

SACP Fourteenth National Congress Central Committee Eight Plenary Session Statement 

9 June 2019

The South African Communist Party convened the Eight Plenary Session of its Fourteenth National Congress Central Committee (CC) over the weekend of 7 – 9 June 2019 in Johannesburg. This being the first plenary session of the CC after the May 2019 national and provincial elections, the meeting undertook a comprehensive assessment of the Alliance election campaign and the electoral outcomes. To this end the CC discussed, among others, the ANC and SACP elections reports, the Secretariat Political Report and other standard SACP CC organisational reports. The Political Report further evaluated the international situation and its implications for South Africa, and reflected on policy priorities for our country in the wake of the ANC electoral victory.

The tasks facing the SACP, our Alliance in the wake of the May 2019 election results

The CC thanked SACP Red Brigades for selfless campaigning and the workers and poor of our country, all those who voted ANC with a 57.5 per cent electoral victory. This shows the confidence that the majority of South Africans still have in the ANC-headed Alliance, despite the many challenges our country still needs to overcome. However, the ANC voters this time around sent a very strong message that they are not giving the ANC a blank cheque. They want the ANC-led government to deal with corruption decisively and ensure that all state resources are directed towards tackling the systemic challenges of class inequalities, unemployment, poverty, social insecurity and uneven urban-rural development.

The CC congratulated SACP leaders and members who have been elected to Parliament and provincial legislatures, including those who have now been assigned executive responsibilities. The CC expects all its elected leaders and members to act in an exemplary fashion, to dedicate all their efforts to selflessly serving our people and fighting corruption wherever it rears its ugly head. To this end the SACP will be mobilising all its structures and members to ensure that the entire progressive thrust of the ANC manifesto is thoroughly implemented at all levels.

In taking forward its 2019 programme of action to strengthen local governance and  ensuring that municipalities address local economic and broader social challenges, the SACP will intensify work amongst communities, calling upon all its members to be community activists, under the theme: ‘Every communist, a community activist’. The SACP will launch this campaign by directing its Red Brigades that campaigned for the ANC electoral victory to return to the various localities to work with communities and municipalities to attend to the many problems our people identified during the campaign. For instance, the SACP across the country will prioritise tackling the challenge of incomplete houses that were meant for the benefit of the poor but were never completed.

As part of taking forward our campaign for the transformation of the financial sector, the SACP, working together with progressive public sector unions, is going to be campaigning for the Public Investment Corporation (PIC) to help design an affordable housing subsidy scheme for public servants whilst at the same time ensuring decent returns to workers pension investments. The SACP finds it absolutely scandalous that PIC funds have been funding many dubious investments whilst public servants who own that money have no access to decent housing.

The SACP will further use its focus on community development campaigning to ensure that the set asides for co-operatives and small businesses are indeed secured as part of the revitalisation of township and village economies. The necessary legislation and policy instruments must be urgently developed to ensure that local economic development for the benefit the poor is realised.

The CC discussed and further underlined the fact that South Africa has one of the most advanced pieces of legislation and policies on disability. However the implementation of these policies and measures for meaningful integration of people with disabilities in all key processes of societal life in South Africa still leaves a lot to be desired. The SACP will be mobilising all its structures to fight for the meaningful participation and empowerment of people with disabilities, including by government. All SACP programmes and campaigns must involve people with disabilities and also deal with issues that affect them.

Backward beliefs that lead to the killings, for instance, of those of our people with albinism must be dealt with decisively. The CC further condemned the continuing killing of mineworkers in the Rustenburg platinum belt. The SACP is calling for workers to focus on building unity in all sectors of our economy, and will continue working for the realisation of the broadest possible unity of the working class as a whole.

The CC further decided that a crucial part of community activism by its members will be to work with communities, non-governmental organisations and the criminal justice system to tackle the scourge of gender based violence, particularly the abuse of women. The SACP firmly believes that our communities will never be normalised until women are completely safe. It is often women that are the backbone of most of our communities that are afflicted by crises of social reproduction as a direct result of class inequalities, unemployment and poverty. It is often women who attend schools’ parents meetings, head poor households, and attend to the needs of the poor, sick and more vulnerable.

The CC is strongly of the view that none of the challenges identified in the ANC manifesto will be addressed unless our Alliance is thoroughly reconfigured as a basis of deepening its strategic relevance and building its capacity to achieve its historical mission. The SACP will mobilise its structures, working together with our Alliance partners, to ensure that our Alliance is thereby strengthened and functions in a manner that is consistent with the challenges of the time.

The CC also started preparations towards the Special National Congress of the Party scheduled to be held in December 2019. The main tasks of this Special National Congress will be to evaluate progress made in the implementation of the resolutions of the Party’s Fourteenth National Congress held 2017. In line with the resolutions, the Special National Congress will also discuss the modalities through which the SACP will participate in the 2021 local government elections in the context of driving the second, more radical phase, of the democratic revolution, with the primary focus on the economy.

State capture and counter-revolution

The phenomenon of “state capture” has caused enormous damage to economic infrastructure, the finances of state-owned companies and broadly the South African economy. This has further weakened our capacity as a country to face the increasingly hostile global economic environment due to the compromised nature of some of our instruments for economic transformation like state-owned enterprises.

The CC in its deliberations about the challenges facing our country has come to the conclusion that what may appear to be merely corrupt and parasitic networks of state capture has now become a counter-revolution directed at crippling the ANC from within and frustrating the capacity of the democratic government to pursue the objective of changing the lives of our people for the better. Any sustained attack on the capacity of both the ANC the Alliance, as well as the democratic government, to carry out their mandate, constitutes a counter-revolution and should be understood and characterised as such.

The factionalisation and destruction of the basic organisational structures of our movement, the buying of delegates and gate-keeping; the destruction of the capacity of the state to collect and/or disburse revenue; the looting and hollowing out of state-owned enterprises and their conveyance to the control of lumpen capitalists like the Guptas, the Watsons, etc; the capture and perversion of key institutions of the criminal justice system like the NPA and intelligence services; are all aimed at crippling the capacity of the democratic government. Much more seriously is that such capture threatens to reverse all the gains we have made as a country over the past 25 years. This is the heart of counter-revolution!

The CC commits itself to intensifying the SACP’s fight against state capture and other forms of corruption as an important part of creating conditions for economic transformation, development, sustainable and inclusive growth. The SACP will continue to mobilise both within and beyond the Alliance, and seek to reach out to all patriotic South Africans committed to fighting state capture and other forms of corruption.

Our economic challenges and their international context

The CC reflected on the emerging realities in the global political economy. In particular there are two recently intensified features:

a. The first is the increased aggression and destabilisation directed at Left-leaning governments in Latin America and elsewhere; and

b.  the second is the launching of “trade wars”.

The fundamental issues at stake in the global “trade wars” are now becoming clearer. The US, as the imperialist metropole, is now seeing its dominance in the rollout of digital technologies challenged by China. More particularly Chinese companies, like Huawei, are considered to be ahead on the rollout of 5G technology. 5G is a key enabler of the deepening and widening digital industrial revolution or the so-called fourth industrial revolution.

The response of the US has been to use national security measures to curtail access by Chinese disruptor companies both to the US market and that of other countries. Imperialist countries have simultaneously sought concessions from developing countries in trade rules – concessions that would severely curtail essential space necessary for industrial policy.

South Africa has already been affected by the collateral damage of the earlier rounds of the US “trade wars” offensive. We were subject to punitive tariffs on steel and aluminium exports to the US, which could be followed by similar measures on automotive products. There is also pressure on us to renounce our status as a “developing country” – the status entitles us to less onerous obligations in global trade rules.

The CC resolved to boost its capacity to vigilantly monitor developments in the “trade wars” with a view to strengthening the resolve of the country to resist unfair and unjust measures and strengthening the just anti-imperialist struggle both in our country and in the international arena.

The CC also called for an urgent development of a national digital industrial policy – which the SACP will approach from the standpoint of the interests of the working class and the poor.

Finally, the SACP will enhance its solidarity work to support governments and states being targeted in the new phase of more aggressive imperialism. This strategic imperative includes our solidarity with Western Sahara, Cuba, Venezuela, Nicaragua and Palestine, among others. The CC condemned the heightened US led imperialist aggression on Iran, and at the same time called on the Iranian government to attend to the many problems raised by its people, including expanding space for and giving play to democratic expression.

The macro-economic debate – no to neo-liberalism, no to “RET” vulgarism

The CC noted and concluded that the emerging current political and economic situation will be highly contested. Two social forces can be identified as already engaged in this contestation. The first is a neoliberalism conservative tendency that seeks to turn the “New Dawn” into a regression to the past era of the 1996 GEAR class project. The second is a bruised, but not yet defeated, lootist faction seeking to justify their accumulation through spurious “radical economic transformation” (“RET”) and associated populism.

The CC’s view is that the Party as well as the working class as a whole must say a categorical NO to both the neoliberalism conservative tendency and spurious “RET” tendency.

The SACP is calling for a sober discussion and debate about the many economic challenges facing our country. In particular we call for rational and intensified content based internal debate within the ANC and the Alliance, and desisting from opportunistic posturing on every question, including on the question of the South African Reserve Bank mandate, among others.

The “radically” sounding slogans on the Reserve Bank and monetary policy by the spurious “RET” and “state capture” fight-back agenda networks are aimed at nothing but the weakening of the Reserve Bank’s capacity to monitor and control outward illicit capital flows headed for places like Dubai. This is what lies behind the agenda from these quarters, in the same fashion as they partially succeeded in eroding the capacity of state institutions like the South African Receiver of Revenue, South African Social Security Agency and parts of the criminal justice system like the National Prosecuting Authority and intelligence services. The Public Protector’s over-reach on the Reserve Bank fell squarely in line with this radically sounding agenda to capture the Bank for perverse agendas.

However, exposing and tackling the spurious “RET” agenda must, on the other hand, not be allowed to be hijacked and diverted towards support for the arrogant, know-it-all neo-liberals and their advocates – who are oblivious to the necessity to have the Reserve Bank’s mandate explicitly target employment creation. Defending the Reserve Bank from state capture does not mean we must go back to the disastrous neoliberal policy of the 1996 class project.

We have an election manifesto which provides guidance. The Reserve Bank policies and conduct of monetary policy are not beyond constructive debate. The arrogance and hysteria on display from neoliberalism’s conservatives, along with much of the media commentariat, is out of order and, in fact, contributes to further unsettling investors – the very ones whose interests the tendency claims to be nursing. The talk of “the barbarians being at the gate” runs the danger of closing down any constructive (and necessary) discussion on macro-economic policy and the role of the Reserve Bank in relation to the efforts required to solve the economic problems of our country.

The SACP also wishes to dissuade and caution officials in state institutions to avoid any overreach or entering into discourses that fall, in terms of the law, under the authority of different state organs. For instance in terms of the Public Finance Management Act (Ch. 2, Sec. 6(1)(a)), it is the responsibility of the National Treasury to co-ordinate macro-economic policy. Political issues must be left to the political structures to discuss, debate and resolve.

We are often told that the Constitution prescribes a narrow focus on inflation-targeting as the Reserve Bank mandate. However, this is not entirely true. The exact wording of the relevant Constitutional clause (224 (1)) is: “The primary object of the South African Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic.” Neoliberal advocates only get as far as the first half of this provision. But the Constitution is clearly stating that protecting the value of the currency is NOT an end in itself – it must be subordinated to, that is in terms of the Constitution it must be carried out “in the interest of” achieving “balanced and sustainable economic growth”. We manifestly do NOT have balanced and sustainable growth in South Africa.

The advocates of neoliberalism often argue that to call for the mandate of the Reserve Bank to explicitly include employment targeting is “populism”, and they will further argue that raising questions like this is interference in the constitutionally guaranteed “independence” of the Reserve Bank. But this, too, is a deliberate misreading of the Constitution. Section 224 (2) of the Constitution reads: “The South African Reserve Bank, in the pursuit of its primary object, must perform its functions independently and without fear, favour or prejudice, but there must be regular consultation between the Bank and the Cabinet member responsible for national financial matters.

Moreover, Section 225 of the Constitution reads: “The powers and functions of the South African Reserve Bank are those customarily exercised and performed by central banks, which powers and functions must be determined by an Act of Parliament and must be exercised or performed subject to the conditions prescribed in terms of that Act.

Clearly the Constitution does NOT envisage Reserve Bank “independence” to mean that it is a free-floating power unto itself. The constitutional requirement that there must be regular consultation with the Minister of Finance – and the Public Finance Management Act’s provision that the co-ordination of macro-economic policy is the responsibility of the National Treasury – mean that developing macroeconomic or even more narrowly monetary policy is the primary responsibility of the democratically elected government.

Furthermore, the Reserve Bank is subject to legislation passed by a democratically elected Parliament. While the current Reserve Bank Act simply repeats the wording in the Constitution, there is absolutely no reason why this Act should not be amended to more clearly reflect the developmental responsibilities of the Reserve Bank. In particular the importance of the national imperative of achieving maximum sustainable employment cannot be overemphasised.

The SACP calls for a sober debate, whilst protecting the Reserve Bank from the beneficiaries of state capture, their fight back and the blindness of the conservatives of neoliberalism.

Necessity to protect the image and dignity of the Office of the Public Protector

The SACP fully supports the existence and independent operation of the Office of the Public Protector. During the drafting of the Constitution by the democratically elected Constituent Assembly, the SACP fully supported the establishment of the Office of the Public Protector as one of the guarantors especially of the interests of the workers and the poor from the excesses of the exercise of state authority. Unfortunately the Office of the Public Protector, instead of being pre-occupied with defending the poor and vulnerable against such, has become an instrument of the better off in society to fight political and other battles.

It is for these reasons that the SACP is seriously concerned about the constant scathing court judgements against the current Public Protector, Busisiwe Mkhwebane. The SACP therefore believes that it is imperative for Parliament to carry out an inquiry into her suitability to hold this important office.

Issued by Alex Mohubetswane Mashilo, National Spokesperson & Head of Communications, 9 June 2019