Backdoor privatisation of SOEs will be fought – COSATU

Federation says talk of breaking up Eskom proof state capture bigger than the Zuptas

COSATU vows to fiercely fight against  any backdoor privatisation of State -Owned Enterprises

26 June 2018 

The Congress of South African Trade Unions has noted the re-emergence of calls and activities by some within the ranks of the movement to advance a privatisation agenda. This first came with the signing of IPPs which happened without any consultation.

Now the exponents of privatisation have developed enough confidence to even make public pronouncements on the breaking up of ESKOM, disregarding anyone in the movement and in the alliance.

As COSATU, we want to state categorically clear that we will fight the backdoor privatisation with every weapon at our disposal. The recent statements by the former minister of Finance Comrade Mcebisi Jonas, who is currently serving as a presidential envoy on international investment is more than an irritation but represents an emerging trend. 

We know that his statement was not made by mistake but constitutes a calculated intention to test public opinion on privatisation and appease international investors at the expense of the country’s economic needs.

We are not surprised by this statement because for the last twenty five years, we have seen how former ministers and other former deployees from the National Treasury in particular have become free agents and have advocated for the privatisation of the state, as soon as they left the public service. As far as we know the ANC does not have such a policy of breaking down and privatising SOE’s.

This is just another proof that State Capture and Corruption is bigger than the President Zuma and the Gupta family. Cde Mcebisi Jonas is partly responsible for the mess at Eskom because the deterioration in governance and the vulgar looting happened, when he was part of the National Treasury. The National Treasury that he was part of fed the debt monster in many SOE’s and now that the chickens are coming home to roost, he acts like a free agent and is a lobbyist for the breaking down and the virtual privatisation of the power utility.

COSATU is forced to conclude that some of those who allowed the SOE’s to accumulate unsustainable debt were not just reckless but they were creating a fertile ground for the failure of these SOE’s Eskom, so that they can then champion their privatisation. This also makes us cynical about the announcement of this joint team of banking executives and government officials that is supposed to look into the immediate funding needs of state-owned enterprises, as well as their medium to long-term structural issues.

This is about more about laying a foundation for the privatisation of these SOE’s and not really rescuing them and keeping them under government control. It is troubling that Cde Mcebisi Jonas is one of President Cyril Ramaphosa’s envoys discharged with the responsibility to lobby for new investment in our economy. We can now conclude that this investment drive is more about looking for buyers of these SOE’s and nothing else.

It is obvious that government does not have a plan of revitalising the economy and the only way it plans to attract this foreign direct investment is by embarking on massive privatisation. They are doing this despite a jobs bloodbath that followed the privatisation of Iscor, Telkom and Sasol.

This is nothing more than the continued retreat and an abandonment of ANC resolutions as we have seen from successive ANC administrations since 1994.

The rhetoric about the centrality of job creation and the transformation of the economy is nothing but a slogan.

The difficult economic situation that we are trying to address as a country and the poverty that has trapped many of our compatriots is not some inescapable phenomenon, but rather something which flows from the logic of the system of capitalism that the ANC government under President Ramaphosa is warmly embracing. Our current economic challenges have everything to do with the Neoliberal policies that have created few billionaires in a sea of poverty.

The latest analysis by the World Bank has recently confirmed that this country is not the only the world’s most unequal country, but that extreme inequality has become a major constraint to higher levels of economic growth, because it is undermining policy certainty and depressing investment.

Our message to President Cyril Ramaphosa is that we are ready to launch a fight against his government to stop privatisation of SOE’s. We still insist that the state must take the lead to transform the legacy of underdevelopment and we want a developmental state to implement a developmental agenda.We need to work on developing an alternative production system that is based on domestic demand and human needs.

We continue to call for a politically governed redistribution of wealth and opportunities from the formal to the non formal sectors of the economy. We will not address the deepening poverty, growing inequality and endemic unemployment through privatisation.

The decision to give private corporations tax breaks in 2013, when the company income tax was reduced from 34% to 28% failed to yield any results; so the private sector is not the solution.   

We demand a government that is bold enough to intervene on behalf of the poor and pushback against the tyranny of the market, not a government whose economic instinct is to handover everything to the private sector. The ANC needs to do more to convince workers that its government is committed to its resolutions and that it has not been captured by private capital. 

Issued by Sizwe Pamla National Spokesperson, COSATU, 26 June 2018