General Secretary’s Report to National Bargaining Conference April 22 to 24, 2016
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The Context for the 2016 Bargaining Round ...................................................................... 4 1. The global crisis of over-accumulation ............................................................................... 4 2. Results of the crisis ........................................................................................................... 5 3. South Africa in the crisis .................................................................................................... 6 4. Let’s look at some basic data about the South African economy ......................................... 8 5. Illegal outflows of capital ................................................................................................ 12 6. Legal outflows of capital ................................................................................................. 14 7. Now I want to turn to look at wages - our wages and their wages. Let’s start with theirs: . 15 8. The South African crisis is not just a reflection of the global crisis. It is a direct result of the neo-liberal agenda of the ANC / SACP government.................................................................. 17 9. Let’s look at the effect of the crisis on Numsa’s sectors in particular ................................. 18 10. So what are we demanding? ........................................................................................ 24 11. Now I would like to look briefly at our bargaining strategy ........................................... 27 12. This NBC must welcome the comrades from the new sectors. They are here because of our ground-breaking decisions at our Special National Congress in 2013 .................................. 27 13. We support the challenge to the latest Eskom tariff increase ........................................ 28 14. Now let’s look at our traditional sectors: ..................................................................... 29 15. We are on the verge of launching a new federation ..................................................... 30 16. Finally, we must remember that Collective Bargaining presents a major opportunity for the union to grow................................................................................................................... 30 17. So in summary ............................................................................................................ 31 3
The Context for the 2016 Bargaining Round 1. The global crisis of over-accumulation 1.1. There is a global crisis of over-accumulation. We need to understand what that means because it is an inevitable feature of a capitalist economy. And it is a dominant feature of our current, global, capitalist economy. 1.2. It works very simply like this: As we know, a capitalist economy extracts surplus value from us, the working class. Capitalists use some of this for their own consumption, but the majority is for re-investment in order to extract more surplus value. So capitalism has to continue to grow in order to have places to invest the surplus value which it extracts from us. But a capitalist economy is unable to continue to grow forever. When it stops growing sufficiently, there is no longer anywhere for them to invest the surplus value. This is what Marxists know as a crisis of over-accumulation. It takes place when the surplus that capitalists have available to them cannot find a profitable place to invest. 1.3. This is exactly what is happening now. It comes in two forms: Firstly, it comes in the form of huge productive capacity which already exists. It was built from the surplus value extracted from us. Now it cannot be profitably used. We know about this in the steel industry. We have seen it in our own steel industry. If we look at China, we see that it has the capacity to produce more than one billion tons of steel. But its economy can only use half of that. So it floods the rest of the world with its steel at rock bottom prices. The result is closure of steel plants all over the world, including the US, the UK and of course South Africa. The IDC reports that South Africa only uses 81.5% of its manufacturing production capacity, down 1% in 2015. Secondly, it comes in the form of capital which has no productive place to go to make a profit. Again, we know that productive companies – manufacturing and mining companies - have huge stockpiles of capital which they are not investing in production. Instead they are finding other places to invest – shares, property, other financial instruments. That explains why share prices on the JSE have been rising while production has been declining. While commodity prices crashed, the JSE boasted a 15% average annual return from 2011-15. Only 12% of the JSE is mining shares. 1.4. The most notorious historical example of this kind of crisis was the Great Depression of the 1930s. That was when the world witnessed one way to solve the crisis of over-accumulation – destroy productive capacity in a global war. By the end of the 1930s, there was no longer a crisis of over-accumulation. There was a war which lasted 6 years and killed 45 million civilians and 15 million 4
soldiers, as well as wounding a further 25 million soldiers. So, not a very good solution. 2. Results of the crisis 2.1. We see the results of this crisis all around us: Unemployment is the most obvious symptom. We have seen unemployment rise not only in South Africa, but across the world. o In 2013 global unemployment was 7.5% o Last year it was 8% Global GDP has risen, but so has the world’s popul ation. So global GDP per person (what they call per capita GDP) has fallen. In 2014 it was $16,700 per person. In 2015 it was $15,800. China’s GDP, which has been driving much of the rest of the world’s economies, has been slowing down since 2013: 5
Banks and financial institutions have crashed or come close to crashing. So capitalist states have bailed them out and taken over their unmanageable debt. The result is that public debt has increased massively. Someone has to pay for the increasing levels of debt. The result has been austerity – there have been cuts in public expenditure to reduce the debt. Cuts in public expenditure overwhelmingly hurt the poor – the rich buy their own, private services. They don’t need public services. 3. South Africa in the crisis 3.1. South Africa is suffering in particular from this crisis because our economy has remained dependent on the sale of minerals. In a crisis such as this, demand for minerals declines very sharply. o You can see on the screen the steep decline in the volume of coal produced in 2015 6
o Platinum mining production was very low in 2014, because of the protracted strike. But even in 2015 the levels are way below the 2011 levels. We have seen this in the dramatic drop in mineral prices. For example coal has dropped from nearly 140 dollars a ton in 2011 to under 60 dollars a ton this year. We know that when demand declines, prices also decline. The capitalist economy always responds in the same way: reduce output in order to restore profitability. So we are seeing the shutting of productive capacity, in mining and downstream processing and manufacturing. Look at Anglo American Corporation. It was Africa’s largest company for the past century. The share price today on the London Stock Exchange values the company at 8% of what it was worth in 2008. Or look at Glencore which has dropped to less than 20% of its value. Poor Ivan Glasenburg, the CEO, is 7
experiencing real suffering: his shares used to be worth 10 billion dollars. Now they are worth a mere $1.7 billion. When there is a decline in mining, manufacturing also suffers. 3.2. The ANC government wasted a huge opportunity during the years of the 2000s. Until 2008, the world experienced what has been called the ‘super cycle’ for mineral production. Production increased enormously and profitability increased with it. In 2012, we reported to this Central Committee the profits of the 3 largest platinum mining companies at the time: Lonmin, Implats and Anglo Platinum. Between 2006 and 2011, these 3 companies made a profit of 160 billion Rand. This was the slide we showed you then. That profit should have been used to capitalize industrialization based on the beneficiation of South Africa minerals. Instead, the ANC government removed exchange controls and allowed the companies to list overseas. The result was that these super profits were poured into the pockets of overseas shareholders. 4. Let’s look at some b asic data about the South African economy 4.1. Firstly growth : You can see from the chart on the screen how GDP has declined over the last 3 years: from 2.9% in 2013 to 0.6% last year. In 2013, the DBSA said that we need a GDP growth rate of 10% or more every year to meet the New Growth Path's target of 5-million jobs by 2020. Instead of moving towards 10%, the ANC / SACP government has taken the economy backwards. 8
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