Does Zuma’s triumph mean victory for the working class?
Center page article of the new edition of Izwi La Basebenzi, journal of the Democratic Socialist Movement.
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As Cosatu presents its Pact to the ANC …
The outcome of the provincial general council presidential succession vote in the last weekend of November represented a crushing blow to the personal and political ambitions of Mbeki and his clique. For the chattering classes who, like the “philosopher king” they worship in the presidency, were so confident of seeing off the challenge of this rural simpleton and his backward supporters, this was a shattering blow too. They were convinced they could keep the barbarians at the gate of the Union Buildings and ensure that what they claim to be Mbeki’s legacy – especially the undreamt of wealth they have accumulated under his economic policy regime – is preserved.
Mbeki’s insistence that provincial general council votes are mere nominations and do not decide the presidency is of course technically correct. But he would have been better off saying nothing. Apart from his comments merely reflecting the desperation now gripping him and his followers, it reflects his contempt for the ANC’s rank-and-file and the organisation’s democratic traditions he always praises to the high heavens and will intensify the antagonism he has attracted towards himself.
This is Mbeki’s third successive humiliation. The outcome of the provincial general councils are in fact a confirmation that the storm that broke at the 2005 National General Council during what the Johannesburg Star described at the time as “Mbeki’s four days of hell” did not abate after delegates overturned his decision to dismiss Zuma as ANC deputy president and reinstated him with full organisational powers and privileges.
Whilst the tone of the June 2007 Policy Conference was calm by comparison, the rank-and-file rebellion nevertheless dealt Mbeki a double blow. It proposed that the presidency be stripped of the considerable powers it had accumulated including the power to appoint premiers and executive mayors. More significantly it rejected his bid for a third term as ANC president. Expressed in the soothing phraseology formulated by ANC secretary general, Kgalema Motlanthe, to spare Mbeki from humiliation, as a “preference that the president of the country should be the president of the ANC” the views of the conference were no less firm for being polite. The atmosphere of the policy conference in reality represented the calm before the category five hurricane of the November 2007 provincial general councils.
Despite Mbeki and his followers’ cries, to quote his chief strategist Mluleki George, that “it is not over until the fat lady sings”, it is in fact all over bar the shouting. The 5 to 4 margin of the provincial totals are actually misleading. Far more telling is the comparative margins of their respective victories. Where he won, Mbeki’s victories were by relatively small margins. Even in his so-called Eastern Cape stronghold, Zuma succeeded in securing 40% of the vote. Zuma by comparison won a crushing majority in his stronghold, KwaZulu-Natal, with over 500 votes to Mbeki’s 9. Perhaps most humiliatingly of all, against all expectations, Mbeki lost the vote of the ANC Women’s League, led by his supporter Nosiviwe Mapisa-Nqakula, whose shocked expression after the result – announced a day later than the provinces after a heated debate that went well into the night – became the poster face of the defeated Mbeki supporters.
Not only has Mbeki lost the support of the ANC mother body by the considerable margin of over 800 votes, excluding the votes of the ANC Women’s and Youth Leagues who enjoy the status of provinces at the conference. But also the Tripartite Alliance partners – the Congress of South African Trade Unions and the SA Communist Party – have been in the forefront of the Zuma campaign along with the Young Communist League. While these organisations are not ANC structures and thus without separate organisational votes, their weighty influence will be brought to bear through overlapping membership between them and the ANC. Even the Umkhonto weSizwe Veterans’ Association, which had unsuccessfully demanded an amendment to the ANC constitution to give them the status of a province at the conference, told Mbeki not to stand for a third term. The votes of the ANC NEC and PECs are in any case split and even an unanimous vote would not turn the situation around.
Mbeki shown the door
There will be no third time lucky. Mbeki, as The Star put it, has been “shown the door”. The tsunami of support predicted by Cosatu general secretary Zwelinzima Vavi two years ago, will sweep Mbeki from power at the ANC’s 52nd conference in Polokwane. As Moshoeshoe Monare puts it, Mbeki now faces the humiliating prospect that he will “see out the remainder of his term of office as president of the country reporting to a man he fired from his government.” (The Star 27/11/07).
Ironically, for the next two years, the controversial two centres of power scenario – the occupation of the presidency of the ANC which has no term limits, and that of the country which is restricted to two terms by two different individuals – through which Mbeki would have been able, after the 2009 elections, to continue ruling the country through his position in the party, will become a reality …but with Mbeki as the monkey and Zuma the organ grinder. Mbeki’s world has been truly turned upside down. Until the constitutionally compulsory end of his second term in 2009, there will be an elephant with a sore tooth and long memory in the room at Tuynhuis – the government house. To adapt the title of Allister Spark’s book on SA’s political transition, the ‘morrow’ after the provincial general council votes, South Africa became ‘another country’.
Zuma’s victory was all the more remarkable given his comparative disadvantage in the contest against Mbeki. Mbeki is the incumbent of a position that he had attained through a cunning manipulation of the party apparatus, an art at which he had become so highly skilled that it gave rise to a myth – that the considerable power concentrated in his hands had been usurped by him behind the back of the party.
In addition to the advantage of the powers of patronage, Mbeki’s personal prestige gave his followers reason for confidence. He presided over the country at a time of the longest economic boom in its history. Eight successive years of economic growth, as he constantly reminds the world; the elimination of the budget deficit for the first time in history with budget surpluses planned for the next three; favourable reports from all the investor rating agencies that all the “economic fundamentals” were in place and amongst the four countries with the fastest growing number of dollar millionaires in the world. SA will also be hosting the soccer World Cup – the first African country to do so.
Mbeki himself enjoys enormous personal prestige as a Sussex University trained economist and self-styled Renaissance Man. Some journalists have gushingly described him as having a vision for Africa with a “breathtaking sweep” that has placed him in the ranks of the liberation presidents Kwame Nkrumah and Julius Nyerere of Ghana and Tanzania respectively. Mbeki has become one of the most popular subjects for biographies in Africa. The latest, ‘Thabo Mbeki: The Dream Deferred’, eight years in the making and released just as the succession battle was reaching its peak, is an erudite, but highly flattering biography, that reinforces the myth of Mbeki the profound if enigmatic intellectual.
Zuma’s legal obstacles
Zuma on the other hand secured his victory even with the ball and chain around his ankles of a rape trial, which, despite his acquittal, has left a permanent stain on his reputation, as well as corruption charges arising out of his relationship with convicted fraudster Schabir Shaik, a businessman and member of a leading ANC family all of whom benefited enormously from the corruption-riddled arms deal. The latest obstacle Zuma had to scale was the ruling of the Supreme Court of Appeals that the documents seized during raids on his and his lawyers’ offices were admissible as evidence, and grants the National Prosecuting Authority permission to apply for the original documents relating to the arms deal from the Mauritian government. It remains possible that Zuma could be charged before the end of his period as president-in-waiting within the next two years.
Despite this, such was Zuma’s confidence about the outcome of the provincial general councils that he went on a whirlwind international tour to drop his calling card as the next president of the country over the weekend of the provincial general councils. His destination included India, as a guest of fellow-presidential hopeful, Sonia Ghandi.
The confidence of the Zuma brigade notwithstanding, the Mbeki supporters are taking great comfort from the fact that what has been settled for now is no more than the ANC presidency. The question of the presidency of the country is in effect now in the hands of the criminal justice system. The Supreme Court of Appeals judgments have cleared the way for Zuma’s prosecution. Two years, as some of them are saying, is a long time in politics. Their dream that ’SA’s presidency’ in the words of Business Day’s Karima Brown (03/10/07), ‘is to be reserved for a sensible, market friendly less gaffe-prone sophisticate who knows how to balance his cheque book and get on well with capital’ is still alive.
But any prosecution of Zuma, whether successful or not, could be a nightmare for Mbeki. Zuma has promised to reveal all and to bring down everybody else involved in the corruption around the arms deal. Revelations in the book on the arms deal ‘After the Party’ by former ANC MP Andrew Feinstein, former ANC representative of the parliamentary oversight committee on public accounts, (Scopa) who resigned in protest at the cover-up of the corruption, show that the presidency played a key role in pulling the teeth of the investigation including issuing specific instruction for the protection of shadowy individuals involved in the deal coming directly from Mbeki himself. The possibility of Mbeki becoming ensnared in the elaborate web of protection he has spun around himself, has been increased by the investigations by both the German and the British police who apparently have an interest in Mbeki’s role.
The events of the last weekend of November have registered much more than the identity of the next president of the ANC and/or the country. They have registered a new era in the ANC’s history. These events herald the beginning of a new stage in what journalist and author Mervin Gumede called, in his book about Thabo Mbeki’s role in it, ‘the battle for the soul of the ANC.’ The divisions in the oldest liberation movement on the African continent and its most powerful ruling party have become unbridgeable. At the end of this road lies the eventual break up of the ANC.
Much of the commentary around the succession battle amounts to idle chatter reflecting, often, the analysts’ ideological preferences and class prejudices. Commentary has settled broadly around two views. On the one hand it is argued that there are no ideological or political differences between the two antagonists; that this is primarily a struggle for power, for access to resources, and to settle old scores. According to this view, Mbeki’s style of leadership is a critical factor in the strife in the party.
It cannot be disputed that Mbeki’s path to power gives ample ammunition for this view. That path is lined with the walking wounded. Rivals systematically and ruthlessly outmaneuvered as he ascended to power include the late Chris Hani (for the ANC deputy presidency) and Cyril Ramaphosa (as Mandela’s successor as president). Mbeki’s undoubted paranoia included instructing the late Minister of Safety and Security to conduct an investigation into outrageously false allegations that leading ANC figures Cyril Ramaphosa, Tokyo Sexwale and Matthews Phosa were involved in a plot to assassinate him.
But even in office his personal insecurities continued to claim victims perceived as a threat. Over the past two years he has dismissed former trusted confidante, National Intelligence Agency head Billy Masethla, suspended the national director of public prosecutions, Vusi Pikoli, and ordered an inquiry to establish whether he is fit for office after he had obtained warrants for the arrest of the National Commissioner of Police and close ally, Jackie Selebi – a proud associate of leading underworld figures. He dismissed the deputy minister of Health, Nozizwe Madlala Routledge for describing high infant mortality at Frere Hospital in the Eastern Cape as a national emergency and attending an HIV/Aids conference in Spain allegedly without his permission.
He has denounced condemnations of corruption in government such as in the arms deal as racism, and critics of his HIV/Aids denialism and its genocidal consequences as slaves and agents of the pharmaceutical industry. Mbeki’s paranoia reached such levels, as revealed in Mark Gevisser’s sympathetic biography, ‘A Dream Deferred’ that he only agreed to stop speaking publicly on his views on HIV/Aids because he genuinely believed that the pharmaceutical industry would arrange his assassination! Mbeki’s arrogance, megalomania and paranoia have turned even commentators who idolise his political and economic policies against him.
More than a power struggle
The other view about the outcome of the provincial general council votes, put forward by the SACP and Cosatu leadership, is that Zuma is pro-poor and therefore under his presidency there will be a significant shift in ANC economic policy. For the Cosatu/SACP leadership a Zuma presidency will revive the Tripartite Alliance and enable the working class to reclaim the ANC. Zuma himself has exploited the arrogance of the elite around Mbeki who look down their noses at the working class and the poor and consider him to be too lacking in sophistication and education to be suitable for office. He has consciously cultivated his lack of formal education and “simplicity” stating in public speeches that to answer questions he does not have to reach into his briefcase. In contrast to Mbeki’s obvious discomforts in the midst of the poor in his suited attire, Zuma is at ease exuding warmth and slips easily into traditional dress.
However, Mbeki and Zuma’s respective political personalities do not explain how the crisis in the ANC has reached the depths it has. Allister Sparks quotes Mbeki biographer, Mark Gevisser, as describing it as having become ’more than just a power struggle (but) a blood feud.’ (The Star 28/11/07). Sparks goes on to assert that ‘…this struggle is not about policies, which are not being debated at all in the run-up to Polokwane. It is all about personalities and the toxic hatreds the two camps have fomented.’ In a situation where there is not even a superficial ideological or programmatic conflict between the two factions, and where the differences are more in leadership style than in the substance of policy, the party should not find itself on the precipice of a conflict that will ultimately consume it. The explanation is not to be found in the succession battle and how it is conducted by the two rivals. The explanation lies elsewhere.
The roots of the crisis in the ANC, perceived by only a handful of commentators in the bourgeois media, is to be found in the wider social processes; in the polarisation between the classes accelerated by the ANC’s neo-liberal capitalist policies. The arms deal has been merely the catalyst for the crisis in the party as it released the most toxic of the effluent mixture of corruption which has been seeping through every part of the ANC’s political body. Mbeki’s political persona has undoubtedly been a critical factor determining the particular manner in which events around the arms deal have unfolded. Had Mbeki acted with some restraint and dismissed Zuma only from his position as the country’s deputy president, he might have been able to carry it off.
But a feature of Mbeki’s reign has been that he has governed facing not the people in SA but towards the G8 capitals of imperialism whose approval for his commitment to their hypocritical demand for ‘good governance’ he constantly craves. This, combined with his appetite for power, as well as his belief that the ANC’s destiny is for him to decide, convinced him that Zuma’s dismissal should not be limited to the deputy presidency of the country, but should extend to the deputy presidency of the ANC itself. Said by all, sycophants and opponents alike, to be possessed of “superior intelligence” he saw no need, even for a decision of such historic importance, to consult the party structures. Mbeki in effect called the revolt against him that first manifested itself at the 2005 ANC National General Council into existence.
But if the arms deal was the spark to ignite the fires of discontent now burning in the ANC, it was the class polarisation in society that provided the fuse. Sparks, a bourgeois analyst, recognises that “the diverging interests between the fast growing multi-racial middle class and the mainly black underclass is bound eventually to split the ANC and its alliance partners, with different wings hiving off to identify with the interests of these separate constituencies.”
The capitalist ruling class has no interest in the disintegration of the ANC. But it is not within its powers to prevent it. It has every reason to be grateful for the role it has played, firstly in derailing the insurrectionary working class movement of the 1980s and preventing the struggle for national liberation from passing over into a direct challenge to capitalism itself and secondly for its efforts in trying to stabilise and legitimise capitalism. No other bourgeois party from anywhere on the political spectrum is capable of replacing the ANC as the reliable defender of capitalism that it has become at this point in time. The deep schisms in the ANC would give the bourgeois cause for serious concern.
Reflecting the anxieties of the more far sighted sections of the capitalist class, Sparks hopes that the scenario of a split can be avoided if Mbeki and Zuma can both be persuaded to step down. He has not been alone in this idea of a third candidate. But a feature of the situation is that the much vaunted notion of an intervention by ANC elders who would instruct both candidates to ‘back off’ as the Sunday Times headlined its article dealing with the various efforts – to persuade Ramaphosa to stand; Tokyo’s unsuccessful candidature, the idea of a woman as a compromise third way candidate – is dead in the water. Political commentator Xolela Mangcu, who has resigned himself to a Zuma presidency only because ‘Mbeki is a greater threat’, wrote an open letter to plead with Mandela to in effect save the ANC from itself. His plea has not so much fallen on deaf ears as it has demonstrated the collapse of the cohesion of the leadership of the ANC as a whole.
The internal conflict in the ANC is an expression of objective processes outside it. The rebellion headed by Zuma is a distorted reflection of the conflict between the classes that has been building up over the past few years. Mbeki’s vicious denunciation of the South African Institute of Race Relations report that absolute poverty has more than doubled since 1996 is as futile as his Aids denialism.
The neo-liberal capitalist Gear policies identified so closely with Mbeki, have wreaked havoc in the lives of the working class at the same as they have created fabulous wealth for the new black elite and the still predominantly white capitalist class. As English author Charles Dickens might have put it: ‘it is the best of times and the worst of times’ for the new elite and their white masters on the one side and the black working class majority on the other.
Unemployment stands at between 6 and 8 million. The government, in a cynical game of numbers, prefers to ignore those who have given up looking for jobs and excludes them from the unemployment statistics. More than 50% of the population lives in poverty. Nearly one thousand people are dying everyday from HIV/Aids under the presidency of an individual who has once again announced his denialism after years of adhering to the ban on public comments imposed on him by the ANC itself.
The ANC’s so-called National Democratic Revolution has solved neither the social nor, in reality, the national questions. Whites control 98% of the economy. The average annual income of whites, at R58 926, while not a princely sum, is still six times that of blacks, four times that of coloureds and twice that of Indians (The Star 30/11/07). 33 consecutive quarters of economic growth have benefited only the elite. SA is one of the most unequal societies in the world. Under the ANC government, business has never had it so good.
Working Class Resists
But the working class is no longer prepared to sit back and watch this orgy of self enrichment by the black and white elite. By June 2007, SA had witnessed 11m working days lost through strike action – the highest by far since the ANC came to power. These figures excluded the biggest and longest public sector strike in SA history and subsequent strikes that have broken out periodically throughout the rest of the year. Protests against poor service delivery and corruption have brought the working class onto the streets in greater numbers with the total number of protest rising from 5 800 in 2005 to 10 800 in 2006 and 9 500 by September 2007. 2007 also witnessed a wave or student protest across the country’s tertiary education institutions.
It is this working class revolt that lies at the root of the divisions in the ANC. Zuma is acting as lightning rod for working class discontent. This explains the depth of feeling amongst his supporters. A working class woman caller from the Western Cape phoned in to SAFM the Monday after the provincial general council to make it clear that even if Zuma were charged and jailed, his supporters would fetch him in his convict orange overalls and handcuffs to come to Polokwane to make his acceptance speech as president of the ANC.
This shows that in a situation where the ANC enjoys an overwhelming majority and there is no mass left wing, working class alternative, the social conflict in society is bound to play itself out in the ANC itself. The objective basis for the nightmare scenario Allister Sparks and the ruling elite hopes is not upon the country – the development of a mass revolutionary socialist alternative is maturing. What is missing is the subjective factor.
SACP/Cosatu leadership sowing illusions in Zuma
Unfortunately the Cosatu and SACP leadership is itself acting as the barrier to such a development. They are sowing illusions in Zuma. Yet Zuma bears as much political responsibility for the arms deal and the cover-up of corruption as Mbeki himself. The signing of the arms deal, more than the corruption that enveloped it, was politically corrupt and a betrayal of the first order in a country with SA’s levels of unemployment, poverty, homeless and disease. But Zuma’s role did not end there. He colluded in the crippling of the investigation and therefore the concealment of the corruption.
Whatever arguments Zuma may be able to make on legal technicalities about his relationship with Schabir Shaik and even if it were true that he did not have a ’generally corrupt relationship’ with Schabir Shaik, the fact is that his very association with Schabir, gave not only Schabir but also other members of his family the political clout to enrich themselves through corruption.
Like Cain and Abel, politically Zuma and Mbeki are the issue of the same political loins. Not only did Zuma support Gear when it was adopted behind the backs of the ANC membership in 1996, he continues to support it today. As the presidential prize has come into his sights, he has given assurances to big business, both international investors and local capital, that there would be no change in policy under him. These views have been echoed by Reserve Bank Governor Tito Mboweni and Finance Minister Trevor Manuel.
In preparing himself for the presidency, Zuma has also pandered to backward sentiments in different sections of society. He has endeared himself to traditional leaders with homophobic statements to the effect that if he came across a homosexual man he would beat him up. He has encouraged the church to oppose legislation they disagreed with. No doubt the African Christian Democratic Party – a creature of Apartheid Military Intelligence – cannot wait for an audience with him to put to him their demands for the repeal of the Termination of Pregnancy Act and legislation prohibiting assaulting children and permitting same sex marriages.
By being married to four wives, Zuma is legitimizing gender oppressive practices and institutions. He was acquitted in his rape trial. But he conducted his defense in a manner that undermined the struggle against gender oppression, and legitimised the humiliating and discriminatory manner in which women are treated in sexual and domestic violence cases.
To the extent that Zuma enjoys the support of those marginalised under the government’s economic policies, he is cynically riding to power on the wave of discontent released by the very policies he supported and continues to embrace. Zuma differs from Mbeki only to the extent that he believes it is necessary to preserve the Alliance and is concerned about not alienating the working class and the poor. Mbeki and his supporters are done with this tiresome and increasingly meaningless tradition. They have lost all their shame and embarrassment. Getting filthy rich is good as a member of Mbeki’s cabinet has said.
But Zuma is no socialist. Like Mbeki he long gave up his SACP membership. As his rural mansion in Nkandla, built alongside the huts of the poor in the area, shows, he worships wealth, power and prestige as much as Mbeki.
Can Zuma deliver the Pact?
Cosatu’s decision to draw up a list of preferred candidates and a Pact for a Zuma presidency will have very little influence on ANC government policy. Zuma has made strenuous efforts to settle the nerves of big business at home and foreign investors. His message has been consistent – there will be no change in economic policy. To Cosatu and the SACP in particular he has put in his excuses in advance. Playing on the hostility to the presidential dictatorship of Mbeki’s so-called class project, he has emphasised that ANC policy is determined collectively and not by the president. For all Cosatu and the SACP leadership’s complaints about a ‘1996 class project’, Gear was in fact endorsed by the ANC’s conference in Mafikeng in 1997 – despite the fact that it was presented to the membership a full year after it had been implemented without the rank-and-file being consulted. There were no complaints about the hijacking of the democratic process. Nor did the demand to abandon Gear even come up at the June policy conference.
The Cosatu/SACP leadership’s illusions will be cruelly exposed. It is absolutely ruled out that the demand in the Pact for the full implementation of the Freedom Charter will be agreed to. Such a policy requires a strategy for the overthrow of capitalism itself – something as far from Zuma’s mind as indeed it is from that of the Cosatu/SACP leadership. The ANC policy conference in June basically reaffirmed ANC economic policy despite the ongoing rebellion against the Mbeki’s residency. The ANC Youth League’s demagogic demand that big business be described as the “enemy of the national democratic revolution” did not reach plenary from the commission where it was raised. Not even the proposal for a basic income grant was agreed.
It is no accident that big business at home and abroad is not at all disturbed by the prospects of a Zuma presidency. The rating agency Moody’s has even suggested that it is Mbeki’s bid for a third term that is a cause for concern. As far as big business is concerned, Mbeki’s role is over. In their view Mbeki has carried out his mandate. It was his task to sharpen the ANC’s capitalist character, burn out its social democratic illusions, bury the Freedom Charter, and to establish it unambiguously as the main party of capital. Capital is clearly willing to discard Mbeki as cynically as they did the apartheid system when they considered it a threat to their system. If Mbeki’s continued tenure at the head of the ANC threatens the cohesion and stability of the ANC, they will dispense with him. If Zuma can more effectively restrain the masses, then Mbeki becomes yesterday’s man and Zuma today’s.
If there is an advantage of the development of a Pact, it is that it provides the rank-and-file with a concrete instrument with which to measure the performance of a Zuma presidency. Zuma will not be able to meet the demands of the Pact even if he were to accept them which is unlikely. Already Jabu Moleketi, Deputy Finance Minister has interpreted the idea of a Pact to mean an offer of a Social Accord by Cosatu. This means acceptance of the demands by big business for wage restraint and a more flexible labour market. This would have disastrous consequences for the workers and will lead to greater joblessness and greater poverty.
The disastrous consequences of Cosatu’s membership of the tripartite Alliance have never been more sharply demonstrated than through the succession battle. The divisions of the succession battles have spilled over from the ANC into the SACP and from both into Cosatu splitting the most powerful organization the working class has ever built down the middle. Every affiliate and every structure of the federation is divided. The so far unsuccessful efforts to oust Madisha as president of Sadtu and Cosatu over his alleged conduct in another organization – the SACP – are a confirmation of the ideological bankruptcy of both the party and the federation’s leadership. As we have warned before, far from the Tripartite Alliance being a source of unity, it has become a guarantor of the federation’s disunity.
The ANC will not split at Polokwane. But it is irreversibly capitalist and will remain so whoever is president. The divisions are beyond repair and at some point it will break up. Should Mbeki, against all the odds succeed in reversing the situation at Polokwane it would merely accelerate the processes dividing the ANC. The mood in the both factions does not leave room for compromise. For once, Zwelinzima Vavi, who has a tendency not to pause and reflect on his utterances, may be correct when he says an Mbeki victory would split the ANC. This is so especially after the euphoria and expectations following Zuma’s provincial victories. An Mbeki presidency would in all likelihood be interpreted by his camp as a vindication of his polices and leadership style. This would merely add new and explosive ingredients to the undeclared civil war inside the party and sharpen the conflict between the classes outside it.
A Zuma victory on the other hand might mean a few changes including introducing a limited free education. But this would merely represent a continuation of an idea that is already under discussion in the ANC anyway. But any changes would be of a cosmetic nature. Major reforms are unsustainable under capitalism, which is incapable of solving the fundamental problems facing the working class. The working class will discover, possibly sooner rather than later, that the belief that under a Zuma presidency, their interests will become paramount is a cruel illusion.
The panicky series of interest rates increases by the Reserve Bank are an indication that the economic boom is far less the result of the alleged genius of Mbeki, Trevor Manuel or Tito Mboweni than the result of a favourable set of circumstance in the world economy not of their own making and over which they have no control and that are coming to an end. Inherent in the crisis in the world economy created by the sub-prime mortgage credit squeeze is the possibility of a US recession which in turn would affect the entire world economy.
The so-called emerging economies like SA would be the first victims. They would experience a flight of capital that would have devastating consequence for SA. The Rand has in effect been propped up artificially by the inflow of hot money in the Johannesburg Stock Exchange. This has disguised the reality of the deficit on the balance of payments and the fact that the SA economy’s manufacturing sector – the bedrock of any modern economy – has failed to meet domestic demand and to compete internationally.
The escalation in the size of the deficit in the balance of payments will exert enormous pressure on the Rand resulting in more interest rate rises. This in turn will plunge the lower middle class with illusions in future prosperity into debt and back into the ranks of the working class from which they believed Mbeki had lifted them. Already the level of household debt has risen to 80% of annual household income.
Therefore, the conflict between the classes will intensify, inflamed by a radicalized middle class facing ruin so soon after succumbing to the illusion of rising and endless prosperity. The material conditions for the split in the ANC will ripen further. What the coming split of the ANC, the death agony of the PAC whose president has carried out a coup against his own party, the disintegration of the SACP over the embarrassing accusations of fraud reveals, is that there is an enormous vacuum on the left. The Cosatu rank-and-file must campaign to take Cosatu out of the Alliance and to spearhead the formation of a mass workers’ party on a socialist programme. Surveys of worker political attitudes have repeatedly proven that at least one third of Cosatu workers would support the formation of a mass workers party. The DSM calls upon the rank-and-file of Cosatu to link up with communities in struggle against poor service delivery and corruption and with students fighting financial exclusions and for free education, as part of a campaign to build a mass workers party on a socialist programme.