Picture: ISTOCK
Picture: ISTOCK

The latest job figures and economic projections paint a dire picture and suggest that in the coming months more people will be plunged into poverty.

This is very alarming considering that, of the 36-million working-age people in SA, 27.5% are unemployed, according to the latest Quarterly Labour Survey.

It is therefore bizarre that there are attempts by the government to weaken the capacity of the state through public service retrenchments. This is either a sign that the government is in denial about the extent of the crisis facing it, or it has run out of ideas.

SA’s economic challenges call for bold transformational measures. Foreign direct investment is not a panacea and sometimes worsens the situation by encouraging dependency and stifling transformation. It also undermines the reproduction of capital and savings through massive repatriation of profits.

In the current epoch of neoliberalism, the centrist political establishment, which includes the Treasury and Reserve Bank, are captive to financial capital’s fixation with narrow bands of inflation targets and budget deficits at the expense of industrial expansion and job creation.

There is a drastic need for a change in attitudes if we are to deal with unemployment and economic stagnation. At Cosatu’s 13th national congress next week, we shall explore bold solutions that will help chart a new developmental path. The key to finding solutions is for everyone to leave their bunkers and collectively participate in a process of finding a uniquely SA developmental path that will comprehend and address the legacy of our past.

We need an economic model that will dismantle the colonial and apartheid economic and social policy paradigm, which is unsustainable. We need an economic trajectory that will ensure that there is a proper redistribution of income and that more people are allowed to participate in the economy.

The past two decades have shown us that this cannot be left to the market to decide.

Unfortunately, the government continues to adopt regressive and contractionary policies that focus only on cutting social expenditure and weakening the capacity of the state. The deceleration of fiscal spending since 2014 has plunged the economy into the doldrums in an environment of depressed private sector investment and household spending.

At our congress, we will be pushing for the adoption of a developmental model that will be based on meeting SA’s economic and social needs first. Our production of goods and services should be geared primarily towards the domestic and regional market.

The government cannot afford to continue to limit itself to the provision of the traditional public goods such as security, infrastructure and social services. It must promote development by redistributing growth, and upgrading and restructuring the economy.

At our congress, we will be pushing for the adoption of a developmental model that will be based on meeting SA’s economic and social needs first. Our production of goods and services should be geared primarily towards the domestic and regional market.

We expect the state to use a variety of economic and other levers at its disposal to regulate and channel investment in job-intensive sectors of the economy. The future is in promoting investment in rural areas and township economies — because economies are made up of people.

The Reserve Bank cannot be indifferent to the economic challenges that have widened inequalities, worsened unemployment and deepened poverty. It generally subscribes to the dominant and conventional economic policy dogma prescribed to it by financial capital, sometimes at the expense of the real producers of wealth in mining and manufacturing. The bank needs to be independent from private interests and the reckless impulses of the government.

No one can argue against the importance of price stability, especially as we still depend on capitalists for job creation and growth. But we also need to acknowledge that the mandate of the global North includes employment creation.

SA needs a central bank that will pursue an inclusive monetary policy and regulate the finance sector to ensure the redistribution of income and wealth to all, as mandated by the Freedom Charter.

The current policy of low inflation has entrenched apartheid’s economic policy of separate development, and income and asset inequalities. Most unemployed people would prefer a job to low inflation. The Reserve Bank should align its policy to industrial development, introduce foreign exchange controls, and impose quantitative controls on commercial banks to ensure that a quarter of their loans go to priority sectors that create jobs on a larger scale.

As we go to our 13th national congress, our perspective of an economic growth path includes issues of social equity, redistribution and environmental sustainability. It moves beyond the narrow definition of economic growth, based on the GDP growth rate and per capita income growth.

• Pamla is Cosatu spokesperson.