Cde Phumlani, I fully encourage engagements and do not regard any difference of opinion as dogma but something to take into account. Let me state upfront that I am not a nationalist nor a praise-singer of the GEAR policy. I'm simply taking a collective responsibility for its existence and failures because it would not change the price of bread by choosing to antagonise the strategy without taking stock of its negative and positive outputs, in the same way an opposition would do. It wouldn't be worthwhile. But, on the positive note, GEAR did create some jobs but were not quantifiable simply because of high retrenchments that went along with it. The conception was to be job efficient but it became a dismal failure. Hence, I said that the state of affairs looked like making trade-offs that involve long term benefits and short term pain. You're quite correct "even the protagonists of GEAR" have acknowledged its failures and one comrade who was able to do that publicly is Jabu Moleketi. I still maintain that the dismal failure was at the implementation level - because had there been an oversight role a strategy could have reviewed or tabled for review at the Alliance level. But you had a situation where played the protagonists of GEAR wanted to prove their experiment without any regard for dissenting views in the movement and society in general. I mean, the strategy was never processed by Lithuli House but it was a "take or leave package" from Pretoria. Now that power has been returned back to the branches and the centre is Lithuli House, movement will ensure that history does not repeat itself. And the policy interventions endorsed by Polokwane will be observed and deployed cadres hold government accountable to ensure that we make meaningful progress in sustaining economic development, eradicate poverty and contribute to a better life for all. All in all, we're in agreement that GEAR has been a dismal failure and worsened the gap between the rich and the poor. Thank you for bringing these key points to the discussion. Remain Morgan
"Sometimes, if you wear suits for too long, it changes your ideology." - Joe Slovo --- On Wed, 3/17/10, Phumlani Dlamini <[email protected]> wrote: From: Phumlani Dlamini <[email protected]> Subject: RE: [YCLSA Discussion] What is to be done? To: [email protected] Cc: [email protected] Date: Wednesday, March 17, 2010, 3:19 AM Cde Morgan Just to entertain few issues from your input below and at the risk of being dogmatic. I beg to differ with your assertion that “FDI helped create substantial (my emphasis) numbers of jobs…”. In fact one of the fallacious assumptions underpinning GEAR strategy was that the rate of economic growth of 5, 6% to 7% per year would create about 400 000 per year by the year 2000. In order achieve the sustainable growth rate of 7% the strategy put primacy mainly on the attraction of FDI and the reduction of fiscal deficit. No analytical or empirical evidence was provided to justify GEAR’s claim that adoption of its policies could produce a sustained growth rate of 7% and how such growth will help create employment opportunities (trickle down approach). The assumptions that “the crowding out” of private investment by government and that deficit reduction would result in a declining interest rate and that lower interest rate would provide strong stimulus to private investment dismally failed in practise. In fact, even the protagonists of GEAR are disappointed at the rate at which FDI flowed to our economy, the trickle down approach failed and the casualties of that failure are the working class and the poor. The resultant privatisation, casualisation and unemployment are now borne by the poor. In a nutshell, the strategy was pro capitalist and anti poor and results are there for everyone to see. The issue is not about implementation but about the overall thrust and the gist of the economic framework. I personally think that the working class or the “lefts” should still vigorously pursue the “intra-Alliance” debate on the appropriateness of our economic framework. Our monetary policy and the thrust of the budgets including the State of the Nation’s Address are largely informed by the capitalist neo-liberal economic policies we blindly adhere to. It is within this context that agreed with your analysis of the “Nationalisation of Mines” debate in your previous input, Nationalisation of Mines within the capitalist neo-liberal economic framework is ridiculous and not likely to yield desired results, namely, benefiting the working class and the poor. The onus is on those who argue for the “Nationalisation of Mines” to prove our analysis wrong and so far they have been more assertive than demonstrative. Amandla! Phumlani Dlamini From: [email protected] [mailto: [email protected] ] On Behalf Of morgan phaahla Sent: 16 March 2010 16:29 To: [email protected] Cc: [email protected] Subject: Re: [YCLSA Discussion] What is to be done? Cde Sentle, I noted your observation on the foreign direct investment programme of the government. I hope you're aware that the mergers and acquisitions are private sector activities - the key drivers of the 1996 macroeconomic strategy of government's growth, employment & redistribution (Gear) policy. It mirrored the ANC's 50th National Conference resolution on Economic Transformation which espouses integration into the global economy in ways that create jobs and provide opportunities especially for black people, women and the poor; as well as macro-economic stability at a level that supports economic growth and development. In the whole, FDI helped create substantial numbers of jobs while mergers and acquisitions brought more foreign capital in the market to strengthen the local currency. But I agree with you it looked like a means to make trade-offs that involve long term benefits and short term pain. The shortfall of this has been at the implementation level - there was no oversight role played by any organ of state in terms of ensuring that government makes great achievements in addressing the vast racial and gender inequalities in the distribution of and access to productive assets, wealth, income, skills and employment. Hence the new administration adopted a national strategic plan on the National Planning Commission in order to co-ordinate the process whereby government develops its long term vision to deliver on its policy commitments. This shift is a directive from Polokwane to build the strategic, organisational and technical capacities of government, including the creation of an institutional centre for government-wide economic planning with the necessary resources and authority to prepare and implement long and medium term economic and development planning. You'll agree that with these policy interventions we will make some headways in sustaining economic development, eradicate poverty and contribute to a better life for all. On the issue of the Reserve Bank, there have been numerous calls ranging from scrapping of the inflation targeting and interest rates slashed to nationalisation of the bank. My take is that there has to be a balance - you cannot adopt a policy that seeks to maintain a positive interest rate at the dire expense of the unsustainable consumption-driven-growth rate which ultimately hits back at the poor. If we're faced with recession it cannot be correct to generate a huge debt by borrowing in order to resuscitate economic inactivity when printing of money is still an option to boost the economy. We need flexibility not stagnant policy. In a nutshell, it's better for the Reserve Bank to pursue a sound monetary policy which seeks to address South Africa ’s negative growth rate in the general interest of the people, without abandoning its mandate to ensure stronger coherence between macro and micro economic policies in relation to exchange and interest rates as well as inflation and trade balance imperatives. I remain, Morgan Phaahla "Sometimes, if you wear suits for too long, it changes your ideology." - Joe Slovo --- On Fri, 3/12/10, [email protected] <[email protected]> wrote: From: [email protected] <[email protected]> Subject: [YCLSA Discussion] What is to be done? To: " [email protected] " < [email protected] > Cc: [email protected] Date: Friday, March 12, 2010, 6:51 PM Cde Morgan, indeed you are correct South Africa does not exist in vacuum. But with regards to foreign direct investment what u should note is the trend of the FDI that is being recieved by our country [in eloborating there are are two kinds of FDI: 1-there is FDI investment that establishes new entities, thus creating more employment and contributing more or less to poverty alliviation 2-there is FDI that is commonly known as M&A [mergers and acquisitions], which results in mass retrenchment of workers through the introduction of the so-called new technologies and down-sizing of their new aquisitions, thus they increase the burden of social responsibility on our government of which i believe is intentional so that they can continue with the super-explotatation of the working class and poor population of the country. Thus, we should then make sure that that the form of FDI that we sought after is to our advantage. Furthermore on the multi-literal and biliteral agreements my concern becomes that, as these agreements are entered into, particularly with the imperialist countries, we seem to be always engaged on unequal terms. Indeed nationalisation is not part of government policy, bear in mind that 'leaders lead through the will and graciousness the people'. I would suggest that we put more or move our focus on the south african reserve bank, because i want to believe that if we are then to begin to cover these loopholes the reserve bank would be a critical point to start on, looking directly into strenghtening the buying power of our currency. In my personal opinion, it is a fallacy that we be made to believe that a stronger currency is an obstacle to the real growth of our economy, our currency continues to be devalued by this conduct. As for the monetary policy committee, we are mockeying our people if really want to make them believe that this committe is progressive, because i want to believe that if it is really in our interest why is it failling to persue monetary policy review, but i guess it might be because it is also dominated by a majority of imperialist forces who care less about the plight of the people What is to be done? Cde Sentle Oliphant -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] . -- You are subscribed. This footer can help you. 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