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Report On The Tripartite Alliance Summit - 1997

1 September 1997


Contents


  1. Executive Summary

  2. Assessment of the current phase of transformation

  3. The role of the state

  4. Reports from Commissions and way forward

  5. Rural Development and land distribution

  6. Labour market

  7. Social Wage / Social needs / Social security

  8. Public sector transformation

  9. Fiscal and monetary policy

  10. Employment strategy

  11. The functioning of the Alliance

  12. A programme for the Alliance


Executive Summary

1. Introduction

1.1. The Tripartite Alliance National Executives Summit was held on 31 August
to 1 September. It was convened two weeks before the COSATU National Congress
(in mid-September), and also in the general run-up to the ANC December National
Conference, and the SACP's April 1998 Congress.

1.2. The Summit also occurred in the context of difficulties within the
Alliance. In his opening address, ANC President, cde Mandela, referred
specifically to "unresolved matters facing the Alliance". In
particular, he referred to the Basic Conditions of Employment Bill and the
Macro-Economic Policy debate.

1.3. Comrade Mandela set the tone for the rest of the Summit by making
several basic points:

    1.3.1. "frankness is what is required at this summit...frankness is
    what the alliance requires among ourselves to thrash issues out and resolve
    them";

    1.3.2. that the Alliance partners are likely to relate to each other in
    three different ways:

      (a) There are issues on "which we agree from the outset".

      (b) There are issues where "we will start from different angles but
      because of our concern for unity and harmony as comrades, we will
      compromise, and come out with a uniform position".

      (c) And, the President added, "there are issues where it may be very
      difficult for us to agree and I think we should be realistic enough to
      appreciate that this is going to be the position".

    1.3.3. On the macro-economic debate, comrade Mandela asserted that it was
    wrong for any partner to adopt a "non-negotiable stand". "There
    is no reason why any document which we have made...may not be amended" in
    the light of experience and comradely debate.

2. Broad strategic perspectives

2.1. The Alliance Summit reaffirmed the common commitment of the partners to
the strategic perspective of a National Democratic Revolution. The alliance is
not a short-term or tactical relationship, it is grounded in a shared strategic
perspective, elaborated in many policy positions, not least the RDP.

2.2. However, the danger is that, while we all invoke the "NDR", we
may be giving the concept very different content. The Summit did not complete
discussion on this critical, overarching topic. Nevertheless, certain points of
convergence emerged:

    2.2.1. The NDR is neither "socialist" nor "capitalist",
    it is grounded in the vision of, in the words of the ANC Draft Strategy and
    Tactics, "All Power to the People".

    2.2.2. The ANC's two alliance partners have socialist programmes, which see
    the NDR vision and its core values, not as a "passing phase" but as
    integral to the kind of socialism for which they are striving. Obviously,
    while sharing a vision of Peoples Power, not all ANC members necessarily agree
    that this implies socialism.

    2.2.3. The national and global terrain on which we are struggling to
    implement an NDR is dominated by capitalism. This is a reality which cannot
    just be wished away. Capitalist corporations own and control enormous
    resources which we require. On the other hand, the capitalist accumulation
    process, left to itself, everywhere promotes inequality and underdevelopment.
    We have to engage capitalism, and we have to struggle with and against it. The
    one-sided emphasis on one or another of these challenges (the "with"
    and the "against") often results in dispute and confusion within the
    alliance. Both the "with" and the "against" are crucial.

3. The role of the state in the economy

3.1. Directly related to the above, is the further conclusion that our
democratic state needs to be an active and interventionist state. A
laizzez-faire approach to existing markets will simply reproduce the
inequalities and poverty crisis in our society. The state needs to intervene
actively into the economy.

3.2. However, the nature of state intervention cannot be measured on a
simplistic scale that ranges from privatisation to nationalisation. There is a
wide range of measures and instruments that the state needs to use, many of them
not narrowly dependent on ownership. These measures include planning and
coordination, regulation, the transformation of land and water rights, the
democratisation of the labour market, and investment and industrial strategies.

3.3. The Alliance summit agreed on this broad approach, but it also agreed
that, if the state is, indeed, to play this kind of active transformation role,
the institutions we have inherited still require major transformation
themselves.

4. Specific Sectoral Issues - Commissions

4.1. The Summit, in Commissions, then addressed a number of broad sectoral
matters:

    4.1.1. Industrial strategy, trade, investment and empowerment.

    4.1.2. The transformation of the labour market.

    4.1.3. Social wage, social needs and social security.

    4.1.4. Public sector transformation.

    4.1.5. Fiscal and monetary policy.

    4.1.6. Rural development and land.

    4.1.7. An employment strategy.

4.2. The report-backs from these commissions are reflected in the
documentation attached.

5. Major decisions of the Summit

5.1. The centrality of a strong, democratic state for transformation requires
special alliance attention - to that end the summit resolved to set up an
Alliance Task Team on the restructuring of the public sector under the
leadership of the Deputy President.

5.2. The alliance must develop a coordinated employment strategy which aligns
all aspects of government policy, and around which the alliance forges a common
approach - in advance of the proposed Presidential Jobs Summit.

5.3. On macro-economic policy it was agreed that we need a developmental,
macro-economic policy, aligned to the needs of the country. Such a policy must
evolve in line with these needs, while recognising the real constraints we face.
No macro-economic policy is cast in stone and the Alliance needs to continue to
discussion on areas where there is disagreement.

5.4. Other areas, including social wage, labour market and industrial and
investment strategy, will be taken forward by task forces of the alliance, which
will report to the national office bearers.

5.5. All of the above requires the strengthening, upgrading and coordination
of the policy-making structures of the Alliance.

5.6. The different alliance partners resolved to use their forthcoming
national conferences and congresses to take forward all of the above, to
consolidate a common Alliance platform.


Assessment of the Current Phase of Transformation

1. A common commitment to the NDR

1.1. As alliance partners we agree that the current phase is one in which we
need to advance, deepen and defend a vast national democratic transformation
process in our country. Among the broad alliance programmatic policy statements
on the general character and content of the national democratic process is the
RDP document with which we, as an ANC-led alliance, contested and won the 1994
elections.

1.2. As alliance partners we have all affirmed that, since the 1994
democratic breakthrough, there have been major achievements in, amongst other
things:

    1.2.1. Consolidating peace and fostering reconciliation.

    1.2.2. Adopting a progressive constitution.

    1.2.3. Ensuring democratic elections for all three spheres of governance.

    1.2.4. Making some significant beginnings in the overall process of
    socio-economic change and delivery by way of legislative reform, institutional
    transformation and implementation of many new programmes.

1.3. These relative successes, and the general lack of strategic vision
amongst our political opponents, have also resulted in a considerable decline in
support for our main political opponents. This decline is, in turn, resulting in
internal turmoil and some fluidity within their ranks. We need, as an alliance,
to count this reality as a further achievement on our part.

1.4. The degrees of success, whether we could have done better (or even much
better), and an appreciation of where there have been failures - these are all
areas of legitimate debate between our three formations, and, indeed, within
each of them. In the ensuing sections of this working agenda, we shall attempt
to elaborate and unpack some of these areas of difference and debate with more
specificity.

1.5. However, as an alliance, collectively and as separate formations, we
have all refused to give way to the campaign of demoralisation (a campaign that
is often a thinly veiled racist campaign) that asserts that "things have
got worse" or "no better" since April 1994. Our preparedness to
be critical and self-critical, and our preparedness to debate among ourselves
should never be confused with the demoralisation campaign waged by our
opponents.

1.6. A key question, and area of debate and misunderstaning that often occurs
in the alliance, relates to how we understand the NDR. For some, there is a very
"stage-ist" understanding of the NDR. This "stage-ism"
presents itself in two mutually reinforcing ways:

    1.6.1. either with the argument that this is the first,
    "capitalist" stage of our struggle, and therefore the
    "creation" of a "deracialised" free market capitalism is
    our key strategic task;

    1.6.2. or, with an equally mechanical "stage-ist" approach to the
    NDR, others dismiss this period of struggle as little more than a platform for
    a different (socialist) agenda. In this latter view, the importance of
    building a powerful ANC, and a united alliance, tend to be underrated. The
    socialist forces in the present, NDR phase are, more or less, hitching a ride,
    with a separate agenda up their sleeves. The NDR and the ANC are treated with
    cynicism.

1.7. Still another mistaken variant of the NDR is to treat it as, more or
less, the equivalent of socialism. Any departures from socialism by the ANC or
ANC-led government are criticised, not on practical grounds (because, perhaps,
there is the belief that they will undermine the RDP or NDR), but from a
dogmatic, ideological and purely labeling standpoint.

1.8. All of these positions are wrong, but all are to be found within our
broad alliance.

1.9. The official programmatic perspectives of all three alliance formations
are, however, quite different from the mistaken positions noted above. In
contrast to these, the official programmatic perspectives of our alliance are:

    1.9.1. That the strategic task of the ANC and its alliance is the
    consolidation of a united, non-racial, non-sexist and democratic South Africa
    - summarised in the ANC Draft Strategy and Tactics Document slogan: "All
    Power to the People". This strategic task is, deliberately, not couched
    in narrow ideological terms. The ANC, and therefore the programmatic
    perspective of the alliance it leads, are neither capitalist nor socialist.

    1.9.2. The ANC's two key alliance partners, the SACP and COSATU, have both
    adopted socialist programmes. However, their commitment to socialism, and this
    is stated clearly in the official policy statements of both formations, is not
    in opposition to the NDR or the ANC. Both the SACP and COSATU see the struggle
    for "All Power to the People" to be absolutely integral to the
    struggle for socialism, and both believe that it is only under socialism that
    the slogan will achieve its fullest realisation. The present NDR struggle is
    not a mere platform, it is inherently valuable.

    1.9.3. Many non-communists in the ANC movement might agree with this, many
    others may not. It is precisely to organise all progressive, popular NDR
    forces within a common organisation and within a broader alliance, that the
    ANC and the tripartite exist.

    1.9.4. The ongoing struggle for national democratic transformation is
    occurring on a national and global terrain that is dominated by capitalist
    accumulation. All forces within the ANC and its alliance, socialist and
    non-socialist, are compelled to recognise this reality. Some might argue that
    capitalism must be abolished; and, until then, we should abstain from any
    responsibility for leading huge transformation struggles in the present. This
    betrayal of our present responsibilities is not the position of our alliance,
    or any of its partners. Nor is the opposite perspective, a simple and
    uncritical acceptance of the national and global realities as we find them,
    our alliance perspective.

    1.9.5. The strategy and tactics of the ANC and of our alliance, in the
    concrete conditions as we find them, involve a transformational engagement
    with the continuous tendencies of capitalist accumulation to exploit and
    oppress, and to reproduce massive national and global inequalities - as the
    ANC Draft Strategy and Tactics Document, clearly recognises (see section 9,
    p.27).

    1.9.6. At the same time we have to find, through continuous engagement,
    negotiation and inducement, points of convergence with the private sector.

    1.9.7. In short, we have to work with and against the profit-seeking logic
    of private capitalism. Failure to appreciate both the "with" and the
    "against" result in one-sided positions, which often result in
    intra-ANC and intra-alliance debates. Naturally, the degree of emphasis placed
    on the with and the against in any particular context will be the subject of
    legitimate debate and difficult judgement calls.

2. The balance of forces

2.1. As alliance partners we share a common strategic understanding that,
while we are committed to a profound national democratic transformation process,
we are seeking to transform our society on a national, regional and global
terrain that is not of our own choosing. This factual observation is not grounds
for pessimism, complacency or resignation. Nor, however, can we simply indulge
in voluntarism, as if fervently wishing for or advocating certain objectives
were sufficient to achieve them. Because our national democratic transformation
process challenges powerful vested interests in and outside of our country, we
can expect constant opposition, and constant attempts to undermine, subvert or
redirect our transformation objectives.

2.2. Between resignation or co-option on the one hand, and reckless
voluntarism on the other, there are many complex choices and judgement calls. At
times, within our alliance, one or another partner might feel that another
partner, or sections of it, are too resigned to, or complacent about, or
co-opted by the given balance of forces. On the other hand, there may well be
the counter-allegation that this or that alliance partner, or sections of it,
are recklessly volunturistic. To remain at the level of general accusation may
or may not be true. But it is unlikely to be helpful without further examination
and debate. This is why, in the sections of this working agenda that follow, we
will attempt to further elaborate, itemise and provide a sense of the
informational base on which strategic policy options have been chosen.

2.3. In general, however, as an alliance we agree that the balance of forces
needs to be analysed and understood not in order to become resigned to its
reality. We seek to understand the given balance (perhaps it is better to speak
of trajectory) of forces in order better to understand how to take forward,
intelligently and in a sustainable manner, a transformation struggle that
progressively changes that balance of forces itself.

3. Threats and challenges to the NDR

3.1. The general characterisation of those forces posing a threat to, or
actively blocking, our national democratic transformation process is itself an
area that results in debate and difference within our alliance.

3.2. The threat to the national democratic transformation comes, in
particular, from those social forces that accumulated powers and privileges
within the old dispensation. It is important, however, to disaggregate these
forces into at least three categories:

    3.2.1. The hard-core counter-revolution.

    3.2.2. Constitutional political party opposition.

    3.2.3. Big capital.

3.3. The hard-core counter-revolution was substantially (if perhaps
temporarily) marginalised by April 1994, and it continues to be disrupted by
ongoing exposure (TRC, trials). But there are signs of some regrouping of these
forces, whose agenda is the active destabilisation and eventual overthrow of the
new democratic dispensation. This regrouping is occurring, in part, on the
terrain of organised crime. The inter-face between crime syndicates, general
destabilisation and a sophisticated disinformation/demoralisation campaign on
the one hand, and 3rd force networks (that subsist in the state apparatus, or
which have been "privatised") is at the heart of this threat.

Possible points of difference within the alliance:

    3.3.1. Is there indeed a counter-revolutionary threat?

    3.3.2. Does it constitute the principal threat to the NDR?

    3.3.3. Is "law and order" the main means for dealing with this
    threat?

    3.3.4. Do other realities (for instance, transformational mass mobilisation
    struggles) wittingly or unwittingly play into this counter-revolutionary
    agenda?

3.4. Our political opponents working within the multi-party political
dispensation. Attempts by our major political opponents (NP, IFP, DP, Volksfront
and the new NCF/NMP) to build a coherent political bloc around those social
forces that benefited from the apartheid past and/or who fear majority rule
have, for the moment, foundered. They have foundered on their own disparate
social and class character (Afrikaner separatists, whites in general defending
privileges, former securocrats, minorities feeling threatened by majority rule,
an ex-bantustan elite, rural traditional leaders). From an alliance point of
view, we have little to regret in this fragmentation of our political opponents.
We do, however, need to recognise that they represent, in varying degrees,
minority social interests of one kind or another. We have also to foster their
ongoing involvement within the unfolding democratic dispensation.

The key strategic question we need to clarify as an alliance concerns the
primary thrust of our strategy to deal with our constitutional political
opponents:

    3.4.1. Do we seek to absorb their constituencies and their leading cadre
    into the ANC? And what price do we pay in terms of our own identity and core
    constituency in so doing?

    3.4.2. Do we seek to win as near to 100% of the vote as possible, thus
    obliterating our opponents? But again at what price to our core platform and
    transformational goals?

    3.4.3. Or do we see them as legitimate opposition political formations
    representing, in the context of a multi-party dispensation, various minority
    views/interests that are not part of our constituency or platform, but which
    have a legitimate presence within an unfolding democracy?

There may, of course, not be a single answer to these questions. The answer
may vary according to whether one is speaking about a party whose primary
constituency is the rural black poor, or a party whose primary constituency is
Afrikaner separatists.

3.5. Big capital - internal and international

    3.5.1. In dealing with big capital, it is important to understand that,
    both in its objective activities and in the subjective attitudes of leading
    business personalities, we are not dealing with a monolithic entity. Big
    capital within our country is well aware of the fragmentation of our political
    opponents. It is unlikely to throw its weight unambivalently behind our
    political opponents and thus risk shutting the door on access to the
    ANC/government. Big business is, however, concerned that the ANC is
    unassailable politically and that, therefore, its own leverage over the
    ANC/government is diminished. Big capital sees our political opponents (and -
    but perhaps not - even the hard-core counter-revolution) not as serious
    alternatives (for the moment), but rather as "useful"
    counterbalancing forces.

    3.5.2. This reality creates space and dangers for us as an alliance in our
    interaction with big capital, both nationally and internationally.

    3.5.3. In approaching this interaction, two extreme views are sometimes
    found within our alliance:

      (a) The illusion that the profit-seeking agenda of big business is simply
      congruent with our NDR objectives - or (in a more cynical variant of this)
      that big capital is so powerful that there is no alternative to failing in
      with it.

      (b) The illusion that we can simply declare big capital "the
      enemy", and pursue headlong our own agenda regardless of the
      consequences.

    3.5.4. The danger of the first illusion is that it disarms us. Unlike our
    major political opponents on the national terrain, the organising ideology of
    big capital is relatively coherent and globally hegemonic (even if its
    hegemony is now less triumphalist than it was five years ago). This organising
    ideology - essentially an ideology that fosters and justifies the conditions
    for the unimpeded, profit-seeking global flow of private capital - is often
    referred to as "neo-liberalism".

    3.5.5. Because of it global hegemony, this ideology is ubiquitous and when,
    as an alliance, we are divided or confused, neo-liberalism quickly fills the
    vacuum, presenting itself as "plain common-sense".

    3.5.6. But the second illusion ("declare big capital the enemy and
    simply pursue our own agenda regardless") is also dangerous. The
    realities of our global and national situation are such that big capital
    controls substantial resources without which we cannot carry forward our own
    national democratic transformation. The power of big capital, while not
    unchallengeable, is substantial and, particularly on the financial markets, it
    is able to manipulate and destabilise.

    3.5.7. However, the more strategically intelligent sectors of big capital
    are able to recognise that only the ANC (but probably not, in their
    perception, its alliance) is able to create the levels of social and political
    cohesion within our country (and within our region) that can establish the
    platform for a return to sustainable profitability. This creates the
    possibilities for an effective engagement with big capital from our side.

Questions to be debated:

    (a) Do we broadly agree on the above formulations on the challenges posed
    by big capital to our NDR?

    (b) How do we manage our interaction with big capital in ways that are
    strategic and sustained?

    (c) What means do we have for gaining the co-operation, for regulating and
    for disciplining big capital? (some of this will be dealt with more
    substantially in the section on "The Role of the State").

3.6. We have distinguished three kinds of threat/challenge to the NDR.
Differences within our alliance are often rooted in confusions caused by:

    3.6.1. An inability to conceptually distinguish these different
    threats/challenges by collapsing, for instance, the NP or big capital
    simplistically into the hard-core counter-revolution. The different threats
    and challenges cannot be dealt with identically;

    3.6.2. Or, conversely, isolating one danger and elevating it into the sole
    challenge we are facing. For instance, treating everything as essentially a
    "law and order" problem, and failing to see that more benign
    opponents might, because of their much greater powers and strategic capacity,
    pose the real long-term threat to the NDR;

    3.6.3. Or, by erecting Chinese Walls between these three kinds of
    threat/challenge. Distinguishing them must not blind us to the possible
    linkages between elements in one or another (in the present or at some future
    point).

3.7. We have considered three challenges/threats to the NDR. There is,
however, one further, overarching threat - the deep-seated poverty and
inequality of our society. This is, perhaps, the greatest potential threat of
all. In noting this threat, we are reminding ourselves that our collective
determination to press ahead with thorough-going transformation is central to
averting counter-revolution. Maintaining the momentum of change is the surest
means to depriving anti-democratic forces of a mass base, without which their
marginalisation will continue.

4. The emergent black bourgeoisie

4.1. The observation that we are pursuing a national democratic
transformation process on a terrain not of our own choosing is connected to
another related matter. Put another way, we are pursuing a national democratic
transformation on a national and international terrain that is dominated by the
capitalist system. We cannot wish away this reality, we have to engage with it.

4.2. Based on this reality, there is a view in some quarters of our alliance,
that it follows from this that a "key strategic challenge" of the
present is for the ANC-led alliance to "create or foster a new patriotic
bourgeoisie". At its crudest, this observation may well be little more than
individual opportunism. But in its more serious versions it represents an
attempt to think strategically about how it is that we engage intelligently with
the reality of a conjuncture dominated by capitalism.

It is clear that this topic needs to be thoroughly debated within our
alliance:

    4.2.1. Is "joining" the capitalist class the only, or best way of
    engaging with the challenges of transforming ownership and management
    functions?

    4.2.2. What is "patriotism", and, what is the measure of
    patriotism among capitalists?

    4.2.3. To what extent are the emerging black bourgeois strata dependent on
    "white" capital, or upon their access to the state apparatus. In
    other words, are we dealing with a "patriotic" bourgeoisie, or with
    a bureaucratic or even comprador bourgeoisie?

    4.2.4. How, as the alliance, do we engage with the reality of an emergent
    stratum/strata of black entrepreneurs?

5. Governance, mass organisation and mobilisation

5.1. As alliance partners we have in our various strategic documents, and in
the RDP base document itself, committed ourselves to the view that the NDR
requires both decisive, democratic use of our new positions within government,
and the organisation and mobilisation of our mass constituency. This strategic
approach is contained, for instance, within the "people-driven" notion
of the RDP.

5.2. However, our common commitment to this general principle does not mean
that, in practice, it is always easy to achieve an effective complementarity
between decisive, state-led transformation and mass participation.

5.3. On the one hand, there is often a major disproportionality in capacity.
The technical, and policy-making capacities of government are (should be) far in
advance of our mass formations. This can lead to technical impatience with mass
formations, on the part of comrades in government. This impatience is often
sharpened by the enormous pressures on government to 'deliver'.

5.4. On the other hand, government structures, especially those responsible
for technical functions are often barely transformed. What might seem like a
technical matter, may in fact be a serious deviation from our NDR goals.

5.5. We have, generally, failed to elaborate a clear mobilisational programme
for our mass constituency. Over the past three and a half years, formerly active
and mobilised constituencies have often been marginalised spectators and anxious
would-be recipients of delivery. This is a recipe for confusion, disgruntlement
and a lack of a shared understanding of where we should be going.

5.6. All of the above problems are further exacerbated by the relative
weakness of our organisational structures - this probably applies especially to
the ANC and SACP. It also applies to our broader mass democratic movement
formations.

5.7. As a result of all of the above, our shared stated commitment to
combining decisive state-led transformation with popular organisation and
mobilisation can often seem to be little more than lip-service. From the side of
government there is the suspicion that mass mobilisation is little more than
"sectoral" rocking of the boat, unnecessary disruption of government's
transformation efforts. From the side of mass formations there is often the
sense that government has "sold out", that it is no longer committed
to our RDP and NDR goals.

5.8. We need to emerge with a much more concrete understanding of our
strategic tasks in and out of government. We need to emerge with a practical
programme of action that is capable of organising and mobilising our
constituency in ways that converge with what we are seeking to achieve in
government. We need, also, to appreciate, that mass mobilisation should not be
narrowly equated with "marching in the streets". The variety of
participatory forms that we have begun to evolve in the context of, for
instance, the legislative process, must themselves be seen as mobilisational
work.

The Role of the State

1. In the assessment of the current phase of transformation there is
agreement that the Alliance has choices and that it can by its actions influence
the balance of forces. This position is set out in all papers that emanate from
the Alliance partners. However, it is also accepted that the Alliance will have
to exercise these choices and implement policies and programmes within
constraints. It follows from this that there is agreement on the need for the
State to play a role in altering the balance of forces and thereby effecting
socio-economic transformation. The issues that then arise are whether the State
influences the balance of forces in a coherent direction and whether that
direction alters the position to the benefit of a class or specific groups in
the society. In addition if the State interventions favour a class to what
extent does this alienate other classes? If this happens what accommodations
emerge in the new relationships?

2. The actual role of the State in the context of the above considerations is
one of the great political economy debates and it is probably the key macro
issue in governance and socio-economic transformation. There has been an active
revival of this debate recently in our ranks. That the State should intervene in
socio-economic processes is not in question. The question is the form and intent
of the intervention. In this regard there is an unease that is expressed by many
in the Alliance and the COSATU document is even more critical. It is important
that this is dealt with.

3. On the basic form of the intervention there is substantial agreement that
the two polar options of complete control of economic activity by the State or
on the other extreme no intervention by the State in the economy are ruled out.
The Alliance sees the State as making institutional interventions that bring
about development and structural transformation in the society. This has been
variously referred to as a Developmental or Interventionist State.

4. There is agreement that the exact role of the State does have to be
located within the specifics of our history and the class configurations that
exist. The role of race, ethnicity and the national question play a particularly
important part in any analysis. The ANC view on the complexity of these issues
within this historical conjuncture is more fully dealt with in Umrabulo 3 that
contains discussion documents for the Conference and in the Special Edition on
Strategy and Tactics. The African
Communist [No 146 1997 ] contains papers by the ANC, COSATU and senior SACP
representatives that also canvas these issues extensively. Without going into
the detail of this crucial issue, it is clear that the Alliance represents the
interests of a relatively complex collectivity that includes the working class,
a large marginalised and impoverished constituency and components of other
classes that were racially oppressed or opposed to racism. The interventions of
the State should be to address the positions of this collectivity.

5. The state's interventionist role is essentially a transformational role
and the great challenge facing us is how we can maintain a transformational
momentum where the state continues to spearhead a national democratic
transformational process which will:

    5.1. Alter the balance of forces in favour of the popular collectivity
    represented by the Alliance.

    5.2. Where the popular forces are empowered in a manner that mobilises them
    as ongoing forces of change. This is therefore a conception that is not
    dependent on government alone to drive change but on an interaction with an
    empowered people.

    5.3. Such a momentum requires that transformational changes have to be
    sustainable and therefore strategic. Short term gains that are not sustainable
    or an excessive reliance on government and legislation alone will result in
    the loss of momentum.

6. It follows that the actual content of progressive reform is not the only
criterion of transformation. The manner of achievement is crucial in that it
defines the capacity to sustain mass involvement in transformation and thereby
the sustainability of transformation itself.

7. The Alliance in its programmes of action must provide strategic leadership
in this advance. It has to define the key issues that need to be addressed, how
many it is possible to deal with and the correct sequencing in order to advance
further. The Alliance is not the only force seeking to transform South Africa
and accordingly it is critical that the Alliance is able to identify the areas
of strength and vulnerability in these other forces.

8. In doing this, the Alliance has to evaluate and analyse the forces at work
in the international economy - globalisation and the class interests that are
dominant in that arena. It then has to analyse the impact of those developments
on the national and regional economies. It also has to take into account the
impact on national reconciliation and nation building. However, having done this
it has to evolve and implement effective policies and programmes that alter the
lives of it's constituency for the better and empower it in the manner dealt
with above.

9. The questions that have to be reviewed are, firstly, whether the Alliance
is fulfilling the role in relation to the government and state that is intended
and secondly whether current actions by the ANC majority government are
effecting the necessary institutional changes that will give rise to such an
improvement and alteration of the balance of forces. There is a clear concern
that there has been a retreat from this position, under pressure of the forces
of globalisation and that a position has emerged where the role of the State is
now seen as being the neutral referee between classes. There is a concern that,
in the economic terrain, the government has adopted a position of there being no
alternative but to manage the economy within the constraints of an economic
orthodoxy, imposed by the dominant paradigm within globalisation. This stand is
particularly strongly stated in the COSATU paper on An Alliance Programme for
Socio-economic Transformation. The question also raised by this concern is
whether there has developed a distinction between the position of government and
that of the ANC. The purpose of this document is to provide a framework for a
structured discussion that will lead to an agreed strategic approach, that
guides our actions as an Alliance. Accordingly, a full review of the debate is
not possible. What is set out are key steps in the reasoning that would inform
policy in regard to the role of the State in socio-economic transformation.

10. There are no proponents in the current policy documents of either of the
polar options - namely of complete state control of the economy or at the other
pole of no state involvement in the economy. What is at issue is whether market
forces are dominant and the state's role is to facilitate their operation or
whether it is the state's role to lead in that it defines the strategic
parameters within which the market functions. In both cases market forces play a
role but in one they dominate in the other they are shaped by the framework set
by the state. An important point needs to be made in regard to the meaning of
market forces. In the first conception above market forces are seen as an
absolute and immutable economic law. In the second conception market forces are
a system of transaction and of resource allocation - both these functions are
derived from and then interact dialectically with productive forces and
production relations. Accordingly the state intervenes to alter the features of
the market forces which are subordinate features of more basic economic
structures The Alliance envisages that the state will play the latter role.
However, it is necessary to be more precise in the role that the state will
play.

11. Is the state's intervention that of establishing the rules of the game as
established by the dominant paradigm? In this sense it becomes a referee between
contesting interests and class forces within that game. Both COSATU and the SACP
have expressed a concern that actions of the government indicate that this is
the position that is coming to be adopted. ANC documents acknowledge this as a
danger but don't espouse any such concern in the present situation.

12. The problematic of the state intervening to the benefit of one set of
social forces without effecting complete class domination of other social forces
is a matter dealt with at some length in the Conference preparatory documents
and in The State and Social Transformation. There is a clear and consistent
position that the role of the state is to intervene in a manner that improves
the lives of the ANC's broad and complex constituency with an unequivocal
emphasis on the poor and the black majority. In doing this the state will
intervene actively in market forces not necessarily to replace them with direct
state involvement, but to transform the market places. However, it is further
argued that there exist both objective and subjective conditions that allow an
accommodation with major components of capital that can be managed to the
overall benefit of the economy and the society. In this latter position, it is
clear that the other two Alliance partners make a similar assessment. This
raises the classic questions of strategy and tactics in the interaction of class
forces and the interaction of this complexity with economic tendencies and
forces. The ANC has put forward positions that argue that it is the capitalist
mode of accumulation that continues to dominate the world economy and that the
state in the South African situation will have to establish institutions and a
coherent policy programme that strategically shapes this process to the benefit
of it's constituency. The state is working with and against the forces of
capitalist accumulation to achieve a defined objective. The relationship is
dynamic and is in essence based on an accommodation that seeks to structurally
alter the socio-economic order. This can only be done if there is a sufficiently
powerful set of social forces that the state can mobilise and thereby influence
and give direction to market forces. The state must be capable of a coherence of
policy and be able to put in place the institutional structures necessary for
change to take place.

13. This is a complex and dynamic process and it will never be a linear
advance. The state will not always be able to act on its chosen terrain. If such
an expectation existed in any significant quarter of the Alliance then there
will be continuous tension. However, it is equally the case that such a strategy
involves judgments and decisive action. The Alliance will accordingly have to be
able to manage this process as we have learnt from our experience in introducing
GEAR.

14. If the state is to intervene in the economy it has to develop the
institutional instruments to successfully undertake such intervention. On this
score it is clear that we confront many challenges. The state machinery remains
considerably unreformed. The ANC-led government's capacity to intervene through
the state is often undermined, deliberately or unintentionally, by unreformed
personnel and institutions. To some extent we have a fragmented state, and the
constitutional dispensation recognising three spheres of governance, while
progressive in intent, has often in present circumstances further fragmented our
efforts.

15. What is the nature of the state's intervention into the economy? It is
necessary to preclude from the discussion those positions that see the only
litmus test of state intervention as being the ownership and control of
production - anything less is seen as being an accommodation or temporary until
the balance of forces is finally tilted to this position. The position whereby
the state should only lay down basic laws that facilitate the working of the
market is also precluded. State intervention can then be a wide range of actions
that seek to alter economic activity. These actions include nationalisation, but
this is not the exclusive intervention. Most attention gets focused on the
spectrum that ranges from nationalisation to privatisation. This ignores other
key interventions that are vital in the transformation. A coherent
transformation will require state ownership; policies that influence private
investment; changed rights of access to and use of natural resources (eg., land,
water, minerals, forests, marine resources) and a range of regulatory and
supervisory dispensation.

16. In this paper, we have focused on the role of the state in the economy.
Obviously, the state's transformational role is not confined to its
interventions into the economy. A progressive, ANC-led state needs to lead
overall social and political transformation. A critical area upon which we need
to bring state power to bear is in the ideological domain, not least in regard
to the transformation of the media. The largely unreformed character of the
media has been one further factor complicating the attempt of our alliance and
the state power we wield, to consolidate and foster an understanding and unity
around our programmatic perspectives.

17. We have focused on state intervention, but clearly the state does not act
alone in the transformation effort. Part of the state's activism is precisely to
help to mobilise certain social forces. The very existence of the Alliance
indicates that the State envisages that mass movements and organisations in
civil society will play an active role in the socio-economic transformation. The
state will not rely on the direct instruments of government and state
institutions alone to bring about the transformation. There is agreement on this
and it is dealt with in various ways in recent documentation. Concerns are
expressed as to whether there has been such mass involvement since the election.
However, what is not so clearly dealt with is what this requires of the Alliance
partners in their own functioning. It is clear that the management of this
process is also causing problems.

18. The efficacy of these interventions will depend on whether they are
coherent and coordinated in their implementation. This requires that there is a
form of planning. The RDP, an agreed Alliance programme, is coherent within the
broad framework of its drafting. In fact, it is probably more coherent than it
is often given credit for. However, as policy is further developed it needs to
retain this coherence and an alignment to the RDP. This requires ongoing
planning and monitoring. This is necessary for another critical reason and that
is that policy will have to be adjusted in the light of practice, available
capacity, changing circumstances and indeed changing balance of forces This is a
complex process that requires careful management and we are clearly running into
problems. There are concerns that policy is being made and implemented by the
ministers alone.

19. In summary, therefore, the Alliance needs to be at one on the following
key issues:

    19.1. That the state will lead, define and transform the parameters within
    which market forces will work.

    19.2. The objective of the state's interventions will be to alter the lives
    of its constituency for the better. In doing this it is cognizant of the
    constraints and that there will be an accommodation with capital in this
    process. It is also accepted that progress is not linear and that retreats and
    accommodations will be made in order to maintain a strategic advance toward
    our stated objectives.

    19.3. The state that we seek to build is one that will empower in order to
    mobilise mass movements and organisations of civil society in the
    transformation process and that this requires new modes of operating from all
    the alliance partners.

    19.4. The state will utilise a range of interventions to achieve its
    objectives.

    19.5. That effective state intervention requires coherence and therefore, a
    form of planning to ensure this. It will also be necessary to monitor and
    adjust policies and programmes.

Alliance
Summit Reports from Commissions and way Forward

Industrial Strategy

1. Basis for Agreement

1.1. There is agreement on the need for an industrial strategy. A number of
problem areas are identified below. However, it is likely that the areas of
agreement will be further consolidated when we have more commonality on the
assessment of the current conjuncture and the role of the state in
socio-economic transformation. The instruments of industrial strategy that are
currently being used can be more effectively assessed in the light of the
tactical, strategic and theoretical issues that arise in the above debates.

1.2. We should accept that policy differences may exist in regard to specific
and general instruments and they must be identified.

1.3. The reason that there is agreement on the need for industrial strategy
is because of the agreement that if current market forces continued in an
unmodified way then the ability of the South African economy to both sustain, -
and more importantly - to expand sustainable economic activity will be seriously
threatened. The emphasis on an industrial strategy is not because other key
areas of the economy such as agriculture are being ignored but because the
transformation of natural resources requires industrial processes. Without an
industrial strategy our economy will revert to raw material production alone and
this will not be capable of generating development.

1.4. Accordingly it is industrial processes, including agro-industry, that
lie at the centre of rebuilding the economy as envisaged in RDP. This is
strengthened by agricultural strategies that facilitate food abundance and food
security. A new reality is the centrality of an information strategy.

1.5. It is also essential that human resource, labour market and
macroeconomic strategies are coordinated. There is a great deal of work being
done in all these areas and summaries are provided for key areas in the ANC
support documents. This is a matter for a great deal of further work in ensuring
common ground. It is essential that this is done because this is a critical
arena in which the Alliance will be able to effect transformation.

2. Problem Areas

2.1. Lack of an agreed strategy to channel/direct private sector investment
through:

    2.1.1. prescribed assets

    2.1.2. tax measures

    2.1.3. exchange control

    2.1.4. interest rate policy

    2.1.5. regulation of financial sector

    2.1.6. other

2.2. Lack of agreed public sector investment strategy

2.3. Disagreement on approach to Balance of Payments problems:

    2.3.1. whether there is an excessive focus on exports which ignores the
    need to increase production of domestic capital goods

    2.3.2. exchange rate policy

2.4. Disagreement on whether the emphasis on export orientation and
competitiveness underplays the need for:

    2.4.1. A major focus on the domestic market/Southern Africa (linked to
    policies of redistribution which raise the purchasing power in the region and
    the significance of this market).

    2.4.2. A deliberate programme of investment in production for this market,
    including the element of import substitution.

    2.4.3. an expansion of demand side measures.

    2.4.4. A tariff policy which protects South African industry where
    necessary.

2.5. Disagreement/unclarity on role of the state in the productive sector of
the economy

2.6. Trade Policy

    2.6.1. Disagreement on key objectives: 'competitiveness' or need to build
    domestic industry/capacity and job creation.

    2.6.2. Need agreement on an active/managed trade and tariff policy rather
    than 'cold wind of competition' In this regard we also need agreement on our
    approach to international trade agreements.

2.7. Need agreement on a Social Plan and approach to other supply side
measures (e.g. tax)

Rural Development
And Land Redistribution

1. Basis for Agreement

1.1. The legacy of poverty and inequality has been especially concentrated in
the rural areas of our country, in both the former bantustans, and
"white" rural areas.

1.2. Addressing this legacy must be on of the key priorities of the Alliance
in reconstructing our country.

1.3. The central question which needs to be addressed in looking at the
question of rural development is the viability of a large-scale programme of
land redistribution, along the lines of that implemented in a number of
developing countries. According to the RDP: "A national land reform
programme is the central and driving force of a programme of rural development
this programme must be demand-driven and must aim to supply residential and
productive land to the poorest section of the rural population and aspirant
farmers." (pp19-20)

1.4. Such a programme of land reform must be complemented by a range of other
measure which raise the incomes, and address the needs of the rural poor.
Special attention needs to be given to the plight of rural women. Programmes to
develop rural infrastructure, regional development initiatives incorporating
rural areas, rural small business and co-operatives, public works programmes,
and rural finance, are some of the issues which have been identified as
priorities.

2. Proposals of Summit

(Land and industrial policy)

2.1. The Summit proposed the convening of an Alliance workshop on Industrial
policy to take these issues forward.

2.2. There needs to be co-ordination of the Alliance approach to employment
creation. This discussion should be completed before the Jobs Summit.

2.3. The Alliance policy process needs to clarify our strategy in relation to
rural development and land reform.

2.4. The Alliance should seek to reach agreement on related issues before
going into Nedlac.



Labour Market

1. Basis for Agreement

1.1. The problems of the South African labour market are amongst others
unemployment, inequality & poverty.

1.2. The structural problems of the labour market, inherited from Apartheid
need to be addressed by a deliberate programme, driven by the state to:

    1.2.1. Reduce inequality in the labour market, and create employment at a
    living wage.

    1.2.2. Create a floor of rights for all workers, especially the vulnerable.

    1.2.3. Invest in large scale training and human resource development
    programmes, linked to restructuring of the labour market & hierarchies.

    1.2.4. Promote centralised bargaining as a mechanism to achieve these
    goals, combined with a legal framework of basic rights.

    1.2.5. Ensure active labour market measures (ensuring mobility of workers
    within the labour market) are complemented by a comprehensive social wage,
    given the large problem of unemployment.

    1.2.6. Embark on a deliberate programme of measures to ensure public sector
    and private sector employment creation.

    1.2.7. Introduce measures, such as a social plan, which are needed to deal
    with the consequences of industrial restructuring.

1.3. The above implies a large scale state driven programme of redistribution
aimed at addressing problems of inequality, unemployment and poverty in the
labour market.

2. Problem areas

2.1. Some in the Alliance believe that GEAR reflects a shift from the above
approach in that it:

    2.1.1. Sees a significant cause of the inability to create employment being
    'labour market inflexibility' despite evidence in the ILO study on the Labour
    Market that, if anything our labour market is 'too flexible'.

    2.1.2. Proposes a 'more flexible' Collective Bargaining system (although
    the RDP envisages greater Centralised Bargaining & the ILO report details
    considerable flexibility in the current system).

    2.1.3. It appears to promote a two tier labour market (it suggests separate
    wage schedules for youth). This is similar to the proposal in business'
    "Growth for All".

    2.1.4. Sees the concept of wage moderation and productivity-linked wage
    increases as a key element in generating growth and employment - despite
    Reserve Bank figures which show that wage moderation and productivity growth
    have not had this effect.

    2.1.5. There is a view that GEAR does not envisage income redistribution to
    the low paid, or to workers in general.

    2.1.6. There is also the view that these approaches will have the effect of
    entrenching existing inequalities of the apartheid labour market.

3. The Alliance needs to agree on an approach to transforming the labour
market, including:

3.1. Specific measures to close the income/wage gap between those at the top
and bottom.

3.2. Comprehensive social wage measures and particularly unemployment
insurance for those not absorbed in the labour market.

3.3. An employment strategy (in both the public and private sectors) to
arrest retrenchments and to reduce the unemployment rate.

3.4. Agreement on financing of training.

3.5. An approach to the role of centralised bargaining and labour legislation
in regulating the labour market.

3.6. An approach to productivity.

3.7. Deal with elements of (privatised) non-wage costs which raises the cost
of employment (including medical-aid and retirement ).

3.8. An approach to the Jobs Summit.

4. Recommendations of Summit

4.1. The problem areas identified above should be reviewed in the light of
the Summit's understanding that GEAR is negotiable.

4.2. The report on the labour market, emerging out of the Labour Market
Commission, should be discussed by the Alliance before being finalised by
government.

4.3. The idea of a comprehensive unemployment insurance needs to be
clarified.

4.4. This Summit framework document should be used as a basis for discussion.
An Alliance Working Group needs to be set up to look both at the labour market
and social wage issues identified in the Summit.



Social Wage/Social
Needs/Social Security

1. Basis for Agreement

1.1. The RDP, the constitution and the White Paper on Social Welfare commit
the democratic government to providing a comprehensive social security system of
some sort, affordable housing, transport, health, land and access to retirement
benefits - all of which together constitute a basic 'social wage' package - an
economic floor below which no one should sink.

1.2. The social wage comprises of direct income transfers (such as social
security benefits, retirement) and social subsidisation of the costs of basic
needs (such as housing, health and transport).

1.3. Alliance partners have put forward proposals on a number of these areas
(social security system, retirement fund, public housing, public transport and
the national health system). The RDP and the COSATU discussion paper see these
benefits as not only addressing poverty, but having a developmental and economic
logic.

1.4. The issue which requires close scrutiny is the form, organisation,
delivery mechanisms and financing of these elements of a social wage, as well as
the level (amount) and the coverage (means-tested or otherwise) of the
population. Another issue which needs to be addressed is the balance between the
direct revving of employers and workers, eg. for health care and social
insurance, and the payment of the social wage from the fiscus.

2. Problem areas

2.1. A number of problems have been raised with the current approach:

    2.1.1. Lack of a clear government process or coherent vision to set up a
    comprehensive social wage and social security net, although elements of such a
    vision exist, such as proposals for a National Health System.

    2.1.2. One view is that the tight fiscal targets of GEAR have negative
    implications for expanding the social wage, while others argue that
    reprioritisation of expenditure allows for development of the social wage.

    2.1.3. It is unclear whether there is actually agreement to establish a
    comprehensive social wage, or whether we are simply aiming at equalising the
    fragmented and ad-hoc system inherited from apartheid. Strategy for a
    comprehensive social security system has been largely absent form government
    policy documents. If we regard the development of a social wage package as
    unrealistic or unviable, this needs to be explicit.

    2.1.4. It is argued that there is a trend of moving to privatise or
    commercialise (subordinate to profit) provision of basic needs, in areas such
    as transport.

    2.1.5. COSATU has argued against what it sees as a concentration on market
    driven programmes of delivery ito infrastructure and housing. In its view this
    both makes housing unaffordable and inaccessible to the majority of workers
    and the poor, vulnerable to "downward raiding", and entrenches
    apartheid geography.

3. Summit Recommendations

3.1. The Alliance should agree on what constitutes minimum standards in terms
of the social wage.

3.2. The Alliance needs to discuss its approach to a comprehensive social
wage. This discussion needs to get detailed inputs from relevant Ministries, and
look at the vision contained in the RDP.

3.3. On food security, the Alliance needs to look at the question of
redistributing government land (it was said government owns 65%+ of the land)

3.4. Concern was expressed that the DoF is opposing the NHI proposal on the
basis that it will increase tax. It was recommended that the Alliance needed to
discuss how to take the NHI forward, and to mobilise to this end.

3.5. A HIV summit needs to be convened at a high level.

3.6. It needs to be established what has happened to the poverty relief
allocation of R400 million.

3.7. The Alliance working group on the social wage and labour market needs to
look at what is achievable in terms of a comprehensive social wage over the
short to medium term



Public Sector Transformation

1. Basis for Agreement

1.1. We need to transform the public sector from being an agent of repression
and minority privilege to an institution which is geared towards delivering
basic services to all South Africans. As such it needs to be both representative
and reoriented towards delivery.

1.2. This definition extends in the RDP and the Constitution beyond the
public service narrowly defined, to all organs of state, or the "public
sector", including parastatals, public service at national and provincial
levels, local government, and semi-statutory bodies.

1.3. This transformation exercise involves:

    1.3.1. Rationalisation of duplicated apartheid institutions

    1.3.2. Restructuring of the public sector to reorientate and expand
    resources to service delivery, away from bureaucracy- which involves a major
    reallocation and reprioritisation exercise.

    1.3.4. The introduction of new cultures, structures and management
    practices- aimed at achieving accountability, efficiency, accessibility.

1.4. Broad agreement has emerged - although with some differences- on
important elements of a strategy for transformation: HRD, service delivery, and
employment equity for the public service, as contained in the current green and
white papers. However there are significant differences on aspects of these, as
well as other elements of transformation.

2. Problem areas

2.1. Lack of agreed alliance strategy to guide restructuring process.

2.2. There is still no clear audit of the public sector, and, linked to this,
a plan to restructure.

2.3. Restructuring has been equated with 'downsizing'. This has been
intensified by the programme of fiscal cut-backs, and the ideology of 'lean
state'.

2.4. It is believed that, in the absence of a clear strategy, mechanical
exercises are being embarked on which damage the transformation process - eg
attrition and voluntary severance.

2.5. Despite the National Framework Agreement, restructuring of state assets
still tend to be privatisation-driven.

2.6. There is lack of agreement on the role of the private sector in delivery
(vs the role of the public sector). There is also no agreed approach to Public
Private Partnerships (PPPS).

2.7. Increasing outsourcing, cut-backs, and involvement of the private sector
in driving state institutions, all lead to a concern about the danger of running
down, rather than transforming the state.

2.8. Agreement is needed on the areas where expansion in service delivery is
required, and an approach to resourcing this.

2.9. Agreement is needed on an approach to public sector pension funds,
including the question of moving towards a pay-as-you-go system, to release
state resources.

2.10. Agreement is needed on a medium-term strategy to implement the
commitment to restructuring the hierarchies in the civil service, training and
closing the wage gap. (Apparent agreement has given way to deadlock with the
collapse of the 3 year agreement in the public sector).

3. Proposed way forward

3.1. An agreed Alliance approach on these issues should lay the basis for a
National Framework Agreement between labour and government on transformation of
the public sector.

3.2. This is an issue which requires urgent and immediate political attention
by the Alliance.

3.2. The Alliance needs to make a political input into various processes
around restructuring of the public sector, including the Presidential Review
Commission.

3.3. We need to agree on the issue of appropriate staffing levels in
different areas of the public sector.

3.4. The alliance needs to extend its engagement on public sector
restructuring to the question of local government

3.5. The Summit proposed the setting up of an Alliance working group, headed
by Cde Thabo Mbeki, to look at the issues raised in the document relating to
transformation of the public sector.



Fiscal And Monetary Policy

1. Basis for Agreement

1.1. We need a developmental and sustainable fiscal and monetary policy (and
more broadly, a macroeconomic framework), which actively advances the agenda of
the RDP, and is sustainable over the medium to long-term.

1.2. The ANC has set out the origins of macro-economic policy and areas that
still need to be addressed in one of the source documents available to the
Summit. Fiscal and monetary policy are crucial components of a coherent
macroeconomic policy. This was briefly dealt with in section 6.5 of the RDP. In
the area of macro-policy there is a clear basis for agreement along the
following lines :

1.3. The RDP remains the basic document of government economic policy.
Aspects of it have been further elaborated in White Papers and other policy
documents. In essence it argues for the integration of five basic policy
programmes: meeting basic needs, developing our human resources, rebuilding and
restructuring the economy, building democracy and increasing participation and
maintaining macroeconomic balance. The RDP is also dealt with in the ANC
Conference preparation documents where it's essential strengths are highlighted.

1.4. The GEAR does not replace the RDP. It cannot in fact do this because it
only deals with one of the five programmes ie the issues around macroeconomic
balance. Macro-economic balance sets an objective of stability in key
macro-economic variables such as inflation, the balance of payments, government
expenditure, savings, investment, interest rates and employment. These variables
interact with each other and can do so in different ways. The basic argument is
that a balanced strategy will facilitate the objectives of growth and
development. The fundamental objective is to provide employment and a rising
standard of living to the overwhelming majority of our people.

1.5. Macroeconomic balance is in effect an overall balance of policy
measures. More importantly, the macro package has to be built on other policy
programmes. An assessment of macro policy has to consider this link between
macro and other sectoral and micro policy. A characteristic of a neo-liberal
package would be a reliance on macro measures without supporting sectoral, micro
or other institutional reforms. Accordingly it is essential to examine the
context within which policy is being applied and whether fiscal/monetary policy
and the GEAR remain consistent with the RDP.

1.6. It is also important to note to avoid unnecessary discussion that the
"social wage" dimension of policy are mentioned but not dealt with in
detail in GEAR.

1.7. These matters are dealt with elsewhere in the working documents for this
Summit.

1.8. The Gear focuses heavily on fiscal policy because it relates very
directly to the mobilisation of financial resources and Government's own
performance is most directly judged on its fiscal performance. Monetary policy
was not addressed as fully. However, it is clear that very detailed discussions
will be needed to fully come to grips with the level of policy detail now being
examined in the Alliance debate. Extracting from the various inputs, a listing
of some of the main areas of concern is provided.

2. Problem Areas

2.1. There is no agreement on implications and objectives of current fiscal
and monetary policy, and macro-economic framework.

2.2. The setting of deficit targets in GEAR is seen by some to arbitrarily
dictate a contractionary fiscal policy, and have major ramifications for
society, including cutbacks in social spending, and stifling of economic
expansion.

2.3. Contractionary fiscal and monetary policy is believed to undermine an
activist role for the state in the economy.

2.4. Some believe viable alternatives to deal with macro-economic constraints
have not been seriously considered, including alternatives for debt management,
programme to bring down interest rates, pay-as-you-go for public sector
pensions, and reduction of dependence on imports.

2.5. Contractionary monetary policy is believed to stifle growth. Especially
by using high interest rates as a blunt instrument to control inflation, and
lack of alignment of the Reserve Bank with a developmental strategy.

2.6. Some believe this monetary policy and liberalisation of exchange
controls intensifies the cycle of financial speculation, volatile capital flows,
and lack of productive investment.

2.7. Contractionary fiscal and monetary policy are believed to undermine
employment creation.

3. Proposals

3.1. Where Fiscal and Monetary policy undermines the RDP, it needs to be
reviewed.

3.2. The Alliance needs to look at ways of restructuring the Reserve Bank and
realigning monetary policy

3.3. The Alliance needs to look at alternative approaches to the budget, the
budget deficit, and the approach adopted in GEAR.

3.4. The Alliance must investigate implementation of a Pay as You Go system
for the public pension fund, as a way of drastically reducing the public debt.

3.5. The Economic Transformation Committee needs to be broadened out to
include the Alliance, to look into these questions.



Employment Strategy

1. Basis for agreement

1.1. The creation of sustainable employment, the protection of existing
employment, and the reduction of unemployment levels, is not the task of one
area of government policy, or the function of one department, but needs a
comprehensive approach which synchronises all elements of policy into a
coordinated strategy (particularly industrial, trade and investment policies,
public sector and public works, fiscal and monetary, and labour market
policies). The employment strategy needs the commitment of all the major
stakeholders in society.

1.2. The strategy needs to be consciously seen as part of a programme to
address the legacy of poverty and inequality, and therefore implies the creation
of particular types of employment. An employment creation strategy which focuses
mainly on creating low-wage employment, and reducing or freezing wages of the
low-paid does not address the problems of poverty and inequality. This would
rather be a strategy for redistributing poverty.

1.3. The unemployment problem in South Africa is structural. Therefore, an
effective employment strategy has to involve restructuring of production and the
economy, led by the state. A market-driven, private sector-led strategy will
continue to entrench inequalities, and substitute labour with capital. If
structural problems in the economy are not addressed, drives for greater
productivity will not in itself resolve the problem, but can continue to worsen
unemployment.

1.4. A planned, coordinated investment and industrialisation strategy, led by
the state, is critical. There needs to be an active strategy of targeting and
promoting sectors and areas of economic activity which have most potential for
creation of sustainable employment.

1.5. Employment strategies need to be aimed at expanding the formal sector of
the economy, rather than contracting it, or expanding informal and unregulated
economic activity. Also, the use of temporary, part-time, or casual workers, is
associated with the reduction of the quality of employment, and the number of
full-time workers, and should be discouraged. We do not agree with the TINA
argument that job-less growth and reduction in formal employment is an
inevitable feature of the current global situation, which has to be accepted.

1.6. An active employment strategy should also be seen as part of an economic
strategy to stimulate domestic demand. As more workers are brought into the
economy as producers and consumers, this in turn stimulates further employment.

1.7. A long-term employment strategy needs to benchmark its targets against
the reduction of levels of unemployment and underemployment. Even apparently
large-scale creation of jobs (as in Gear) is consistent with rising or static
levels of unemployment (given new entrants onto the labour market). Further,
social agreement is needed on maintaining existing employment, and investment in
new employment as a social priority. There needs to be a national climate in
which agreement is reached on a programme for retention of existing jobs, and
creation of new employment. This needs to be agreed at national, sectoral and
workplace levels. Where there is a crisis in an industry, a Social Plan needs to
be put in place to deal with the downscaling process.

1.8. In addition to promotion of employment in the private sector, there
needs to be agreement on an employment strategy for the state sector, the social
sector, and small enterprises. This should include:

    1.8.1. Plans for mass delivery of public infrastructure; public works;
    labour intensive construction; procurement strategies; an agreed approach to
    PPPs; and expansion of the public sector in areas of service delivery.

    1.8.2. The development of a coordinated employment strategy involving all
    government departments and state agencies

    1.8.3. Parastatal employment plans, which link employment expansion to
    roll-out of services

    1.8.4. Fiscal and monetary policies aimed at encouraging productive and
    employment-creating investment, and penalising speculative or employment
    shedding investment

    1.8.5. Investigation of the viability of promoting the social sector,
    including a co-operative sector, and other elements of worker and
    community-owned enterprises

    1.8.6. Land redistribution and promotion of small-scale farming

2. Problem Areas

2.1. Lack of agreement as to what constitutes the major impediments to
employment creation, and the reduction of unemployment.

2.2. There is a view that current policies - including macro-economic
policies, industry trade and tariff policies, investment policies, public sector
restructuring, and privatisation - are not acting to create employment; are
stifling economic activity; rendering our industries vulnerable to job-loss and
inhibiting productive investment. Further, that the drive in some quarters to
deregulate the labour market threatens to undermine the quality of existing
jobs.

2.3. There is also a view that over-reliance on private sector driven growth
and investment, without the introduction of measures to lead economic activity,
and to channel and discipline capital, are failing to counteract, or leading to
entrenchment of patterns of financial speculation and job-less growth. There is
a need for agreement on measures to regulate the private sector, aimed at
employment creation.

2.4. There needs to be agreement on what programmes and strategies the state
can use in its infrastructure programmes, housing, procurement, public works,
taxation, etc; to use its economic leverage and regulatory powers to ensure
employment creation.

2.5. In particular there needs to be a review of our approach to the
following areas, around which there is disagreement, or different perspectives:

    2.5.1.T Tariffs and trade negotiations

    2.5.2. Export orientation vs. development of domestic market

    2.5.3. Role of SMME's

    2.5.4. Role of state in employment creation

    2.5.5. The impact of labour market policies

3. Summit recommendations

3.1. The alliance must develop a coordinated employment strategy which aligns
all aspects of government policy, and around which the alliance forges a common
approach - in advance of the proposed Presidential Jobs Summit.

3.2. With regard to employment strategy the commission held that there was a
need for a broad inter-departmental approach to eliminating unemployment and
poverty.

3.3. In addition to the issues flagged in the framework document on
employment creation (outlined above), the Alliance needs to address the
following:

    3.3.1. The problem of new technology and displacement of workers : how to
    combine employment creation with advancement of our technological base

    3.3.2. Investment strategy and use of prescribed assets on pension and
    provident funds, including an RDP bond, as a means to direct investment into
    employment creation

    3.3.3. Employment strategy in relation to restructuring of the public
    sector, and the impact of privatisation.

    3.3.4. Alliance should resist the approach of employment at all costs, and
    state incentives to sweatshop factories, e.g. Botshabelo should be reviewed.

    3.3.5. Alliance needs to develop position on question of the push in some
    quarters to outsource & contract out state functions, and the impact of
    this on employment.



The Functioning of the Alliance

1. Brief Assessment of Alliance since April 1994

1.1. While in the public media a great deal of attention is continuously
given to predicting an imminent "break in the alliance", from within
the alliance, this is not a dominant concern. What is central is the question:
"How do we make the alliance work better?" The question marks a
general appreciation that, notwithstanding the general commitment to our
alliance, it is an alliance that has not functioned nearly as effectively as it
should have. To assess this functioning and to seek improvement it is useful to
consider a number of areas:

1.1.1. Policy-formulation - the alliance was central to the drafting and
popularisation of the RDP in 1993/4; since April 1994 there has been intense
interaction within the alliance on some issues of policy-making (restructuring
state assets, new Constitution). In other cases, especially when the matter is
of direct sectoral concern to, for instance, COSATU, there is intense engagement
with ANC ministers in government but less effective alliance management of the
process in general.

In the course of 1997, the ANC has sought to rebuild its own policy-making
capacity, and in the process the SACP and COSATU have been increasingly involved
in policy conferences and seminars. Question: how successful are these
initiatives? ; how can we improve upon them?

On many other issues there has been less effective alliance work on
policy-formation - reflecting in part the complexity and vast scope of
policy-making in the new circumstances, and the disproportionality between
government capacities (and pressures upon it), and the capacities of our three
allied formations.

    1.1.2. Organisational co-operation - There are a number of sectoral areas
    in which there has been substantial cooperation between two or all of the
    alliance partners. These include:

      (a) co-operation between organising departments of SACP and ANC.

      (b) co-operation between SACP and ANC on political education, and between
      SACP and COSATU affiliates.

      (c) close strategic co-operation between SACP and ANC in the
      financial/fundraising area.

      (d) tripartite co-operation in media production and through the alliance
      project - the Centre for Democratic Communication.

      (e) co-operation in the field of the Internet.

      (f) some co-operation around international solidarity work - jointly
      hosting solidarity groups etc.

    1.1.3. Elections - the alliance has fought the various rounds of elections
    together. Presumably this has, in general, unified and broadened the ANC
    electoral effort, at least within our own core constituency. We need, however,
    also to assess how effectively the alliance has worked in these electoral
    campaigns and what needs to improved.

    1.1.4. Overall co-ordination

      (a) The national secretariats have met on a fairly regular basis (in
      theory fortnightly) throughout the last three and a quarter years. However,
      these meetings often lack a capacity to carry through decisions, reflecting
      organisational weaknesses within the respective formations. The meetings are
      often focused on immediate interventions, and on crisis management.

      (b) National officials. In the last months of 1996, and through 1997
      there have been relatively frequent alliance bi- and tri-laterals between
      officials of the respective formations. It is generally agreed that such
      meetings need to be more regular, in part to buttress the coordination at
      the secretariat level, and in part to raise the alliance debate to a more
      political and strategic level.

      (c) Joint executives - over the past three years there have been five
      meetings of delegations from the three executives. (This is the sixth). It
      has been resolved that these need to be more frequent - around 3 per year.
      The lesson derived from the April 1997 executive summit is, however, that it
      is imperative that such meetings be well prepared with a clear set of
      objectives and effective documentation - otherwise they can set us back,
      rather than take us forward.

1. 5. Alliance co-ordination at provincial, regional and local levels.

All of the above occur at a national level. At other levels the picture is
even more uneven. In some provinces there is regular and effective contact
between the alliance partners, but this is often the exception rather than the
rule.

2. Areas of complication within Tripartite Alliance.

2.1. Managing differences. In the ANC's 1997 January 8 statement it is said:
"We need from our allies unity in action, but a real unity based on our
different formations acting independently and robustly defending their
principles, their constituencies and their perspectives."

2.2. This clearly states the fundamental basis of any meaningful alliance.
There would be little point for an alliance if the respective formations were
mere echoes of each other, or if they agreed absolutely on everything.

2.3. However, when differences do emerge, it is not always easy to deal with
them effectively and constructively. Finding the right balance between unity in
action and robust independence can be complicated. In our situation, much of the
media and other unfriendly forces are on the constant look-out for signs of
"tension within the alliance". These forces are happy to muddy the
waters.

2.4. We have, as an alliance, learnt a number of lessons these past few
years:

    2.4.1. Constant communication at all levels is crucial, particularly when
    one or another alliance partner is about to issue a critical statement, for
    instance;

    2.4.2. Respect for the constructive raising of concerns is essential. If
    our various formations do not raise certain critical concerns that are in the
    public domain, other more hostile forces - ultra-left, or demagogic forces -
    will. however, we all need to be constructive. We need to guard against cheap,
    public point-scoring.

2.5. The opportunistic use of alliance structures.

    2.5.1. One of the major sources of irritation, particularly at a
    grass-roots level, within the alliance has been a tendency for elements (who
    have, for instance, failed to be elected on to the ANC branch executive) to
    use an SACP (or SANCO) branch to launch a rival claim. This kind of activity
    is often closely bound up with inter-personal rivalries and election-list
    processes.

    2.5.2. There is no simple solution to the problem, but it calls for
    maturity and decisiveness from local and provincial leaderships, and also a
    clear division of labour and strategic purpose of our respective
    organisations. (An SACP branch is not an alternative to an ANC branch, but a
    local-level organisation of socialists within the context of a broader ANC-led
    alliance).

    2.5.3. The SACP and COSATU have incidentally, systematically disowned those
    who have sought to be elected into local governments for instance on an
    "SACP ticket".

3. The lack of a clear alliance programme of action.

3.1. The most serious obstacle to the effective functioning of our alliance
has, however, been the absence of a common Programme of Action around which we
can:

    3.1.2. Unite our efforts strategically;

    3.1.3. Build our respective organisational structures

    3.1.4. Re-build a broader mass democratic movement; and

    3.1.5. Mobilise popular forces.

3.2. It is this lack of a clear alliance Programme of Action that has
exacerbated all of the other problems noted above. And it is a lack that
deprives our co-ordination work of any strategic purpose,' or measuring stick.
This summit must help us to develop such a Programme of Action.



A Programme for the Alliance

1. Basis for Agreement

1.1. There are two major components which need to be present if the Alliance
is to effectively drive the process of transformation:

    1.1.1. An agreed alliance platform on key strategic policy areas for
    transformation

    1.1.2. A mass-driven programme to ensure that the popular forces, together
    with the democratic state, are able to drive forward this alliance platform in
    the face of resistance from forces attempting to block transformation

1.2. The RDP remains the perspective of the Alliance, and needs to be
asserted as the basis for our programmes of transformation.

1.3. We need, in the concrete conditions facing our new government, to
develop an agreed programme to implement the RDP, and to identify which are the
key areas which the Alliance wants to focus on to tilt the balance of forces,
and qualitatively advance the transformation agenda.

1.4. The COSATU Discussion Paper has proposed that the Alliance reach an
agreement on an approach to implementation of transformation, and identifies
core strategic areas where such an agreement could be reached. The Alliance
needs to decide whether it wants to pursue this approach. It also needs to
decide whether this would form the basis of the platform for the 1999 elections.

1.5. Our constituencies have largely tended to be spectators in the
transformation process. The Alliance needs to galvanise a mass movement for
transformation, which unleashes the energies of our people in taking forward
programmes which concretely improve their lives. Such a movement needs to be
driven by the Alliance, but needs to go beyond the Alliance by incorporating all
key sectors and strata of the popular forces. Such a movement would need to
openly mobilise and defend government programmes aimed at transformation, which
are being resisted by conservative forces. Creative campaigns at national and
local level are also needed to capture the imagination of our people, and
involve them in implementing practical projects, such as national literacy,
health, housing, public sector transformation and other programmes. Proposals
have also been made for the donation of working time to reconstruction projects,
and financing mechanisms which could leverage the economic muscle of our people.

1.6. The Alliance needs to set up the appropriate structures, including at
the highest level, to plan, monitor, and implement this two-pronged programme
for transformation. Experience has shown that existing Alliance structures are
not able to perform these functions. To align the Alliance and government
programmes will also require close structural co-ordination. Serious
consideration should be given to the Norwegian model, which involves weekly
planning meetings including the Prime Minster, Party leader and trade union
leadership to ensure effective coordination.

2. Recommendations

2.1. Tight co-ordination in the alliance needs to also include a regular
co-ordination mechanism with government ministers, which would deal with
strategic issues.

2.2. The possibility should be explored of including the alliance leadership
in monthly cabinet caucuses.

2.3. The proposal for an alliance platform needs to be explored by the
alliance leadership, and processes set in motion to address this, if it is
decided to endorse this approach. The discussions in forthcoming congresses and
conferences should lay the basis for this.

2.4. Alliance policy discussions need to focus on strategic issues.

2.5. Mass movement for transformation needs to be developed to drive forward
the programmes of transformation.

2.6. There is need to develop greater cohesion in the alliance on a shared
theoretical perspective.

2.7. The alliance needs to begin tapping more effectively on progressive
intellectuals, look at the possibility of setting up a think tank, and ensure
greater synergy between the research and policy work of the alliance and
government.

2.8. Legislation providing for the investment of a prescribed percentage of
funds into social investment projects.