Date: 12/09/2009
Source: COSATU
Title: COSATU: Ntshalintshali: Speech by the Deputy General Secretary to the Annual Summit Meeting of the National Economic Development and Labour Council, Johannesburg

The world economic crisis and its impact on growth and development.
This Nedlac summit comes at a time when the world faces multiple crises. It is an extraordinary and perhaps unprecedented period. Never before in recorded history has there been such a convergence of crises and forces that threatened our future.

The financial crisis has triggered a global economic crisis, with spiralling unemployment and poverty. This, in turn is occurring in the midst of global climate change - the global warming crisis - that is heating the planet with unimaginable consequences. At the same time, the convergence of these crises is further compounded by the prospect of a worldwide food crisis and mass hunger and starvation. For us, in addition, is the energy or electricity crisis.

All these crises have their origins in a socially unjust and environmentally unsustainable model which endangers the capacity of our society to provide decent lives to the world's people.

This model has translated wealth creation into environmental degradation and concentration of income into the hands of a few. It has prompted a system where citizens have been turned into unsustainable consumers, and where unsustainable production models are taken as necessary "collateral damages" for achieving growth and development.

In many ways, the driving forces behind these convergent multiple crises can be traced not only to the global economy and prevailing system of industrial capitalism, but also to its governing institutions and their neo-liberal model of economic globalisation.

These institutions and a few powerful industrial countries have managed and governed the global economy primary in the interest of economically powerful. Their agenda of maximising profits through uneven and unlimited economic growth has benefited the multinational corporations at the enormous expense of both the people and environment.

Eminent persons including Professor Stiglitz have noted that the current financial and economic crises, which are now commonly compared to the great depression, are however in many ways more complex. They point to the fact that decoupling theory was proving itself to be a myth, as different markets worldwide were being affected.

The economic crisis is neither a natural catastrophe nor a problem created by the rotten United States housing market. The crisis is a necessary effect of 30 years of neoliberal policies. It is a result of internal contradictions in the existing economic values. The deregulation of the economy, privatisation of public services, the redistribution of wealth from the bottom to the top and financialisation of the economy have all contributed to creating the current crisis.

The neo-liberal credo told us that deregulation and privatisation would vitalise the economy and make it more efficient. It would regain growth and create increased prosperity and welfare for all. This now has been exposed as an ideological smokescreen covering the interest of the rich and wealthy. Neo-liberalism has therefore been completely discredited. Any measures to correct the crisis must therefore not only address the symptoms but its root causes. What we need is a widespread re-regulation and democratisation of the economy.

This leads me to the question of food crisis. We all know that food security exists when all people at all times have physical or economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and health life. To achieve food security, all four of its components must be adequate. These are availability, stability, accessibility and utilisation. In our case our primary challenge lies on the accessibility or affordability among others affected by the high prices created by collusive behaviour by some in the food chain which the Competition Commission is probing.

At the heels of this, is the energy crisis, put simply the electricity or ESKOM crisis with which we are grappling to find a lasting solution. We know the origin of the problem and what is required. However we disagree with ESKOM's approach, especially on the tariff increases and its burden to the working class and the poor. Where on earth have you seen tariff increases of such magnitude at such a short intervals? Very soon access to electricity will be a thing of the past to the overwhelming majority.

Economic, food and electricity crises converge with the climate change crisis. South Africa, like the rest of the world, is vulnerable to the impacts of climate change. At the same time South Africa emits high quantities of greenhouse gasses. In fact we are rated the highest in Africa and 12th at the global level. This means are both a victim and polluter. This climate change crisis poses a notable threat to our country's ideal for sustainable development growth path and poverty alleviation efforts.

In all the above-mentioned cases of crisis, the root causes are the same - lack of commitment to regulation, a push towards free-market economics and an international system that has underperformed, sometimes very badly, in exercising governance of globalisation. All these crises punish the worse-off and most vulnerable, those that did nothing or very little to cause the problem.

You may be wondering why I am raising these issues that almost all of us know about and agree on, as the information is based on evidence. It is because we all know that