Date: 12/04/2011
Source: The Congress of South African Trade Unions
Title: Cosatu: Vavi: Input by the general secretary, to the Madrid Dialogue on green economy and decent jobs

Our challenge today is the massive concentration of wealth in the hands of a few people, accompanied by the rapid degradation of the natural environment. A study by the World Institute for Development Economics has found that 1% of the richest adult population owns 40% of the world’s wealth.

The 2008 study notes that “roughly 30 per cent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world’s top 1 per cent of wealth holders”. In addition, the study projects that if the patterns of accumulation continue, “the lower deciles will be increasingly dominated by countries in Africa, Latin American and poor parts of the Asian-Pacific region”.

Now we all must find consensus around the need for a new global development trajectory. Most of the world’s poor live in economies that operate within the framework that was historically constructed by colonialism. What colonialism has done, and the current global patterns of accumulation continue to reproduce, is the global division labour that has made many smaller economies vulnerable to global and climate shocks. For these economies to emerge out of these vulnerabilities, they have to industrialize.

The largest rain forests, which are crucial climatic stabilizers, are located in some of the world’s poorest countries. The tropical rainforests of Brazil are 90-95% less than what they should be. The UN Food and Agriculture Organization says 8.5 million hectares of rainforests are pulled down every year. Countries such as India, Mexico, Philippines, Bangladesh, the Congo and Ghana have lost more than 50% of their rainforest cover while Nigeria is said to have permanently lost 80% of its forests. Even despite this, the forests in these countries continue to play a crucial role in stabilizing global climatic conditions.

Not only this, some of the most strategic minerals that continue to be essential to the current, global accumulation of capital are found in the world’s poorest regions. Yet, the extraction of these minerals has not been sustainable. It has not been sustainable in two ways. Firstly, the benefits to the local populations have been extremely limited and these benefits have been in the main accumulated by multinationals and the local elites. Secondly, beyond the extractive and environmentally harmful economies, global trade rules, especially those imposed by the WTO and its sister organizations, and imposed policies, continue to limit space for these countries to break out of mineral dependence.

In the light of the above, the challenge faced by the developing world, and indeed the global community, is to ensure that countries in which the vast majority of the poor live have a strategic role to play in the new development paradigm. If we agree that the old pattern of capital accumulation, which paid little attention to the environment, social inclusion and equitable wealth distribution across and within the world’s population, has failed the sustainability test, then we should also agree that we need to develop new poles of wealth creation.

For starters I venture to submit that green industrialisation should be led by countries that have been disadvantaged by the old industrialisation paradigm. If we talk about social inclusion in a genuine sense, I submit that we have to allow ample scope for those countries that have not industrialised to industrialise. If Green technologies and skills have to be developed, the new poles of accumulation need to be countries that have faced difficulties in industrializing, especially those that house the crucial rainforests.

It cannot be that our global well-being is to a large extent dependent on rainforests in Central America, Africa and Asia, yet the very same countries are home to the poorest people in the world. If we effect this new division of labour, and ensure that the people in these countries own and control their industries, we will go a long way to ensure an equitable global development path that is also environmentally sustainable.

UNCTAD has noted in its 2010 report that 60% of global energy industrial use is accounted for by four sectors: petro-chemicals (26%), iron and steel (19%), non-metallic minerals especially cement (9%), and pulp and paper (6%). In my own country, 70% of our exports are made up of petro-chemicals, basic iron and minerals. We also have a vibrant forestry sector, which consumes a lot of water. These industries are clearly problematic from the standpoint of climate change, yet they are essential for our survival at least in the short to medium term. We want to industrialize and move toward low-carbon sectors, but the trade rules have closed the space to do so.

We do not want to hold a gun to the head of the world’s population. Left with no other path towards industrialisation, some of us in the developing world will accelerate our industrialisation by extracting our raw minerals, process them, and sell them to the global economy in order to raise sufficient foreign exchange to finance our long-term development strategies. Some of us will accelerate the pace of pulling down rainforests in order to sell timber for foreign exchange so that we can industrialise to an acceptable level. We need not follow this route if the patterns of global division of labour are properly laid out to guarantee global equitable development.

Let me close my input by stating that in our view, it will not be proper set punitive standards for carbon content whilst the requisite capital equipment to produce low-carbon commodities is still owned by the rich nations. We will not accept unequal distribution under green industrialisation. Therefore, when we say we need to seriously confront the need to create genuinely new poles of green wealth creation on a global scale, we mean that we will not support any form of capital accumulation that breeds inequalities—even if these forms of capital accumulation are green.

In this social protection is particular very important for countries of the South and Africa in particular. Social cohesion is as important as the challenge of broader economic development. Many countries in the South can simply not afford providing social security to their people and regrettably many countries in the developed nations are embarking on so-called fiscal consolidation measurers that will leave more workers more vulnerable. Yet we all know that increased human capital support economic growth and limit the risk if excessive income inequality whilst ensuring redistribution of wealth.

Our objective of decent work can only be realized through effective provision of quality education, healthcare and social security protection. Social security system therefore can reduce the poor pressure on natural resources. We need proper legislative framework to provide a social protection floor as a first step towards a more comprehensive social security system that will address vulnerability of the poor.

Caring state genuinely concerned about growing inequalities between and within states must promote these protection measures for their people. A recent study of the ILO shows that a mere 0.5% of the GDP can put in place important elements of the social protection floor. This 0.5% can progressively be moved to 5% of the GDP to provide a more comprehensive social security system. To me it seems failure to this will be not just be a dereliction of political responsibility but a crime that risks more uprisings as we have seen in the Northern parts of Africa recently.

Thank you