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This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

03 Oct 1996: Cronin, Jeremy

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POM. Jeremy, from an SACP point of view what is your analysis on how well the government is doing in addressing social and economic inequalities?

JC. We're about to go into a Central Committee meeting this weekend and I've prepared a fairly substantial document as the secretariat of the party looking a precisely nearly 2½ years now of ANC-led governance.

POM. This won't be published until the year 2000 so it will be old hat by the time it comes out.

JC. I think it's a mixed picture but a complicated picture and I can talk for half an hour. Maybe you should give me a sense of the architecture.

POM. A sense of the architecture is that it would seem to me ...

JC. No I'm sorry, what I'm asking is of the session. We've got an hour so if you give me a sense of the kinds of questions you're going to ask and therefore time allocations.

POM. It is going to be about the government's macro-economic programme and the implications of that, the seeming move towards increasing privatisation, the failure despite following the rules and regulations of the IMF and the World Bank to attract foreign capital in any substantial way, the failure in any substantial way or maybe in any way whatsoever to address the unemployment problem and the failure to again address in any substantial way the housing problem, the emergence of a new black elite which seems, at least to the people I talk with in the townships, increasingly cut off from their grassroots and there is resentment that I find among members of the ANC of the fact that no parliamentarians, no ministers ever show up in the townships unless they are accompanying Mandela and that's maybe once a year or whatever, but that there's no visible presence of their being there with the people.

JC. It's that package of things basically.

POM. And that in the context of your own document, the globalisation of capital, the emphasis on the economy becoming competitive, the liberalisation of trade which is almost the death of such industries such as the textile industry for example, the uneasy position, as it appears again to me, of COSATU reflected maybe in the fact that NUMSA are going to have a meeting to reassess its relationship with the alliance now that the liberation phase or the first stage of the liberation phase is over. What is their role in the second phase? And whites, you have this anomaly in a way at one level of major issues like the constitution was passed democratically, it went to the courts, the courts proved its independence in sending it back, the IFP have come back into the Constituent Assembly, violence in KwaZulu/Natal is down, the second round of elections for local government are over and took place especially in KwaZulu/Natal peacefully, all good indicators of a stable democratic order emerging and yet white fears seem to be, and white scepticism about the future seems to be increasing. The brain drain is increasing just as more white scepticism about the future that gets reflected internationally and then make foreign investors sceptical about investing in the country because, I think it was Derek Keys who said to me yesterday, it's just a fact that foreigners take their cue from the manner in which whites are reacting to changes in the country and if they're sceptical about the future it makes us sceptical too. How about that for a short ...?

JC. OK, so let me therefore talk, with interruptions certainly, but let me start perhaps here. I think nearly 2½ years into the transition period one sees first of all real gains, and I think you have signalled them. On the political constitutional front, growing stability and so forth. I won't elaborate. You've made the point. I think likewise at the level of political violence you've made the point. I concur with that. I think that virtually everywhere in the country what were levels of 2000 to 3000 towards the end of the negotiations period being killed in political violence now it's virtually down to zero with the exception of KwaZulu/Natal and even there it's down substantially.

. Even on the economic front I think that if one goes back to 1990 one sees an economy in very deep recession heading for a brick wall basically. Unemployment increasing by leaps and bounds, with the exception of the public sector where it's growing by leaps and bounds, so you're getting a really massive, bloated bureaucracy. I think that even there with all the current problems, which we will come to in some detail, one has an economy that is growing, not as quickly as we would like to see, but growing. Inflation is at manageable proportions. There are indicators of manufacturing employment beginning now to pick up. There are fragilities, the balance of payments to some extent, unemployment remains a massive problem, and clearly the rand is vulnerable.

POM. I won't say 'thank God', but it really helps me out on every trip here.

JC. Yes, every time you come round it gets cheaper. OK, so I think that a degree of concern is certainly appropriate but I think that it needs to be well balanced against what we are emerging from and also balanced with a sense of the enormity of the challenges and the shortness of the period we're looking at. So I would factor all of those in. Then a second general point I would make, which again you've touched upon is that the 2½ year period that we're looking at in terms of the sociology of the movement of the ANC has been marked by a very significant development, one which as a sort of Marxist party we talked about, but I think the reality is quite dramatic and has a kind of specificity about it which maybe only reality can teach us and which we maybe didn't understand properly, and that is the emergence of a black middle stratum which is quite mobile upwardly. I don't know if anyone has got figures for it, certainly tens of thousands of individuals, it might touch one or two hundred thousands, I'm not sure. It's black people that now occupy middle and senior positions both in the private and public sectors. It's parliamentarians, it's people in ministries and departments, it's people in the army, it's people in management in the private sector or in parastatals and what's particularly significant about this grouping is that it's the core cadre base of the ANC led liberation movement. It's the activist core that finds itself suddenly very upwardly mobile. I think it would be very short sighted to adopt a King Canute sort of hold it back, stop it, rewind, back to the township, the poorer the better. Personally I think that much of the lifestyles expectations and so on of this upwardly mobile group are informed by what were previously extraordinarily sharp racial inequalities so that it's not just any middle management positions into which people are going. They are management positions which are structured by class and gender realities but also over-determined by huge racial, previous racial inequalities. It's not just the distance from inner city to suburb, a reality which exists in any capitalist country, it's the distance between a township, a black gutter education school, a black compound and what was formerly the white suburb or a white position in a private school or tertiary institution or government middle and senior management. So it's quite a sharp ladder and it's sharpness is part of the legacy, the verticality of the ladder, the steepness of it is partly a legacy which remains somewhat of an unquestioned legacy, but it's a reality which is happening.

POM. You mean they are adjusting quite well?

JC. Yes, not too many questions are asked about transforming assumptions about wage levels, salary levels or the vertical steepness of the wage level between people on the shop floor and those in middle management.

POM. Just to illustrate your point without belabouring it, is that last Saturday for the first time in coming here for eight years I said I've never been to Sandton City, I would like to just see what Sandton City is like, and in the space of twenty minutes I bumped into two ministers.

JC. Yes. Sandton City remains very white but there are quite a lot of blacks, many of them are not South African blacks because Sandton City has now become a kind of African Mecca for the nouvelle elite from Zaire, Nigeria and everywhere else but there is certainly not an insignificant number of black South Africans as well. So that's a reality of the situation and I think that mapped onto that then is a fundamental - well there are two potential trajectories for the project for transformation and change in South Africa one of which is a sort of ideal type, not ideal in the morally ideal sense, but two ideal types. The one would be a project of real change which is a modernising, the normalising and re-integrating of South Africa into the global economy version of democratic change so there are some real democratic advances of the kind that we are seeing by way of a constitution or regular elections at three different tiers, modernising obviously, re-tooling the economy as best as possible and so forth; but a limited set of changes dominated by class and social perspectives where a new elite joins an old elite and there is some change but also there's a curtailment of change and you get a 30%/70% solution where 30% of South Africans benefit some by way of more stability but perhaps a slight decrease in wealth or privilege, but 70% remain excluded fundamentally.

. That agenda is clearly mapped out in, say, this S A Foundation's Growth for All document where it calls for a two tiered labour market, for instance, a first tier that then co-opts and admits the better organised semi-skilled labour force, part of COSATU, into a first tier which is regulated, where unionism prevails and so forth, where there's a social accord, but in which the great majority of the work force find themselves in a 'flexible', virtually unregulated labour market in the name of creating jobs and so forth and greater competitiveness on the global market. That's also written into the privatisation agenda, that's the logical outcome of it that if you privatise health care, transport services, electrification, water or whatever or housing then those things might become available to an upper echelon of the work force and of course to the rest of the 30%, but again you confine a majority of the population to a poorly funded, over-stretched welfare net which barely functions. So that's one potential direction for the change. The new South Africa could become that 30% solution.

. The alternative, which obviously in the Communist Party we are propagating and seeking to give momentum to, would be a more 100% solution which is one that sees the bridgehead of April 1994, the democratic breakthrough, deepened and extended into above all the social and economic domains. And that would also mean not disowning the new elite in our country and that's where the crunch is going to come. Already there are signs of it, that in the heady period of 1994 to now, 1996, where literally tens of thousands of active, bright, intelligent people are belatedly occupying positions of authority, being able to pursue effective careers and so forth, the impression can easily be created that the sky is the limit. But of course within five or ten years the positions will be occupied. Not everyone is going to board that train, unless there is substantial and ongoing transformation not everyone is going to get - at this stage every black person there's a lot of sourness or uncertainty or finger-pointing at MPs who don't visit them except when Mandela comes, but there's also the knowledge that maybe I too can make it or I know someone in my family that has made it, so those possibilities seem to be around. That's not going to be the case in five or ten years time, the ceiling is going to be hit, there is not an indefinite space so the continuing intake for all blacks in our country and it's at that point, but which one can already detect, there's a whiff of it already at which the new elite can either choose to see the majority of the population as a motor force for ongoing transformation and align themselves with that ongoing transformation process or they can see the 70% down there as a threat to their newly found privileges, powers and authority and might then opt for bureaucratic and authoritarian solutions to the problem. But as the 70% demand delivery, where are our houses and so forth, there are two options really at the end of the day. The one is, well let's organise, let's struggle for more redistribution and so on, or shut up and that's it.

POM. But if I look at the last 2½ years both living here and not living here, therefore being inside for a period and outside for a period, it seems to me very clear that the first course is being pursued in terms of the willingness to please foreign bankers, bend over backwards to show how attractive South Africa is for foreign investment, the increasing emphasis if anything on privatisation, the very fundamentals of the macro-economic plan which have been laid down to be non-negotiable and which received a positive response from business and a quasi-negative response from labour, I think in part because labour didn't want to be disloyal, I think it had more troubles with the plan than it openly said but for the sake of maintaining unity it didn't address some of the fundamental concerns that you're addressing right now in terms of what does this mean, in terms of the 70% or redistribution in the future or where does it provide for delivery rather than growth.

JC. I think the picture is more mixed than that but there is a genuine conflict which is not necessarily - because it's a contestation involving the same social forces to a considerable extent over the direction of the change process at the heart of which organisation is the ANC itself so the terrain of confused conflict and uncertainty and strategic battle really, which doesn't involve two neat armies hoisting one flag for modernisation, normalisation and a limited change in another which unambiguously hoists its flag as if they were two separate social forces. As I say it's a contestation for the moral perspectives of the new elite, amongst other things it's a contestation for the best organised workers, the NUMSAs for instance, because both kinds of projects would seek to win over to their perspective of change NUMSA workers.

. So for social reasons in the first place one is seeing a much more mixed reality in my view. I would challenge the rawness, the bluntness with which you are putting some things, without denying that they are ingredients of the real picture. So increasing moves to privatisation, I contest that. I think that if anything we've, from a left perspective, seen a more sober picture emerging on that front. I think within the ANC through 1994/95 there were a variety of different perspectives on the issue of restructuring state assets but one quite dominant view was that we should go with the fashions of the times, namely privatisation, and then that was often given some kind of black economic empowerment spin, the so-called Malaysian route that we should privatise but in privatising we shouldn't just privatise but empower an emerging black bourgeoisie like they did in Malaysia. Now I think that those, in debate and in discussion and in struggle for that matter, those views have not emerged as the dominant views certainly within the ANC or within Cabinet, importantly. And what we've got since, emerging from government from early December last year, 1995, Thabo Mbeki's announcement of government's intentions to restructure state assets. His December statement was significant in several ways. The first was that he said that the process would be driven by the RDP priorities and not by some kind of ideological formula handed down by IMF, World Bank or Reagan or Thatcher.

. Secondly, it was a negotiating position so what was being announced in December was government as owner of state assets saying these are our positions around which we wish to negotiate. We think the following has to be done. Thirdly, the negotiations, the impending negotiations for which these were, as it were, a starting position from the government side, those negotiations were to be held with labour, that the private sector as an interested party but not an involved party was going to be kept to one side. So these were negotiations that would not happen for instance in NEDLAC but would happen in a bi-lateral process between government as owner and as trade unions as affected parties in the first instance. There was a concession that obviously all South Africans are affected by water supply or electricity but that the driving point, the way in which those negotiations would be institutionalised in the first instance would be a bilateral government/labour forum. COSATU in particular protested and complained about what was tabled in December. The party felt that COSATU was missing the point a little bit, they failed to see what Mbeki was saying and that there was a significant switch and clarification of government position. By February this year there was a national framework agreement in place which really, as it were, restated what I'm saying, which I think Mbeki had already said in December but sort of canonised it within an agreement which said that the restructuring of state assets is not about privatisation for its own sake, it's about asking how we in the first instance effect delivery in regard to a range of things, water, electricity, housing, with the resources and assets that we've got.

. Other things would be important but the key one would be service delivery, service provision. Other things would be, the second most important thing would be employment, potential loss of employment and what one did about that in any restructuring exercise, whether it would be privatisation or some other kind of restructuring and then other factors, profitability, technical competence and all those issues as well but it was, as it were, encased firmly within an RDP perspective. Since that time, they began as bilaterals, there are now six or seven sectoral specific commissions meeting bilaterally looking at transport or electricity and so forth and there is uneven progress and obviously there are capacity problems from both sides but particularly from labour, but we think all of that is an indication of a government that's not hell bent on some kind of privatisation for its own sake and there is an approach both from COSATU and from the ANC in government, and it's one that the party is supporting very strongly within that broad strategic understanding of what one is doing, a case by case negotiation and approach to what needs to be done.

. So in the case of ESCOM there is no argument for privatisation. Restructuring, yes, to improve its capacity but no need. In the case of Telkom, for instance, there is the need for strategic equity partners to bring in technology in particular which we are incapable of producing given the limited market in South Africa, and also to bring in some capital. There are risks in doing that, it won't be A T & T, but let's say if you bring in an A T & T, even if it's a 20% shareholder it can run you off your feet albeit that you retain 80% or 70% of shares, so there are real risks in that path but we think it's the only intelligent path to be pursued. The detail is still in the process of negotiation.

. So in short what I'm saying is that while there is a constant chorus from outside, and even partly from inside government to privatise because that's the way of the world and that's the intelligent thing to do and so on, we really don't think that that's what's happening. There is a constant struggle to buttress the positions which we think are progressive ones and we don't underrate the problems but restructuring there has to be. We've inherited a massively bloated, ineffective, useless often, public sector which is none the less a real asset but it's a public sector which was there to provide services to white suburbs, to provide electricity or water to white owned industry and as a training ground for white artisans who then went on also into the private sector, so there was a lot of artisanal training that went on in the Railways for instance, or in ISCOR, the former state owned public sector, Iron & Steel Corporation. Artisanal training has more or less ground to a halt in the new South Africa and we need to re-gear para-parastatals to do that amongst other things. So those are assets which we intend to use, some of them are non-assets. We agree with government that there is no need to remain on in Aventura tourist ventures, that's something that can be privatised or whatever. It's not a core function for the kind of reconstruction and development process that we've got.

. On the macro-economic framework that we've seen announced we do have problems with what's been announced and we've stated those, carefully, I think for the reasons that you've said, we don't want to be pushed into a little left corner where we become the reason why it's not working, the private sector says we're getting mixed signals on the one hand, that's the first concern. The second concern is clearly preserving the unity of the alliance which we see as strategically incredibly important, but at the same time when we're unhappy we intend to say so and we have been saying so, as I say with a degree of carefulness in the way in which we conduct the debate. Our concerns really amount to two or three issues around what's been announced as the macro-economic framework. The first is the process which was pursued. A small group of macro-economists, technically competent macro-economists, were assembled in mid-January of this year, correctly so in the sense that the Reconstruction & Development Programme has been vulnerable to the accusation of, well, that's all very nice but the figures don't add up, what is the macro-economic framework within which you intend to do these things? So there is certainly a need to elaborate macro-economic policy in any case but also to make visible what's been done in any case. But the process was held very tight, again for understandable reasons, all kinds of pressures and so forth and all kinds of speculative activity surround any macro-economic planning. But our concern was that the political organs of the ANC, never mind the alliance, were not really driving the process, none of us are claiming to be macro-economists. Well it's a pity, one does need technical competence there's no doubt about that and we don't claim to have that but we also very firmly believe that politics needs to be in the driving seat, it needs to set the pace, the parameters, the strategic perspective even if you don't have the ability to, within that perspective, punch in computers and run things through macro-economic planning programmes. We feel there was not enough of that.

. That exercise then quickly coincided in time with the mid-February through to mid-March rapid depreciation of the rand and that was then felt as a very perceptible pressure particularly in the Finance Ministry and so the technicians were goaded, well not goaded but told to push ahead to move much more quickly, we're under pressure, we've really got to come up with something. So there was a process in which we think there was not sufficient political oversight secondarily from the alliance but primarily from the ANC itself. As the Deputy General Secretary of the party I was consulted in the last weeks before it was unveiled but as an ANC NEC member I was never consulted before it was unveiled, so they were more nervous about the SACP and COSATU because it was along with COSATU that we were being told, given glimpses, and then finally in the days just before it was unveiled we got a pretty full version of what was coming. The problem was the ANC wasn't there, there were a couple of ministers from the ANC but not the ANC as a political structure driving it. So that's our first package of concerns, process.

. Related to that then is the message 'non-negotiable'. Now we understand why that's being said, but in a way our understanding is part then of a second set of concerns. The Director General of the Finance Department, the minister, Trevor Manuel, the deputy minister, Gill Marcus, all in the days following its unveiling said it's non-negotiable and then they qualified it by saying, "Well the core of it is non-negotiable." It still remains somewhat unclear what is non-negotiable and I will come to that in a moment. But what they were saying to potential foreign investors was, "This is it, rest assured this is it, this is the plan, we're in charge." Because they were being goaded a great deal through the depreciation of the rand and in general with, from the private sector here and somewhat internationally, who's in charge? Who's in charge of this economy? Is it Trevor Manuel or is it Sam Shilowa? What's your plan? And so on. So they were being told that you're weak, that we don't have confidence that you can see something through. Can you really stand up to the trade unions? So there was a great deal of goading. So the word 'non-negotiable' was part of the message and we understood that.

. That goes to the second substantial concern that we have. Is this a set of messages or is it a serious macro-economic plan? I suppose if one is sceptical about the plan then one might be relieved to hear that it was just a set of messages but that's not good enough and it indicates that it's a symptom of something deeper. We want a serious macro-economic plan. We need it. We've treated what's not come on to the table, and we're saying it's on the table, it's not non-negotiable, as an attempt to be that. We're saying we will give it credit for trying to be that. We have problems with X, Y and Z about it, but we need to be serious about this and therefore that's good, it's compelling us to be serious about macro-economic planning. Sometimes we have the sense that there's a kind of cargo cult in regard to foreign investment and it's not coming. A cargo cult as anthropologists, that somewhere along the line South Africa is going to be rescued by this arrival of cargo in the shape of foreign direct investment and as in any cult when the cargo doesn't arrive then you start having recourse to signals and a ritual of signals, we didn't quite get the spell right or we didn't quite say the thing in the right order, let's try it again and again and again. We're worried that that's what this is, that it's all about attracting foreign investors rather than a plan to make the macro-economy work.

POM. Kind of built on the assumption that if you do this then foreign investment will come?

JC. If you send the right smoke signals they will come in. And we're saying we don't believe that. We think that their response to signals tends to be, well we like that but can we really believe in it, or, that's nice music but more, louder, harder, run more. So when you say we want you to come, please, it sends a signal of weakness, lack of confidence in what you're doing and actually the better signal if you're talking signals is to get on with the job, to harness the resources you've got and they will come into a growing economy if you can make it grow. They don't come in to signals in our view. They manipulate signals [and ask for me.]

POM. You might be surprised to know that yourself and Derek Keys very much agree on this.

JC. That's right. I'm not surprised because I think that intelligent, sober observers of the situation, we say China is a good example. They send all the wrong signals from Tiananmen Square to red flags and they call themselves communists and so on, but it's a hugely growing economy and massive market and that's what foreign investors come into. They're a cynical bunch, they come in for profits, if there are profits they are coming to, but signals, I'm not saying the signals are irrelevant but they are not the most important thing. So that's the second substantive concern about it, that it's misguided and it's about signals.

. And that in turn then relates to the broader and perhaps even more substantive issues that it's a package that is excessively reliant on private investment both domestic and external and that's an exogenous factor. You whistle in the wind and hope it comes and it's not there for sufficiently premised upon, a plan around getting domestic demand moving using state assets, not expecting them to be able to do everything or run the economy, we do need direct investment, foreign and local. But it's far too premised on that and therefore if you look at all the graphs there's a kind of steady growth pattern, a steady decrease in unemployment and so forth and then a sudden sprint towards the end of the five-year period and that huge gathering of acceleration of improvement of the situation is entirely premised on the unknown which is foreign investment essentially. So those are our concerns about the macro-economic policy, the way in which we are conducting our engagement with this.

POM. How about the part of it that is committed to reducing the budget deficit and even specifically by 1% this year which it appears, again to people that I've talked to, that there is no way to do that without also cutting into basic social services?

JC. I'm glad you asked that question because first of all when we probe into the plan and we say what is non-negotiable, we see a number of key pillars in the programme. The one is a social accord. Now clearly that's not non-negotiable. A social accord is about key actors negotiating, so clearly you're not talking about that. Another key pillar is restructuring state assets. Those are under negotiation right now in a bilateral process within a national framework agreement, accord, and the growth equity and redistribution macro-economic plan flags that issue. So that's clearly not non-negotiable. Is the budget deficit reduction perhaps the non-negotiable? We suspect that that's at the core of what's non-negotiable. Well already reality is, regardless of what COSATU and the SACP or other forces say or don't say, reality is eating into that projection. When we say to them, you say the budget deficit is five point one and you're going to bring it down to four within twelve months, aren't you forgetting to notice that actually the budget deficit is closer to five point seven, five point eight and they said well yes it is but shush. So first problem is what they're bringing it down from isn't what they say it is. They say it's also probably going to be closer to four point eight than four at the end of the year and they said but we can live with that because there's going to be quite a lot of budget roll-overs so that some of things that we thought we would spend in this twelve month period aren't going to be spent because of capacity problems or the lead-time required for housing, construction and so forth and therefore it's more like four point eight. So that's the first thing to understand and we're saying that's our next problem with your non-negotiable, that it puts you into a corner, not us or South Africa, it's too inflexible. We understand why you're saying you're determined to move ahead with an intelligent macro-economic plan, we understand that many things can't wait for six months while they get negotiated, that government has to govern and we have sympathy for that and as government governs we can then negotiate and we can look at what reality is telling us and retool it as we go on. That's how it has to be done and we know that, we understand that and we want you to lead and we want to empower you but we're going to be debating with you as we go. I know that wasn't the substance of your questions but that's the first point to be noted about this budget deficit.

JC. Secondly, does the budget have to be reduced? I think so, the deficit has to be reduced. The budget runs around 172 billion currently. 40 billion of that goes into interest repayment on the budget deficit so a huge chunk comes out, just goes away. Another huge amount goes into recurrent costs, salaries, car fleets, all kinds of things, pension funds very significantly.

POM. 40% goes into repayment?

JC. No not 40%, 40 out of 170, so you could work out the percentage.

POM. 40 billion rand?

JC. Out of 170. It's a huge, huge amount. It's not Reaganism that's compelling our comrades in government to say we need to look very seriously, and they're saying that unless they knock it by a significant factor in the next twelve months it escalates, it doesn't go down. It's related to the very high interest rate situation we've got here. As you know there are extraordinarily high interest rates which they are committed to bringing down and the macro-economic plan commits us to doing that. It's not easy to do that because of the balance of payments situation but our foreign reserves were down to three weeks I understand in April 1994. The post election euphoria brought in quite a lot of foreign investment but it was short term portfolio investment. It's coming in because inflation is quite low and there are enormously high interest rates so you make about 7% or 8% just by putting money into unit trusts or whatever in South Africa.

POM. When the rand was relatively stable?

JC. Was relatively stable at that stage. But even regardless of that, because in Japan you can make about 2% on a portfolio investment of that kind, in South Africa because (i) inflation is relatively low and (ii) there's these interest rates, you virtually have a guaranteed 7% - 8% return. That's what's attracted millions of dollars basically into the country. That's what's giving us some breathing space on our foreign reserves. What's dangerous about that is the Mexican scenario that when it's short term investment it can come in but it can go out within an hour. So it's fragile.

. There's a complicated challenge on the front of the interest rates that we've got in South Africa where we need to bring them down because (i) the high interest rates are hitting government and the interest it's got to pay on its deficit. It's also hitting all kinds of other things like housing, obviously it puts the bond rate up very high, it's hitting the ability to float small and medium enterprises and so forth, the very high interest. But if we just slash them the foreign investments that we've got in our country would flow out very quickly. So that's a complication which left critics of government need to understand not just have some kind of easy solutions to.

. So there is a real budget deficit problem, that was my original point. We're not sure, we're not macro-economists, we're not sure not only that the intentions are do-able, because I think reality is already starting to fray at the edges of that, the intention to bring it down to 4% within twelve months, we're not sure whether it's not too harsh and that it certainly has the potential to have a very negative impact on social services. What we need to do, and I think generally, and I was coming round to that point, the way in which we're relating to the government announcement of the plan is to say, well we heard you saying it was non-negotiable but reality and ourselves are going to negotiate with it. First point.

. Second point, we are going to say that we think there are alternative plans although we don't necessarily have a massive capacity to generate well modelled alternative plans but we're going to engage with it at a macro level to begin with, but more to put down some benchmarks and to ask questions like the one you've just asked me: isn't this an excessive budget deficit reduction exercise, couldn't there be some more laxity? We're asking those questions. But even if we go for a 5.1%, if that's what it is, to 4% reduction over the next twelve months where do you reduce becomes also a site of struggle so it's not as though we lose that battle and fold our arms. We say, OK let's get it down to 4%, what gets hit? Military spending, bloated expenditure on recurrent expenses in the bureaucracy? Do we use this exercise to act as a transformational weapon rather than just hitting easy targets, soft targets which are pensions or health care or whatever?

. So those are battles down the line as well and from the ministers responsible primarily for the exercise, and this is what's good about what we're seeing from government, whatever our misgivings about the plan that they've announced, they've located it firmly and we intend to hold them within this, they've located it firmly within the Reconstruction & Development Programme. They are saying, you want a Reconstruction & Development Programme, we too, what is necessary? Our beginning point hasn't been what will the IMF like, what message will the World Bank like to hear? We've started by saying how do we get employment moving, how do we provide services and so on, and this is our answer. You might not like it but this is the answer frankly that we come up with. We're saying, OK, we take you at your word and therefore we're not about to break the alliance or whatever and you will hear some of us accusing of neo-liberal tendencies and so on, but that isn't the way to conduct the debate. The way is to say OK, how do we implement the RDP rather than scupper it. That's how we're trying to drive the process around the macro-economic debate.

POM. So in essence the commonality that binds you is your common belief in the implementation of the RDP. There are differences of opinion over the best way to achieve that.

JC. And no easy answers. We accept that. We think there are any number of things that can be said critically and we've said them about the plan but we're engaging within the framework of how to implement the RDP.

POM. There has been just in this context and others talk about it, again I think it may be more wishful thinking than anything else, an inevitable break up in the alliance post 1999, that the divergence of interests that it holds is no longer held together by the same glue of getting rid of apartheid. A couple of questions just around that point. One, do you believe that the country needs to develop a strong multi-party system in order to develop democratically? Two, do you think that will come about without major political realignments in the future? And three, can you have a viable democratic system in the absence of a strong multi-party system where there is an effective opposition voice in parliament, an effective opposition voice in the sense that there is the reasonable possibility in time of the opposition becoming the government and the government the opposition?

JC. I think that multi-party democracy is certainly an important ingredient of a developing democratic dispensation. I accept that. I think that there are other democratic imperatives as well in our situation and I think that those need to be weighed and not just abstractly but concretely within the dynamics and political culture of the South African situation. So I think, to begin a little bit further back, one of the ironies of the South African situation is that it has taken an African nationalist organisation and its hegemony, including electoral hegemony, and an African nationalist organisation in an alliance with the South African Communist Party, to spearhead a constitution making process which has brought about an incredibly humanist, liberal, one of the most humanist and liberal constitutional dispensations. I think that goes to a deeper reality which is the pre-condition for a flourishing democracy in South Africa is some kind of nation building effort in all kinds of senses at the more superficial but important symbolic level of a united country, rugby team, one soccer team, one Mandela and so forth, and clearly only the ANC and a Mandela type persona has been able to bring about the degree of unity that we've got. One doesn't want to overstate the unity but there is a remarkable level of symbolic sensed, perceived, cultural identification in the kind of unity that one sees.

. More substantially nation building in my view is about putting in institutions, a constitution, a function in democracy at the three different tiers that we have got, but also infrastructural development. Part of what we're inheriting is an apartheid social and physical geography. South Africa wasn't just divided because there were some racial laws. The geography of South Africa is manifestly a highly - the infrastructure of South Africa, transport, electricity, water supply, all of that is heavily marked by apartheid in the broader sense of that word and therefore a major transformational process in my view of getting water to rural areas is part of the democratic project. I think it would be a great error to simply, I'm not suggesting that that's your error, but western observers of South Africa or Africa imagine that the presence however superficial it might be of a multi-party democracy equals democracy and often that's a very superficial reality in an African country.

. So I think that the necessity, the way in which political organisations align or break up, the way in which they conduct themselves when they are trying to be progressive political organisations needs to take that spectrum of things into account. I don't have a problem in theory and in abstract with the notion of an independent Communist Party, a Social Democratic Party, a Black Liberal Party or whatever, all of those are currents that you will find inside of the ANC, breaking into three different parties or four different parties or whatever. There's a distinct Africanist current in the ANC. There's a distinct socialist/communist current in the ANC. There's a blend of others as well. In other circumstances a more robust democracy might be guaranteed by the political separation of those forces into distinct political parties. But there are other realities and imperatives as well and as a Communist Party we are certainly constantly weighing those different imperatives. So although I think there are also other immediate concerns; would we survive electorally, would we become like the PAC? That's a good question and our critics often say, well you're just clinging to the coat-tails of the ANC because you're terrified of growing up. Of course they don't want us to grow up, they want us to disappear which is why they're encouraging us to let go. That's a calculation which an intelligent communist would think about but I think there are also more substantial reasons why the unity of this liberation movement, the ANC, becomes so important and I think that I would argue that the necessary trajectory of democratic politics is not necessarily into a kind of a Republican and Democratic party two-step or a Social Democratic or Labour Party, Conservative Party two-step. I think that those systems are in considerable disrepair as well. I think there's a lot of alienation, disillusion and marginalisation of large numbers of people in the United States dispensation or the British or German dispensation and that what I see as progressive politics emerging in India, Italy, Russia in its different way, is often of broad fronts involving Greens and women's movements and regional movements and anti-corruption forces and all kinds of things forming for electoral purposes into a single front but often combining an electoral party and a social movement kind of reality about them. I think that out of our own particular trajectory and culture and reality we've generated something like that in this ANC that we've got which is an ANC that is in government, that fights elections but it's an ANC that's an alliance of trade unions and civic organisations and the Communist Party and a range of things. Maybe that isn't the past, maybe that's the future of progressive left politics actually.

POM. Is this kind of hegemony that you're talking about or this broad coalition of interests kind of staying together is a force that makes transformation possible whereas if you put those interests in opposition to each other what you end up with is either stalemate or incremental change?

JC. Or a politics that is dominated by - it's good that the rationale for multi-party democracy is that you keep a ruling party on its toes and it's mandate is not for ever, it has to seek constantly an electoral mandate. In our situation given the size of the ANC and barring breaking up of one kind or another, it hasn't got an eternal mandate but it's got a couple of decades of mandate in it one would suspect. That has dangers in it of complacency and so forth but the other route also has dangers. I think the US epitomises this, that what Clinton is currently doing in the Middle East has bugger all to do with the Middle East, it has everything to do with the presidential election that's forthcoming, so that you can get a politics that's driven absolutely by electoral concerns and not transformational concerns where both parties pursue the centre and they're not parties of political conviction, they're parties of ideally of unusual personalities with absolutely unusual programmes. You attempt to have programmes that are absolutely unusual but you try to have some kind of personality leading your party and it becomes contesting personalities and everything is driven by public opinion polls and so forth. So without falling into an old kind of Marxist dismissal, which would be wrong, gravely wrong, of representative democracy it's very important. One should also not detract into a narrow electoralist mode.

POM. Last question.

JC. I'm glad to hear that in the streets out there.

POM. Protest? Sounds like the old days. Last quick question. Are politics becoming more polarised again in the sense that racial patterns of voting are beginning to reassert themselves or are asserting themselves more than they did in 1994, like looking at the elections in the Cape or in KwaZulu/Natal?

JC. I think they were pretty racial in 1994. So one's talking about coloureds and Indians. I mean whites are not voting ANC and Africans aren't, with the exception of Inkatha, Africans are not voting for anything else other than the ANC. You get two significant minority groupings in the shape of Indians and coloureds who are more electorally volatile than whites and Africans and if anything in both cases one has seen continued fluidity I would say. I think that's the message that comes from Western Cape and from the Natal local government elections where this fluid behaviour from those minorities feeling themselves caught in between, uncertain of the future, uncertain of the ANC, uncertain if that's the home for them, but equally awkward with the alternative choices. So I don't think there is a polarisation that's new in the last period. I think that the National Party continues to battle to make inroads into the African sector and there is no credible alternative to the ANC amongst the African majority apart from Inkatha whose regional base has been underlined very firmly by recent electoral development and if I were to make a prediction about electoral - I think the National Party in some form, under same name or another (it might well change names and symbols) will be around for the long term basically because it represents a class perspective essentially muddled in with a racial reality. I'm not sure that Inkatha will be around. I think it's going to wither more rapidly than what one might suspect over a fifteen year period. I think that it may well be a spent force within that kind of period. It's already very confined to the rural areas. Inkatha won KwaZulu and the ANC won Natal in the local government elections.

POM. Some headline I saw in the newspaper said, "IFP wins the election, the ANC wins the power". OK Jeremy, thank you.

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