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 It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.
9 Towards A National Social Agreement
A strong tradition of collective bargaining characterises the South African industrial and social environment. Sectoral and regional agreements are likely to contribute to structuring future growth and development. There is an important role also for a broad national agreement, to create an environment for rapid growth, a brisk investment trend and accelerated delivery of public services based on equity and universal access. The challenge facing the government and its social partners is to ensure that a national agreement underpins rapid growth, job creation, and development.
The immediate objective of the agreement would be to ensure that the recent depreciation of the currency does not translate into a vicious circle of wage and price increases leading to instability in the financial markets and a decline in competitive advantage. For this reason it is important that wage and salary increases do not rise more than productivity growth. It is equally important that price restraint should be maintained, facilitated through an effective competition policy and continued trade liberalisation.
In the longer term, a broad social agreement might address a wider range of issues related to economic restructuring, income distribution and social policies. Orderly collective bargaining between organised labour and employers must remain the foundation of industrial relations.
For its part, the government commits itself to an accelerated increase in its contribution to social and community living standards. Most of the policy frameworks and institutional systems are now in place, including through enhanced public sector investment, to ensure the following:
Equally important, the government will provide a combination of real exchange rate management and tax incentives aimed at encouraging private sector investment. For workers, this will give certainty that wage moderation will contribute towards growth, job creation and social benefits. For the business sector, this strategy creates an environment in which investments can be made confidently, competitiveness is enhanced and public policies are clear. The objective is to address the income inequalities which characterise the South African economy and which mitigate against sustainable growth and job creation in the long run.