Picture: Ayanda Ndamane African News Agency (ANA)/taken March 14, 2023 – Nehawu members march at Cape Town Home Affairs Barrack Street, shutting down Home Affairs and the Labour Department as their strike continues.

By Trevor Ngwane

South African public sector unions and the government recently signed a 7.5 percent wage agreement, thus ending a tumultuous tug-of-war between the capitalist state and organised labour.

However, a group of unions with a minority vote in the Public Services Collective Bargaining Council are refusing to sign the deal, although it will go through because of majority rule. Among the unions is the National Education, Health and Allied Workers Union (Nehawu), which was recently on strike. The unions are unhappy and feel tricked and short-changed by the ANC, the governing party and the employer.

There is an age-old confidence trick called “three cards”, which has seen many a “Jim comes to Joburg” character lose his money. The victim is lured into placing a bet on finding the “money card” among three facedown playing cards. Inevitably, he selects the wrong card and loses. The unhappy unions feel like losers and accuse the ANC government and most of the other unions who signed the deal, of trickery and betrayal.

Who is fooling whom? Is the wage agreement a victory for the workers? What are its shortcomings, if any? The road that led to this wage agreement has been long and winding, with many twists and turns. It began with the government reneging on a three-year wage agreement, followed by its imposition of a 3 percent wage adjustment on workers, and culminating in a 10-day strike by Nehawu, which ended in defeat after it was vociferously attacked because of the disruption of public services.

There was widespread opposition to the strike and the workers’ demands, including by powerful international financial institutions (IFIs).

The International Monetary Fund (IMF), a global financial institution with considerable influence, conducted its surveillance mission in early March and concluded that the economic outlook was negative. It lowered its forecast for South African growth to 0.1 percent this year.

The reasons given were mainly loadshedding, softer commodity prices and a rising debt-to-GDP ratio. It warned against “wage bill overruns” and advised the government to reduce the public-sector wage bill. It noted how corruption, financial support for state-owned enterprises and the demands of public servants for higher wages contributed to the country’s debt burden, leading to the diversion of funds from service delivery to interest payments.

The loudest voices in the public debate appear to share the IMF’s economic and ideological outlook, venting their disapproval of the 7.5 percent public sector wage agreement, which is seen as deviating from the fiscal frugality that underpins the latest state Budget.

It is usual for some people to be unsympathetic to the plight of public sector workers during difficult economic times because they expect them to suffer like everyone else. Some voices exhibit hostility towards workers, saying: “Civil servants are overpaid, and they underwork.”

Some accuse the ANC of populism and trying to entice workers to vote for it in the coming May 2024 national elections. The government has no money and may have to rob Peter to pay Paul, that is, divert funds from other departments and services to honour the wage increase.

The argument dovetails with the fiscal discipline mantra beloved by the IMF and mainstream economists. The government is said to have a finite pot of funds from which it allocates according to a prescribed formula or set of rules and priorities.

The question is: Who formulates the rules?

In 1999, there were mass protests in Seattle, US, against the World Trade Organisation (WTO), which spearheaded an international movement for socio-economic justice that pointedly asked the question.

The Battle of Seattle signalled the birth of the so-called anti-globalisation, anti-Neo-liberal movement that targeted the World Bank, the IMF and the WTO, which were seen as responsible for the rich getting richer and the poor poorer.

At the height of the movement, its activists hounded all the important meetings of the IFIs, which were accused of protecting and promoting the interests of capitalist corporations and imperialist governments. The movement saw the World Economic Forum, which meets every January in Davos, Switzerland, as the embodiment of the nexus of global corporate and state interests that perpetuated exploitation and oppression in the world.

The IMF was seen as part of this Davos “Mafiocracy” of bankers, industrialists, oligarchs, technocrats and politicians who were responsible for most of the world’s social, economic, political and ecological ills.

Historically, the IFIs were responsible for anti-poor policies, such as the structural adjustment policies that wrecked the economies of post-colonial societies; they used debt as leverage to force governments to submit to the interests of the Davos “Mafiocracy”, and thus, turn them into Neo-colonies of advanced capitalist states.

The collapse of the Soviet Union and the attendant ideological emasculation of socialism as an alternative to capitalism opened the door to capitalist triumphalism and facilitated the unchallenged hegemony of the capitalist system in the world. Capital and the capitalist classes rule supreme despite the perennial and devastating crises of capitalism.

The IMF, WTO, World Bank and rating agencies are some of the mechanisms through which this domination is enacted and cemented. Under the ANC government, the racist public sector, which served capital and the white population, was turned into a neo-liberal sector that served the self-enrichment needs of the aspirant black bourgeoisie.

It was reconfigured to channel public funds into private pockets through privatisation, commercialisation and financialisation. The neo-liberal public sector denies public sector workers their role of providing quality goods and services to all of humanity, especially the working class and the poor.

Expenditure on the wages and needs of public sector workers is denigrated and viewed as a waste of society’s resources. The market is proffered as the solution to humanity’s problems and as the conduit for the satisfaction of all human needs.

Despite the ANC’s anxiety about losing the labour vote, the workers should remember Karl Marx’s words: “This organisation of the proletarians into a class, and consequently into a workers’ political party, is continually being upset again and again by the competition between the workers themselves. But it ever rises up again, stronger, firmer, mightier.’’

Trevor Ngwane is Director of the Centre for Sociological Research and Practice at the University of Johannesburg

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