There has always been a rift between the ruling African National Congress (ANC) and the Congress of South African Trade Unions (Cosatu) on privatization. But it deepened substantially in January when the Government decided to sell the state telephone company, Telkom, under the rubric of ‘black economic empowerment’.
A great deal is at stake here because the probably inevitable departure of Cosatu and the SA Communist Party from the ANC-led alliance will occur over ideological differences – such as whether basic services should be operated on a for-profit basis. Cosatu won a minor victory early in the new year when some railroad privatizations were halted by Transport Minister Dullah Omar. But President Thabo Mbeki has cemented his agenda for ‘restructuring state enterprises’. He labels his trade-union and community opponents ‘ultra-Leftists’ and has so far combined intimidation with divide-and-rule tactics to maintain the pretence of unity.
It has not been an easy job. The union placards say: ‘We did not fight for liberation only to sell it to the highest bidder!’ In October last year a partially successful, two-day strike of a quarter of the national workforce highlighted how far matters had deteriorated. A previous two-day strike had, for Mbeki, badly marred the August 2001 World Conference Against Racism. Then, a year later, the World Summit on Sustainable Development (WSSD) featured a march of 20,000 activists who attacked the ‘privatization of the WSSD’ – including the crucial water and energy sectors.
Access to water and electricity has become a key struggle in South Africa’s townships. One study conducted through the Government’s Human Sciences Research Council found that an estimated 10 million people have suffered water cutoffs and electricity disconnections under privatization, mostly because they couldn’t afford new, higher rates.
As a result the country’s cholera epidemic continues, with more than 140,000 cases since August 2000. Millions of people – especially children – get diarrhoea each year because of unaffordable purified water and atrocious sanitation. Tuberculosis and other respiratory diseases are also rampant since without electricity women are forced to cook and heat with coal or wood.
As the Government prepares to sell off 30 per cent of the national electricity company, Eskom, next year, it too has clamped down on customers in arrears. In Soweto 20,000 households were disconnected every month in 2001 – until resistance from militant communities rolled back the process.
Access to water and electricity has become a key struggle in South Africa's townships...
With Cosatu again campaigning against Telkom’s privatization, there appears to be renewed scope for an ‘alliance of the dispossessed’. Municipal Workers Union members sometimes dispense with traditional ANC loyalties to join Anti-Privatization Forums (APF) in the major cities, even while the latter are tentatively preparing for a future political party challenge to the ANC Government. Most importantly, the APFs and other militant communities continue taking matters into their own hands – including illegal reconnections of electricity and water.
The privatization of Telkom will provide another rallying point for ANC opponents. Telkom’s delivery statistics since liberation in 1994 are shocking. According to Cosatu:
• Since its partial privatization and full commercialization Telkom has increased tariffs for services used by poor households – basic rental and local calls – while slashing rates for rich families and businesses, especially international calls and the internet. Rates recently jumped 13 per cent for low-income families but only 6 per cent for the high-income group.
• Because of high basic costs, poor people can no longer afford phone lines. This has led Telkom to cut 80 per cent of the new land lines installed over the past five years.
• At the same time the company has slashed employment by a third and cut back on investment.
The cost to South Africa’s development, especially to the poor, is unacceptably high warns Cosatu. ‘Privatization can only worsen conditions for the majority. The reality of the Telkom sale is that property is being expropriated from 46 million South Africans to be auctioned off to, at best, 1 million ‘investors’ in the name of black economic empowerment.’
Critics threaten to disrupt further attempts to privatize by targeting merchant banks, foreign firms and international agencies that are promoting the panacea. Whatever the outcome, it is safe to say that President Mbeki’s faith in privatization is jeopardizing the future re-election of the ANC.
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