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Speech by Zwelinzima Vavi, COSATU
General Secretary, to Special Congress
of the Communication Workers Union

Comrades,

We meet today at the start of an historic COSATU
campaign, one with particular meaning for your union
– that is, the anti-privatisation campaign initiated last
week by the Central Executive Committee of your
Federation.

This campaign must reverse the slow undermining of
the democratic state, ensuring that it can play its full
role in the social and economic development of our
country and our communities.

The Communication Workers Union has experienced
at first hand the dangers of privatisation. In the past
decade, most recently in the name of “developmental
restructuring,” both Telkom and the post office have
faced repeated assaults. The results, as we see
almost inevitably with privatisation, have been both job
losses and worse services for the poor. Only the rich
have benefited.

In the past three years, we have seen the loss of 17
000 jobs just in Telkom. That is almost a third of the
company’s total employment. In these three years,
Telkom, by itself, accounted for over 2 per cent of job
losses outside the public service.

At the same time, the restructuring of Telkom has
been associated with declining services for the
majority of our people. According to the government’s
own statistics, in the October Household Survey, in
1999 less than a third of African urban households and
less than one in ten African rural households had
telephones, compared to over 80 per cent of rural and
urban whites. The level of telephone connections in
African areas had fallen since the previous year.

Soaring rental charges for telephones place them
beyond the reach of at least a third of our people. At
the same time, the increase in local telephone
charges makes telecommunications increasingly
inaccessible. Local charges rose 35 per cent even
after inflation in the past two years. At the same time,
we saw a 40-per-cent fall in the cost of international
phone calls, which mostly benefit business and the
rich.

We should not be surprised at this kind of results from
privatisation. Our only surprise is that government can
still call it “developmental.” After all, private companies
must seek to maximise their profits. No matter what
the broader social gains would be, they can’t afford
simply to give services to the poor. After all, no men
or women open a business to meet challenges of
poverty, unemployment and or to provide services to
the people. All these are accidentals in pursuit of
profit by companies. That our government suddenly
believes that business will provide services to the poor
is astonishing indeed. Certainly they will compete to
improve efficiency for business and the rich – but no
one competes for those with empty pockets.

That is why the Alliance has always called for a strong
developmental state, which can undertake
interventions that are crucial for development. One of
those interventions is the provision of
telecommunications to poor households and
communities. We could accept increased private
provision of services to business and the well-off, if it
helped pay for increased services for the majority.

Improving telecommunications to the poor is important
in a variety of ways. It helps people participate more
actively in the economy. Studies show that people in
households with telephones find jobs much more
easily. Furthermore, telecommunications open the
door to substantial improvements in health care and
education. And finally, it is critical for families and
friends to communicate – which is particularly
important in our country, where apartheid scattered so
many people far and wide.

In short, the extension of telecommunications to the
poor must form a central part of any development
strategy. But the privatisation process has undermined
efforts in that direction, rather than strengthening them.

The Telkom experience underlines something else –
the way that government has embarked on all kinds of
creative forms of privatisation, convincing itself that
because it is not simply selling off public assets, it is
not undermining the state. But it plans to hand control
over telecommunications to the private sector just as
effectively as if it had auctioned Telkom to the highest
bidder.

The process started a few years ago with the sale of a
“strategic share” to foreign partners. We were
assured, as labour, that this would not lead to
retrenchments, and that government would retain
control of the company. Instead, we have seen
massive job losses. Moreover, it has become clear
that, in the still-secret shareholder agreement,
government gave up the power to make key
decisions, including around top-level personnel and
labour relations.

Now, government has announced a further phase in
this complex privatisation process, with the
introduction of a second national service provider. In
effect, as in so many areas, government claims it is
not privatising Telkom – but it is privatising
telecommunications. And that will aggravate current
problems. As Telkom must compete with the new
provider, both companies will face increasing
pressure to drop the less profitable part of the market
– that is, our own, working-class communities.

True, government argues that the second service
provider will also have some obligations to service the
poor. But it is typical that these obligations remain
entirely vague, with neither time frames nor
mechanisms to ensure monitoring and fulfilment. We
see neither stronger regulation nor proposals on
pricing that could ensure that the new providers give
all our people access to telephones.

Government’s says it will let underserved communities
set up co-ops or look to independent SMMEs for
telephone connections. That cynical decision
underlines the extent to which its current policies
abandon the poor. It grants the poor the right to pay for
their own telephones. In contrast, the apartheid state
paid for telephone infrastructure in rich communities
over several decades. Surely, when we risked our
lives in the struggle for freedom, we did not mean to
set the poor free to pay for basic services.

This privatisation by stealth is replicated across our
economy and our society. Our government knows that
we did not elect them in order to undermine the
strength of the state. So it finds all kinds of clever ways
to hand its functions and resources to private
business, often without actually selling off assets.

In the case of state-owned enterprises, as with
Telkom, it sells off substantial shares as well as some
assets; and it brings in private competitors.

In the case of local government, it employs private
management for basic services, especially water and
refuse removal, as well as simply privatising some
functions. These moves make it increasingly difficult to
implement the ANC’s commitment, in its 2000
elections manifesto, to provide free lifeline services for
all.

For the national and provincial public service,
government looks to outsource unskilled work, shifting
tens of thousands of workers from permanent, well-
paid jobs to casual labour. In addition, wherever it can,
it makes people pay for services. In education, this
has meant the effective semi-privatisation of the entire
public school system. The results have been the
reinstatement of the inequalities we fought against in
the past, this time on the basis of race and class
rather than race alone.

Government says that it has consulted with labour on
all these moves, especially around state-owned
enterprise. Why, it asks, do we then feel we must take
action?

Because – and no union has experienced this more
deeply than CWU – we have talked and talked to
government, and seen extraordinarily little change in
their policies. Our discussions under the NFA have
indeed been interesting, challenging and intellectually
stimulating – and they have had no visible impact
whatsoever on proposals for privatisation.

We are not fighting for an empty process of
consultation. We are fighting for a policy to strengthen
the state so that it can provide an adequate social
wage and effectively support economic growth and job
creation.

We know the press and even the opposition parties
will portray our campaign as undermining the unity of
the tripartite Alliance. That would be wrong.

We in the Alliance know from our long history that our
strength derives from robust and open debate and the
mobilisation of our people. The Alliance brings
together the progressive forces of our country, rooted
in relationships forged in the struggle against
apartheid. Still, if we as COSATU feel that government
policy does not reflect the principles of the Alliance
itself, we have no choice but to take action. We know
that our Alliance partners understand the need for
mass mobilisation and mass action to take forward
the progressive movement and the reconstruction of
our society and our economy.

In this connection, we note the irony and sadness the
fact that it the high-ranking Communist Party members
in posts dedicated to the implementation of
privatisation and other policies hostile to the working
people. These comrades end up driving policies that
strengthen private ownership, reduce protection for the
poor and workers, and lead to massive job losses.

Still, we recognise that the blame lies not with
individual comrades, but with the policy decisions and
processes within government.

Because finally, we have to ask why this government,
our government, a government for which COSATU
fought and campaigned, has fallen in love with
privatisation.

One answer lies in the failure to develop a
participatory democracy, where our people have a
real say in decisions that affect them. As a result, it
becomes too easy for officials to push their own
agendas at the cost of the Alliance’s constituencies.
All too often, these agendas are shaped by consistent
lobbying and pressure by local business, foreign
governments and companies, and multilateral
agencies like the World Bank and the WTO.
Sometimes this lobbying reflects short-term interests –
consultants make millions out of privatisation, and
financial interests can make billions – and sometimes
it arises out of ideology. In either case, our campaign
must counterbalance these forces by giving our
people, the majority of South Africans, a voice.

In addition, privatisation follows from the budget cuts
caused by the GEAR. Between 1996 and 1999,
government spending dropped steadily in real terms.
To justify these cuts, the Treasury argued that services
could be provided by the private sector instead. But
we know there is no free lunch – and private
companies will not serve our people for free. It is
simply a delusion to think that they will make up for the
shortfall in government resources.

Comrades,

The success of our anti-privatisation campaign rests
with you and all our members. We need to make sure
that every South African understands the nature of
privatisation and how it affects our communities. We
must mobilise in our workplaces and our
neighbourhoods. When COSATU publishes the
programme of action for the campaign, we must each
take part as strongly as possible

Siphiwe Mgcina
COSATU Spokesperson

[email protected]
082-821-7456
339-4911

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