Johannesburg - The Congress of SA Trade Unions (Cosatu) wants a complete overhaul of the South African economy, its general secretary Zwelinzima Vavi said on Wednesday.
"We inherited a disastrous growth path from the apartheid era, a commodity based economy which is anchored on capital intensive sectors of the economy," Vavi said after a meeting of Cosatu's central executive committee (CEC).
To add insult to injury, the country had adopted inappropriate macro-economic policies.
"The underlying cause of the crisis now ravaging the working class is the mistaken policies between 1996 and 2004," Vavi said.
These included cutting tariffs and privatising basic services, conservative fiscal and monetary policies and "appeasing the narrow interests of financial markets in particular".
Focus on labour
Cosatu wants a new growth-path linked more to industrial growth, and a more expansionary fiscal and monitory policy.
There was a need to move away from capital intensive sectors of the economy and focus on more labour intensive sectors, said Vavi.
Cosatu welcomed an undertaking by Finance Minister Pravin Gordhan and newly-installed South African Reserve Bank Governor Gill Marcus to open discussion on micro economic policy.
It also welcomed Marcus's willingness to engage on inflation targeting.
"We think that the policy has been a disaster for South Africa's development challenges," said Vavi
He blamed inflation targeting for the high interest rate and the high exchange rate.
The country's exchange rate also needed to be looked at.
The currency was far stronger than the country's economy demanded, Vavi said, adding that a rate of R10 to the Unites States dollar would "give the manufacturing sector a breath of fresh air". Fixing this rate could also be considered.
"In South Africa, we believe too much in the forces of the market... we are calling for a much bolder government... a government that realises we are in deep, deep crisis... not a shy government that is a prisoner of the markets," Vavi said
The ANC's insistence that South Africa would maintain its conservative and sound fiscal and monetary policies, would not deter Cosatu from its desire for change, he said.
Cosatu would develop a framework document to outline how the economy needed to change.
It would detail a policy position on exchange rate management, interest rate policy and inflation control.
Nothing to smile at
Vavi bemoaned this year's massive job losses and the high rate of unemployment
"We are going to see massive net job losses in 2009... we estimate that more will be lost between now and December to make the number way above a million," he said.
He said the 959 000 jobs lost in the past nine months would not be cancelled by the 0.9% growth rate, announced by Statistics SA.
"... That's why we are not even smiling at the 0.9% GDP [Growth Domestic Product] growth."
It remained to be seen whether this was "a statistical artefact" or reflected an "underlying turning point" in the volume of production.
"Surely we are in crisis... I have never seen unemployment going below 23%.
"The worst mistake we can make is to continue to blame the international economic crisis for our woes.
"... In South Africa, we have been in any case sitting on a ticking time bomb since the 1994 democratic breakthrough," he said.
- Sapa