South Africa's Suspended Revolution: Hopes and Prospects

4. The viability of a sustainable social pact

111 4 The viability of a sustainable social pact Social pacts have become a mantra of South Africa’s political transition. Ever since the notion was mooted by Geoff Schreiner (1991; 1994) and Adrienne Bird (Bird and Schreiner, 1992), who were then senior officials in the Congress of South African Trade Unions (COSATU), the idea of a social pact has appealed to leadership figures in business, labour and the state. It is not difficult to imagine why. After all, a social pact promises the possibility of peace between warring social partners, a non-zero-sum outcome where all sides stand to gain at least part of what they desire. For an incumbent political elite, who needed to manage popular and stakeholder expectations and grow the economy, a social pact was a particularly attractive solution. But the romanticised expectations and euphoria surrounding the establishment of the National Economic Development and Labour Council (NEDLAC) in 1996 were soon dashed by the cold reality of everyday economics and politics. Within a year or two, business, labour, and the state were bickering over the Growth, Employment and Redistribution (GEAR) strategy, and almost all other government policies. A climate of political mistrust spread throughout the country during President Thabo Mbeki’s terms in office, interrupted by brief attempts by the African National Congress (ANC) and COSATU to broker a kind of truce – usually around election periods. Yet although hopes for a social pact were dashed, the idea retained its hold on the imaginations of many academics and leaders in business, labour and the state. Every now and then, therefore, 112 South Africa’s Suspended Revolution the idea resurfaces. It arose for example after the upsurge of labour activism following the ANC’s victory in the general elections of April 2009. At that time, driven by the biting effects of the economic recession, the global backlash against corporate executives’ remuneration packages, and the fear that the ANC (including COSATU members deployed in the Cabinet and in government more broadly) was abandoning its roots and being seduced by the trappings of office, unions became more active and robust in their wage negotiations. Over the next few years, this led to a set of rolling public and private sector strikes. In 2010 20 674 737 workdays were lost – the highest yet recorded (Department of Labour, 2011: 26). Caught off guard, business and political leaders initially reacted by berating workers. ANC leaders, most notably the general secretary, Gwede Mantashe, accused workers of compromising the image of the Zuma administration (Business Day, 6/11/2009). Business leaders responded true to character, highlighting the threat of investment fleeing South Africa’s shores (Business Day, 17/08/2010; Black Business Quarterly, 19/02/2011). In the midst of all of this, the notion of a social pact was again advocated by a number of leaders from all of the contesting stakeholder groups, as well as by academics and political commentators. But is a social pact feasible in South Africa, and why did earlier attempts at forging such a pact fail? To answer these questions, it is necessary to understand the political, economic and social conditions that enable social pacts to emerge and succeed. In my view, the South African literature on corporatism1 and social pacts has not investigated this sufficiently. Indeed, much of the literature has been dedicated either to describing union (and business) behaviour (Adler and Webster, 1995), or offered superficial analyses of comparative cases with a view to identifying the adoption of a corporatist route in South Africa (Maree, 1993). However, before addressing the fundamental question of whether an equitable social pact that promotes 113 The viability of a sustainable social pact sustainable inclusive development is viable for South Africa, it is fruitful to undertake a brief review of the idea of a social pact in South Africa, its institutionalisation through NEDLAC, and the successes and failures thereof.2 Social unionism and South Africa’s first social pact South Africa’s democratic transition, like those of most ‘Third Wave democracies’ (Huntington, 1991), has been characterised by two distinct transitional processes: political democratisation and economic liberalisation. The goal of the first is representative government. The aim of the second is the integration of South Africa into the global economy. From the early 1990s, COSATU’s leadership was refreshingly aware of the dilemmas spawned by this Janus-faced transition, and during the first few years of the negotiations period, they...