AFTERMATH: A police van lies destroyed in the main street of Wolseley, near Ceres, on Wednesday after protesting farm workers went on the rampage. Picture: HALDEN KROG
AFTERMATH: A police van lies destroyed in the main street of Wolseley, near Ceres, on Wednesday after protesting farm workers went on the rampage. Picture: HALDEN KROG

THE violent protests at Lonmin’s Marikana mine and the farm unrest raging through the Western Cape wine belt are not just a labour market crisis but a perfect storm of a number of crises — political, economic and labour market — all coalescing at the same time. A solution limited to wage increases only, firing workers en masse or tightening or loosening central bargaining will be terribly counterproductive.

Economic growth in South Africa has been too sluggish over the past few years to increase the rate of job creation, reduce poverty and create wealth. Economic growth has been mostly jobless and not inclusive. It has reinforced the inequality of race, class and opportunity.

At the same time, there is the failure of the state to deliver effective public services. One can call these public services a "social wage". This means that during these hard times, it is not capable of providing a cushion through such a "social wage".

However, as state failure increases and the "social wage" shrinks, workers try to secure higher wages to compensate — to pay for rising public transport, education and housing costs.

Many may never get another job in their lifetime if they are retrenched. Others, even if they are fortunate enough to have a regular income, can barely survive on it. Retaining a job and negotiations for higher wages or to avert retrenchment are therefore increasingly becoming life or death affairs — as the Marikana and the winelands unrest shows.

But ordinary people have also lost faith in the institutions and arrangements that underpin the post-1994 social contract, such as Parliament, the collective bargaining system and the National Economic Development and Labour Council. Democratic institutions are increasingly experienced by ordinary citizens as unresponsive, unaccountable and irrelevant.

The traditional "legitimate" institutions and leaders, such as political parties, certain civic organisations and trade unions and their leaders, are also found to be increasingly irrelevant in a fast-changing society with new needs and new problems, and which need new ideas and new tools. If these "legitimate authorities" don’t become more responsive, accountable and democratic quickly, people will increasingly look to new ones, including populists ones, or seek answers in violence.

For example, Marikana has called into question the reason for the existence of trade unions. At Marikana, workers rejected established trade union representation by the National of Union of Mineworkers and put together worker committees to negotiate on their behalf, circumventing the official bargaining processes, which suggest that both the union and the official bargaining process risk irrelevance.

Even the African National Congress (ANC) appears to be in danger of becoming irrelevant. The Marikana violence showed that the social gap between the ANC and its leaders and its supporters is so wide that the local ANC did not even know what was happening there.

The present violent farm protests in the Western Cape wine belt have been spearheaded from outside established trade unions and political parties.

But South Africa’s business models are also under pressure. The model of low wages, migrant labour and minimal skills transfers, and the provision of amenities for workers versus huge remuneration and benefits for executives is never going to be sustainable.

Marikana is also a direct result of the failure of black economic empowerment (BEE) as a policy to broadly empower black South Africans. BEE is simply the wrong policy — it empowers a small elite, mostly because of their political capital rather than their proven ability to set up and manage bricks-and-mortar businesses.

The best solution is to pursue policies that empower the largest number from the black majority — mass quality education is the best bet. Instead of pursuing BEE deals with politically connected elites, business should rather give shareholding to employees or surrounding communities, or aggressively transfer employee and surrounding community skills. If workers at the Marikana mine had been given a shareholding in the mine, and the rock drillers had been trained in new skills, the chances of the Marikana violence happening may have been reduced.

Since this current round of mining unrest is not a "normal" labour market issue, dismissing workers will not work — it may escalate violence and instability.

Companies will have to lift wages, while at the same time negotiating pacts with workers to strike formal agreements to raise productivity and to link future wage increases to inflation and company profitability. The current BEE strategy, in which mining and other companies partner with senior ANC leaders and trade unionists as insurance against transformation pressure, is discredited. Giving BEE stakes to employees, transferring skills and wealth through providing housing; and other alternatives, such as empowering surrounding communities, are much more sustainable options.

In any event, such BEE activities will offer better protection against popular outrage.

All trade unions in the mining sector agree that a mining indaba with all the stakeholders is needed to resolve the crisis in the long term. It would provide an opportunity for mining companies and trade unions to construct a long-term partnership to protect the viability of South Africa’s mining sector and the broader economy. Such an indaba would have to deal with issues such as minimum wages, housing, skills development, a new kind of BEE and a mining victims’ fund for the sector.

To prevent more Marikanas, we need to set up a coalition for growth between all stakeholders — the government, business, opposition political parties, trade unions, civil society and citizens — that goes beyond the ANC’s inner ruling elite.

Such a coalition should pursue pragmatic policies and agree to mutual compromises that make South Africa prosperous.

South Africa’s large and sophisticated business sector is at a competitive advantage compared with many other competing emerging markets. However, since 1994, the energy, skills and know-how of South Africa’s business sector has not been effectively leveraged by the ANC government for development. Most of the successful East Asian developmental states were built on the back of growth coalitions between governments and businesses. Business saw the mutual benefit of partnering in a national development strategy: a virtuous cycle of new growth opportunities for them and their country. In many of these East Asian states, businesses disciplined their free-riding peers. East Asian developmental state governments secured the trust of business by delivering effective services, minimising corruption and governing fairly reasonably in the interest of the largest number of people — not only a small elite.

Since such a broad national coalition for growth may not be feasible in South Africa, sector-based growth coalitions may be an option. This will mean that the mining and farming sectors must convene indabas at which all stakeholders are represented to forge a common growth strategy for the future.

The government must genuinely govern in the interests of all South Africans.

It must govern better, be more accountable and cut corruption to secure its own credibility, without which growth coalitions are not possible.

• Gumede is author of the recently published Restless Nation: Making Sense of Troubled Times (Tafelberg).