Zwelinzima Vavi, General Secretary, COSATU

Input to 31st Congress of LO-Norway - 8 May 2005

Dear comrades and friends,

I am grateful for the opportunity to speak at this important event. We are proud of the strong ties between our two Federations, ties that go back long before we in South Africa won our freedom. Indeed, without the support of the Scandinavian unions, South Africa's liberation would certainly have been even more delayed. Thanks again for your immense contribution to freeing humankind from the bondages of apartheid and oppression.

Comrades and friends,

The past few years have underscored the risks of a unipolar world - a world where the U.S. enjoys sole domination. We have seen the invasion of Iraq and open bullying of other states backed by the threat of war.

The reversion to gunboat diplomacy, where the U.S. thinks it can determine what is best for the world can only be stopped by the solidarity of working people around the globe.

Perhaps even more worrying has been the quieter violence of globalisation. Its written and unwritten rules undermine efforts in both the North and the South to improve conditions for workers, ensure greater social and economic equity, and bring about sustainable development.

The most obvious place these rules are imposed is at the WTO. Current trade rules harm workers and the poor in three ways.

First, they treat unequals as equals. The fact is that countries in the South need to develop new industries in order to increase employment and improve living standards. New sectors usually require considerable government support to become competitive, including trade protection and often subsidies.

Every country that has developed historically, including all of Europe, the U.S. and parts of Asia, used massive tariff protection and other types of government support to build new industries. But the WTO has largely ruled out these types of structural policy. The current negotiations may go even further by imposing a formula for tariffs that leaves almost no scope for national policies.

In addition, some Northern states want to impose free trade in services. That can even outlaw anti-poverty measures, which often involve subsidies to service providers for the poor. In Mexico, the government was recently told that its subsidy to the state telecommunications company to ensure universal access was illegal under WTO rules.

Second, the WTO rules still permit competition based on exploitation of workers and the environment. Employers will always cut corners to make profits. In some cases, the WTO has ruled against government regulations to address this tendency. Even more fundamentally, multinational companies now seek out areas where workers are poorly organised and desperate. That undercuts workers who have managed to build strong organisations and win rights and better conditions.

Third, even on their own terms, the WTO rules remain unfair. Barriers to exports by developing countries remain strongest precisely in labour-intensive areas like agriculture and clothing. Trade in these industries would go some way toward creating employment for the poorest in developing countries. But these are precisely the sectors where countries in the North have retained strong protection.

Beyond the WTO, globalisation imposes its own, unspoken and massively unfair rules. The effects on fiscal policy and labour rights have proven particularly harmful to workers both in the North and the South.

The free flow of capital between countries makes it harder for governments to adopt expansionary fiscal and monetary policies. Restrictions on government spending in particular can lead to slow growth and rising unemployment, as well as cuts in government spending on basic services for the poor. In many countries, workers have seen the gradual dismantling of structures for social protection for which they struggled for over decades, even centuries.

At the same time, we are seeing continual attacks on labour laws by employers and multilateral agencies. The argument comes up repeatedly that workers' rights slow down job creation and growth. We are urged to give up gains won over the past century and a half as the price for keeping jobs at all.

This is not a trade-off we can accept. We cannot accept that world trade and national growth can be built on a race to the bottom. Our own experience in South Africa is that the sectors with the worst conditions for labour are also the slowest to grow and develop.

We are told that labour and the poor in general must sacrifice because globalisation will speed up growth, which will ultimately raise living standards even for those who lose out now. But workers know that capital almost never lives up to its promises, and that is true for globalisation as well.

The ILO's World Social Commission found that world economic growth has actually declined as globalisation accelerated in the past 20 years. Analysis of World Bank data shows that per person, the international economy expanded at 2% in the 1970s, 1,3% in the 1980s, and only 1% in the 1990s. In the World Commission's words, 'It is striking that global growth has been slower since 1990, the period in which globalisation has been most pronounced.'

Poverty has improved worldwide only because of gains in India and China, which have hardly held to the Washington Consensus. Studies uniformly show that China's access to the WTO has already led to growing inequalities, which are likely to deepen still further in coming years.

Sadly, our experience in South Africa since we won freedom is practically a textbook example of the problems of globalisation. Under apartheid, the economy was increasingly closed to international trade and investment. From the early 1990s, that situation was reversed.

But opening the economy has not brought the benefits promised us by multilateral institutions and big business. Instead, we have seen slow growth - averaging about 2,5% a year - and soaring unemployment, with investment well below the levels needed for sustainable, equitable expansion.

Since 1994, joblessness in our country has grown from 16% to almost 30%. The vast majority of the unemployed are young, educated Africans. The average unemployed person has eleven years of education. Jobs have been created in low-wage sectors like retail, construction and the informal sector. Meanwhile, the core of the productive sector and the union movement - the big formal companies in mining, manufacturing and the public sector - have been decimated.

In addition, in the mid-1990s, faced with the threat of a massive capital outflow, the government imposed fiscal restrictions that led to substantial budget cuts. Yet apartheid left many of our communities with entirely inadequate health, education and basic services. In these circumstances, fiscal cutbacks imposed great burdens on our people. Since 2000, we have seen renewed growth in government spending, which has contributed both to higher living standards and faster economic growth.

Our experience underscores the risks of aiming for an export-oriented strategy without taking into account internal needs or international realities. South Africa historically exported minerals, which were joined in the 1980s by heavy chemicals and cars, largely due to massive state support. The government's emphasis on exports means that these sectors have continued to grow faster than the rest of the economy. Yet they simply cannot create jobs on the scale needed to address the unemployment crisis. WTO rules and fiscal restrictions, however, make it very difficult for us to build other industries that could bring about employment creation as well as higher economic growth.

It doesn't help that we are not competing on a level playing field. Like other countries in the South, we face barriers to exports to the North, particularly for agricultural products - sectors where foreign sales could help create employment.

The development gap between North ands South is so huge that even if these barriers were to be removed tomorrow the gap will persist for many years to come, if not becoming a permanent feature of globalisation.

It is important that there is a growing number of voices speaking against these practices. There is however a much more fundamental question that is increasingly slipping off the agenda of the world. What is it that the world should do to end poverty and underdevelopment in the South? Where is the coherent strategy to address the huge gap between the North and the South or even within each country? Even if anti-free trade barriers were to be removed tomorrow (indeed we want them removed) the fundamental question would remain begging for an answer.

The answer to these questions cannot just be making more declarations, such as the Millennium Development goals. Already many African countries have indicated that they will not meet most, if not all, of the Millennium Development goals. The question is what should we do in the South and in the progressive North to help Africa realise the millennium goals.

Our experience in South Africa points to the importance of ensuring a progressive national response to the challenges of globalisation. There are workable responses. They require, however, that business be forced to take a longer-term view so as to ensure sustainable growth. That, in turn, means the state must take an active role, which is only possible if workers and the poor have a strong voice in national policy.

Today, then, this is the main challenge for us as COSATU: to ensure that economic policies are dictated not by business, but by the progressive forces in our country.

Our situation as COSATU at the national level points to the challenges arising out of globalisation for the international labour movement. We see two main tasks for world labour: to ensure workers can protect themselves again the power of the multinationals, and to work with progressive political parties, progressive governments and other progressive social movements to move the WTO, indeed the process of globalisation from its unfair and anti-poor agenda.

We need a new coalition of the progressive forces to develop a minimum platform inspired by the slogan 'another world is possible' to mobilise against the current trend of globalisation.

To achieve both aims, stronger national organisations are central. In COSATU, we always say that we won't win in the boardroom what we can't win in the street. That is why our core campaigns today centre on recruitment and on strengthening our organisations to improve service to members and internal democracy.

In dealing with multinationals, the ideal model is obviously to ensure support across borders against the common employer. We are proud that one of our unions, the metalworkers, held a solidarity strike in 2001 against HP Billiton for comrades fighting for organisational rights in a new aluminium smelter in Mozambique.

Ideally, we would like to see international works councils and framework agreements in all multinational companies. That may require that stronger unions and federations do more to support union organisation in other countries. Already, several of our affiliates assist sister organisations across the region with training.

Many social movements and companies have now argued that they will ensure decent working conditions even in countries where workers can't organise. Unless that approach ultimately leads to normal organisational rights, however, it can prove disempowering and unsustainable.

Throughout history, workers' conditions have only improved where workers themselves, through their unions, have a voice in monitoring and enforcing standards. The only long-term solution is to ensure strong unions and more democratic governments that together can protect workers' rights.

As for the WTO, the international labour movement has long had a minimum programme of demanding core labour standards - the right to organise, an end to forced labour, and an end to discrimination.

This programme obviously remains necessary and relevant. But it is simply not sufficient in itself to improve conditions for workers. We need to go beyond it to a developmental approach that can better serve our members in both the South and the North. The resolutions of the recent ICFTU Congress went some way toward laying the foundations for a broader engagement strategy along these lines.

A more developmental approach to globalisation would centre, on the one hand, on ensuring that WTO rules leave space for countries in the South to protect and support new industries. At the same time, it would demand that states in the North make sure that workers and the poor do not bear the burden of adjustment. Instead, governments should combine active labour market policies and appropriate macro-economic strategies so that workers never face prolonged unemployment.

Agreeing on a developmental approach to globalisation is critical for international solidarity. Otherwise we can end up seeing trade as a zero-sum gain, where development in the South must undermine workers' conditions in the North - a situation that is inherently divisive and conflict-ridden.

In Norway, as in South Africa, ties to progressive political parties give us an advantage in engaging on national and international policies. Still, our experience in South Africa is that even dear comrades only listen when we have strong organisations. After all, they face unrelenting pressure from business at home and foreign governments. Often, COSATU stands alone as the countervailing voice for workers and the poor.

We would like to see stronger political leadership in the North to accept the sacrifices needed to encourage sustainable development in the South. According to World Bank data, in 2005 only Norway and Sweden invested 1% of their GDP in international aid, while only three other countries exceeded the U.N. target of 0,7%. Certainly we would expect that target to be met at least by all E.U. member states. For its part, the U.S. is putting less than one fifth of a percent of its GDP into international aid, and much of that is actually military expenditure in the Middle East.

Even more important than increasing aid is to change economic policies to permit development in the South.

At the national level, that means reducing support for agricultural exports and a cut in tariffs on labour-intensive products. To be viable, these measures must be accompanied by support for low-income farmers and workers so that they don't bear the cost of adjustment alone.

Internationally, we must demand that our political leaders do more to ensure that WTO rules respect the imperatives of sustainable development. That means trade rules and dispute settlement processes must:

• Support economic diversification and growth in the South,
• Make it possible to extend basic services to the poor.
• Support strong labour rights for workers everywhere in the world, and
• Ensure environmentally sustainable development nationally and internationally.

Finally, in the South, political leaders face difficult tasks. Above all, we expect them to strengthen democratic institutions that give a voice to workers and the poor. On that basis, we can begin to define and implement strong development strategies that enrich the majority of our people, rather than the multinationals and the associated local businessmen.

Comrades and friends,

The tasks before us are daunting. When has it ever been easy to build the labour movement or bring about sustainable development? Still, we are sure deliberations at this Congress will take us further on both fronts.

Again, thank you for the chance to make this input. We in COSATU wish you great success in your work here. A victory for one is also a victory for all - a stronger union movement in Norway will strengthen our efforts in South Africa and around the world.