Privatisation agenda will not save SA

The state has tried the neoliberalim model in various forms for 31 years and it has not worked

- Andile Zulu

The World Bank has approved the $1.5 billion Infrastructure Modernisation for South Africa Development Policy Loan to provide funds to “enhance energy security, increase port and rail volumes and support the transition to a low-carbon economy”.

Does this new loan not contradict the government's stated efforts to practise fiscal responsibility?

For the past several years, the treasury has said South Africa stands on the edge of a fiscal cliff, prioritised servicing debt and chased a budget surplus at the expense of direct public investment to create jobs and satisfy the needs of millions overwhelmed by poverty and the cost of living.

Since 2010, the government has taken on six foreign loan agreements with the World Bank, placing greater pressure on repayment of debt.

The treasury operates within a logic that justifies the agenda being pursued by the government of national unity (GNU). Behind the curtain of political theatre surrounding debates on education, land reform and black economic empowerment, the government is united by a commitment to structural reforms that will extend an exploitative and costly dependence on private investment for public infrastructure development.

A central component of placing public utilities and services in the hands of private operators is fiscal consolidation. Austerity shrinks the role of the state, weakening its ability to service the public and enforces reliance on private firms, clearing space for market competition. Austerity measures in Kenya and Argentina have increased poverty and shrunk wages.

Private companies needing to cut labour costs require workers who are easy to hire and fire, unprotected by collective bargaining. Around the world, creating labour market flexibility has produced job insecurity, eroded workers' rights and heightened exploitation