So, these three directors of ESCOM walk into a bar, see . . .
South Africa has no good stand-up comedians, otherwise a joke like that almost writes itself. It only lacks a punchline. Fortunately, ESCOM and the “Electricity Regulator of South Africa” (ESCOM in a silly hat) have provided the punch, which can be summed up in a line.
Electricity tariffs up 71% in three years.
Notice, that’s allowing for inflation. In simple rands, the increase is 98%. And, of course, ESCOM was asking for 146%, so we are told this is a bargain. It is, of course, a bargain, but not a bargain for us electricity consumers; it’s a bargain for the multinational companies which will buy ESCOM’s assets on the cheap, divvy them up and stuff our money into their big pockets in the Cayman Islands. There is no longer any room for doubt that this process is all about facilitating electricity privatisation; the corporate financial consultants are now admitting it. Meanwhile, the fact that Barbara Hogan, our Minister for (Privatisation of) Public Enterprises, has declared that private consumers should pay more for electricity so that the poor corporate electricity users can have an easier time of it (she didn’t quite use those words, instead lying by pretending that the corporate users didn’t pay less for electricity, which they do) , we know what the score is.
Well, we aren’t supposed to know what the score is. No news outlet at all has pointed out what is happening now. Let alone the ENRON-style scam which made it possible, by panicking the lame-duck Mbeki government into allowing ESCOM to first order massively overpriced new power plants in an unnecessary rush, and then blackmail the government into massively subsidising the excessive payment. However, Mbeki’s bungling could have been reversed; the Zuma government has locked the system into place, while big business has helped it out by systematically lying. But you can tell what’s going on behind the curtain because of the orgasmic shrieks of the fat cats.
This is what the Creator has been saying for some time, but it gives no pleasure to know it. Note, please, that this increased cost of electricity translates into less corporate investment, less small business development and less consumer spending, therefore slower economic growth. It also translates into more inflation, therefore higher interest rates, therefore less borrowing for investment. These are mostly, probably, small effects, but they are there, and a few economists are even admitting that they are there, though of course these economists nevertheless support increased electricity prices because their best friends are getting the cash and some will trickle down to them. (Virtually all economists are corporate economists, these days.)
More to the point, the buying out of ESCOM will not represent more wealth for South Africa. It is extremely unlikely that ESCOM will be sold for enormous sums. Instead, it will be sold off piecemeal, to various buyers (often, of course, fronts for the same multinational) which will make it possible a) to charge much larger consultancy fees kicked back to individuals involved in the deal, amongst whom will undoubtedly be Hogan and her friends, and b) to conceal the actual cost of the sale, which will be low. Then, of course, the profits will leave the country. Within a couple of years, this capital flight will be more than the entire sum obtained from the sale of ESCOM’s assets. And every year after that the capital will continue to flow out of the country. It is like our mining companies moving overseas.
Meanwhile, there will be as little investment in electrical infrastructure as possible. If you don’t like that, move somewhere else where the state owns the electricity companies. But don’t blame the companies providing the electricity. Blame the government. The newspapers will tell you to, because they will be paid by the companies providing the electricity.
What’s also interesting is that Hogan has hinted that the new price will fall particularly heavily on rural electricity users. Those lights that are on in the valley? Those lights are going to go out. It’s cheaper to supply electricity to the cities than to the countryside. The whole ANC push to electrify the villages and thus give poor children the opportunity to study after dark is going to be reversed.
The Creator was right about all this just because this is how things work in this modern world (™Tom Tomorrow). However, you might, if you have been paying any attention at all, be a little surprised by one of the features of these remarkable developments. This is the massive uprising against the electricity price increases and the openly proposed privatisation of electricity companies, the great electricity war, rivalling or exceeding the water war in Bolivia eleven years ago.
You might be surprised; why didn’t this happen?
It is true that the trade unions have made a noise about this affair. To be precise, the white union Solidarity has complained that the electricity price increase will be bad for business. (That surely tells you what you need to know about Solidarity; a trade union so passionately concerned with the rights of employers.) COSATU has said that it is “unacceptable” that this electricity price increase is so high. However, neither trade union has said anything about either a) the scam around a supposed need for more power plants (the need was less great than claimed, and it was filled by tremendously overpriced plants purchased without competitive bidding), or b) the whole privatisation project, in which we are paying to provide ESCOM with both plant and profits calculated to make privatisation more attractive. Why aren’t the trade unions talking about these things? Why aren’t they noting that this whole affair is straight out of the neoliberalism IMF/WTO handbook, the kind of thing Naomi Klein and Arundhati Roy used to write about?
They aren’t mentioning these things because their workers are very, very concerned about such issues. South African workers are not stupid and they can join the dots. Point out the extent of ESCOM’s crookery and the workers will scream. They’ll scream and demand action, because this is a gun pointed at their heads. They know that the goal of big business is to cut their wages and destroy the Labour Relations Act, and they will easily see that expensive privatised electricity is a strong potential tool to enable businesses to say “We can’t afford high wages or high employment any more because of this pesky electricity thing”.
Electricity market flexibility equals labour market flexibility?
So you’d think that the unions would mention these things, not so? Except, of course, if they do that, if they get their workers het up, then the workers might demand that they stop these things from happening. They have the clout to do so, too. If the workers of COSATU so desired, they could stop Hogan in her tracks, not to mention all the corporate consultancy Sirens singing in Hogan’s unblocked ears.
But the leaders of COSATU don’t want that. The leaders of COSATU make much of their money from COSATU’s corporate investments. They are also, most of them, engaged in BEE scams, getting directorships in white companies in order to act as black front-men in pursuit of government contracts and good PR. In short, the interests of the leaders of COSATU and the members of COSATU are diametrically opposed. What’s more, COSATU’s leaders are getting a good deal out of the Zuma government, which they supported and which is now pressing for privatisation. The Zuma government survives by virtue of the support of big business. COSATU does not want to rock Zuma’s boat — to do so would have to be to admit that the leaders of COSATU took all their workers into battle on behalf of Zuma on false pretenses, at the behest of big business. If they admitted that, the leaders of COSATU would be lucky to get out of town with their pants still on.
So that’s why the unions are urging their members to look over here, at the increased price, and not over there, at the process by which the increased price was obtained and the purpose for which it was introduced.
But, thank God, we have the Trotskyites. They have not benefited from any of these corporate matters, being principled Marxists of the Leninist (but definitely not Stalinist, Maoist, Titoist or Bolivarian) stamp. We have Patrick Bond, Richard Pithouse, Ebrahim Harvey and Ashwin Desai. We have the Soweto Electricity Crisis Committee dedicated to promoting the cause of cheap (actually, free) electricity. We have the Anti-Privatization Forum, which, its name subtly hints, is devoted to discussing opposition to privatization. Well, the Creator has been critical enough of the Trotskyites, but at least they are there when we need them.
Wait a minute. Where are they? In the old days you could be sure that when there was an opportunity for a bit of good PR, the Trots would be there in the nearest friendly township, handing out T-shirts and lunchpacks to anyone willing to hop in the back of the van and drive to where a demonstration was required. There might have been only a dozen Trots, but thanks to the Rosa Luxemburg Foundation there would always be funding for a modest mob to stand and chant, and be photographed carefully for the newspapers to indicate the mass support for whatever was being chanted.
There were plenty of occasions last month for this. The electricity regulator was holding “public hearings” (basically opportunities for those fat-cats who weren’t in on the deals to whinge ineffectually). Had the Trots been there, possibly relevant issues could have been raised. Instead, they were not. Not the APF, not the SECC, not anybody. It’s as if they didn’t exist.
Why did the Trotskyites suddenly decide that the primary issue which they had campaigned about for fourteen years, namely the contention that the ANC was going to sell the people out to foreign big business and privatise state assets, no longer mattered? Was it because the ANC is selling the people out to foreign big business and privatising state assets? Can it be that the Trotskyites were supported, not actually to prevent the ANC from doing these things, but to undermine those elements in the ANC which did not wish to do these things? Can it be that the Trotskyites are just as corrupt as COSATU, and in precisely the same way?
Gosh, the concept of a corrupt, dishonest Trotskyite is so shocking to the Creator that it’s just impossible to go on. Sorry. Loss of illusions is a terrible thing to experience. Next you know, it’ll turn out that my tooth wasn’t taken by a fairy . . .
So, these three directors of ESCOM walk into a bar, see . . .