[South Africa] Cosatu Strike Will Damage SA, Say Analysts

from All Africa

Chantelle Benjamin
Johannesburg

THE national strike today by Congress of South African Trade Unions (Cosatu) members is expected to cost the economy R2bn, but economists say the real harm will be to the country's image among foreign investors.

About 1,7-million members of various Cosatu affiliates are expected to take part in the protest against job losses and unemployment.

Absa economist Chris Hart said: "The economy has started to generate jobs for the first time in a decade. We want investors to believe this is a stable environment and to continue to invest here. Instead this strike enforces old, erroneous perceptions that this country has an unreliable labour force."

Economist Richard Downing agreed that the strike would affect confidence among the international community. "Particularly in light of the security industry strike and the way it's been conducted," he said.

"SA is competing against developing countries like China and India, which pay lower wages, and at present wage demands, SA cannot be competitive."

Downing estimated that a one- day strike could cost the economy R5,5bn, but figures from previous May strikes suggest the turnout is likely to be closer to 30%, which would cost the economy R1,7bn.

Today's protest is expected to disrupt public and private sector delivery, affecting schools, mining, health services, rail and harbour operations, manufacturing and vehicle assembly plants.

Cosatu is demanding an end to casualisation and outsourcing of jobs, and that retailers buy local products instead of imports. The union federation is also calling for greater commitment to a development strategy that creates employment. The economy grew 4,9% last year and 4,5% in 2004, and government has said that it plans to accelerate the annual growth rate to 6% by 2010 in a bid to reduce the 26,7% unemployment rate.

Cosatu spokesman Patrick Craven said yesterday that the country was enjoying the fastest economic growth it had seen in more than two decades, but that many of its members were not seeing the benefits.

"At a time when we are told that our economy is booming, it is disgusting that so many of our citizens are living in abject poverty primarily because they cannot find work or have to survive in low paid, insecure, temporary jobs," said Craven.

Several of Cosatu's 21 affiliated trade unions issued statements this week in support of the strike.

The National Union of Mineworkers, with 300000 members, said it had encouraged members to join the strike because the mining industry had laid off more than 40000 workers in the past three years, while the South African Clothing, Catering and Allied Workers Union said that over the same period, its sector lost 62000 jobs.

South African Chamber of Business spokesman Johan Zietsman said the chamber did not believe the strike was a constructive solution to the problems highlighted by Cosatu.

He said the government's Accelerated and Shared Growth Initiative was designed to work towards a solution.

Business Unity SA (Busa) said it was concerned about the effect of the strike on economic growth, transformation and job creation.

"It's a pity Cosatu is proceeding with its stayaway instead of using all possible avenues, such as Nedlac, to try to resolve underlying issues," said Busa CE Jerry Vilakazi.