In just less than two months, South Africa has already experienced fuel price increases twice.
Develop Me with Tapiwa Gomo
The last increase which saw petrol trading at almost 14 rand a litre was effective on February 5. Each increase in fuel prices pushes the cost of living upwards, eroding the stagnant earnings especially among low-income earning citizens.
There is every justification for the labour movement to convert main roads into dance floors of protests as their constituent is the worst affected. The mine workers’ movement has not stopped marching since the Marikana incident. And the South African economy, which is traditionally dependent on a stable mining industry, has been dented and may continue to feel the pinch of the recent fuel price increases and host to the theatre of the labour movement.
By August 2013, the South African rand had fallen by 15% against the US dollar. Some analysts have projected that the rand may fall to 16 rand against the US dollar by the end of 2014 unless the economy is stabilised.
This is happening to an economy that has not yet recovered from the vagaries of the global recession.
In fact, analysts, by early January this year, had cautioned that the economy has been growing at below its potential since the 2008 global financial crisis.
One is tempted to think that this is the time when a nation expects its politicians to demonstrate leadership and step in to bring the two sides together to save the economy. The truth is that the labour movement and the employers, or rather investors, need each other in order to mend the situation.
The longer the standoff protracts, the wider the rift and more is bound to be lost in the cleavage.
It is the economy that suffers and everyone loses in the end.
There is no doubt that it is a scary hiatus to scale for the ruling African National Congress (ANC) given that in just a few weeks, there will be elections.
Calling the labour movement to order, necessary and relevant as it may seem, is surely a risky venture considering that workers are getting hungrier and angrier as they are losing the value of their earnings or their jobs every day. On the other hand, employers are unhappy as production has gone down due to industrial action and frustrated by the increase in the costs of imported raw materials.
The ANC needs political survival in the short term and they know that the same disgruntled workers are their major constituency. They are also aware that the biggest economy in Africa is fast shrinking to precarious proportions not because of any natural causes, but their lack of strategic focus and management.
So they choose to trade cautiously on both economic and political ends.
During a recent Mining Indaba, Minister in the Presidency Trevor Manuel was in a pulpit mode as he called on all parties to ensure peace.
“You are dealing with an environment where there’s exchange rate volatility and you need, at least, to secure industrial peace in order to ensure that we can attract and retain the investment and look to the mining industry because it is so fundamentally important to the South African economy.” He told the gathering at the Indaba without elaborating how his government would intervene to ensure peace prevails.
It may seem as if the ANC is using peace as the currency to buy time as they drag their feet until people cast their votes.
But such an approach may backfire and will have colossal consequences both economically and politically. For example, the ANC’s silence has created loud echoes in the new political parties emerging in South Africa today and yet the damage on the economy is seen in the high unemployment rate of 24% in 2014 and investor apprehension and possible flight.
There is no doubt that the ANC will win the next elections, albeit a huge dent, but the ostrich approach of hiding their heads in the sand from the current storm may haunt them immediately after election.
There is no doubt that the voices of opposition will have grown in stature in Parliament and that the economy will need serious attention, while on the social front more problems will be mounting in a country where the number of people of receiving social welfare grants is growing faster than taxpayers.
The 16 million social grant beneficiaries in 2014 will gobble up to R113 billion this financial year.
Like one of my colleagues explained it, it is like going on protest on a doctor who is in the intensive care unit and on a life-saving machine, whose life needs to be saved first before addressing the lives of those protesting.
It is inconceivable how the labour movement in South Africa will have their grievances addressed without understanding those of the employers.
Only the government, as the mediator, rather than a peace-maker, should have a better understanding of the situation with the full view that everything else that goes on in South Africa is because of the economy and it needs to be protected and sustained.
Tapiwa Gomo is a development consultant based in Pretoria, South Africa.