South Africa’s deteriorating economic situation is becoming increasingly difficult to ignore.
Last year, the International Monetary Fund warned against forecasts about the health of the world economy that the worst was yet to come. And in South Africa – despite the encouraging words from some commentators who are drilling that the country can be brought back from the brink – it is becoming increasingly difficult to imagine that we will be an exception.
In the aftermath of the unrest that spread across several countries in July 2021, some warned that the country’s worsening economic situation was a powder keg. Another explosion, he said, was guaranteed.
Meanwhile, social upheaval has taken on an increasingly familiar form: small fires everywhere. The question is, what (and who) will connect those small fires, causing a full-blown fire?
Last week brought more bad news about the economy.
S&P Global downgraded South Africa’s outlook from positive to stable, as the rating agency said the country’s energy crisis will disrupt growth. which expects a shallower contraction and suggests that the country is entering another technical recession.
Also supporting recession concerns, business confidence fell again in the first quarter of this year, according to an index compiled by the Rand Merchant Bank and the Bureau of Economic Research. The index shows that 64% of businesses are not satisfied with their existing operating conditions.
Then the rand issued R18.50 to the US dollar, the weakest level since May 2020, after Federal Reserve chairman Jerome Powell suggested that interest rates in the states will rise to a higher level than previously expected.
The majority of us will feel the most acute weakness of the rand due to still high inflation and South African Reserve Bank interest rates in response. Next to reducing the burden, the long cost of living crisis is one of the biggest risks to the economy and social stability of the country.
The cost-of-living crisis has, after all, given the backbone to several protests, including controversial industrial action by health workers affiliated with the National Education, Health and Allied Workers Union (Nehawu).
Although it is difficult for the public to be alarmed by a sudden strike – especially when it violates access to already inadequate services – we can also appreciate that the economic situation is deteriorating, and that should be enough to rally. calls for solidarity and more widespread protest.
Last year, the trade union federation Cosatu called a national strike with the aim of forcing the government “to fix the economic mess the country has found itself in.” [in]”.
In a statement released before the strike, Cosatu outlined several compelling reasons for the mass action: “Right now, half the country lives in poverty with many families forced to live without adequate food and many unable to find work. Workers cope with wage stagnation with wage cuts by inflation and punishing debt … The growing frustration in the country is mainly fueled by policies that favor the elite and colored by animus against the poor.
The South African Federation of Trade Unions (Saftu) also joined the strike and supports the current indefinite strike by public sector unions, led by Cosatu. Five years ago, the two federations failed to find common ground when Saftu launched a one-day national strike over a proposed minimum wage and amendments to labor relations laws that curtailed the right to strike.
The meeting of Cosatu and Saftu could signal that labor is willing to put aside its differences, which have long undermined the movement’s strength, to fight against the state and the capitalist class that have aligned themselves.
The problem is that the South African labor movement has proven to be an unreliable spokesperson for expressing our frustrations. This is because Cosatu, still the largest trade union federation in the country, continues to balance its alliance with the ANC against the interests of workers and the public.
The closeness of the federation to the ruling party has eroded public trust.
It also didn’t help that, with the fall of private sector unions, Cosatu’s interests were increasingly aligned with those of the public sector – which was easily blamed for the collapse of service delivery. The last major public sector strike in 2010, which also put lives at risk, divided the country, with many turning against unions.
Cosatu understands that strike action in the public sector threatens solidarity demands. “A successful strike must be based on persuasion and not coercion. This is the only way to galvanize and mobilize for a strike of sympathy and solidarity action that embraces the largest part of the workers,” said the federation this week.
The dispute over public sector wages has become a clear battle in the labor battle for relevance in the tripartite alliance and this political dynamic is disturbing enough to reduce the public – although there is something out of Nehawu’s agitation which is reported to break ranks with the ANC.
If the labor movement fails to continue to fight for a fairer economy, and if it cannot unite other parts of society under this banner, coordinated action against the failed state can continue to elude us. Whether you consider that good or bad is your business.
What we do know is: those little fires will continue to burn. Many others can be lit. And, if we have learned anything from the riots in 2021, it is that the character of the final fire – whether it is cleansing or chaotic and dangerous for all in its wake – will be determined by those who control it.