Strikes, strikes and more strikes, and in the meantime, we are sinking deeper into the pit.
Within the South African labour market, strikes are becoming more and more the national order of the day, with demands being set which in any language is unattainable – yet due to the fact that those that partake in the said strikes do not understand the seriousness and the consequences of their actions on the economy of this country and the prosperity that it so desperately needs to create employment and to become a safe haven for investors, to invest in the economy in the country and simultaneously encourage growth and freedom and alleviate poverty, so evidently clear.
The South Africa growth engine in the economy is in neutral, with a downward bias (inclination or prejudice for or against one thing of person), and look out for this to be confirmed in the Budget speech of the former Minister of Finance come February 26th, 2014.
For an economy that is boasting the world’s worst unemployment rate, low or no growth is a real liability in every way. Even this alone makes it obvious that sooner rather than later a lot of South Africans could consider the state of the economy the most pivotal (of crucial or central importance) issue in this election cycle and beyond.
The perennial (lasting for a lifetime) question of the first 20 years of our democratic dispensation has been: how do we get this economy moving fast enough and working for all South Africans? The answer lies somewhere between reality and wishful thinking.
The reality is that South African competes with the rest of the world for capital. Investors do not buy our shares or invest in our assets as an act of charity; they do so if they believe that they will be substantially rewarded for return on their investment. So any whiff (a smell that is smelt only briefly or faintly signifying something bad) of potential trouble is enough to send investors scurrying (hurried with short quick steps) for the exists.
Current delinquencies (neglect of one’s duty /failure to pay an outstanding debt) are now running at 61.8% of the credit active consumers, up from 58.3% during the 2009 recession.
An interest rate hike would raise the delinquency rate rapidly causing further deterioration in employment on the private sector.
Strike activities in the mining sector, which will be followed by another strike somewhere, will be a harbinger (a person of thing that announces or signals the approach of something bad) of things to come should this have the consequences of having to raise the interest rate.
Demanding unattainable remunerations is like shooting yourself in the foot, especially in a country where our growth rate is closer to 0% than anything else. Where should the money come from to pay these outrageous demands, when the economy is not growing and the employer doesn’t have any sales for its products?
The rand is at its lowest level to the dollar in many years, and this is a clear indication that the investors in the world market has lost confidence in the South African economy where we as a country import more than what we export, leaving us with a trade deficit and this has to be financed, and the only way that it can be financed is through loans, at high interest rates, and then the treasury have to increase taxes to pay the loans, and in the end the ones that are suffering are those that are demanding unattainable salary packages and or remuneration for trivial work.
We need to do introspect of what we really want to achieve through these almost daily strikes – we are the ones that even if those unattainable demands are met, will lead to layoffs, increases in prices of commodities to pay these demands, and then the situation is a ‘catch 22 situation’ where we will have to again demand more to pay more for the goods.‘Half an egg is always better than no egg at all’ and this choice is ours to make