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Edward Love
 
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Walmart in South Africa: what it means, and why the government has done its best to interfere.

11 December 2013, 15:02

The South African government was always opposed to the idea of Walmart entering the country. In 2011, when the American conglomerate proposed the idea of a 51% stake in local company Massmart (the owner of Makro, Game and Builder’s Warehouse), both the national government and worker unions immediately protested the move.

What was the issue? The South African government aired the view that with an American conglomerate in the door, jobs would be killed and Chinese goods would be pumped into the country.

On another level, the South African government might well have feared their financial clout. Walmart is the richest retailer in the world. In fact, Walmart is the second richest corporation behind only Royal Dutch Shell. To give you an idea of how wealthy that makes them: BP, Exxon and China Petroleum National are all members of the top ten; all are substantial oil conglomerates. And Walmart is above them all. To put it into further perspective: Toyota sits only in thirteenth place, Apple seventeenth. That’s why, when the merger went through in 2012, Walmart infiltrated our shores with ease.

Still, it has agreed to toe the line. Walmart has invested a handsome sum of money, pumping fiscal impetus into the development of skilled South African workers. Its arrival has generated 4.5 billion dollars of foreign growth. But in the last year, that figure has flat-lined.

American investors are wary of a countries that impinge themselves on free-market capitalism. When the Massmart-Walmart deal was on the table in 2012, a senior member of the U.S. Chamber of Commerce admitted that American investors were waiting to see how the South African government would welcome Walmart before deciding to enter the country themselves. Now, with foreign investment tapering off, it’s clear that, while Walmart might have the financial clout to appease governments and pump money into socio-economic causes, other investors working on narrower margins of profit are less willing to indulge the risk.

At least Walmart isn’t going anywhere. Consulting firm Deloitte believes the company will have a positive impact on the South African economy. New stores under the Walmart-Massmart umbrella will generate jobs and give the consumer more places to shop. It also happens to be an international firm with a global network of affiliates, meaning it’s an influential tool in the growth of the country.

Worker Strikes
No big company is immune to worker dissent, of course. In America last month, Walmart workers embarked on a strike in cities ranging from Los Angeles to New Jersey, Virginia, Dallas, Seattle and Chicago.

All the workers want, according to CBS News, is to be treated with respect.  The union workers group, OUR Walmart, has urged Walmart employees to stand up for their rights, and cites concerns like: a single “restroom for both genders”, “emergency exits [that] are often blocked” and “workers [being] exposed to hazards.” There are examples of stacked boxes falling from great heights and forklift drivers working in the same areas as on-foot crew. “Forklift drivers routinely drive into the dark trailers and containers while workers are inside, presenting a risk of workers being hit by forklifts”

But it’s not the forklifts at fault, of course. These are essential tools in the warehouse trade that drive jobs and generate revenue for big companies. The problem inevitably falls at the door of the workers themselves, who are disgruntled and unwilling to follow proper procedural practises. Walmart has distanced itself from claims that it is not educating its staff. In Bangladesh, where dangerous working conditions are notoriously common for the local populous, Walmart has, in fact, pledged inspections at 100% of its factories to ensure safe working conditions.

It turns out that the problem in America isn’t a safety concern as much as a monetary one. Anthony Goyita, a father of four, works night shifts at the Walmart store in Duarte, California. He wants a better wage and a bit of respect. Courtesy of CBS: ‘“I'm a hard worker and take pride in my work"’. Working part-time, Goyita earns $9.60 (R97) an hour, or roughly $12,000 a year (R124 440). ‘"I'm not a slacker. I'm there on time. I give it my all, and it's only fair I should be compensated for that."’

But David Tovar, Walmart’s vice president of corporate communications, believes they are employing enough staff and dispensing a very fair wage. And with over a million people on their books, Walmart has the biggest employee-pool in the world. It’s hard to argue with that.

Here in South Africa, Walmart appears committed to quality goods, and they intend to further make inroads in the food market. With the ability to offer food at cut-price rates they can offer South African citizens affordable, quality food. It’s a pity that Walmart’s example hasn’t inspired more American interest in our shores, but until the government relaxes its stance on foreign investment, capitalist enterprises will largely head elsewhere. 

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