Prolonged strikes will hurt the economy – experts

2011-07-14 12:48

Prolonged strike action in the private sector will be detrimental to the economy, economists said today.

“If the industrial action is prolonged, the impact on the economy would most likely be profound,” said Nedbank economist Isaac Matshego.

He said the strike, which is in its second week, had already impacted negatively on manufacturing and production in certain sectors.

“Should it continue, this will definitely impact the economy on a wider base.

“Generally, strikes are never good for any economy and in South Africa, we have strikes too often. We need some fundamental changes before the economy can reach its growth potential,” said Matshego.

FNB chief economist Cees Bruggemans said the longer the strike goes on, the broader the disruptions would be.

“There might have been some shortages this week but ultimately the economy can handle it, unless it becomes long-lasting.

“Then there will be fundamental shortages in sectors like transport and this means shortages of all kinds of products, not just fuel,” he said.

“It certainly doesn’t help this struggling economy.”

Earlier, the Chemical, Energy, Paper, Printing, Wood, and Allied Workers Union (Ceppwawu) said the strike in the fuel sector would continue into next week as no meetings were scheduled.

Union co-ordinator John Appolis claimed there had been no wage talks since June 24.

“We have talks in the glass, pharmaceutical, and fast-moving consumer goods sector for tomorrow (Friday), Saturday and Sunday, but no meeting is scheduled in the petroleum sector,” he said.

“So our members will continue to be on strike up until and even after Monday.”

Engen spokeswoman Tania Landsberg referred queries to the SA Petroleum Industry Association (Sapia), which was not able to comment.

However, in a statement issued yesterday, the association had thanked the National Bargaining Council in the chemical industry for “its mediation role in wage negotiations”.

Sapia represents petroleum companies, including Engen, Shell, BP, Chevron, Total, Sasol, and PetroSA.

Automobile Association spokesman Gary Ronald said if the claims were true, the strike in the fuel sector would have serious implications for everyone.

“This is very worrying. If it’s true, we are looking at the strike expanding to 12 days or even more, and it would have a severe impact on businesses.

“And imagine if fuel cannot get to the hospitals, then there will be severe implications involved.” 

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