Strikes, violence will undo us: Gordhan

By Drum Digital
14 September 2012

If the unrest in the mining industry continues, it will undermine investment confidence and cut growth in the South African economy, Finance Minister Pravin Gordhan warned on Friday.

Responding to a question at a media briefing in Pretoria -- called to announce a clampdown on the strike violence in the sector -- he said the unrest could also affect mineral exports and employment.

"The violent acts we engage in... undermine confidence in the South African economy. And if we undermine confidence, we undermine investment, both from South Africans and from foreigners, in our economy."

Gordhan said the unrest had to stop because it was "extremely damaging to our economy, in more ways than we understand at the moment".

He said if the instability continued, resulting in more lost production at the mines, "the cost will be in terms of the overall growth numbers in South Africa".

Mineral resources constituted an important part of the country's export package.

"[This] would mean that if we export less, and we continue to import what we are importing, it will widen the... current account deficit, which now stands at over six percent."

It would also cost the country jobs, at a time when unemployment was already at 23 or 24 percent.

"We cannot allow this [unemployment figure] to increase," Gordhan said.

"Everybody in South Africa has a responsibility to ensure we boost the confidence in our economy."

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