10 September, 2012

Economic Folly in the Aftermath of Marikana

by Hussein Solomon

In the aftermath of the tragedy at Marikana, economic folly continues to afflict the minds of the tripartite alliance leadership. Following a meeting on Friday, the ANC, COSATU and the SACP leadership saw it fit to blame mining companies for the unrest sweeping across South Africa’s mines. Indeed, in their joint statement the ANC’s Gwede Mantashe, COSATU’s Zwelinzima Vavi and Communist Party boss Blade Nzimande accused mining houses of fanning the flames of conflict.

The patently illogical nature of such statements is obvious to all – mining companies have a profitable reason not to flame such unrest. After all each day the Marikana miners are on strike costs LONMIN millions in lost revenue. More importantly, there is sufficient evidence to suggest that South African corporations have been a force for good and that the stereotypical image of blood soaked capitalists is fallacious in the extreme. A recent Sunday Times study has demonstrated that more than 90 percent of 3200 companies surveyed across 278 business sectors have actually exceeded their corporate social investment. Business is not the problem – government is!

Such statements, however, do serve a political purpose – deflecting the blame from government. Unfortunately, since the ANC took over the reins of power in 1994, it has scarcely provided either political or socio-economic leadership to the pressing problems confronting this country. When faced with crises, convenient scapegoats are to be found to deflect blame from government failures such as the ever elusive third force – and now it is the turn of the mining houses to be blamed for the ANC not making good on its promise for a better life for its supporters.

At issue is the fact that the ANC government, the trade unions and the Communist Party refuse to deal with a central problem- that given the global recessionary environment, employers cannot afford massive salary increases. To be clear the Marikana workers are demanding a wage increase from R5405 per month to R12 500 per month – more than a 100 percent salary increase!

Should LONMIN cave in to this demand, labour unrest will spread throughout the country as similar outrageous demands are pushed forward by other AMCU copycats. South Africa cannot afford such salary increases or such labour disruptions especially in the context of a global economic recession. To put matters into perspective, a recent report from the Industrial Development Corporation pointed out how problems in the Eurozone are impacting on South Africa. Should our exports to the European Union drop by 5 percent, domestic growth will contract by R5.9 billion and 18 700 jobs will be lost. To compound matters, the Eurozone crisis according to economists will be with us for another decade, the US economy remains sluggish, whilst both India and China’s economies are beginning to slow down.

In this international context, the ANC and its tripartite allies see it fit to attack the business community – the very creators of jobs – for short-term political gain. This is the height of economic folly.

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