There would inevitably be an economic backlash for smaller economies from the US-led war in Iraq, the unrest in the Middle East, and the surging oil and gold prices for smaller economies which would filter through to Southern Africa and South Africa, according to labour analysts Andrew Levy.
In their latest report on labour relations and employee benefits in South Africa, they say that within the Southern African region the picture is clouded by regional food shortages, political unrest and food riots in Zimbabwe. There are also reports of illegal immigrants crossing over the Limpopo river into South Africa where food and fuel are available and the possibility of employment is better than north of the border.
According to the report, the economic outlook for South Africa for 2003 looks pretty healthy, but it warns that the “usual shadows lurk on the periphery”.
The rand has appreciated back to levels of mid-2001, inflation seems to be topping out after reaching punitive levels in 2002 as a result of the currency’s tumble the year before, and the outlook for lower interest rates in the first half of the year is upbeat.
On the negative side the report said unemployment was still running at almost 30% by the official estimate as at September 2002 and the HIV/Aids pandemic is costing lives and resources, while little is being done on a national level to contain and treat the disease.
Andrew Levy said, however, that labour conditions as a whole, poverty income inequalities and job creation are areas difficult to encapsulate.
“My guess is that strike activity is likely to remain stable this year because as more long term agreements are negotiated, high conciliations last year have contributed to this and of course the Labour Relations Act,” Levy said.
In its forecast for 2003 GDP growth is expected to be stronger in excess of 3% compared with 2,8% in 2002.
High levels of unemployment, the casualisation of labour, HIV/Aids and skills development remain key challenges for this year. The report said because the bulk of wage agreements negotiated in 2002 were based on lower inflation rates, and forecasts at the beginning of the year, it is anticipated that settlements will average in 8%-9% range during 2003.
The Labour Department, having achieved significant labour law reform since 1994, is expected to focus on the enforcement and implementation and development of policy and guides in the form of Codes of Good Practice.
The department is also expected to forge ahead with its plan to implement a minimum wage in those areas not covered by bargaining councils. The report added that Occupational Health and Safety will feature prominently on the labour department’s agenda as it aims for a vision of zero tolerance.
By September 2002, 76% of funds from the national skills fund allocated for effective training was utilised and a target of 100% of funds by March 2003 was set. Levy added that the “stormy marriage” between the African National Congress, the Congress of South African Trade Unions (Cosatu) and the SA Communist Party is expected to continue despite ideological differences.
“Cosatu is expected to remain beleaguered and is likely to remain this way for much of this year. But it will not be wished away and so its current state is likely to reflect a stalemate between it, business and government. It will take strategic shifts from it and the other parties before it realises its potential to influence policy and to establish a workable solution,” Levy said. – I-Net Bridge