The government will continue to consult with business and labour to overcome unemployment and increase investment in spite of a threat by the Congress of South African Trade Unions (Cosatu) to strike against unemployment and the strong rand.
In a calm reaction to the Cosatu threat, government spokesperson Joel Netshitenzhe said on Tuesday the process of consultation is continuing.
Cosatu has warned of a ”job-loss bloodbath”, saying spiralling unemployment is already behind unrest in poorer townships.
”We are finalising some of the economic programmes for this year, especially through our consultations in the presidential working groups,” said Netshitenzhe.
The South African Chamber of Business (Sacob) said it does not support Cosatu’s approach to resort to industrial action and the Democratic Alliance called it ”illogical”.
”Many of their ‘demands’ will worsen unemployment, while strike action itself will further deter investors from establishing job-creating operations in South Africa,” said DA finance spokesperson Ian Davidson.
Sacob called for a solution to the problem ”through proper dialogue through the correct channels, in which the determinant of the rand’s value through market forces must not be disregarded”.
”The chamber is well aware that many businesses are under serious pressure from circumstances associated with the current strength of the rand,” said Sacob spokesperson Bill Lacey in a statement.
It also suggested that a further liberalisation of exchange control might provide one possible option.
Cosatu spokesperson Patrick Craven said no dates have been set for the strike. However, the union body will ”definitely be mobilising among all members, especially among mining and textile workers”.
”If we see a serious move on behalf of business to cancel retrenchments that have already been announced — that would be progress.”
A Cosatu statement over Easter weekend called on the government to declare a state of emergency regarding job losses. It also called for strong measures to be taken to end the overvaluation of the rand, especially through a reduction in the real interest rate.
The DA called the interest-rate demand ”ridiculous”, saying it shows ”an alarming misunderstanding of the reality of monetary policy in South Africa”.
Econometrix chief economist Azar Jammine said: ”I do share Cosatu’s concern about the high rand causing people to lose jobs.
”But the trend of the world and South Africa has been more and more towards high-tech and knowledge-intense activities.”
He said labour-intensive sectors such as mining, manufacturing and agriculture are worst hit in the climate of unbalanced economic growth performance driven by a strong rand and reduced pressure on interest rates.
”Tough as it is for Cosatu”, South Africa cannot employ more people in these low-skilled sectors as long as there is a minimum wage and countries such as India and China are prepared to pay workers less, said Jammine. — Sapa