Investors fear South Africa strike

Strikers could bring South Africa to a halt

After weeks of private-sector strikes by steel, mining and automobile workers, South Africa is bracing itself for a nationwide stoppage called by the 1.8-million-member Congress of South African Trade Unions (COSATU).

The strike is scheduled for 29 and 30 August, and is intended as a protest against government privatisation plans.

Estimates of the cost to the economy vary wildly.

What we have seen... is an ideological commitment to bring in the private sector, with little or no attempt at in-depth analysis of the impact on development

COSATU

Tony Twine of South African research group Econometrix told the Business Report newspaper that 1.3bn rand (£107m; $154m) in lost production could be hugely amplified by the blow to investor confidence.

South African Chamber of Business economist Richard Downing, on the other hand, predicted a 3.6bn rand hit from each day of the strike.

Messy divorce

But whatever the final cost, the result is the strongest evidence yet that the close relationship between the trade unions and the ruling African National Congress (ANC), born out of the fight against apartheid, has conclusively been broken.

South Africa's economy has grown for 11 straight quarters, with GDP figures today showing a 2.3% annualised growth in the second quarter of 2001.

But the growth is not yet filtering to the poorer parts of society, pressure groups and trade unions say.

South Africa is suffering from sharply rising unemployment, and the steady weakening of the rand - largely due to the uncertainties generated by Zimbabwe's land grab crisis - has made matters worse.

Motives for sell-off

That has prompted COSATU and seven other organisations to accuse the government of letting privatisation become an end in itself.

We have made it very clear that the essence of our economic policy is not going to change

Jeff Radebe
minister for public enterprise

"What we have seen... is an ideological commitment to bring in the private sector, with little or no attempt at in-depth analysis of the impact on development," COSATU said in a statement.

It was "disappointed", it said, that the government "argues for privatisation primarily to reduce government spending and cut input costs".

Privatisation was likely to drive up costs of basic services, COSATU said, claiming water and telecoms selloffs had already led to steep price hikes and cutoffs of needy communities.

COSATU's secretary-general, Zwelinzima Vavi, told a radio debate that the government has done nothing to meet union complaints that the selloff of healthcare, water and telecoms assets needs to be rethought.

The government has yet to answer charges that the moves will result in mass job losses, Mr Vavi said.

Government stands firm

But in the same debate, public enterprises minister Jeff Radebe insisted that COSATU had been consulted over the timetable along with other economic players and had agreed to the plans.

"We have made it very clear that the essence of our economic policy is not going to change," he said.

"Right now, the issue of restructuring is ANC (African National Congress) policy and we have to implement it to its natural conclusion."