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24/08/2012 17:54
REUTERS
http://www.iol.co.za/business/international/economic-woes-begin-at-home-1.1369305
Policemen keep watch over striking miners after they were shot outside a South African mine in Rustenburg, 100 km (62 miles) northwest of Johannesburg, August 16, 2012. South African police opened fire against thousands of striking miners armed with machetes and sticks at Lonmins Marikana platinum mine, leaving several bloodied corpses lying on the ground. South African policy makers from President Jacob Zuma down routinely reach for external factors such as the euro zone crisis to explain why Africas biggest economy cannot grow faster or create more jobs. But the bloody confrontation at the Marikana platinum mine last week, which killed 44 people and uncovered deep undercurrents of labour and social unrest, is forcing them to look closer to home for the sources of the nations problems.
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Economic woes begin at home - International | IOL Business
24/08/2012 17:54
year will be less than the 2.7 percent projected in February. The World Bank has cut its own estimate to 2.5 percent from 3.1 percent. In her latest monetary policy statement, Reserve Bank Governor Gill Marcus reiterates her by now familiar argument that negative spillover effects from the euro zone crisis on the South African economy are likely to persist and intensify. But Marcus and Gordhan acknowledge the economy is riddled with structural constraints that keep growth below potential. Domestic operating headaches cited by South African businesses include electricity tariffs that have soared by an average 25 percent per annum since 2009, and unsustainably high labour costs. South Africas union-friendly labour legislation enforces a mininum monthly wage of about $230$240, much higher than $55 and $70 in neighbours Zimbabwe and Mozambique.
http://www.iol.co.za/business/international/economic-woes-begin-at-home-1.1369305
to augment sales to Germany, Britain and Switzerland, Malan said. The one good thing that came out of the recession is that we have become far more diversified in our marketing mix and are not as dependent on the European market as we used to be. By contrast, some of the domestic headwinds look a lot more difficult to reverse. A recent survey by the South African Chamber of Industry and Commence shows local businesses are downbeat in their assessment of the operating climate in terms of security, infrastructure and the labour market. Participants rated the labour environment and ease of doing business in the country at a meagre 2.8 out of 10 for each of these categories while security and infrastructure also scored poorly at 3.4 and 3.9 respectively. But even if Europe were out of the equation, growth would barely reach 3.5 percent, the World Bank says, citing power bottlenecks as state utility Eskoms ageing infrastructure fails to generate enough to meet rising demand. By contrast, growth in Nigeria is seen at 6.5 percent this year while East African giant Kenya expects 5.2 percent expansion. A POTENTIAL SOCIAL TINDERBOX? The Marikana mine carnage also shines a harsh spotlight on South Africas glaring income disparities and social inequalities, which fly in the face of the ruling African National Congress promise to create a better life for all after the end of apartheid in 1994. Amid a growing perception that a much-debated government black empowerment drive has bene-
Were losing our competitiveness because our commodities are also produced in South America and elsewhere in Africa where the labour costs are a fraction of what they are here, Riel Malan, managing director of fruit and vegetable exporter Unlimited Group, told Reuters. LOW MARKS FOR BUSINESS CONDITIONS Malan said his company saw a sharp euro zonerelated fall in demand for citrus fruits and baby vegetables from nations such as Spain and Portugal, who are grappling with debt problems that have raised the spectre of a global recession on the heels of the last one in 2008/09. The previous downturn slashed Unlimiteds exports by about 40 percent and it has not completely recouped the lost trade, despite cultivating new markets
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Economic woes begin at home - International | IOL Business
24/08/2012 17:54
fited only an elite and ANC-connected few, an increasingly restive black population has stepped up often violent protests against enduring poverty and poor basic services. The global headwinds have put into even sharper focus the demanding policy challenges of high inequality and unemployment in the country, said World Bank country director for South Africa Asad Alam. This is tweaking the nerves of local and foreign investors already jumpy about calls from radical factions of the ANC to nationalise mines and confiscate white-owned land. The countrys Gini co-efficient, a measure of income inequality, is one of the highest in the world at 0.69, Planning Minister Trevor Manuel conceded last week, when he unveiled a growth plan whose ambitious targets include creating 11 million jobs over two decades and more than doubling per capita income.
http://www.iol.co.za/business/international/economic-woes-begin-at-home-1.1369305
This was just days before the Marikana bloodshed added dark clouds of potentially spreading labour unrest and violence to the already glowering economic outlook. - Reuters
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