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SOUTH AFRICA is heading for a recession, according to headlines this week. The economy has contracted by an annualised 0.6% in the first quarter of this year, it was reported.
This is in stark contrast with a growth of 3.8% in the last quarter of 2013.
And who do we have to thank? Not Boland Bank, as the advert of some years ago claimed. No, we have to thank Amcu, the trade union who stubbornly continues with its devastating strike in the platinum mine sector.
The strike has greatly contributed to a contraction of 24.7% in the output of mines in general, the biggest since 1967. And, as especially the platinum mines produce a metal used in, for instance, car manufacturing, factory output has plunged with 4.4%.
Let me try to understand the situation in terms which even an economic illiterate person like myself can grasp. Let me explain it to myself in rugby terms.
Here we have the Springboks playing a test match against the All Blacks – the two strongest teams in the world. The Boks’ match plan is to harass the New Zealand full-back by kicking the ball wide and deep in the hope of catching him on the wrong foot, or perhaps in possession of the ball.
And indeed, our flyhalf gets the ball, kicks it deep, but the opposing fullback is beautifully in position, snatches the ball out of the air and sends it back with interest. The Boks lose terrain.
All right. You try it a second time, and the same happens. By the third or fourth time, the penny drops. Your tactic isn’t working. In fact, the All Blacks start threatening the South African tryline.
And so the Bok captain thinks on his feet and changes tactics. He will now keep the ball close to the forwards and kick only when there is a gap to be exploited.
Being tactically flexible, thinking on your feet, does not apply to rugby only. It is generally a wise thing to do. Your basic goal – to win the match – stays the same, but when you see that one method doesn’t work, you try another.
Now, the basic goal of Amcu is – or should be – a living wage (R12 000 per month in their view) and better working conditions for their members. The tactic they started off with was a strike.
The problem is that the mining industry says the mines will become unprofitable if they accede to Amcu’s demands. I am always in principle sceptical about assertions like these, knowing the avaricious appetites capitalist enterprises have for ever bigger profits, even when this could only be reached at the expense of the workers. I have seen this happening far too often.
But, when the employers still hold out even after the longest industry strike in South African history, one must conclude that they do have a point in this case. They really cannot afford to pay R12 000 a month.
They would, of course, have more credibility if the bosses themselves would be paid a little less extravagantly, but that doesn’t change the basic situation.
To use the rugby metaphor again, the Amcu flyhalf has repeatedly kicked the ball far and wide, but the platinum mine employers’ fullback has punished them repeatedly by kicking the ball so far back that their own tryline is threatened.
Time to change tactics, a reasonable person would conclude.
The fact is that the strikers have damaged themselves greatly by being so inflexible. Not only have they forfeited about R12bn in wages, but they have also plunged the whole platinum mining industry – as well as the South African economy as a whole – into a possible recession.
And if the economy as such contracts, who are disadvantaged most? Correct. The poor and the unemployed. Those with jobs may also lose out, because the industry’s capacity for wage increases in future is damaged, and some mines will undoubtedly also either close down or switch over to automisation, laying off some workers.
In the end, Amcu’s gamble has not only not paid off. It has backfired. It is doing their own members a disservice.
The fact that the new minister responsible for mines, Ngoako Ramathlodi, has pledged to mediate, is to be welcomed. It is, of course, never too late, but the decision is well overdue. Up to now the government has been prominent in its deafening silence.
One suspects that the ANC wanted to avoid taking a stance for fear of losing votes. With the election behind us, at last the government has discovered that it has a voice.
Let us hope that Ramathlodi will be able to find a compromise solution so that the platinum mines may resume production, and that a full-blown recession may be averted.
But for that to happen, the Amcu flyhalf will have to realise that the platinum mine fullback is not to be trifled with. Think on your feet!
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
This is in stark contrast with a growth of 3.8% in the last quarter of 2013.
And who do we have to thank? Not Boland Bank, as the advert of some years ago claimed. No, we have to thank Amcu, the trade union who stubbornly continues with its devastating strike in the platinum mine sector.
The strike has greatly contributed to a contraction of 24.7% in the output of mines in general, the biggest since 1967. And, as especially the platinum mines produce a metal used in, for instance, car manufacturing, factory output has plunged with 4.4%.
Let me try to understand the situation in terms which even an economic illiterate person like myself can grasp. Let me explain it to myself in rugby terms.
Here we have the Springboks playing a test match against the All Blacks – the two strongest teams in the world. The Boks’ match plan is to harass the New Zealand full-back by kicking the ball wide and deep in the hope of catching him on the wrong foot, or perhaps in possession of the ball.
And indeed, our flyhalf gets the ball, kicks it deep, but the opposing fullback is beautifully in position, snatches the ball out of the air and sends it back with interest. The Boks lose terrain.
All right. You try it a second time, and the same happens. By the third or fourth time, the penny drops. Your tactic isn’t working. In fact, the All Blacks start threatening the South African tryline.
And so the Bok captain thinks on his feet and changes tactics. He will now keep the ball close to the forwards and kick only when there is a gap to be exploited.
Being tactically flexible, thinking on your feet, does not apply to rugby only. It is generally a wise thing to do. Your basic goal – to win the match – stays the same, but when you see that one method doesn’t work, you try another.
Now, the basic goal of Amcu is – or should be – a living wage (R12 000 per month in their view) and better working conditions for their members. The tactic they started off with was a strike.
The problem is that the mining industry says the mines will become unprofitable if they accede to Amcu’s demands. I am always in principle sceptical about assertions like these, knowing the avaricious appetites capitalist enterprises have for ever bigger profits, even when this could only be reached at the expense of the workers. I have seen this happening far too often.
But, when the employers still hold out even after the longest industry strike in South African history, one must conclude that they do have a point in this case. They really cannot afford to pay R12 000 a month.
They would, of course, have more credibility if the bosses themselves would be paid a little less extravagantly, but that doesn’t change the basic situation.
To use the rugby metaphor again, the Amcu flyhalf has repeatedly kicked the ball far and wide, but the platinum mine employers’ fullback has punished them repeatedly by kicking the ball so far back that their own tryline is threatened.
Time to change tactics, a reasonable person would conclude.
The fact is that the strikers have damaged themselves greatly by being so inflexible. Not only have they forfeited about R12bn in wages, but they have also plunged the whole platinum mining industry – as well as the South African economy as a whole – into a possible recession.
And if the economy as such contracts, who are disadvantaged most? Correct. The poor and the unemployed. Those with jobs may also lose out, because the industry’s capacity for wage increases in future is damaged, and some mines will undoubtedly also either close down or switch over to automisation, laying off some workers.
In the end, Amcu’s gamble has not only not paid off. It has backfired. It is doing their own members a disservice.
The fact that the new minister responsible for mines, Ngoako Ramathlodi, has pledged to mediate, is to be welcomed. It is, of course, never too late, but the decision is well overdue. Up to now the government has been prominent in its deafening silence.
One suspects that the ANC wanted to avoid taking a stance for fear of losing votes. With the election behind us, at last the government has discovered that it has a voice.
Let us hope that Ramathlodi will be able to find a compromise solution so that the platinum mines may resume production, and that a full-blown recession may be averted.
But for that to happen, the Amcu flyhalf will have to realise that the platinum mine fullback is not to be trifled with. Think on your feet!
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
