Cosatu strike: A noble cause uniting SA - economist | Fin24
 
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Cosatu strike: A noble cause uniting SA - economist

Sep 27 2017 13:32
Carin Smith

Cape Town - Short one or two day strikes do not leave lasting damage and one normally sees a lot more catching up on short strikes, economist Mike Schüssler told Fin24 on Wednesday.

He pointed out that SA has just fallen 14 places in the World Economic Forum's latest competitiveness rankings.

"We are also falling in other rankings from doing business to actual gross domestic product (GDP) per capita tables that organisations such as the World Bank keep up to date," he said.

"We keep shooting ourselves in both feet with long strikes, but these days with blatant corruption in front of our very eyes. None of those who are robbing us blind via our state-owned enterprises or government departments have been held accountable. Only the smaller players have been held to account and outside firms such as Bell Pottinger."

Schüssler said he is always concerned about strikes and particularly big nationwide ones, but he also feels that one needs to support the principals and the mission of Wednesday's strike.

"So if the strike shows solidarity between employers and employees against this surge in criminal behaviour, then I support it. If the role players are for once on the same side, it can even help productivity and motivation of those South Africans who work," he said.

"I support this stay away and encourage others to point out our similarities in the fight against crime. The fight against corruption is something that unites South Africans from all walks of life or all levels of the workforce so to speak.

Strike impact

Tumisho Grater, an economic strategist at Novare Actuaries and Consultants, told Fin24 on Wednesday that, while reports have suggested that this is the largest strike in SA’s post-Apartheid history, one needs to keep in mind that this is a one day strike and the impact may not be as significant as a strike that is protracted.

"While the sheer number of those on strike may have a direct impact on a number of sectors, as well as an indirect impact on associated sectors and civil services, this will not be large enough to impact GDP forecasts for the year," she explained.

"The economy may experience some loss of productivity today and granted, sectors such as transportation, mining, civil services, and production industries may be affected. However, it is simply too early to state or approximate what the overall cost of the strike would be."

She added that, owing to the scale of the strike, the loss of production hours is not determinable, although one cannot rule out that it may be significant - but again a protracted strike would have been more of a concern.

In terms of markets, she said Novare does not expect a reaction.

"The rand weakness has been on the back of the latest dollar strength. The greenback made gains following remarks from the US Fed chair Janet Yellen on the need to continue with rate hikes in the US," explained Grater.

"This has increased the expectations for a Fed rate hike in December and has subsequently weighed on the rand. Another potential risk is any new revelations regarding President Donald Trump’s tax proposals."

Tim Harris, CEO of Wesgro (Cape Town and the Western Cape's official tourism, trade and investment promotion agency), told Fin24 on Wednesday that what is clear in dealings with investors and companies, that corruption in SA makes promoting investment more difficult.

"Attempts to remove corruption, and its vehicle - state capture - will therefore, and in our opinion, help improve investment sentiment in SA. Clean, effective government, as is evident in the Western Cape, is a great draw card for people looking to do business in our province, and we will continue to share this positive news on our many trade and investment missions around the world," said Harris.

"Does it engender confidence and hope? I don’t necessarily think so. The noble cause of protesting against corruption can only happen at the ballot boxes in 2019."

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cosatu  |  mike schussler  |  strikes  |  sa economy  |  labour
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