Labour & Politics

Is SA’s Winter of Discontent about to arrive?

Is change at the ballot box coming in 2016?
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Is the combination of power blackouts and labour unrest about to change the face of the political economy in South Africa like it did in Britain nearly four decades ago?

While it is still early days, if things go wrong in wage negotiations in some key sectors in this year’s “strike season” in South Africa, which is about to start in the public sector, and to be followed by the mining sector, it could easily become as disruptive as last year’s.

 In September of last year the South African Reserve Bank declared that the country’s "…  barely positive growth rate was extremely disappointing given the country's development needs, and was mainly brought about by the drawn-out industrial action in the platinum-mining subsector which started on 23 January 2014 and only came to an end five months later."

 This year will see the expiry of existing wage agreements in the national and provincial public sector (including education and health), in the municipal sector and separately in the mining subsectors of gold and coal. Disruptions in both the state sectors and especially in the mining sectors have the potential to impact negatively on electricity supplier Eskom, which is already deep in crisis.

Last week we reported how the “build-up to next year’s local government elections is shaping up to delivering an event that can give considerable momentum to dramatic political change in South Africa.”

Discontent with the level of public sector service delivery is playing a key role in this shift in political sentiment among especially the ever-growing urban population in the country. And it is the public sector service delivery performance, especially at municipal level that will be most negatively affected by labour unrest in that sector.

 It is also those growing numbers of urban dwellers, especially in the larger towns and cities that are impacted on most directly by the electricity blackouts that have become part of South African life.

 Wage negotiations in the public sector have already started at the end of last year in the Public Service Coordinating Bargaining Council. Interrupted over the festive season, it should have re-commenced since. Separate municipal sector negotiations, in its own bargaining council, are to follow.

 In the mining industry the coal and gold sectors’ separate existing wage agreements also expire this year. New ones will be negotiated in their separate, but sub-sector centralised, bargaining forums during the second half of this year.

 Besides the direct negative social impact of the electricity crisis, it is also hampering economic growth. According to the chief economist of the Steel and Engineering Industry Federation (Seisfsa), Henk Langenhoven, up to a third of the R16 billion of gross fixed capital formation in the metals and engineering industry last year was spent on energy efficiency, not capacity expansion. He blamed power failures for an almost 2% contraction in the sector in November, compared to the previous month.

 The effect (over 12 months) on the more electricity intensive sub-industries was mostly even bigger, from 1.9% on the electrical machinery and equipment sector to 6.3% on structural steel – and 13% on general purpose machinery sectors.

 With the links and interaction between factors like the generally constrained economic environment, the ongoing Eskom crisis, and troubles on the labour front, the socio-political atmosphere in the build-up to next year’s municipal elections next year looks rather troubled.

 In the mid- to late 1970s chronic trouble on the labour front had the British economy with its back to the wall. There were rolling electricity blackouts and eventually a collapse of municipal services such as garbage collection. It all culminated in what became known as the ‘Winter of Discontent’, which led to the fall of the socialist Labour Party.

 In its wake came the rise of conservative ‘Thatcherism’, the collapse of the labour movements’ dominance and a private enterprise-friendly economic environment, which saw the British economy develop into the fourth strongest in the world.

South Africa might just be about to enter its equivalent of the ‘Winter of Discontent’ as the campaigning for next year’s all-important municipal elections is fast coming into full swing.

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by Piet Coetzer & Stef Terblanche

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