The widespread and, at times, ultra-violent public workers strike in South Africa effectively ended Tuesday after nearly three weeks. Now comes what may be the even harder parts: recapturing some of the international business capital the nation gained during a successful hosting of the World Cup earlier this summer and creating some type of stability in the nation that won't scare off business and investment opportunities.
Predictions are piling up that what may have been an ill-planned public workers strike has destroyed much the gains South Africa made during the World Cup. The concern is that investors and businesses will be scared away from activity there because the illusion of stability that had become apparent earlier this year was just that: an illusion. The nation's largest labor union, the Congress of South African Trade Unions (COSATU), spearheaded a lengthy public workers strike on August 18 after the government balked at demands for a pay raise of 8.6%, more than twice the rate of inflation. The violent nature of the strike rose to a level far beyond what was seen in Greece earlier this year or during the almost expected annual "strike season" periods in South Africa itself.
COSATU eventually called off the strike amid negotiations of a new labor deal with the South African government as bad public relations was mounting amid deaths at understaffed hospitals and multi-billion-dollar economic damage to a nation that had struggled, like many worldwide, with a deep recession in recent years. It did so even as many of the rank-and-file workers - apparently angered at both the government AND its better-paid union leadership - balked at the idea because the government's offer did not rise to THE union's original demands.
Mekael Teshome, associate economist with Moody's Economy.com, predicted there are certain to be short-term ramification of the strike, but does not believe the recent events truly hold the key to South Africa's economic future or strip away all of the international goodwill gained from World Cup. Among other factors, Teshome says unrest is almost expected for those paying attention to labor happenings in the African nation over recent years.
(Editor's Note: To see full story, with more analysis from Teshome, check out NACM's upcoming edition of eNews, which will be available at nacm.org on Thursday.)
Brian Shappell, NACM staff writer