Dark shadow falls over a once promising economy

At first glance it appears to be just another trade union merger. But look at developments in their broader context and recent initiatives by South Africa’s still powerful NUMSA Metalworkers’ Union take on greater significance.

NUMSA has announced that on May 1st it and several other unions will be launching a highly militant Workers’ Federation. NUMSA has also formed a ‘United Front’ organisation to fight the all-important local government elections this Summer and the new Workers’ Federation will spawn a new socialist workers’ party later this year.

This is no empty rhetoric or just one more party to add to the 20+ parties already operating at a national level — for there is huge power vacuum growing in the country following the numerous scandals associated with President Jacob Zuma. The formerly dominant ANC party is losing its grip and Zuma’s decision late last year to sack Finance Minister Nhlanhla Nene led to a run on the Rand. The economy is highly reliant on exports to China and China’s slowdown is adding to the economic woes. Also into this void is stepping Russia.

Russia sees South Africa as a back door to the West and used its links through the BRIC economic grouping to create an almost invisible, but nevertheless tightening, stranglehold on South Africa as the US–led embargo against it began to bite. Now Russia is secretly helping to fund its nuclear programme and is also backing the growth of radical politics like the flourishing South African Communist party in a headlong ‘divide and rule’ strategy.

The situation is particularly worrying for multinational employers that have invested heavily in the country. But many are now reacting sharply to what they fear is a pending economic collapse. Foreign direct investment (FDI) into South Africa fell by 74% in 2015 and there is plenty of bad news to follow. That is why May 1st will be a significant date for employers — as well as the union movement.

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