The recent miners’ strikes across parts of South Africa have revealed very clearly that all is not well in Africa’s ‘rainbow nation’. Whilst in the short term the deaths of 34 miners at the Marikana mine after police shot them dead has sparked similar strikes at other mines, resulting in a significant loss of output for an economy largely dependent on the industry, the lasting impact has been far greater as it has laid bare fundamental issues of political, social and economic discontent entrenched in South African society. Without question these deep-seated challenges need to be confronted and acted upon by South Africans, but this does not excuse the international community from playing a supportive and constructive role where possible in the future progress of South Africa.
The most obvious reason for the miners’ striking was the fact that they wanted higher wages; so far this has resulted in wage increases of between 11 and 22 per cent for those at the Lonmin mine in Marikana. However, what these demands really reveal is the vast economic inequalities that exist in South Africa between those that have profited in the post-apartheid era and the majority that have not. Economic development as a positive by-product of greater racial equality, as was reasonably hoped for by South Africa’s black population following the end of apartheid in 1994, has not materialised. There is a growing sense and realisation that racial inequality has been replaced by economic inequality with few black South Africans securing the best jobs and the better wages alongside white South Africans. As would be expected, issues of race remain prevalent in the arguments of those who decry the disparities in wealth across South Africa. However, the crux of the issue lies in the fact that job opportunities remain limited as overall unemployment stands at over 25 per cent with youth unemployment around a staggering 50 per cent. This only serves to exacerbate tensions, as those without jobs feel even more aggrieved about the few who have prospered since the end of apartheid, whilst they feel like they have gained very little. The issue of unemployment, particularly amongst youths, could easily rear its head with major consequences similar to those seen throughout the Arab Spring.
The crisis has also highlighted the incompetence of South Africa’s dominant party, the ANC. With the incumbent President Jacob Zuma at the helm, the reaction of the party to the strikes was seen to be slow and out of touch with the reality on the ground. However, the strikes have asked even greater questions of whether the ANC party is capable of delivering the necessary economic reforms to deliver growth and jobs to put South Africa’s underperforming economy back on track – the economy is expected to grow at around only 2.5 per cent this year which is less than each of the other BRICS nations.
Similarly, the episode has also illustrated the vulnerability of the ANC to external attacks following former ANC Youth Leader Julius Malema’s numerous rallies at mines and open criticism of the political establishment. More worryingly Malema has built traction with many black South Africans and is perhaps the only one to have advanced his position over the last month; this is worrying because his rhetoric and views have sounded much like Robert Mugabe’s and Zanu-PF’s following his advocating of nationalising mines, his criticism of whites and the British in controlling mines and his apparent support for seizures of white-owned land. Having failed to engage with Robert Mugabe effectively to help resolve land issues in Zimbabwe, resulting in scenes of anarchy as land was forcibly grabbed from white farmers, the UK would be advised to judge this situation more carefully in South Africa if it were to escalate. The timing of recent charges against Malema for money laundering also hints at a politically motivated strike in collusion with the judiciary in order silence him. If this is true, then serious questions need to be asked of the ANC’s and Zuma’s political ethics.
The attractiveness of South Africa as a destination for domestic and foreign investment has also been negatively impacted. The tumble in Lonmin’s share price has shown the tangible impact South Africa’s problems can have for investors. Whilst mining companies are acutely aware of the local risks associated with mining, as seen by London listed Rangold following the recent coup in Mali, the past month has undermined the assumption that South Africa is Africa’s most reliable and stable market for investors. Furthermore, the potential fallout of a leadership challenge at the ANC convention later this year, which could result in radical nationalisation projects if Malema were to triumph, also illustrates the threats that South Africa’s political risk poses for investors. Without private sector investment, the South African Government is unlikely to be able to solve all the economic challenges on its own, so maintaining its appeal as an investment destination is important.
Ultimately there is little the international community can do to influence the next steps South Africa takes. Instead South African society needs to ask itself some questions that require honest answers from within. However, one thing is for sure: the fight to free the nation from the shackles of apartheid was not fought for the current status quo.