Difficult times face South Africa’s economy. ‘Three strikes and you’re out’ is the call in baseball. South Africa’s mining industry has had three strikes and then some more and, now, the world market is taking note of, and acting in response to, this state of ongoing uncertainty.
The question is whether South Africa is going to have a greatly reduced mining industry or not. Already, this country has one in four people unemployed. However, if one compares our economy to a boat, the rate of unemployment is rather like the rate at which a boat can take on water. All boats leak a bit and take on water, and some boats can leak quite a lot and still their pumps can keep them afloat. But once the rate of water inflow exceeds the capacity of the pumps, the boat sinks.
The recent exchange rate volatility is a sign that our economy is leaking quite a lot. However, if our unemployment rate rises beyond a certain level, then, like a swamped boat, the economy will go from leaking into full sinking mode. After that, getting the economy to stay afloat once more is a considerable undertaking.
Part of the problem is to do with the legacy of apartheid. The Nat government never paid much attention to education of the black majority. I do recall one government minister in the fifties saying something to the effect that it was not necessary to educate people who would only find work digging ditches.
In contrast, Korea invested massively in education in the fifties and sixties. It also invested in the right sort of education, growing its technical skill base on all levels, from artisans to engineers. South Africa didn’t.
If children are not taught to be mathematically literate from the very beginning of their school careers, they won’t be able to cope with the demands of tertiary technical training. Korea has reaped the benefits of its investment in technical education and, now, has the skills base to support a manufacturing economy.
In South Africa, in the mining industry for example, employers struggle to find adequately qualified and experienced technical staff. Some of the major OEMs have resorted to setting up their own training academies, so that, at the very least, they will have the staff to support and service the equipment they are selling.
In the South African labour scenario, the country has many people whose marketable skills are very limited. However, understandably, after 1994, the aspirations of many were raised to new heights. A car, a fridge, a brick house. Now their expectations are not being met and their belief is that by striking they can dragoon employers into paying more. This tactic has unfortunately been successful over the past decade.
In the US and Australia, I am told, miners have a higher level of education than they do in South Africa. A typical Aussie miner is multi-skilled and can not only operate mining equipment, but can also carry out first line repairs.
Now the challenge for South Africa is to move its less skilled mine employees up the skills curve, so they can command better remuneration. And so they can realize at least some of their aspirations for a better life.
But at the moment, South Africa faces a huge problem. Partly because of the legacy of our past, we have many people who are accustomed to using unreasonable tactics and violence to gain what they want. The problem is that if the mining industry goes on having strikes and labour unrest, South Africa’s economic boat is headed for the bottom.
Veteran journalist Tim Cohen, editor of the Financial Mail, commenting on the South African labour situation, wrote in his editorial this week: “To say this is a national disaster is an understatement.” I have to agree.