Johannesburg - As international ratings agency Moody’s Investors Service placed South Africa’s ratings on review for downgrade, the country’s biggest labour federation Cosatu yesterday confirmed it was part of Finance Minister Pravin Gordhan’s road show to allay overseas investor fears.
Cosatu spokesman Sizwe Pamla told Business Report that the federation had dispatched its first deputy president, Tyotyo James, to be part of Gordhan’s delegation in a show of unity between the government and labour, as the possibility of South Africa’s credit downgrade loomed.
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“As Cosatu we felt ratings agencies are blackmailing us, what they demand from government is for government to give business a licence to run amok.
“They want deregulation of labour, the right to hire and fire and to be free of constraints labour laws put on them,” Pamla said.
“We felt the voice of labour was needed to say, business must come to South Africa, and to create jobs, but we have to address (the) structure of economy that does not allow the black majority to participate.
“We want to give assurance to allow them to invest, but caution them that we as workers have conditions.”
Stagnation
He said labour was paying a high price for economic stagnation because of the high rate of retrenchments.
“We are in this together, if the government has been downgraded to junk status we will be all affected.
“We are concerned because workers’ wages are already in junk status they are repealed by inflation as food prices have gone up. We are going to have something to kick-start the economy.”
Labour unrest, particularly the five-month strike that rocked the platinum belt. has largely been blamed for the dim view the ratings agencies have cast on the stability of the South African economy.
Mining companies Impala Platinum, Anglo American Platinum and Lonmin suffered a total revenue loss of about R24 billion and a further loss of R10.6bn in wages as a result of the strike.
Moody’s said that during the review it would assess the likely effectiveness of the government plans, including those contained in the National Development Plan, to address structural constraints on a more inclusive growth through improvements in infrastructure.
“The ratings agency will also use the review period to examine whether recent reforms, such as the amendment to the Labour Relations Act last year, are likely to reduce work stoppages from strikes as the end of various key wage agreements approaches and thereby potentially improve how business views the labour market environment in South Africa,” Moody’s said.
Pamla said that the ratings agencies needed to look at the underlying causes of strikes in South Africa.
BUSINESS REPORT