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Crime and violent protests harm business confidence in SA

14th August 2009

By: Chanel de Bruyn
Creamer Media Online Managing Editor

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The increased "belligerence on the part of labour", violent service delivery protests, as well as the increase in cash-in-transit heists in South Africa, was "substantially" harming confidence in the business environment, the South African Chamber of Commerce and Industry (Sacci) reported on Friday.

Sacci released an assessment of the key focus areas in the policy environment during Zuma's first 100 days in office, in comparison with those focus areas as outlined in Sacci's first quarter review, released in March.

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Only crime and security and labour have regressed on the chamber's policy radar since President Jacob Zuma took office.

"Annual ‘strike season' of labour unions reached record highs this year and has come at a significant cost the economy, if one considers the labour days lost nationally," the chamber noted in a statement.

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It emphasised that the labour environment appeared to be increasingly belligerent, especially from the perspective of foreign stakeholders, which might not always distinguish between labour strikes and service delivery protests.

Further, the chamber noted that the recent spate of heists in shopping malls had had a "very negative" impact on the policy radar.

Armed robbers have organised heists at seven shopping malls in the Gauteng area in the past few days.

"The level of criminal activity currently experienced is usually associated with the festive season but seems to have been drawn forward possibly as a consequence of economic hardship. Government would be expected to develop an urgent response to this emerging trend over the [coming] weeks," Sacci stated.

It added that other areas that had to be dealt with included: improving the judicial system to enable it to perform its constitutional mandate effectively, strengthening correctional services and a no-tolerance policy against corruption.

Crime and service delivery were also two areas that the opposition party, the Congress of the People (Cope), expressed concern over.

The party noted in its scorecard of the President's first 100 days in office that Zuma's response to the service delivery protests being held across the country, was too late, as he had only visited these areas a month after the protests began.

It proposed that the President needed to be more proactive in this regard.

In terms of crime, Cope highlighted that more action and less talk was required, adding that the refusal by government to release crime statistics was also concerning.

Meanwhile, the ease of doing business focus area had improved marginally on the radar, with business anxiously anticipating implementation plans in support of government's commitment to reduce red tape, especially for small-to medium-sized enterprises, noted Sacci.

Further, the chamber said that the State's "bail-out plan" had the potential to contribute "tremendously" to alleviating stress in the business environment.

Most notably, the R2,4-billion to be channelled to the national job fund would "ease tensions" in the labour environment, it said.

Zuma announced the creation of the fund on August 5, saying that the training lay-off scheme would entail the temporary suspension of work of employees to be used for training purposes, as an alternative to retrenchment.

Further, the R6-billion set aside by the Industrial Development Corporation to support companies in financial distress owing to the economic crisis, would benefit business and labour.

However, despite a commitment by development finance institutions (DFIs) to support these businesses, it was still challenging for businesses to gain access to DFIs, as well as to financial support through the private sector financial institutions.

CLEAR LEADERSHIP NEEDED

Meanwhile, Democratic Alliance leader Helen Zille noted in her SA Today newsletter that South Africa needed to see "clear leadership, brave policies and unyielding allegiance to the Constitution" by the President.

Commenting on Zuma's first 100 days in office, she commended his honesty about the problems, such as crime, unemployment and failing education, facing South Africa.

However, she added that, "Although he acknowledges our country's problems, President Zuma shows no inclination to give a clear lead on what should be done about many of them. He gives a sense of drifting on the strongest current of the day".

 

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