South African Minister Manuel Says Unions Damaging Labor Market

Photographer: Chris Ratcliffe/Bloomberg

Head of South Africa’s National Planning Commission Trevor Manuel said, "What the country needs is a labor market that operates efficiently.” Close

Head of South Africa’s National Planning Commission Trevor Manuel said, "What the... Read More

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Photographer: Chris Ratcliffe/Bloomberg

Head of South Africa’s National Planning Commission Trevor Manuel said, "What the country needs is a labor market that operates efficiently.”

South Africa’s labor union movement is damaging industrial relations that have exacerbated widespread strikes in the continent’s largest economy, according to Trevor Manuel, a minister in President Jacob Zuma’s office.

Divisions at the Association of Mineworkers and Construction Union and the ruling African National Congress-aligned Confederation of South African Trade Unions have helped to create a dysfunctional labor market, Manuel told Bloomberg TV Africa at the World Economic Forum in Davos, Switzerland Jan. 24. At least 70,000 workers at the world’s three biggest platinum producers are currently on strike, while employees at the automaking, construction and aviation industries were among those that staged walkouts last year.

“Cosatu is living through its own summer of discontent, AMCU has divisions,” said Manuel, who is also head of the country’s National Planning Commission. “All that bodes poorly for the industrial relations environment, because there are too many forces who kind of want to thump their chests. What the country needs is a labor market that operates efficiently.”

The strike by AMCU members at Anglo American Platinum Ltd. (AMS), Impala Platinum Ltd. and Lonmin Plc, has entered a fourth day with workers demanding a minimum entry-level wage of 12,500 rand ($1,127) per month, more than double the current pay. The National Union of Mineworkers, the nation’s biggest labor group, won’t support the ruling African National Congress in this year’s parliamentary elections, it said in December.

The work stoppages are placing pressure on South Africa’s current-account deficit which reached 6.8 percent of gross domestic product in the three months through September. The rand slid to its weakest level since October 2008 on Jan. 24, declining 0.9 percent to 11.0886 per dollar.

The nation relies on metal exports for more than half its foreign exchange earnings. The country is the world’s largest producer of platinum, used in jewelry and catalytic converters, and the sixth biggest miner of gold.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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