Written by Ed Cropley | From Reuters

Winter arrived in South Africa this week, covering hills and highlands with snow in a fittingly chill metaphor for an economy beset by everything from labour unrest and flat-lining output to rising inflation and waning external confidence.

South Africa’s problems are many and complex but at their root is the collapse of the balance struck in the dying days of apartheid between the predominantly white world of business and the predominantly black one of organised labour.

The deal that underpinned the mechanics of the “new” South Africa until a 2009 recession saw strong unions, allied to the ruling African National Congress (ANC), delivering workplace stability in return for wage increases slightly above inflation.

Now, weak growth, ideological turf wars in the ANC, cynicism and neglect by union bosses and management, and fallout from events such as the police killing of 34 strikers at a platinum mine in 2012 have left that model in tatters.

“It’s as bad as it’s ever been – probably the lowest point of our labour relations,” said Andrew Levy, a labour consultant at Andrew Levy Employment in Johannesburg.

“We’ve lost all sense of good-faith bargaining. The bargaining is in the utmost bad faith.”

RECESSION FEARS

Front and centre is the longest and costliest strike in the 130-year history of South Africa’s mines, a five-month walkout by 70,000 members of the platinum sector’s AMCU union that triggered a first-quarter decline in national output.

The first GDP contraction since 2009 sparked a rare sense of urgency from President Jacob Zuma’s new administration but efforts to end the strike failed again this week.

The local economy in Rustenburg, the ‘platinum city’ whose growth since the end of apartheid in 1994 has been likened to the Klondike gold rush, is collapsing with dramatic effects.

Read more at Reuters