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Beyond the Mines: Wildcat South African Strikes Spreading

Reuters reports:

Toyota Motor Corp said it had been forced to shut its South African car factory for four days because of an illegal pay strike, the first sign of wildcat mine stoppages spreading into other parts of Africa’s biggest economy.

Trade union leaders at the Japanese car giant’s Durban plant said workers would return on Friday after winning a 5.4 percent pay rise inspired in part by a hefty increase won last month by strikers at Lonmin’s Marikana platinum mine.

Our worries about unrest in South Africa and its potential to derail the country’s economic progress are bolstered by this latest news. The unrest is spreading to more mines and even beyond the mines, to truckers and others. The established unions haven’t been able to manage the situation, and workers are increasingly ignoring union leaders.

And in the most ominous news yet, foreign investors are being spooked both by the current unrest and by the uncertain prospects ahead:

[A]n investment banker said the unrest had raised questions about an acquisition by a foreign company in the industrial sector.

“The due diligence process happened several months ago, it was expected to be closed by now and another round of questions came through,” the banker said. “You certainly had senior people on the other side go: ‘can we find out what is happening here because this is really worrying us.’”

As we’ve said before, the world is (justifiably) fixated on the conflagrations underway throughout much of the Middle East right now, but the worsening problems for South Africa remind us that there are other spots around the globe with real crises too. Post-Apartheid South Africa has up to know consistently proven the skeptics wrong and kept its liberal and democratic political institutions alive. Whether they will remain so a decade from now is something that bears close watching.

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