Multmedia feature story on Global Financial Crisis
Posted by ntandoncube03 on July 8, 2009
This year it surfaced “beyond doubts” that the global financial crisis, nevertheless it started off in the United States’ Wall Street has distressed the developing countries exceptionally bad.
South Africa – regional economic power house has confirmed this ‘beyond doubts’, said Genetic investment senior economist Munodawafa Mhuka.
Recession is commonly defined as being two quarters of negative growth.
The South African economy has gone into recession for the first time since 1992, following a sharp slowdown in the manufacturing and mining sectors
Victor Polikarpov, executive secretary of the Russia-South Africa Business Council said the global economic crisis is pushing countries in regions with emerging markets, such as Russia and South Africa, to together move beyond the dollar-based economic model. Given their politico-economic similarities, these two countries should build on opportunities to share expertise and technology.
South Africa President Jacob Zuma ready to fight poverty head-on
Africa’s biggest economy contracted at an annualised rate of 6.4% between January and March, compared with the same period a year earlier. It was the biggest decline since 1984 and followed an annualised 1.8% fall in the previous three months.
Mhuka said the global financial crisis is bullying to set back the achievements gained over the past decades in terms of poverty mitigation and achievement of the millennium development goals by developing countries.
Because of global crisis in Africa and world wide hundreds of household breadwinner have lost employment and have been pressed back into dearth.
“The shock is predominantly ruthless in developing countries because of quite bulky concentration of poor and vulnerable people combined with a general lack of social security system and limited capabilities of the governments to take care of the affected
“It’s far worse than we expected,” said Elna Moolman, economist at Barnard Jacobs Mellet. “It confirms the recession in the economy and certainly increases concerns about overall growth for 2009, given such a bad start for the year.”
Unemployment among young South Africans is suspended at 30 percent, shooting up to over 60 percent for youths in their late teens and early twenties.
According to a 2008 report by the Centre for Development Enterprise (CDE), a conservative think tank that researches the effect of poverty and unemployment on South Africa’s economic growth rate, 65 percent of the four million youths between 15 and 24 that were available for a job in 2005, were unemployed.
Cosatu general secretary Zwelinzima Vavi meets Labour rights groups!! Has raised concerns over jobs losses.
Pre-recession figures by the state-owned Human Sciences Research Council furthermore show that about 30 percent of youths between 25 and 34 are jobless.
A financial catastrophe of such magnitude obviously needed a global response even though the national governments across the world have been adopting fiscal stimulus packages to revive demand depending upon their capacities.
The international community has responded to it in a spirit of cooperation and to contain further deepening of the crisis.
Statistics South Africa (SSA), which calculated the latest figures, said the slowdown in manufacturing and the mining and quarrying sector had been primarily responsible for the contraction.
Mining firms have been hit by falling demand for their products as a result of the global economic slowdown.
The government has predicted that there will be another quarter of negative growth to come before the economy recovers.
“Looking ahead, we expect another quarterly contraction for the second quarter, but this is expected to be smaller,” said National Treasury Director General Lesetja Kganyago.
The UN Conference on the World Financial and Economic Crisis and its Impact on Development was held on 24-26 June 2009 with leaders and ministers of many countries and adopted an outcome document containing some proposals for addressing the concerns of developing countries, specially the poorer and smaller ones not represented in G-20.
Labour rights groups say the global financial crisis has forced Africa companies to lay off thousands of workers, and provided cover for firms to dodge their legal and financial obligations to their workers.
” A rising phenomenon of business owners exploiting the global financial crisis as an opportunity to dismiss employees without paying them their legal financial rights…or to violate the rights of workers,” according to a study by the Centre for Trade Union and Workers Services (CTUWS) published Jun. 1.
The global meltdown has had calamitous consequences on Africa and other developing countries.
Africa fashion manufacturing industry heavily affected by this global recession has launched Africa fashion deliberated at fighting the problem to the world while contributing to the realisation of Africa renaissance.
AFI chairperson Precious Moloi-Motsepe said African Fashion Week would benefit African textile industry, inter African trade as well as capitalise on global interest.
AFI chairperson Precious Moloi-Motsepe says African Fashion Week benefits inter African trade as well as capitalise on global interest.
“Inter-African trade is an underexploited source of growth for Africa whose share of global trade is only 2 percent. In 2006, only 16% of South Africa’s exports were destined for the continent, yet it is widely acknowledged that increased inter-African trade is a way to improve the economic environment of the continent and establish an economic infrastructure that will attract more capital investment.”, Motsepe added.
“Our mandate has jobs at its heart: the quality of jobs and the quantity of jobs, more jobs and better jobs, as the best means to combat poverty and social disintegration. Why does a trade union devote time and energy to fashion promotion?” posed former Southern African Clothing & Textile Workers’ Union (SACTWU) general Secretary now South Africa Minister of Economic Development Ebrahim Patel
“Fashion is a vehicle to that goal. Behind the fun, the glamour, the images, there is a serious business and a major employment opportunity and reality.” he explained.
Companies suffering losses began restructuring and retrenching staff in late 2008. The first wave of layoffs and cutbacks targeted temporary staff and factory workers, among the lowest paid in the country. Over 100,000 workers were laid off during the six months ending March 2009, according to a senior official.
Retrenched workers say that managers pressured them into early retirement, or dismissed them without providing due severance packages.
Men at work. The construction industry has been one of the first to suffer from the global financial crisis, with local firms laying off workers
CTUWS reports widespread deterioration of working conditions among retained staff in the public and private sectors.
The NGO has documented cases of company managers altering contracts or forcing workers to sign resignation notices as a condition for their continued employment. Firms have also slashed salaries and bonuses, withdrawn benefits, or transferred workers to lower-paying positions.
“The company cut our salary by 30 percent,” says Tafara Midzi, a cleaner at Kine Centre in Johannesburg. “We are forced to work longer hours, and they use any excuse to deduct from our pay. But if we open our mouths, they tell us about the global financial crisis and say we should be lucky we still have jobs.”
