Business: Can Rampahosa channel his inner Thatcher?

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Business: Can Rampahosa channel his inner Thatcher? By Tim Cohen tim_cohen

In 1987, an anti-apartheid firebrand named Cyril Ramaphosa led South Africa’s biggest-ever mining strike. Some 300,000 miners—from a union Ramaphosa himself had founded—walked off the job, protesting pay and working conditions.

“He wants to move the power to the middle, he wants to reduce the power of unions in a party that is in an alliance with the unions,” said Nic Cheeseman, a professor of democracy and international development at the University of Birmingham in northern England. “Thatcher didn’t care about losing the support of the unions because she never had it.” In that sense, Ramaphosa’s task might be more akin to that of Labor Prime Minister Tony Blair, he said.

“Labor effectively has a veto on economic policy in South Africa,” said Claude Baissac, who leads Eunomix, a South African country-risk consulting firm. “The government always loses, condemning a vast swath of the population to exclusion, unemployment and poverty.” In his state of the nation address on Feb. 7, Ramaphosa spoke only of the need for a “pragmatic and cooperative relationship” between the government, unions and the private sector. He also announced a restructuring of Eskom and an early retirement program for state workers.

The government has folded to union pressure at times since Ramaphosa took power. When Eskom’s board last year said pay wouldn’t be increased because of the company’s financial problems, which include $29 billion in debt, workers protested and some sabotaged power plants leading to electricity outages. Public Enterprises Minister Pravin Gordhan intervened and Eskom agreed to boost pay by an inflation-busting 7 percent—and even more for the next two years.

 

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