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Unemployment Worries

Nanama Keita/Twenty Ten

Location: Johannesburg, South Africa

Locals fear job losses after the FIFA World Cup ends.

Associated Features: Striking Staff Fired(Text Article) Stadium Workers(Audio Feature)

Tensions mounting between native job-seekers and immigrants competing for a declining pool of work in South Africa are expected to intensify shortly after the 2010 FIFA World Cup. This, as more workers continue to suffer lay offs as a result of completion of construction works and other major projects that were undertaken by the country in the readiness for the world show-piece.

When South Africa was handed the right to host the 2010 World Cup in May 2004, the then-President, Thabo Mbeki, said the monthly-showpiece would undoubtedly boost economic growth in the country, with emphasis on job creation in various sectors of the economy.

Mbeki’s successor, President Jacob Zuma, re-echoed similar promising remarks during the opening of the tournament on June 11, when he said that, “The event itself will create such an opportunity that our economy is not going to be of the same size after the World Cup. We are very confident that after this, employment will go up”.

However, it seems the predicted economic boost vis-à-vis job creation by the coming of the World Cup to South Africa is a far-fetched dream.

The country’s unemployment rate has risen for a fourth consecutive quarter in the first three months of 2010 as companies shed jobs. This has left many economic analysts fearing the worst when the final whistle is blown at the magnificent Soccer City Stadium on July 11.

The unemployment rate, the highest of 62 countries tracked by Bloomberg, increased to 25.2 per cent from 24.3 per cent in the final three months of last year, Statistics South Africa said in a report released last month. The number of people with jobs dropped by 171,000 to 12.8 million.

The continent’s biggest economy lost 870,000 jobs last year as the economy fell into its first recession in 17 years, undermining President Jacob Zuma’s pledge to cut the unemployment rate to 14 per cent by 2014.

“The further increase in the level of unemployment is not encouraging and suggests that consumer spending will improve at a slow pace,” Johannes Khosa, an economist at Nedbank Group Ltd., said.

“Some companies, particularly in the service sector, could be hesitant to expand their labour forces until the recovery has gained significant momentum, though there is no positive sign yet,” he added.

South Africa’s unemployment rate enjoyed a considerable decline between 2004 and 2008, but the trend changed suddenly in the last quarters of 2008, with many analysts linking the increased job loss to the number of people suffering lay offs in the various sectors, including the construction industry.

“In terms of the 2010 FIFA World Cup, employment in South Africa was expected to receive a huge boost, but when one looks specifically at the tourism and construction industries, these ‘leg-ups' only have a short-term impact on job creation,” said Tahir Sema, spokesperson of South Africa Workers’ Union.

He said that when the World Cup was set to come to South Africa, thousands of South Africans were contracted, mostly in the construction industry, as the country moved to improve its infrastructure. However, as the construction work is completed and the World Cup comes to an end, Sema foresees a drastic increase in unemployment as companies begin lay-offs.

“The new stadiums heralded a construction boom, but many of the workers who built them have already been laid off and are without work. Behind the spectacle, the World Cup is exacerbating the struggle of poor South Africans who are facing evictions, lack of public services and unemployment. The South African government needs to tackle these problems as an urgent priority."

Mr. Mthandeki Walter Theledi, Secretary General of the workers’ union, said the heart of the country’s employment problem, which extended well beyond the recession, was the youth unemployment. He said people under 34 experienced 75 per cent of job losses. Theledi said South Africa’s economic policy priority should be to encourage the creation of jobs rather than just growth: “The government needs to focus on the labour intensive sector and start promoting and investing in these sectors,” he said.

He added that the nation’s biggest workers’ union was greatly saddened by the recent unemployment statistics, saying, “We will be pushing the government to make sure that the unemployment rate comes down as soon as possible. We are proposing a new growth plan for the country and this plan will focus on industrial development other than exports, which the country has heavily relied on since the days of apartheid. We are of the opinion that this plan, which is at the final stage, will help cut down the rate of unemployment.”

South Africa has some of the worst employment figures in the world. Nearly five and a half million people – one in every six adults – are out of work in South Africa.

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