Few jobs, dim hopes feed circle of strife in South Africa

[JOHANNESBURG] With the largest reserves of more than a dozen minerals, South Africa is not about to run out of riches. Yet the unrest rumbling through its mining industry reflects the deepening failure of Africa's largest economy, almost two decades after the end of apartheid, to tap its natural wealth for the lasting benefit of all its citizens.

On Monday, police used tear gas to disperse strikers at a gold mine near Johannesburg. This came not long after the worst violence of the post-apartheid era: on Aug 16, police at a platinum mine owned by Lonmin Plc used live ammunition to turn back strikers armed with spears and machetes, killing 34 of them. The workers were demanding a near-doubling of their monthly pay to 12,500 rand (S$1,855). They were also fighting with one another, in a clash triggered by a breakaway union.

South Africa's mining industry - which generates nearly one-tenth of its gross domestic product and half its foreign exchange, and provides about 500,000 jobs - has been hard hit by slowing demand from China and Europe. (The price of platinum, for example, which is used in catalytic converters for cars, slumped with sluggish auto sales in Europe.)

But the country's economic problems go well beyond that. Unemployment, now at 25 per cent, has not dipped below 22 per cent since 2000; the level of inequality, as measured by South Africa's Gini coefficient, is worse now than at the end of apartheid.

Source: http://www.businesstimes.com.sg/premium/economy-watch/few-jobs-dim-hopes-feed-circle-strife-south-africa-20120906

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