Times Of Swaziland: FUEL TO THE FIRE

FUEL TO THE FIRE
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Sanele Sibiya on 06/07/2022 07:12:00


Globally, the economy is faced with stagflation, regardless of the aggressive
moves from central banks across the globe to curb the problem. We expected
supply chains to be restored by now, post-COVID-19, and we anticipated a
short-lived confrontation between Russia and Ukraine, something similar to the
annexation of Crimea in 2014.
We did not anticipate a prolonged war and the level of sanctions was not
anticipated. We did not expect the global north to inflict pain on itself just
so to stand up to Russia. At the height of the global recovery, with fuel prices
already high, we did not expect that the world would cut out Russian oil from
the global market. We are already seeing yet another record fuel hike in SA and
we expect the same to follow in the country. I fear we do not have the social
cohesion to weather the storm of what is to come economically. I fear that the
current economic events are adding fuel to the fire and these are the channels
through which they may transmit from the economic to the social.
Wage negotiations
The prevailing global economic conditions that we are importing into the
domestic economy as a net importer; we are importing high inflation and
importing high fuel prices. These will translate to more vigorous wage
negotiations and we expect Public Servants  Associations (PSAs) to be hard on
the streets. Eventually government will succumb to the pressure and award a
lucrative cost-of-living adjustment, which will in itself induce inbuilt
inflation. That is what I foresee in the short to medium term on the front of
wage negotiations. This will result in protests across the country and it will
be difficult to quell until the unions get what they want. The government
negotiating team and government as a whole will not have the pedestal to call
for social cohesion.
The current fragmentation in the country renders government aptly unable to
execute its mandate effectively since they do not have much social support to
lead stability in the country. The curse of governments globally is that when
things are not going well in a country, everyone tends to blame the governments.
It is for this reason that the job of every incumbent government is to ensure
they are in good standing with the population. At times when economic policy
fails, just like in the current time period, we need social capital to carry us
through. The economy, sadly, is not dealing us a hand that can buy the social
capital, the peace and the stability that we need for our economy to weather the
current economic storm.
Tertiary student demands
The education system is slowly trying to recover from the effects of COVID-19.
All institutions are trying to restore almanacs to pre-COVID-19 expectations.
The school calendar is also trying to catch up to restore pre-COVID-19 school
terms. We are going to see an overlap of semesters to periods which will not be
covered by the scholarship agreements; this will be a likely trigger for
prolonged periods of instability in the country. I foresee such coinciding with
demands for scholarships for incoming fresh students. We hope that the Ministry
of Labour will be proactive in addressing this problem before it explodes. We
are a country engulfed in high social tensions, as such I fear we do not have
the social capital at present to deal with such social pressure. We need to work
on rebuilding our social capital, we need it now more than ever.
General protests on cost
of living
History has shown us that people always take to the streets to protest
skyrocketing cost-of-living. As already alluded, people tend to associate all
economic woes with government failure. Regardless of whether it is a supply side
shock like the one we are facing, which cannot be addressed using basic fiscal
policy and monetary policy, the people always look upon government to do
something about their suffering. Hence, we should expect a couple of protests
around the cost-of-living in the next two to three months. These are likely to
be outside the purview and control of the unions, it will be a cross-cutting
issue. Again, I am afraid that government does not have the moral pedestal to
convince the nation that we are all together in this and we need to rally
together to weather the storm.
The dialogue
We are approaching very difficult times as an economy, and social capital will
be our greatest currency if we are to survive what is to come. We can start by
rebuilding our social capital by diffusing tensions that exist by dialoguing
with one another. Setting the tone together on how we can traverse the murky
waters we find ourselves in, the dialogue is paramount to our survival as a
nation and as an economy. Meanwhile, spend on commodities that you really need,
avoid clout spending and unnecessary trips. Also, start those back yard gardens
so you reduce on shop purchased nourishment.