SA's gloomy scenario

A dark cloud is hovering over our country. The economy is struggling to create new jobs.

Jobs are being shed in an economy still reeling from the global economic crisis that has caused price volatility of metals.

The instability and decline of the mining industry has a direct impact on whether the government will continue to receive sufficient tax revenues from the mining sector.

Linked to this are question marks about whether the government will continue to fund the ever-expanding fiscal obligations in the form of social grants.

It does not help that the government, trade unions and chief executives of mining companies have failed to provide leadership in the mining sector.

The government has largely been absent. If anything, government leaders and our president, who is preoccupied with his own material advancement, appear clueless.

That there are many ministers dealing with economic matters and one that specifically deals with labour does not help.

Reserve Bank governor Gill Marcus, worried about the inflationary pressures in the economy which might drive the Central Bank to raise the repo rate, and in turn put pressure on the economy, had to do something: call a crisis meeting among all stakeholders to find a solution.

This could have been done by the president - if only he understood the depth of the crisis and his contribution to it. Yet, his defence of the indefensible expensive "security upgrade" of his residence in Nkandla suggests otherwise.

The trade unions have been cut off from workers who are now seeking alternative representatives. In both the mining and transport sectors, strikes were accompanied by violence which union leaders seemed incapable of stopping.

Mining bosses are adept at shooting themselves in the foot - allow strikes to drag, losing much needed revenue, only to agree with workers' original demands at a later stage.

Now, rating agencies - which operate like credit bureaus who determine the credit worthiness of consumers - have downgraded SA's credit rating for what basically is a lack of confidence in the way the government manages the economy.

This means borrowing money to supplement the country's budget will be difficult and expensive.

It's a vote of no confidence in the country's present political climate.

The situation can be turned around if only those who rule the country understand the implications.

Failing which, it will be difficult to deal with the consequences of the looming storm.