Alliance+partners+fight+off+wage+plan



=Alliance partners fight off wage plan=

Business Report, Johannesburg, July 4, 2005

 * By Andile Ntingi**

Johannesburg - The ANC's left wing alliance partners, Cosatu and the SA Communist Party, emerged triumphant at the ruling party's national general council yesterday when they fought off proposed radical labour market reforms.

In a discussion document published prior to the four-day council meeting, which ended yesterday, the ANC had suggested the idea of a dual wage system in which young workers earned less than prevailing wage agreements - a proposal it hoped could reduce the country's unemployment crisis.

But Willie Madisha, the president of Cosatu, said yesterday that the unions and the council rejected the idea because it could result in the widespread exploitation of young workers.

"The national general council has affirmed the position we have always had that there should be no worker [who] is excluded from fairness and access to proper labour market laws," said Madisha.

"I am happy to say that the labour laws will continue to favour the working class and the poor."

A leaked draft report had said further research was required to quantify the effects of labour market regulation for job creation, particularly in the second economy.

Trade and industry minister and senior ANC member Mandisi Mpahlwa said there was a degree of flexibility in South Africa's labour market, meaning it was not difficult to fire workers.

"There is some evidence that ... there is an existing flexibility," Mpahlwa said.

The official unemployment rate in the country sits at a staggering 26.2 percent, with between 8 million and 11 million people believed to be jobless.

The ANC reaffirmed its position that the government should strive for a stable and competitive rand. The currency's rebound from its record low of R13.85 against the dollar in 2001 has hurt export sectors such as mining and manufacturing, forcing them to shed jobs and call off expansion plans.

"The feeling is that we need some kind of an equilibrium that will satisfy both exporters and importers," said Smuts Ngonyama, the national spokesperson for the ANC.

Ngonyama did not elaborate on what the party believed to be a suitable exchange rate level, and did not explain what strategies the government must use to achieve a competitive rand.

However, the initial ANC discussion document refers to the use of interest rates and the accelerated buying of foreign reserves as possible options for weakening the local currency.

A report published by the Bureau for Economic Research suggests that the majority of local exporters would be competitive at an exchange rate of R7.70 against the dollar.

The rand, which has depreciated 15 percent against the dollar this year, was bid at R6.7568 versus the dollar at 5pm on Friday.


 * From: http://www.busrep.co.za/index.php?fArticleId=2610697