DURBAN, March 01 (IPS) – South Africa’s near record inflation in food prices, burden shedding, rising energy costs and expected further fuel and interest rate hikes have eroded workers’ disposable income and further disadvantaged the poor. Analysts predict that the country was at increased risk, including civil unrest.
Head of Policy Analysis at the Center for Risk Analysis, Chris Hattingh, warned that the lower fuel price, which the latest data from Statistics SA showed last week, had largely contributed to pushing annual consumer inflation from 7.2 percent in December 2022 to 6 percent . .9 percent in January, could turn out to be only a temporary reprieve. The fuel price index fell 10.5 percent between December 2022 and January, the data showed.
United Trade Union of SA (UASA) spokesman Abigail Moyo said the state’s inability to provide food producers and retailers with enough water and electricity to efficiently run businesses has fueled inflation that has drained the disposable income of the workers has eroded.
“Economically driven financial stress through no fault of their own has been a factor in employees’ lives for years. With products like cornmeal up 36.5 percent since January last year, onions up 48.7 percent, samp up 29.6 percent and instant coffee up 26.4 percent, it’s clear that the tough times for households are far from over. are. .
Business Leadership South Africa CEO Busisiwe Mavuso also warned that unless there were “meaningful and targeted interventions”, the country could face an Arab Spring-type uprising.
Hattingh added: “This inflation relief provided by lower fuel prices may prove to be temporary. The reopening of the Chinese economy is likely to push up international oil prices, which will have consequences later in the form of higher fuel prices. South Africa is also more exposed to imported inflation. If the costs and prices of manufactured and consumer goods and inputs rise, this will drive up inflation locally.”
“Of great concern regarding pressure on consumers is that food and non-alcoholic beverage inflation was recorded in January at 13.4 percent (annual). The last time this value was this high was in April 2009, at 13.6 percent,” he said.
In addition, the bread and grains category recorded the largest increase of all product groups at 21.8 percent, while meat inflation rose from 9.7 percent in December 2022 to 11.2 percent in January.
“A fundamental weakness in the economy – unreliable electricity supply – could likely drive prices and inflation up throughout the year. This will result in more pressure on consumers and businesses and will add to the likelihood of civil unrest,” he said.
He said burden shedding was now a priced-in “feature of South African life” as evidenced by the Rand’s weakening to R19 against the US dollar.
Annual inflation at 6.9 percent was also outside the South African Reserve Bank’s (SARB) target range of 3 – 6 percent.
“With the latest January data coming in, the SARB could continue its cycle of rate hikes by another 25 basis points at the next meeting of the Monetary Policy Committee,” Hattingh said.
Independent crime and police expert and former senior researcher at the Institute for Security Studies, Dr Johan Burger, warned that signs of potential unrest due to the rising cost of living and disillusionment were visible across the country.
He said most middle- and upper-income households were forced to cut spending because of higher interest rates and rising prices of staple foods.
“Those of us with relatively stable incomes are already struggling and having to think twice before buying anything, so you can only imagine the pressure people in lower income brackets must feel,” he said.
“For many, this has been the situation for many years and it has gotten worse. The unemployment rate stands at 32.9 percent and the unofficial unemployment rate is even higher. High levels of unemployment lead to high levels of poverty, creating all sorts of social problems,” he said.
Burger said during the July 2021 looting, much of what was stolen was food and goods that could be sold for cash.
“In some cases, people who went shopping were attacked and robbed of their food. Other cases we’re seeing now are when a truck breaks down on the road near a community, and suddenly a flood of people comes in and robs it of whatever it’s carrying – be it food or something they can trade for food,” he said.
Burger said these incidents showed a “general instability” against the backdrop of a weakened criminal justice system that cannot deal effectively with criminals.
“The potential for large-scale disturbances and looting and for large groups of people to come together and participate in popular uprisings could happen. When large groups of people are exposed to extreme levels of ownership over a long period of time, they build resentment and feel neglected by the state. They feel their needs are not being recognized, and with this resentment comes a disdain for the state, its laws and the police, and they feel they have a right to riot and take what they need,” Burger said.
“And if they rise in large enough numbers, it will be very difficult for the state to suppress these kinds of revolts. The chance of this happening is very real – it’s almost visible; it’s just below the surface,” he said.
Burger said all it took to create unrest was a potential trigger, as had happened in KwaZulu-Natal to a pro (former president Jacob Zuma campaign prior to the July 2021 riots).
“The danger is that it can spread very quickly, because those levels of poverty and deprivation exist in almost all of our communities across the country. In 2008, the xenophobic riots spread within a few days, and we saw 69 people killed and many more injured and displaced,” he said.
He warned that local protests over service provision have been going on for years, and if left unattended could also get to a point where “resistance will explode”.
“Dissatisfaction with their situation is growing and many poor communities see themselves as the neglected part of South Africa. They promised nothing when democracy came in terms of employment and services, and they are starving when this happens; there is a disconnect between part of our population and the institutions that govern us, and therefore there is a real potential for large-scale insurgency,” Burger said.
Gareth Newham, head of the Justice and Violence Prevention Program at the Institute for Security Studies, said rising food security and hunger, with about 60 percent of the population now living in poverty and a large proportion of households going hungry every week, is a high level of despair and frustration.
“This challenge has been around for a while and rising food prices could make that even worse,” he said.
However, he said the current causes of most public violence were labor-related disputes and service failures.
“We don’t have a problem historically where food insecurity has been a major driver of public violence, but that doesn’t mean it won’t be. There could arguably be a level of hunger that does lead to it,” he said.
IPS Report of the UN Office
© Inter Press Service (2023) — All rights reservedOriginal source: Inter Press Service
