Sunday, November 4, 2012

South Africa: Unemployment Surges to 25.5%, Spike in Crime Expected

According to Reuters, most economic observers know all too well that unemployment in South Africa has remained at roughly 20% for most of last ten years, yet in the third quarter of this year unemployment nationwide climbed to 25.5%.

South Africa's mining sector, despite a six-week walkout that resulted in a considerable wage deal for miners, is on a collision course to see more layoffs, particularly in the last few months of 2012.

COMMENT: The reality is that whenever you see one in four workers of any country unemployed, it means that things are in crisis. Such a high unemployment rate will produce  either a major spike in economic crime or street unrest or BOTH.

For years I've been cautioning travelers and tourists to be careful whenever they are in South Africa, as virtually all major cities have seen high levels of violent crime.

Unfortunately, Finance Minister Pravin Gordhan has said that the SA economy needs sustained growth of 7%  a year, nearly three times the 2.5% projected for 2012, to make a formidable dent in unemployment.

Consequently, it is for all of the reasons cited above that I discourage tourist travel to SA, and urge business travelers who must travel to take deliberate steps in assuring their personal security awareness, including staying in high-security accommodations, maintaining a low profile, being predictably UNPREDICTABLE and even considering  a ballistic-resistant vehicle if they are a person of considerable means.  
The expanded definition of unemployment, which includes people who have stopped looking for work, has increased to 36.3%.

It should also be noted that private households laid off some 29,000 domestic workers during the the third quarter, very likely putting at risk the homeowners who discharged their nannies, cooks, pool cleaners and gardeners.