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South Africa Unemployment Rate Drops Despite Slowing Economy

  • Delia Robertson

Despite a recent spate of bad economic news, the latest unemployment rate for South Africa has actually declined. The Labor Force Survey reports a drop from 23.2 percent in the third quarter of 2008 to 21.9 percent in the fourth quarter. The improvement is largely due to an increase in construction industry jobs.

VOA reporter Delia Robertson, in Johannesburg, says, "It seems to have been a surprise. And I think not a surprise that the rate has come down, but to the extent to which it apparently has come down and the timing, given the current economic climate. South Africa's GDP (Gross Domestic Product) decreased for the first time in over a decade in the last quarter of 2008. And so I think a lot of people were expecting the jobless rate to increase rather than decrease," she says.

With the April national elections approaching, is this good news for the ruling ANC party and bad news for opposition parties? Robertson says, "I'm not sure that the impact will be that great. I'm sure the parties will try and make use of these statistics. But for a lot of people whose lives haven't changed under ANC rule, these statistics are pretty meaningless. And there is a fair amount of resentment toward the ANC because of the slow pace of change. Although, I suppose if one was going to be completely fair, you could say that in 15 years the ANC has done quite a lot. But one thing they haven't done…is reduce unemployment at the rate people would like to see it reduced."

Asked whether the improvement is due to construction jobs related to building for the 2010 World Cup, the VOA reporter says, "What we might be seeing is…one of the effects of job creation reaching a critical mass, where creation of jobs is very, very slow and very, very incremental and then all of a sudden it starts picking up. I don't think it's directly related to 2010 construction because most of 2010 construction is nearing its end already. Most of the stadia will be completed in the coming months…. That, I think, has already been factored in."

Robertson says, however, that there could be another downturn in the jobless rate. "Up until certainly the end of last year, the construction industry has been busier just because of a consequence of this very slow and incremental build-up in the economy. And it started to make an effect. Given the current economic circumstances, though, and the downturn in the global economy and the downturn in South Africa's economy…what we might see is a reversion to an increase in jobless numbers."

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