South Africa\u2019s government sought a series of commitments by labor unions and business, ranging from lower entry-level wages to an agreement to boost investment, as part of a plan to revive the nation\u2019s struggling economy.<\/p>\n
The proposals angered both parties because they contain stipulations they aren\u2019t willing to meet and want the government to do more to confront immediate problems such as power outages and state corruption, according to people familiar with the matter who asked not to be identified because the talks are private.<\/p>\n
The \u201cFramework for a Social Compact in South Africa,\u201d a 32-page document authored by the government this month, is a step toward president Cyril Ramaphosa\u2019s commitment in his state-of-the-nation speech in February to forge such an agreement. The document, seen by Bloomberg, concedes that previous commitments between the parties have not achieved the desired results.<\/p>\n
\u201cFailure on the part of the social partners to confront these issues will yield the same results as previous compacting efforts,\u201d the government said in the document.<\/p>\n
Work on agreeing the social compact is still underway, and differences and their resolution are part of that process, presidency spokesman Vincent Magwenya said in response to a request for comment sent by text message.<\/p>\n
\u201cRegardless of the objections from any of the stakeholders, the commitment towards attaining a social compact remains.<\/p>\n
Text messages seeking comment from spokesmen at the Congress of South African Trade Unions, the country\u2019s biggest labor group, and Business Unity South Africa, the main business association, weren\u2019t immediately answered.<\/p>\n
News24, a South African news website, reported on the document earlier.<\/p>\n
Ramaphosa initially promised a social compact within 100 days of his speech on Feb. 10.<\/p>\n
Earlier this month, Thabo Mbeki, who beat Ramaphosa in an intra-party fight for the right to lead South Africa after former President Nelson Mandela stepped down, criticized Ramaphosa for failing to deliver the plan. He warned the country faces Arab Spring-style protests because of growing inequality, unemployment and poverty.<\/p>\n
\u201cNothing has happened, nothing,\u201d Mbeki said July 21. \u201cThere is no national plan to address these challenges of poverty, unemployment, inequality – it doesn\u2019t exist.\u201d<\/p>\n
The document shows that for its part, the government \u201ccommits to create a safe environment for investment, ensure efficiency and good governance.\u201d<\/p>\n
Business was also asked to agree to targets to enforce the use of locally made products, to strengthen job security at large companies, moderate executive pay, put worker representatives on boards and help the government boost welfare payments \u201cfunded through revenue measures.\u201d<\/p>\n
Labor unions are expected to agree to multi-year wage deals, reforms to labor laws and measures to boost productivity, the document shows.<\/p>\n
The government pledged to accelerate structural reforms, improve governance of state companies and municipalities, and to protect infrastructure against sabotage.<\/p>\n
Those commitments come with South Africa in the 14th year of an electricity-supply crisis, with many municipal governments in a state of near collapse and rampant sabotage that triggered power cuts and interrupted the shipping of export commodities such as coal to ports.<\/p>\n
Government suggestions that a basic income grant be implemented have drawn criticism from business groups that say such a plan would cripple the economy. More than a third of South Africans are unemployed and interest rates and inflation are surging.<\/p>\n
Labor unions won\u2019t countenance lower wages or weaker labor laws, the people said.<\/p>\n
The government said it expects a final agreement in January.<\/p>\n