Global competitiveness: Labour relations constrain progress
The Global Competitiveness Index (GCI) shows that South Africa marginally improved its ranking from 54th last year up to 50th this year. This is welcome progress, but is mostly due to the continued excellence in our financial services and auditing sectors.
We would have performed a great deal better if it was not for strained labour relations and rigid labour market conditions. The GCI clearly indicates that there are government and labour-related constraints that are limiting South Africa's competitiveness.
The labour-related problems become obvious when studying the following statistics:
Hiring and firing rigidity: 139 out of 142 (down from 86th last year)
Flexibility in wages: 138 out of 142 (down from 130th last year)