South Africa unrest creats panic, affects business

Published on Tuesday 20th May 2008

Johannesburg (South Africa): Among the victims of a surge of anti-foreigner violence in South Africa was a construction company owner accused of hiring foreigners who died when a mob set fire to his house.


Shops have been looted, fearful staff aren't making it to work and the business community worries about the long-term effects on the economy of the violence that has hit South Africa's commercial hub, Johannesburg.

Police said the construction company owner, a South African, was set upon Monday night, and they were investigating reports his attackers accused him of hiring foreigners, a common practice in the building trade, restaurants and other sectors in South Africa. His home was destroyed in the fire.

In all, at least 22 people have been killed in about 10 days of unrest, most of it flaring in squatter camps that are home to impoverished South Africans and immigrants from neighboring countries. South Africans complain the foreigners are taking their jobs, but the violence is likely to only further slow growth and job creation in a country where a quarter of the adult population is looking for work.

"You don't know how angry I am," said Richard Sishuba, president in the province that includes Johannesburg of the National African Federated Chamber of Commerce and Industry.

Sishuba said a large part of his organization's membership is drawn from the 3,000 or so hawkers and other informal traders who work on the streets of downtown Johannesburg. About half those traders are from elsewhere in Africa, he said.

"They're contributing immensely to our economy," he said, saying the immigrant traders buy from South African wholesalers and provide an important service to South African consumers.

But the hawkers, South African or otherwise, have been off the streets in recent days.

"Because of fear, they're not free to go out and trade as usual," Sishuba said.

Attacks on foreigners erupted on the edge of downtown over the weekend, leaving streets strewn with broken glass. Police said looters took advantage of the unrest, even clearing out an Internet cafe.

Siphiwe Nzimande, chief executive officer of Business Against Crime, which brings business leaders together to work with the government on fighting crime, said the economic impact of the violence had not yet been compiled, but that it was affecting retail, transportation and other sectors.

"Criminal elements are fueling the underlying xenophobic tensions arising from the competition for scarce resources to foster anarchy and use the instability to rape, murder and enrich themselves by looting shops and homes," Nzimande said.

South Africa already has a reputation as a crime center, and the international attention the xenophobic violence has drawn could further erode investor confidence. It also comes as South Africa seeks to improve its image ahead of hosting the 2010 soccer World Cup, AP report said.

Tourism Minister Marthinus van Schalkwyk, speaking to reporters in Cape Town earlier this week, was worried about the impact of the anti-foreigner violence on how tourists see South Africa. He said visitors from elsewhere in Africa made up the fastest growing sector of his country's tourist economy.

"Africans increasingly travel to South Africa as a holiday destination," van Schalkwyk said. "These attacks have the potential to impact negatively on these markets."

Moeketsi Mosola, head of the South African government's tourism marketing arm, said while the violence was breaking out in isolated areas, it could hurt efforts to promote the country as a "must visit" destination.