Latest news with #economiccrisis
Bloomberg
8 hours ago
- Business
- Bloomberg
Insolvencies Jump to 11-Month High as UK's Tax Hikes Take Toll
The number of companies going bust in England and Wales rose to the highest in 11 months as firms struggled with the Labour government's tax hikes and a broader slowdown in the economy. Insolvencies rose to 2,238 in May, a 15% jump from a year earlier, the government's Insolvency Service said on Friday.
News24
a day ago
- Business
- News24
Capitec CEO isn't wrong: Unemployment data needs work
• For more financial news, go to the News24 Business front page. In June 2025, Capitec CEO Gerrie Fourie suggested that South Africa's real unemployment rate might be closer to 10% than the official 32.9% - the reaction was swift and unforgiving. Critics accused him of 'madness,' misunderstanding labour metrics, and trivialising the economic struggles of millions. But amid the furore, Fourie touched a nerve, one we can no longer afford to ignore. We need to be forthright. Any figure of the unemployment rate represents an enduring crisis that continues to erode our democratic dividend and undermine our efforts to build a more equitable and prosperous society for all South Africans. At the same time, we must all visit the fundamental assumptions guiding our understanding of the problem itself. What if the way we measure unemployment is not just analytically contested but structurally flawed? What if the very tools we rely on to understand our labour market are obscuring its most vital dynamics? This is not to say that our government, through Statistics South Africa, has been dishonest or missed the point through the years, but rather that the instruments and definitions used, while internationally accepted, may not fully capture the unique complexities and realities of South Africa's diverse economy, particularly its significant informal sector. South Africa's massive informal sector fundamentally challenges standard unemployment metrics. Millions officially classified as 'unemployed' are actively engaged in vital, though precarious, economic activities, such as street vending, waste recycling, home-based production, subsistence farming and numerous micro-services. These generate essential income and sustain communities, forming a vast parallel economy. Therefore, standard definitions, which prioritise formal employment structures like fixed hours, registered businesses, and regular wages, fail to capture this fluid, irregular, and self-directed work, misrepresenting significant economic participation as idleness. The fact that one is not seeking employment, is discouraged, or does not report any 'income' or 'wage' in the conventional sense, should not imply economic inactivity or irrelevance. Limitations Our unique economic landscape, shaped by historical exclusion and inequality, demands context-sensitive metrics. The rigid employed-unemployed binary obscures critical nuances, including underemployment, sporadic work, unpaid family labour and discouraged workers who actively survive informally. Relying on tools designed for smaller informal sectors misdiagnoses exclusion and risks policies that fail to support or integrate this vital economic segment. Admittedly, the official unemployment rate, derived from Statistics South Africa's Quarterly Labour Force Survey (QLFS), uses International Labour Organisation (ILO) standards, as rightly confirmed by our Statistician-General, Risenga Maluleke. It is important to acknowledge that although the ILO provides a standardised framework for measuring unemployment, it has limitations. A key limitation is the exclusion of 'discouraged workers,' those who have stopped actively seeking work, from the official count. This can lead to an underestimation of the true extent of unemployment, particularly among women. Additionally, the ILO definition relies on individuals actively seeking work in the past four weeks, which may not capture those who have been unemployed for extended periods and may have become less active in their job search. These standards are internationally recognised and sound in principle; however, they have limitations. Statistically invisible They were likely designed for economies where formality dominates, yet they tend to undervalue the reality of emerging markets where survivalist and informal economies are not only widespread but essential. It is necessary to emphasise that South Africa has a particularly complex labour market: sophisticated in parts yet exclusionary in others. Many South Africans are not unemployed in the literal sense; they work long hours selling food on the roadside, fixing shoes, braiding hair, or delivering packages via digital platforms. However, because their activities often lack legal status, banking records, or employer verification, they are statistically invisible. This invisibility is not benign. As Michel Foucault noted, how a state 'sees' its citizens, through censuses, surveys and indicators, is not just descriptive but political. It determines where resources flow, which sectors are prioritised, and who is included in the policy imagination. Troubling reality Across the Global South, countries with expansive informal sectors report strikingly low unemployment rates. India, with an informality rate above 90%, records unemployment rates under 5%. Mexico, Nigeria, Zimbabwe and Ethiopia—despite structural challenges—report similarly low rates. South Africa, with an informal economy estimated to comprise 40% of total employment, somehow reports the highest unemployment rate in the world. There is a profoundly troubling reality in our labour market, mirroring trends across the Global South: the relentless informalisation of the African worker. As scholars like Guy Standing illuminate, this creates a growing 'precariat' or workers stripped of stable contracts, benefits and legal protections, existing in perpetual insecurity. This is evident in models like Shoprite's Sixty60 delivery service. Reports suggest deep labour rights transgressions and potential circumvention of migration laws, potentially relying heavily on vulnerable foreign nationals and drivers operating without proper licensing. While such practices may fuel corporate profits and boost tax collections, they fundamentally erode worker dignity and flout our migration laws. Enhanced tax revenue may be problematic when achieved through the systemic exploitation and informalisation of labour. We urgently need businesses committed to ethical conduct, recognising that loyal and honest citizenship demands treating workers with dignity, not as disposable cost centres. Dogmatic fixation on formality This crisis reflects our nation's unresolved struggle: building a vibrant economy that simultaneously protects labour rights. Our history is one where economic progress was built upon the foundation of cheap, exploitable black labour. Disturbingly, many companies remain anchored in this unpalatable logic. Their substantial profits are too often subsidised by poverty wages and resistance to adhering to labour laws, perpetuating a modern form of exploitation. The Shoprite case highlights a critical flaw in our current statistical lens: even those formally recognised as 'employed' can face severe decent work deficits – insecure incomes, unsafe conditions and denied benefits - which our rigid metrics fail to capture. Formal employment status, in such contexts, offers no guarantee of dignity or security. The human cost of this informalisation extends far beyond wages into wellbeing and visibility. Informal wage workers at the foot of the formal economy, such as Sixty60 riders, face significantly heightened health and safety risks due to unregulated work environments. In South Africa, informal workers experience injury rates 2-3 times higher than their formal counterparts, alongside severe psychological stress, with women disproportionately affected. Critically, this precarity is structurally reinforced, since only 10.7% of informal enterprises hold municipal licenses, thereby denying workers access to basic infrastructure and legal recourse. Unlike the often entrepreneurial, family-driven informality seen in parts of West Africa or South Asia, South Africa's informal sector reflects not prosperity, but our dogmatic fixation on formality. Suppressing informality does not create formality; instead, it traps workers in a vulnerable, invisible underclass. Right tools, wrong terrain The Sixty60 paradox, characterised by soaring profits and tax contributions alongside alleged deep-seated worker indignity, exposes the dangerous fallacy of equating state revenue with societal well-being or ethical progress. True dignity requires labour security and voice, neither of which is inherent in precarious gig work. To turn moral clarity into action, we will work with other government entities, including Statistics South Africa and the National Treasury, to address our concerns. We will also ramp up our labour inspection efforts to improve enforcement and compliance. Our view is that this disconnect is not purely economic but methodological. We could be using the right tools for the wrong terrain. Again, we must stress that this is not about pushing the black majority further into an abyss; we acknowledge vast swathes of surplus labour that continue to characterise the South African labour market. However, our immediate concern is solely whether the statistical measures accurately reflect the nature of economic activity, particularly informal survivalist efforts, within this complex reality. As the Department of Employment and Labour, we are addressing this definitional challenge. In our internal policy discussions, we are advancing a more nuanced classification of employment, distinguishing between formal unemployment (individuals actively seeking or available for formal sector work) and economic participation (those actively engaged in the informal economy or self-employed outside regulated sectors). This is not an attempt to mask the crisis or rewrite history. Instead, it is a genuine bid for clarity, so that policymakers, economists and communities alike can operate from a shared and realistic understanding of South Africa's complex labour market dynamics. Resilience is not success Yet, our data underscore a profound crisis: official unemployment stands at 32.9%, rising to 43.1% under the expanded definition (which includes discouraged job seekers). Youth unemployment (15–24 years) is staggering at 62.4%, while graduate unemployment stands at 11.7%, revealing deep-seated structural challenges, even for the educated. Furthermore, there are currently 3.8 million young people classified as NEET (Not in Employment, Education or Training). These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms and complex realities of all economic activity, both formal and informal. Behind each statistic lies a human story of effort, ambition, exclusion and resilience. It is essential to stress that this resilience should not be mistaken for success; the informal sector is not thriving, but merely surviving under conditions of precarity and exclusion. Research from the UCT-Harvard Growth Lab identifies South Africa's informality rate as 'abnormally low' relative to peer economies, not due to prosperity, but rather to state-imposed constraints, including hostile zoning laws, bureaucratic red tape and over-policing. Crucially, unlike entrepreneurial, family-driven informality in West Africa or South Asia, South Africa's informal economy is predominantly employee-based, precarious and excluded from support systems. This vulnerability is strikingly illustrated by the fact that only 10.7% of informal enterprises held a valid municipal licence in 2023. These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms, complex realities and systemic barriers facing all economic activity, both formal and informal. We need to distinguish between informal and illegible. Just because someone is not counted does not mean they are not making a contribution. New tools needed If we want a policy that reflects the realities on the ground, we need new tools. A hybrid data ecosystem, combining the QLFS with alternative indicators such as mobile money flows, anonymised bank transaction data and digital platform work patterns, can provide a more complete and human-centred picture of labour in South Africa. Crucially, unlocking this invisible economy requires collaboration. Private sector players, including Capitec, which processes billions of township-based transactions annually, may hold part of the key to decoding our invisible economy. However, this must be done with ethical safeguards, public oversight and institutional collaboration, not in corporate isolation. Gerrie Fourie may have overstated his case, but he also illuminated a critical truth: our unemployment narrative is not just technical; it is moral. A country that fails to see the economic contributions of its people, no matter how unorthodox, fails to recognise and thus harness its potential. We are at a crossroads. Either we continue to wage policy wars based on partial metrics, or we build a statistical framework that honours the full complexity of labour in South Africa. One pathway leads to ongoing crises, while the other results in inclusive renewal. Let us choose to see. Let us choose to count. Let us choose to act. Nomakhosazana Meth is Minister of Employment and Labour.
Reuters
a day ago
- Politics
- Reuters
Paetongtarn Shinawatra, Thailand's prime minister, under siege
BANGKOK, June 19 (Reuters) - After less than a year in office, Thailand's Prime Minister Paetongtarn Shinawatra has her back to the wall - and little room left to manoeuvre. For months, the 38-year-old - the second woman and the youngest Thai to hold the position - has grappled with a faltering economy that has stalled her Pheu Thai party's flagship economic scheme while coping with an unwieldy ruling coalition. But the leaked audio of a phone call with Cambodia's former leader Hun Sen, after weeks of bickering between the two Southeast Asian neighbours over a disputed border, could be the final blow to her 10-month term. "Paetongtarn is untenable now," said Thitinan Pongsudhirak, a political scientist at Bangkok's Chulalongkorn University. "The leaked conversation is deeply compromising to her position as prime minister and deeply damaging for Thailand. I think there's no way she's going to last." In her June 15 call with Hun Sen, who she referred to as "uncle", Paetongtarn not only appeared to kowtow before the veteran Cambodian politician but also denigrated a senior Thai military commander - seen as red lines by her critics and allies alike. Facing an unprecedented backlash, Paetongtarn - a political novice who held no government position before becoming premier - delivered a public apology on Thursday, insisting that she did not know the call with Hun Sen would be recorded. "This was a private call from my personal phone," she told reporters. But it came after the conservative Bhumjaithai party - the third largest in parliament's lower house - pulled out of the ruling coalition late on Wednesday, citing the audio of the call, which was released in full by Hun Sen after the initial leak of a clip. The Pheu Thai party now only holds a narrow majority in Thailand's 495-member parliament, and the exit of some other coalition partners, some of which are due to hold individual meetings to decide their respective positions, could swiftly bring down the government. Thailand's main opposition, the People's Party, underlined the lack of public trust in Paetongtarn on Thursday and called on the government to dissolve parliament, which would trigger fresh elections. "Paetongtarn needs to take responsibility for what has happened," said Pavin Chachavalpongpun, a Thai academic at Japan's Kyoto University, referring to the audio in which she described a prominent Thai army commander as being part of "the opposite side". "She may not trust the army. But she should not be telling this to foreign leaders." Paetongtarn, educated at Chulalongkorn University and Britain's University of Surrey, was primarily involved in the Shinawatra family businesses before becoming prime minister but has spent much of her life exposed to the tumult of Thai politics. She was 8 when her father, Thaksin Shinawatra, entered politics in 1994 and began a meteoric rise to become prime minister by a landslide in 2001 - only to be ousted in a coup five years later. In 2011, her aunt and Thaksin's sister, Yingluck, also found her way to the premiership but was ejected by a court ruling, followed by a military coup. On the campaign trail in 2023, seeking to resuscitate her family's political fortune, Paetongtarn harked back to the track record of previous Shinawatra administrations and promised robust government policies to kick-start Southeast Asia's second largest economy. Paetongtarn, who is married with two children, also made no bones about her closeness to her father, Thailand's most influential but divisive politician who returned to the country in 2023 after over a decade-and-a-half in self-exile to avoid a prison term. Since she became prime minister last August, following the abrupt removal of her predecessor by a court order, Paetongtarn has struggled to deliver on her party's promises, even as she operated under the long shadow of her father, who is himself facing court cases that could see him return to prison. In particular, a decision last month to freeze a $14 billion cash handout programme, a key plank in the 2023 election, in the face of potential U.S. tariffs has hit Pheu Thai's popularity. But this crisis will likely damage the party's standing further, making it even more challenging to head into fresh polls, according to analysts. A snap election, however, may not be amenable to some current and former members of the ruling coalition, including Bhumjaithai, and instead favour the People's Party, said Olarn Thinbangtieo, a political science lecturer at Burapha University. "This is more about pressuring the prime minister to resign than dissolving parliament," said Olarn, outlining the possibility of parliament picking Bhumjaithai's leader Anutin Charnvirakul to replace Paetongtarn. Move Forward, a forerunner of the People's Party, won most seats in the 2023 election but was blocked from taking power by an unelected senate, paving the way for second-place Pheu Thai to cobble together a coalition and form a government. Still, there is a possibility that Pheu Thai can engineer a survival strategy to retain power, but Paetongtarn's actions may also determine the future of Thailand's most prominent political dynasty. "This could be the end of the Shinawatra brand," said Chulalongkorn University's Thitinan. "She has really damaged it."
Reuters
2 days ago
- Business
- Reuters
Separatist Moldovan region facing crisis without Russian gas, minister says
CHISINAU, June 18 (Reuters) - Moldova's pro-Russian separatist Transdniestria region faces a dire economic crisis triggered by this year's halting of gas supplies from Russia and a collapse in industrial and farm production, a senior minister in the enclave said on Wednesday. Moldova's pro-European President Maia Sandu has warned that Russia could use instability in Transdniestria to sow chaos and influence a September election to secure a parliament and government more favourable to Moscow. Sandu is seeking European Union membership by 2030. "Forecasts for Transdniestria's economy are not encouraging, based on uncertainty over gas supplies, a lack of a contract on power exports from the thermal plant and the fact that major industrial plants are idle," Economic Development Minister Sergei Obolonik told a government session on Wednesday. "There remains a risk that Moldova could introduce new sanctions and restrictive regulations," he said, according to local media. Transdniestria broke from Soviet Moldova in 1990. Other than a brief 1992 conflict, it has lived alongside the rest of the now-independent state with little upheaval for more than 30 years thanks largely to assistance provided by Moscow. But Russia halted supplies of virtually free gas in January after Ukraine shut a transit pipeline. Separatist authorities secured alternative gas through a Hungarian supplier with Russian funding, but that supply has proved insufficient to keep the economy afloat. Obolonik forecast a 12% drop in gross domestic product in the second half of the year from a year ago, a 30% plunge in industrial output, a 6% slide in agricultural production, a 20% slide in foreign trade and inflation of 16%. Improvement next year, he said, depended on finding reliable gas sources and on Moldova introducing no punitive measures. "We can expect no real growth in the economy," Obolonik said. "The best scenario is for indicators to remain at this year's levels."
LBCI
2 days ago
- Business
- LBCI
BDL raises withdrawal limits under Circulars 158 and 166
The Banque du Liban (BDL) announced an increase in monthly cash withdrawal limits, as outlined in Circulars 158 and 166, citing ongoing economic and financial hardship, as well as the urgent financial and humanitarian needs of depositors. In a statement on Wednesday, BDL said Circular 158's monthly cash withdrawal limit will rise from $500 to $800, while Circular 166's limit will increase from $250 to $400. These new limits will take effect on July 1, 2025, and will remain in place for one year, renewable through July 1, 2026. The decision also includes an extension of both circulars, originally set to expire on June 30, 2025. BDL emphasized the importance of swiftly passing legislation that ensures the return of depositors' funds. It added that it is actively coordinating with the Lebanese government and Parliament to achieve this goal. Read the full decisions on Circulars 158 and 166.
