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Literature review

Haynie (2008) mentioned that the majority of immigrants in South Africa had been displaced and scattered all over the communities, scared to return to their homes. Parts of Gauteng and the Western Cape had been declared disaster areas in a bid to speed up government funding.  Cape Town had the most efficient sites to locate camps, in Johannesburg, the economic hub, United Nations High Commissioner for Refugees assisted with searching for displaced sites.  An observation was made that up to 3million Zimbabweans were believed to be in South Africa in which many of them had informal documentation because of the political system back at home. In addition to, they refused to return creating competition for scarce housing and jobs. Therefore the government had to diverge their governmental funds into protecting foreigners and abiding the refugee right to protection

After the next couple of months it was expected that the foreigners would return to the communities once the attacks halted, however they didn’t. Temporary camps were made to place the victims of xenophobia, gradually some were assimilated into society but others refused. When a problem becomes chronological it consumes money and time. Ivan (2009) illustrated the action taken by City council of Cape Town to file a court order to evict the remaining immigrants because one of the camps, Blue Waters was popular holiday campground in the summer months situated next to a long white sandy beach with stunning views over False Bay and the Drakenstein Mountains. In which the town obtained revenue from, it limited the government sources of revenue. It also was now popular for crime and rape because some community members had resentment towards immigrants. Magubane(2008) showed that  the interest of academic scholars on how xenophobia would affect them. The students of Witwatersrand’s took it upon themselves to study the underlying causes, contexts and consequences of the attacks on foreigners in South Africa. Because under human capital theory: the ability to perform labour, skills and knowledge is needed to produce economic value. In the economic long run they would be affected by paying higher taxes and receiving lower wages in order to produce enough funds for consumption in the foreseeable future. In the short term a high crime rate would be the looting of property for cash.

Like wise, Potter (2008) and Rander (2008) mentioned how the pinch of the economy after a couple of months from the xenophobic attacks. The price of fuel, food and its complements had been rising on a regular basis as well as interest rates due to scarce and limited resources. Most of the funding that was on reserve was used to deal with the xenophobic crisis.

Rander(2008) also emphasized how the business’ that had a high employment of foreigners experienced high rates of absenteeism as they failed to attend work.  The National Union of Mineworkers (Num) indicated how the mine sector is one of the back bones of the economy and if this crisis wasn’t taken care of, a greater impact would be felt than what is already being seen. It is because most of the skilled and well trained workers were foreigners; to replace them it would be hard.

Tourism industry of South Africa may be facing some difficult times because most countries made a warning against travelling to South Africa as the attacks escalated. Wendell (2008) indicated that the tourism industry contributes about 8%of annual Gross Domestic Product (GDP), employing about a million, with such a contingency the companies would be forced to lay off workers as revenues decline and ability to pay employees runs down. The Department of Home Affairs found it hard to keep track of all immigrants in South Africa especially those with informal documents who did border jumping. Lekota and Sapa (2009) that the lack of border control made the Government to introduce a 90- day visa waiver for several SADC countries. In the hope of improving the time taken to issue temporary and permanent permit. It now takes four days instead of 15 days. As well as improving paper work for immigration application and to reduce illegal documentation. Meanwhile, Hassan Isilow (2008) mentioned that, If anti foreign violence persists in South Africa, FIFA would be force to move the 2010 World Cup to another country. There would be a major loss, if South Africa would have to give up its right to host the world cup after having preparations. Such as renovating hotels, constructing new stadiums and improving transportation system, at the same time creating jobs.  Because this source of fund could have been used to import more police workers to reduce crime and improve health care system. The impact it would have had on the economy is that it would need to find a way to generate money to pay up loans which it was expecting to gain from actually hosting.

In brief the economy is affected directly or indirectly by the policies or decisions it would make, but the key factor here is xenophobia and the perception of South Africa as a Rainbow nation is reduced

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