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Xenophobia Surges as Covid-19 Slams South African Economy – BNN

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(Bloomberg) — As the coronavirus outbreak has slammed the South African economy and pushed unemployment to a 17-year high, it’s awakened a recurrent social demon: xenophobia.

Anti-immigrant groups have staged demonstrations in recent months in Johannesburg, the biggest city, and in Pretoria, the capital, demanding the mass deportation of foreigners. The provincial government of Gauteng, the nation’s economic hub, wants to pass a law next year to limit ownership of businesses in low-income areas, known as townships, to South African citizens and foreigners who are fully legalized.

That threatens to upend an industry of convenience stores numbering over 100,000 nationwide with annual revenue of 100 billion rand ($6.8 billion), according to GG Alcock, a consultant on township marketing and an author of books on the informal economy.

“Every foreign national that came to our country since 1994 must be deported,” said Victoria Mamogobo, the 34-year-old chairwoman of the South Africa First party, as she demonstrated on Nov. 27 with a group waving national flags and banners in downtown Johannesburg. “You’ve got people all the way from Nigeria who are here to sell tomatoes on our streets. How is that helping us grow our economy?”

Since the apartheid system of racial discrimination ended in 1994, Africa’s most developed economy has been a magnet for migrants from the continent and as far afield as Bangladesh. That’s sparked bouts of violence every few years, with mobs attacking and looting shops and killing foreigners — the most extreme instance in 2008 left 60 people dead and another 50,000 displaced. Today, social media helps whip up the hatred.

Barrage of Criticism

A barrage of criticism following clashes between locals and immigrants in 2019 prompted President Cyril Ramaphosa to dispatch envoys to other African countries to calm tensions.

Many of the migrants are refugees, legally in the country and allowed to work. Some are economic migrants — many undocumented — and others, including hundreds of thousands of Zimbabweans, have been given work permits. While it’s unclear how many migrants are in South Africa, estimates of the number of Zimbabweans alone exceed 2 million.

Still, with South Africa’s economy set to contract by the most in nine decades this year, unemployment at 31% and local elections scheduled for 2021, some politicians have found blaming foreigners for everything from joblessness to poor public services is a vote winner.

Finance Minister Tito Mboweni in April said locals should be prioritized in post-pandemic recovery efforts. The government of Gauteng has denied its township development bill unfairly targets foreigners.

“Which part is xenophobic? Because what that bill is saying is that you must be a South African, you must be in South Africa legally,” said Vuyo Mhaga, spokesman for Gauteng Premier David Makhura. “The bias will obviously be for South Africans.”

Loot, Kill

Xenowatch, which gathers information on xenophobic attacks, says that between January 2019 and November 2020, 1,376 shops were looted and 37 people were killed.

Immigrants, many from Somalia and Ethiopia, dominate the ownership of township convenience stores because they are better equipped than South Africans to compete against formal supermarket chains, according to Alcock.

While South African store owners tend to operate by themselves, Somalians and Ethiopians band together and buy in bulk, allowing them to offer similar prices to supermarket chains, he said. South Africans still own the properties, and, according to his estimates, immigrants pay 20 billion rand in rent in townships annually.

“The assumption is that if they stop illegal immigrants from trading then immediately those jobs will be taken up, or those small businesses will be taken up by South Africans,” he said. “That’s not true.”

Court Challenge

South Africa First and the Put South Africans First movement, founded in April, are demanding interventions from government including a citizenship audit, the introduction of a public-service fee for foreigners and an end to the issuing of non-essential work permits.

The African Diaspora Forum, which campaigns for migrant rights, made a submission on the bill on Nov. 25 and said it will challenge it in court if is passed.

As he listens to Nigerian gospel music and eats bread dipped in tea in downtown Johannesburg, Ekechukwu Nnadi points to a nearby street corner where he was beaten by anti-immigrant rioters three years ago. The incident hasn’t stopped him from coming back.

“This is where I make my ends meet to pay my rent and take care of my family,” he said.

©2020 Bloomberg L.P.

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B.C.’s recovery economy: Health rules will regulate the revival of spectator sports – Business in Vancouver

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B.C.’s recovery economy: Health rules will regulate the revival of spectator sports – Entertainment, Media & Sports | Business in Vancouver

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Third wave, constrained government spending biggest risks to economy: Poloz – BNN

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Former Bank of Canada Governor Stephen Poloz said the worst thing that could happen to the Canadian economy during the COVID-19 pandemic is for the federal government to put the brakes on its virus-related spending spree.

“My biggest risk is we get ‘Wave Three’ and more, and for that reason maybe governments lose faith in the model and they have to constrain their spending. That would be my biggest concern, but right now, I’m feeling more optimistic given the vaccines,” he said.

While Canada entered the pandemic with an economy that Poloz described as “the best shape it’s been in for a long time,” data from Finance Canada shows the government’s support measures relative to GDP were among the highest across G7 countries.

But Poloz said it’s because of the targeted government aid and temporary measures like mortgage payment deferrals that Canadians have been “well-armed” through the pandemic.

“It boosted their savings quite a lot and at the same time they’re actually spending more,” he said. “So we have a very lively consumer with pent-up demand.”

He acknowledged there has been some permanent loss of demand and damage done to the economy because of the pandemic, but added the government appears to be thinking differently about fiscal policy.

“It sounds like they’re focusing a lot more on what we call ‘structural’ policies or investments. The first thing you think of is infrastructure. For example, you do a big piece of infrastructure and it serves us for 30, 40 or 50 years and it adds to the productivity of the economy,” he said.

“Anything that comes along that can tilt upwards the long-term growth trend of the economy will be really timely at this stage.”

Poloz said sustainability will be key when it comes to Canada’s ballooning debt.

“The rate of growth in the economy needs to exceed the rate of interest you must pay on the debt. Provided it does so, the stock of debt will shrink as a share of the economy while they service the debt. And today, debt service is quite inexpensive,” he said.

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Third wave, constrained government spending biggest risks to economy: Poloz – BNN

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Former Bank of Canada Governor Stephen Poloz said the worst thing that could happen to the Canadian economy during the COVID-19 pandemic is for the federal government to put the brakes on its virus-related spending spree.

“My biggest risk is we get ‘Wave Three’ and more, and for that reason maybe governments lose faith in the model and they have to constrain their spending. That would be my biggest concern, but right now, I’m feeling more optimistic given the vaccines,” he said.

While Canada entered the pandemic with an economy that Poloz described as “the best shape it’s been in for a long time,” data from Finance Canada shows the government’s support measures relative to GDP were among the highest across G7 countries.

But Poloz said it’s because of the targeted government aid and temporary measures like mortgage payment deferrals that Canadians have been “well-armed” through the pandemic.

“It boosted their savings quite a lot and at the same time they’re actually spending more,” he said. “So we have a very lively consumer with pent-up demand.”

He acknowledged there has been some permanent loss of demand and damage done to the economy because of the pandemic, but added the government appears to be thinking differently about fiscal policy.

“It sounds like they’re focusing a lot more on what we call ‘structural’ policies or investments. The first thing you think of is infrastructure. For example, you do a big piece of infrastructure and it serves us for 30, 40 or 50 years and it adds to the productivity of the economy,” he said.

“Anything that comes along that can tilt upwards the long-term growth trend of the economy will be really timely at this stage.”

Poloz said sustainability will be key when it comes to Canada’s ballooning debt.

“The rate of growth in the economy needs to exceed the rate of interest you must pay on the debt. Provided it does so, the stock of debt will shrink as a share of the economy while they service the debt. And today, debt service is quite inexpensive,” he said.

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