To rein in inflation now exceeding 10 percent, the highest level in five years, the South African Reserve Bank raised its repurchase ("repo") rate 50 basis points to 12 percent June 12. The move prompted Congress of South African Trade Unions (COSATU) President Zwelinzima Vavi to threaten that the umbrella labor body will begin rolling strikes July 2 to protest interest any rate increases. Vavi said this strike would come regardless of whether the Reserve Bank raised the repo rate by 50 or 100 basis points (two figures considered by the government), as well as a proposed 53 percent electricity tariff increase. COSATU and its 2 million members could significantly disrupt economic activity nationwide in protest of the expected interest rate hike and the proposed electricity tariff increase. Though COSATU has not targeted specific industries, the rolling strikes set to begin at the provincial level July 2 will harm the South African economy and further paralyze its government. COSATU is South Africa’s umbrella labor organization. It has members throughout the nation and in 21 sectors of the South African economy, including its mining, industrial and commercial industries. COSATU is a potent political force, and together with the South African Communist Party and the African National Congress (ANC) comprises a ruling alliance that informs government policy-making. A strike by COSATU will likely further slow the South African economy — which at 2 percent annualized growth already is underperforming through lost productivity — as will increased costs should Pretoria deal with the strikers by boosting wages as it has before. South Africa already struggles to compete internationally. Dealing with the immediate effects of rapidly rising food and fuel prices — South Africa is a net energy importer, though it is a net food exporter — is of more immediate concern to COSATU and its members than productivity is, however. Meanwhile, South Africa is struggling to cope with the economic effects of an electricity crisis. Growing consumer and industrial demand for electricity not matched with an increase in supply caused a power crunch beginning in January, and the subsequent introduction of rolling power cuts. The power cuts have further constrained economic output, as all sectors have been forced to reduce electric consumption. Though plans exist to expand power plants and build new ones, the completion of these projects is several years off. The threat of rolling strikes and unrest over high food, fuel, and electricity costs — as well as containing xenophobic violence against immigrants from other African countries — are unlikely to end in the near term, compounding the Mbeki administration's paralysis. In a bid to deflate the COSATU protest, the government probably will offer salary increases and subsidized electricity to the poor in stages. The unrest is unlikely to lead to an early departure by South African President Thabo Mbeki, even though he is a lame duck as a result of his December 2007 loss to Jacob Zuma as ANC party president. National elections are not expected until December 2009, and Zuma, Mbeki's likely successor, opposes Mbeki's early departure. Rather than become South Africa's president that much sooner, Zuma would rather wait and get two full presidential terms. Moreover, Zuma benefits from Mbeki’s unpopular economic policies. Zuma has gained the support of COSATU, which is largely anti-Mbeki, helping him win the ANC presidency. But despite Zuma’s better relations with COSATU, the global crisis of high food and energy costs means South Africa’s economic problems and resulting limitations will not be overcome easily.