Moneyweb (Johannesburg)
Tim Wood
24 September 2001
Johannesburg — An Associated Press report widely distributed in the United States quotes Finance Minister Trevor Manuel saying: "America was attacked. How can the rand weaken (against the dollar) on that? Somebody must explain that kind of rationale to me."
Surely, by now, everyone knows that the rand has traded on sentiment for over two decades and will continue to do so?
The same report cites mounting frustration that despite South Africa being lauded for its fiscal and monetary soundness it has not been rewarded with foreign investment. And the rand has lost nearly 30 per cent in the last 12 months alone.
It's not clear where the frustration is directed, but it is implied that government officials are growing tired of following traditional prescriptions. Nothing could be more dangerous. The only message Manuel should be transmitting internationally is that he will hold the line.
Politics, words and images matter
There is only one way to improve the value of the rand in the medium term. Scrap SA's foreign policy and start over.
When SA officially signaled its adoption of a policy of moral equivocation by shunning Taiwan in favour of China in 1998, it attracted extraordinary attention to the circle of friends it was forming. The friends are less than savoury and circumstance has made it worse.
When the emerging market crises hit in 1997 and 1998, Malaysia and Indonesia's influence over SA was unseemly given the rapid slide into totalitarianism there. Mental notes have been made of the standing ovations in parliament for Fidel Castro; the fawning over Muammar al-Qaddafi; the easy tolerance of Robert Mugabe, Eduardo dos Santos, Sam Nujoma and Laurent Kabila; the shadowy money links with Saudi sources; cosying up to the P.L.O. and I.R.A.; and the hospitality afforded North Koreans openly looking for nuclear material.
A country can make friends with whomever it chooses. But then it must not bellyache if the friends it really needs shun it as a result.
The rand has lost so much ground precisely because SA refuses to conduct a simple and transparent foreign policy. Everything is nuanced and double-sided. Nothing could be more fatal in the international affairs of a developing country. Nowhere is this clearer than in the context of the terror attacks on the US.
Fresh off the World Racism Conference in Durban that filled American televisions with images of hatred for Israel and unconditional sympathy with the Palestinians, it doesn't take much for currency traders to make a connection with the attacks. Add in SA's refusal to offer the US whatever assistance it requires and news reports of Jihad recruiters having the run of the country's mosques, and it is not hard to see where another 10-cent loss on the currency comes from.
If SA could invade Lesotho on the pretext that it did, then offering military and any other assistance to the US to wipe out a global scourge is the least it can do.
The time for equivocation has ended. This is a defining period in international affairs and SA must be remembered for doing the right thing as well as being on the right side. At some point it will be too late, just as it might have been if we had followed Brand to Berlin instead of Smuts to London in 1939.
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