Staff Reporter
10 March 2010
Johannesburg — FORCING the rand to weaken would be a "very shortsighted" move for SA to make, Dominique Strauss-Kahn, MD of the International Monetary Fund (IMF), said yesterday.
His comments come amid a heated debate on the rand's strength. There have been mounting calls from trade unions and some business leaders to weaken the unit, after gains last year were seen as a threat to the competitiveness of local exports, jobs and growth.
Strauss-Kahn said any policy measures aimed at weakening the rand would scare off foreign investors and the capital needed to fund the deficit on SA's current account, its broadest measure of trade in goods and services.
The currency appreciated by 28% against the dollar last year, making it the best performer after the Brazilian real. It was trading at about R7,40/ late yesterday, unchanged from the start of the year, but has firmed 2% against a trade- weighted basket of currencies.
Finance Minister Pravin Gordhan said in the budget last month SA needed a "stable and competitive" exchange rate, but its volatility was the main problem for business and growth. He also made clear there were no plans to try to peg the exchange rate at any level, a step that could backfire given the strength of global markets.
AllAfrica's Charlayne Hunter-Gault meets up with IMF managing director Dominique Strauss-Kahn in Johannesburg.
Strauss-Kahn also said policy makers in SA should introduce more competition into the economy -- especially into the banking sector, which is dominated by four major players.
"Creating more competition would certainly have a good impact on inflation," he said during a lecture at Wits University.
Strauss-Kahn was due to meet President Jacob Zuma yesterday and was expected to press home this message.
"Efforts have to be made to create a more effective economy," he said.
Strauss-Kahn also said that the world needed to prepare for the next economic crisis, even as it began to recover from the worst recession since the Great Depression.
He was concerned recovery could mean leaders would feel less pressure to work together and pursue reforms such as tightening the regulation and supervision of financial markets.
"The consensus is stronger when you're afraid. Certainly this consensus is not as strong as it was six months ago."
He said he could not predict the timing or the nature, but "don't fool ourselves, there will be future crises".
The IMF predicted output would grow 3,1% this year. But it also cautioned that unemployment would continue to grow.
"I won't say that the crisis is over. I would say we are probably in the second part of the crisis."
Economic stimulus packages adopted around the world, including in SA , had helped avert a greater crisis, Strauss-Kahn said.
While the initial intervention focused on growth, this "must be the year where economic policy focuses on job creation", particularly in the small business sector.
SA lost 900000 jobs last year on top of already high unemployment. "But the situation could have been much worse," Strauss- Kahn said. " In SA, the right policies have been implemented timely and strongly enough."
Strauss-Kahn is on an African tour that started in Kenya and will take him to Zambia from SA.
The continent was hard hit by the downturn, which dried up foreign investment, aid and markets for its raw materials such as oil and gold.
But Strauss-Kahn said the continent seemed to be keeping pace with the global rebound. With Mariam Isa, Reuters, Sapa-AP
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What is happening all over Africa today can be avoided, if African leaders can take the high road and lead by example. Allow democratic principles to flourish.Educate the public both intellectually, morally and spiritually. Money is not everything ,but it helps to take care of few needs . Please , read a new book titled African development and influence of Western media, By L.Emeka Ogazi through createspace.com /3434887. God Bless you all, Long live Africa !!!!
USA and other western countries record human rights violations that are much more egregious that those this white westerner sees in Africa.
Does the IMF ever lecture the USA or UK or the European countries on human rights? Perhaps they do - under the sheets (of racism).
The human rights charges against the African countries are leveled by whites (of the imperialist kind) who populate those agencies (and see it essentially as another psyche war tool in the white imperialist campaign for world domination.
Does the IMF implore the USA and ICC to submit themselves to the ICC with regard to the charges of horrendous atrocities those countries have committed against innocent people? Not - really.
The western countries dismiss reports of human rights violations - because such charges are LIKELY to be tinged with a political agenda by their enemies. Europeans are eternal tormentors of the African. Should the Africans therefore dismiss and reject any efforts to account for the charges leveled in the reports emanating from the Europeans and their captive international agencies like the (ICC, IMF, the various human rights bodies and the shrill white plunderer in western countries? Maybe they should.
Does the IMF know how to access the human rights reports on European countries - or do they discount the reports because they are written by Africans who have a political axe to grind? Yet the Africans are not the ones
Studies have suggested that when it comes to monetary/financial matters, the IMF and its sister body named Worlds Bank is clueless and, INDEED, undesirable to put it mildly: The economic health of the countries of the World that the IMF has tried and claims to have assisted to prosperity since the 60s have actually done worse.
So, the IMF is primarily staffed by those that are IGNORANT (or better still, maliciously destructive) in financial/monetary/economic matters they claim to be expert on. Why do the creeps wish to hoodwink the African into assume that they can be better at other matters in which they claim no expertise - like human rights? [Or are they looking for an excuse for their dastardly crimes of plunder in Africa?]
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Monetary or economic awareness have little or nothing to do with the IMF: That is not their forte - if they have any outside the racism realm. After all, isn't the current world economic recession also wreaking havoc in their western countries - despite the whites' increased destabilization and plunder of the fabulously resource-rich countries of Africa - and the attendant perennial and, eh, fortuitous attrition by mass slaughter of the native?
.
Hoodwink the African? Isn't that what these whites who rationalize crass murderous, plundering, racist imperialism are good at?]
Excellent Interview. The Hon. Dominique Strauss-Kahn made a statement that concerns me: “In the past, the IMF would come with a lot of conditions, not only the ones which are needed to fix the problem immediately, but also other conditions. [They're] certainly useful for the country but not needed immediately and creating more political problems than solving questions. That we got rid of and now the number of conditions in the IMF programmes has been streamlined considerably. There are almost half the number of conditions compared to the past, and that's one way I had in mind when I say the IMF has changed.”
I am curious to know what past ‘conditions’ the IMF set in the past that proved nonproductive that is still hanging around the necks of African nations.
The Economic Times news reported 13 March 2010 that the Reserve Bank of India "RBI has done its bit to help economies struggling from the global financial crisis, by lending $10 billion to the International Monetary Fund’s war chest, dedicated to the cause."
War Chest? Dedicated to what cause?
It appears the International Monetary Fund is also in need of Debt Relief and finds itself borrowing money. Now I can understand the slight friendliness and newly change of ways and conditions of the IMF.
The best response to the lectures of these INVADERDOM institutions---the IMF and rest---is SILENCE.
STONE COLD AFRICAN SILENCE.
In other words, the lectures and the lecturers should be told in words not uncertain at all TO BUZZ OFF.
Thanks to God, we now know that INVADERDOM has no interest in the economic development of Africa whole; that the so-called poverty and backwardness of African life are systematic and strategic games by INVADERDOM, with a solid assist from the sordid fifth columnists of 'African' leaders.
Enough then: we are sick and tired of this concocted existential angst, concocted over 500 years of INVADER plunder of African resources, natural and human.
And, the plunder goes on and on and on.
ENOUGH.
Cheers from GENERATION TRUE AFRICAN LIBERATION.
So chokora if the IMF refuses to give you guys money then do not hold it against it because after all it is in your opinion, run by ignorant folk.
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