Gordhan: Protectionism a risk to global growth
Trade protectionism is a serious risk to global economic growth as countries emerge from recession, Finance Minister Pravin Gordhan said on Wednesday.
In a speech prepared for delivery to the American Chamber of Commerce in South Africa, Gordhan also said Africa’s economic powerhouse, which climbed out of recession in the third quarter of this year, needed to address the “very real and human costs” of the crisis after nearly one million jobs were lost.
Gordhan said South Africa’s exports and imports were expected to decline by roughly 20% in 2009 compared with 2008 and that there was “quite a bit” to lose from a rise in protectionism.
“Trade protectionism is a serious risk to global economic growth. Enhancing fair and balanced trade is essential to growing incomes and ridding the developing world of poverty,” he said.
Gordhan reiterated that the “carry trade” phenomenon, which has seen the rand currency surge more than 20% against the dollar this year on a wave of appetite for high yielding currencies, was a matter of concern for South Africa.
While the currency’s strength has raised fears it could hit exports, both the government and the central bank have repeatedly said the exchange rate will continue to be determined by market factors, without interference from the authorities.—Reuters.