Cosatu condemned the news on Tuesday that treasury had donated $2-billion to an IMF "firewall" meant to prevent future financial crises.
“South Africa is one of the most distressed economies in the world, with massive levels of unemployment, poverty and inequality ... and should therefore be a beneficiary rather than a contributor to such a fund,” the Congress of South African Trade Unions spokesperson Patrick Craven said.
“It seems to be an attempt to show international institutions and big powers that South Africa is one of the ‘good boys’.”
Earlier, the treasury announced that President Jacob Zuma had committed some of South Africa’s reserves to the International Monetary Fund (IMF) at the G20 summit, a meeting of the world’s greatest economies, in Los Cabos, Mexico. The funds would be considered part of South Africa’s foreign reserves, treasury spokesperson Jabulani Sikhakhane said.
Participating countries with no way out of a financial crisis would access the so-called firewall fund through a temporary loan, with conditions, and not purchase agreements to the IMF’s general resources account.
Sikhakhane said the funds were committed based on the premise that South Africa’s voting power and quota shares in the IMF be reformed, as agreed to in 2010.
Craven said that since 1993 there had been a false assumption that South Africa was a developed country, and fiscal and monetary policy had been based on this assumption ever since.
“The result has been that the already high levels of unemployment, poverty and inequality have become even worse, with massive job losses, especially in the key manufacturing sectors,” he said.
Cosatu wanted to know which ANC conference resolutions gave the government a mandate for such a contribution to the IMF.
“Were the alliance partners, or even the ANC NEC [national executive committee] consulted over the decision?” asked Craven.
Cosatu wanted ANC delegates at next week’s policy conference to endorse the policy in the ANC discussion paper on international relations, which proposed that the World Bank and IMF be reformed.
“The decision must be reversed and the $2-billion used to alleviate the plight of the poorest South Africans and to invest in the restructuring of our economy,” said Craven. – Sapa