Protests are already being planned against a proposed World Bank loan to South Africa, writes Gaye Davis
FINANCE Minister Trevor Manuel will face tough questions when he returns on Saturday from the joint International Monetary Fund (IMF)/World Bank annual meeting in Washington.
MPs from his own party want information about a loan South Africa – in an apparent policy turnaround – is negotiating with the World Bank, while organisations are mobilising for a campaign around the visit next week by its managing director Michel Camdessus.
Bodies strongly opposed to the IMF and the World Bank, its sister organisation, have been invited to a meeting in Johannebsurg on Tuesday “to discuss possible joint activities in relation to the Camdessus visit” to raise awareness in South Africa of the role of the IMF and to stimulate debate around its policies.
They include trade unions, church groups, organisations involved in labour and economic issues as well as the South African National Civics Organisation and South African Students Congress. There is a suggestion that Camdessus be challenged to a public debate.
One of the organisers, Brian Ashley of the Alternative Information and Development Centre, said questioning of IMF and World Bank policies, which saw developing countries’ economies opened by Structural Adjustment Programmes for the benefit of “elites and monopoly interests” in developed countries, had “quickly turned to protest and then mobilisation as the full horror and social costs of these policies became apparent”.
Manuel said ahead of the Bank’s annual meeting in Washington that talks around “a small loan of less than $100-million had begun” but added that they would not be a priority for South Africa at the meeting. Some commentators found his caution understandable given antagonism towards the bank among trade unions, NGOs and within the ANC itself.
Scant details of the loan have emerged. Reportedly around $70-million, it is intended to swell a fund geared to help industry, particularly small to medium enterprises, become more competitive.
If signed, the loan will be the first concluded between South Africa and the bank since 1965. Bank staff have been involved in making policy on a broad front since the 1990 unbanning of the liberation movements, but agreed to ANC requests not to fund the outgoing apartheid government.
“Until now the policy has been not to borrow from the IMF and the World Bank,” said ANC MP Professor Ben Turok. “I would imagine that quite a few MPs would have anxieties (about the loan). We have been told on a number of occasions that borrowing usually implies conditionalities and impacts on a country’s sovereignty.”
The issue was “very sensitive”. Both the Bank and the IMF had been keen to lend to South Africa for some years, especially since the ANC came into government. “The World Bank gives a great deal of technical advice on a broad front and two bank advisers were part of a panel that advised government on its macro-economic strategy.”
But the question of South Africa borrowing money from the bank was a different matter, Turok said. Apart from conditions attached to loans and their impact on a country’s sovereignty there was the question of interest rates. If South Africa borrowed at a particular rate and the rand fell further it risked falling into the kind of debt trap that had crippled Latin American economies, Turok said.
There are indications that the loan may be made in rands – an unprecedented step for the bank – and Turok said he had been assured by trade and industry director general Dr Zav Rustomjee the loan had “no strings attached”.
“We must await to hear from the relevant ministers whether this loan will lead to further borrowing or not,” he said. “We did not receive prior notice of this loan. People have only heard about it through the press. We have had no documentation – possibly because Parliament has been in recess. No doubt we will be given details.
“At this time we must move as a body. The ANC, government and MPs must develop positions that are sustainable and agreed. I have sufficient confidence in the ANC and MPs to believe we will sustain a good position,” he said.