Economists Allied for Arms Reduction (Ecaar) will need to have deep pockets to pay the costs of its failed arms deal application to the Cape High Court, says South African Finance Minister Trevor Manuel.
Speaking outside the National Assembly on Thursday, he said if the application by Terry Crawford-Browne on behalf of Ecaar had been successful it would have had ”profound consequences” for South Africa.
The application — in which it was argued that Manuel had not applied his mind when signing foreign loan agreements on the arms deal — was rejected by the court earlier on Thursday.
Earlier, in the National Council of Provinces, Manuel said: ””Well, Mr Crawford-Browne’s application was turned down with costs … which is very important because this individual sought to continually argue that we don’t apply our minds. I want to be there when the costs are recovered.”
Manuel said the case had been vexing and Crawford Browne had personally called him ”a prostitute” on one occasion during the World Summit on Sustainable Development two years ago.
”If the court had upheld [the application] it would have had profound implications on the ability of the government to lawfully contract,” he said, noting that what had been dealt with was a contract between the government [the South African government] ”acting with private bodies who were the lenders in the circumstances (in the arms deal).
”If the court had found that government was not able to contract like that it would have had profound consequences.”
He noted that South Africa borrowed about a billion dollars a year on international markets.
”In addition in the course of this year we will borrow something [about] R800-million a week on our local markets.
”None of the individuals who lend money to government would feel [have felt] secure about it [if the court had ruled against the government]. It would raise the cost of borrowing and it would impact severely on the ability to deal with the social issues at hand.
”Our debt service costs would increase and we would be less able to deliver democracy to the lives of the poorest South Africans.”
Asked about the extent of the government’s costs in the case, Manuel said they had been expensive, including high costs of a senior counsel. Ecaar was ordered to pay costs.
Crawford-Browne had argued that in signing the agreement Manuel could not have applied his mind because the default clauses ceded control of South Africa’s economic and financial policies to European banks and governments and the International Monetary Fund.
Official opposition finance spokesperson Raenette Taljaard said: ”The DA believes that court actions such as the Ecaar case ruled on by the Cape High Court today serve two critically important functions.”
”It has served to keep the burning issue of the cost the ANC government is willing to incur for arms acquisitions alive. At a recent price tag of approximately R48,7-billion [Estimates of National Expenditure 2004], the astronomical cost of the arms deal must not be forgotten in this election. The Strategic Defence Procurement spends over 39,1% of the entire defence budget in this Budget year.”
In addition Taljaard said: ”As we approach the election, government has the option this month of indicating whether it will cancel the third tranche of the Hawk-Gripen fighter jet package.”
”This would save the South African taxpayers R10-billion. The Democratic Alliance calls on government to tell the people of South Africa whether it will continue with this march of folly of an arms expenditure drive or whether sanity will prevail.” – I-Net Bridge