Watch out for the World Bank
September 25, 2005
By Na-iem Dolllie
When the World Bank says anything about any country, there is ample reason to be suspicious. This is not only because the US-controlled global lender has a history of dictating the most draconian terms when it makes loans to countries, but its political agenda to entrap recipient states into long-term debt repayments has devastated many developing nations.
South Africa is the 28th most conducive country for doing business, the bank says. This is hardly a compliment coming from a body that stipulates debt reduction, inflation targeting, fixing budget deficits and slashing public spending as the most important conditions for granting governments money.
In addition to these onerous conditions, the recipients are expected to service their debt and if they do not - if for whatever reason the country misses a payment - the consequences are too ghastly to contemplate.
The lender's sister organisation, the International Monetary Fund (IMF), has been equally punitive. Yesterday and today, finance ministers have been meeting to "redefine" the fund's role.
In a world where capital markets are more easily accessible, the IMF's role as a lender is becoming increasingly less attractive, especially because other lenders are far less concerned about political and governance structures, and far more concerned with regular repayments on time.
It is time for the World Bank and the IMF to make an honourable exit. Yes, thousands of jobs are at stake.
Yes, the political fallout may be costly. And yes, vested superpower interests may be difficult to dislodge.
But it is time to write off odious debt and let the rest of the world get on with being economically productive and not beholden to the thin layer of ideologues, bureaucrats and appointed apparatchiks who run these two institutions.
Cosatu is disputing an IMF report that blames high unemployment in South Africa on "inflexible labour laws".
According to Sapa, the union federation's spokesperson, Paul Notyhawa, has said: "Once again the IMF has failed to provide significant evidence that our labour laws are inflexible and a hindrance to employment growth."
Notyhawa invokes the authority of the SA Small Business Partnership, which in its June report suggested that a lack of confidence and demand in the economy, and not the labour laws, were the reasons behind the country's high unemployment rate.
Big, fat black economic empowerment (BEE) deals, impressive as they no doubt appear on paper, have to benefit more than just the few black individuals who sit at the top of the pile.
Petrochemicals giant Sasol has unveiled a R1.45 billion empowerment deal. Of this, R1 billion will go to Tshwarisano, the new BEE partner. This consortium is led by, you guessed it, former justice minister Penuell Maduna, who served as energy minister before moving to justice.
Together with Hixonia Nyasulu and former Eskom chairman Reuel Khoza, Maduna will own 30 percent of the consortium.
The remaining 70 percent will fall into the hands of PulaNala from Mpumalanga; the Lelethu Energy and Mineral Group from the Eastern Cape; Tswelopele Mineral and Energy Holdings; Amandl'Embokodo, a women's consortium with about 250 000 indirect beneficiaries; and former investors of Exel, Sasol's former BEE partner.
If the Phakisang service station owners are anything to go by, then the BEE deal will indeed benefit the larger community. But only time will tell.
Foreign direct investment (FDI) in Africa has often been touted as a major driver of development and growth.
Yet in the past 20 years FDI has not nearly satisfied the development requirements of Africa's burgeoning market, according to a UN Conference on Trade and Development report.
Instead of contributing to growth, FDI has allowed multinationals to do as they pleased on the continent, not without the support and acquiesence of corrupt dictatorships.
Proudly South African must be reeling from the public disillusion of small and large companies that have pinned their brands to its mast. At anywhere between R500 and R500 000 a year, membership must produce some returns, the firms argue.
Beverages group SAB will not be renewing its membership until it has been appraised of Proudly SA's business plan. Comair has decided to dump its membership.
Pick 'n Pay has been approached to join but it's dithering.
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