Downgrade 'a warning to ANC'

Cape Town - According to the Democratic Alliance, South Africa's downgrade by the Fitch rating agency from stable to negative is a stern warning to the ANC and its partners in the tripartite alliance not to toy with South Africa's prudent macroeconomic policies in pursuit of short-term, self-interested agendas.

Kobus Marais, who speaks for the party on finance, pointed out on Tuesday that the Congress of South African Trade Unions (Cosatu) has already outlined its intentions to create a "new" economy through broad systematic state intervention, the "disciplining" of firms, the harnessing of retirement funds for social investment and the removal of inflation targeting as a policy goal.

"As Fitch has noted, if these harmful policy shifts are realised, we will almost certainly face a downgrade in our investment rating," Marais said. "This will raise the government's borrowing costs, affect its social welfare rollout and compromise its massive infrastructure investment programme.

"Transnet (R37bn) and Eskom (R150bn) will both be reliant on domestic and international capital markets for their funding. Without affordable lending, we won't be able to invest in roads, railways and ports, broaden our power generation capacity and harness the potential employment benefits of a growing economy."

Marais urged the ANC to show astute economic leadership. "The post-Polokwane ANC must realise that it cannot disregard the realities of the global market place if South Africa is to weather this storm," he said.

The DA will at the first available opportunity submit a motion for a debate on the state's response to the global economic crisis when prliament sits next week for the last time this year.

- I-Net Bridge