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Cosatu blasts IMF over capitalist policies

Johannesburg - The Congress of South African Trade Unions (Cosatu) on Wednesday slammed the International Monetary Fund's (IMF) policies, saying that it exacerbates shocking levels of unemployment, poverty and inequality across the world.

The trade union federation was responding to IMF's Article IV report on South Africa, adding that it was flabbergasted, spokesperson Patrick Craven said.

It was compiled after consultations between the country and the IMF between May 22 and June 4. The IMF holds bilateral discussions with its members every year.

According to the report, South Africa's economy had made important strides over the past two decades, but in recent years the structural problems holding back growth and job creation had come to the fore.

The country had under-performed compared to other emerging markets and commodity exporters, increasing the already high levels of unemployment and inequality.

Craven said the IMF was shifting the blame on to the workers and the poor.

"It lays the blame for the poorly performing economy of South Africa, on 'the government’s poor record in controlling the wage bill and potential spill-overs from high wage demands in other sectors represent downside risks'," he said.

"It is thus blaming the world capitalist crisis, brought about by the IMF’s own neoliberal ‘free-market’ capitalist policies, and the shocking levels of unemployment, poverty and inequality which this has caused in South Africa and elsewhere, on the main victims of that crisis - the workers and the poor."

Economy, growth and jobs

In the report, it raised issues about the economy, growth and job creation.

The report called for social bargaining, which should include "wage restraints" in return for hiring commitments, measures to enhance product market competition, and improved public services.

Craven said: "This in essence, means an 'egg and bacon' agreement, where the business 'chicken' commits to lay eggs for breakfast and calls on the worker 'pig' to lay down its life to supply the bacon."

This would lead to a downward spiral of the already meagre living standards of most workers, bringing lower levels of demands for goods and services, which would lead to more jobs being lost.

Craven said the IMF's view was at odds with research done by the International Labour Organisation, which argued in favour of a wage-led growth strategy which was likely to generate a more stable growth regime for the future.

Cosatu urged the government not to be misled by the IMF's policies.

"Rather stick with the ANC’s proposal for a radical economic programme for the second phase of the transition, and engage with the economic proposals tabled at the recent alliance summit, on which there was considerable agreement between Cosatu, the ANC and SACP," said Craven.

IMF "must go to hell"

Government must ignore advice from the IMF, the National Education, Health and Allied Workers' Union (Nehawu) said in a statement.

“The IMF should keep its nose out of the South African policy formulation processes and stop imposing its ineffectual policy of so called 'fiscal rectitude' on South Africa.”

“This is the same policy that has left millions of people trapped in a cycle of poverty around the world.”

Nehawu said government should not allow the IMF to hijack the people's mandate and impose neo-liberal policies on the country.

It added that the organisation destroyed many people's livelihoods with its policies.

Treasury said earlier on Wednesday that issues raised by IMF were already being addressed in government policies and programmes.

Cabinet, at its August lekgotla, agreed that the country's economy could no longer rely heavily on the global economy to reignite growth and create jobs, it said.


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