Johannesburg - South Africa must not give up on economic growth in the face of threats from what has been called a "global financial meltdown", ANC president Jacob Zuma said on Tuesday.
Addressing delegates at the National Union of Metalworkers' 8th congress, Zuma said: "The current global financial crisis impresses upon us to work even harder to ensure that our people are cushioned against economic shocks.
"An increase in the prices of food and other critical produce is anticipated, economic growth will be hard to achieve and there will no doubt be other difficulties and challenges, but we must not give up trying to achieve growth and development."
SA Communist Party general secretary Blade Nzimande said assurances were being made that South Africa would not be as adversely affected as the US and UK due to its macro-economic policies and fiscal discipline.
"But, in fact, the reverse is true," he said.
The party had always argued that the country needed to be disciplined with public resources and had argued against "white elephant" projects like Gautrain, Coega, the arms procurement package, the Pebble Bed Modular Reactor, and the Dube Tradeport.
He said some within the ANC had become very rich through the billions spent on these projects.
"We are constantly being warned that whatever the changes in personnel in the cabinet the one iron law that cannot be broken is the imperative of no change in economic policy. This argument is an argument living in a fool's paradise..."
Impressing foreign investors
Nzimande said if the country remained in its current trajectory, it would be forced to turn to the International Monetary Fund and this should be avoided as the country would lose its sovereignty.
He said that after apartheid South Africa became fixated with linking up and catching up to the global economy.
"Impressing foreign investors" became more important than developing a national industrial policy, or addressing skills challenges.
The party had warned about continued "neo-liberalisation" but had been scoffed at.
By 2007 warnings were being sounded by international bodies and it no longer sounded alarmist amid a wave of bankruptcies and bail outs of banks and institutions.
"The sum total of these bail outs is some three to four times larger than South Africa's annual GDP - which gives an indication of the sheer size of the crisis," said Nzimande.
Labelling the bail outs the "socialisation of debt", he said the middle and working classes of the US and the rest of the world were being forced to pay for the super profits and recklessness of the super-rich.
A major change in global accumulation was needed, without it workers and poor would suffer.
Nzimande's counterpart in the Congress of SA Trade Unions Zwelinzima Vavi agreed that the financial crisis would hit the poor the most and that jobs could be lost.
Banks and investors worldwide are trying to cope with the domino effect of massive losses along the investment chain caused primarily by defaults in the US's sub-prime market - a sector which provided loans to high risk lenders at higher interest rates.
- Sapa