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Cape Town - Finance Minister Trevor Manuel has warned
members of cabinet that the global turmoil will have an effect on the South African economy.
Cabinet spokesperson Themba Maseko said on Thursday that the minister made a presentation to cabinet on the effects of the world-wide economic melt-down, but said that the only statements on the subject would come from the Reserve Bank Monetary Policy Committee meeting on Thursday, and from the minister himself when he delivers his medium term budget policy statement on October 21.
Maseko said that the principal effects will be on the ability of South Africa to export its products to developed countries ? for example, he suggested that if the price of platinum were to fall, it would be difficult for this country to afford to buy the imports that are badly needed.
Maseko also suggested that Eskom is going to find it difficult to raise money overseas to fund its massive infrastructure build programme.
"Eskom may have to come back locally," Maseko said, "and source funds on local markets."
He added that cabinet is of the view that our economy has shown signs of resilience in many respects. He cited the banking sector "largely because of he efforts of government regulation which has been put in place. Giving for example the issue of FICA (Financial Intelligence Centre Act) which has made sure our banks are properly regulated".
Impact to be felt by developing nations
He also said: "There are also obviously exchange control measures that are still in place which we think have also played a role in terms of shielding the South African economy. But again as the global economy goes through this turmoil and the GDP growth in many of the developed countries shrinks, the
chances are that the impact will be felt by many developing nations including South Africa.
"There is no way that we can say that our economy will not feel the impact of what is taking place globally."
Maseko also said that the third summit meeting of India, Brazil and South Africa (IBSA), which will take place in India next week, will discuss joint action to meet the challenges of global economic governance. Other subjects on the IBSA agenda will be joint action on energy, food security development and
ways to promote tourism.
- I-Net Bridge