Johannesburg - The rand is far too strong,
Congress of SA Trade Unions (Cosatu) secretary general
Zwelinzima Vavi said on
Monday.
He was addressing
the launch in Johannesburg of a joint declaration by the country's three major trade union
federations and a grouping of important SA manufacturers on creating
decent jobs.
"The
declaration calls for interventions to ensure an appropriately valued, competitive and stable currency,"
Vavi said.
A competitive
currency would allow SA manufacturing to compete on a footing similar to that of other developing countries, he said.
"The Chinese
economy has grown because the Chinese actively intervene in their currency and they peg it at a particular
level.
"Government
from time to time speaks about the need for the rand to reach a competitive level, but we only really hear this
in the Budget speech or the state of the nation address."
Vavi said the SA Reserve Bank confirmed that
it bought "lots of dollars", but this was not enough.
"We need to
see some aggression in terms of the competitiveness of the exchange rate, and more needs to be done."
Borrowing must become more affordableVavi also called
for a reduction in real interest rates, as well as the introduction of concessional finance for productive investment.
"Currently,
the unavailability of finance and the exorbitant level of lending rates by the financial sector makes
borrowing expensive," he said.
Vavi said that
171 000 jobs had been lost in the first quarter of 2010.
He was referring to
last week's Quarterly Labour Force Survey, released by Pretoria-based Statistics SA.
According to the
survey, the country's unemployment rate rose to 25.2% in the first quarter of 2010 - an increase of
0.9% from the pervious quarter, showing that SA's
recovery was still fragile.
"SA is sitting
on a crisis," Vavi said.
"And it has
been sitting on a crisis since the inception of democracy because that economy was not restructured, because certain sectors that should have been supported were not,
and because we didn't identify sectors that would give us a
competitive edge."
Vavi said if
government "steamed ahead" with its Industrial Policy Action Plan (IPAP2) without taking cognisance of
issues such as the rand and interest rates, the plan would not
succeed.
"We won't
address unemployment until we deal with the currency and interest rates."
He said the
declaration would be published in several newspapers and urged all South Africans to attach their signatures to
it.
Addressing the
launch, Stewart Jennings, CEO of plate glass maker the PG Group, said macro- and micro-economic policies
had to be synchronised.
"Until now,
the goals of our industrial strategy have not adequately been supported by aspects of our macro-economic policies."
Like Vavi, he said
the most urgent concern for employers in manufacturing was the "negative impact" of the
overvalued and volatile rand.
"I personally
would like to see the rand linked to a basket of currencies, but we need an urgent debate among the best
economic brains on the local currency."
A further challenge
that needed urgent attention was to find an approach to the country's energy needs that avoided
"current excessive price increases".
Local industry needs a helping hand
Jennings said all
South Africans could support government's efforts to build the country's domestic industry by buying locally-produced goods.
He suggested measures
be put in place to create a preferential procurement framework that promoted local industries and locally-produced products.
"This call
should not be interpreted as protectionism, but rather as nurturing our domestic industry," he said.
The three major
trade union federations represented at the launch of the declaration were Cosatu, the Federation of
Unions of SA and the National Council of Trade Unions.
Together, they
represented three million members and large manufacturers employing over 100 000 workers.
SA manufacturers
that signed the document included ArcelorMittal SA, Consol Glass, Hulamin, Bell Equipment, the PG Group and
Altron.
- Sapa