Fin24

Minister: IMF loan gives SA influence

2012-06-25 17:10

Johannesburg - South Africa's $2bn (about R16.58bn) loan to the International Monetary Fund (IMF) will help the country gain influence, International Relations Minister Maite Nkoane-Mashabane said on Monday.

"This pledge by Brics countries is in line with the provision to transform institutions of global governance," she told the ANC Progressive Business Forum Brics colloquium, ahead of the party's four-day policy conference in Midrand.

"It has been a tradition... that decisions in international financial institutions are made and influenced by countries with strong financial muscles.

"In this regard the more we contribute financial resources to such institutions, the better the chance and prospects for us as a country to influence decisions."

President Jacob Zuma made the commitment of $2bn to the IMF at the G20 summit, a meeting of the world's greatest economies, in Los Cabos, Mexico, last week.

The money would be loaned for an IMF firewall meant to prevent future financial crises.

Cosatu and the African National Congress Youth League, among others, criticised the move, saying the money could have been better spent on domestic problems.

In total, the members of Brics - Brazil, Russia, India, China and South Africa - had contributed $75bn to the IMF fund.

"The Brics pledges were contingent on the completion of the quota review to... better reflect the relative weights of IMF members in the world economy," Nkoane-Mashabane said.

The countries' weighting had changed given the strong gross domestic product (GDP) growth in emerging markets and developing countries, she said.

The minister said it was time South Africans took advantage of the Brics membership.

"We should stop asking the question now as to what the hell is South Africa doing in Brics," she said.

"We should now be focusing on what should business be doing to take advantage of South Africa's membership in Brics, and opportunities abound."

Earlier, ANC treasurer general Mathews Phosa echoed her sentiments to the business colloquium.

"Whenever our leaders sit... and sign agreements... it becomes important that we as private sector should make follow-ups, should network, should do the deals."

He called for emerging markets to determine their own futures and set up their own institutions.

"(There) is a growing view that emerging economies should shape their own future, create their own institutions."

This would be fleshed out at the colloquium and over the next few days at the policy conference.

He said Brics was a "major force to be reckoned with".

The Brics grouping accounts for more than 40% of world GDP.

The ANC policy conference would debate and decide new policies. These would then be confirmed at the party's elective conference in Mangaung in December.

Comments
  • jacques.shepperson - 2012-06-25 17:36

    Joke of the year...

      Koos - 2012-06-26 02:34

      She is doing some wishfull thinking.

  • Adil Smit - 2012-06-25 17:46

    Google the IMF,wikipedia and read the criticisms.

  • mzwandile.dlamanzi - 2012-06-25 17:58

    She is one of the few that belong to that class of Thibos.

  • Bless Boswell - 2012-06-25 18:25

    Charity begins at home. Imagine what that money could have done for the poor impoverished people of South Africa. Our government probably does not even acknowledge that they exist. It's a disgrace.

      Alf - 2012-06-25 20:20

      Agreed. It was also interesting to see the reaction of the other BRICS "partners" when S.A. announced the $ 2 Billion. Like "you really think you can play with the big boys?" As for our International Relations Minister, does she really think that anybody would take her seriously after she suggested that the parties involved in negotiations at FLOP 17 should get into a huddle? Comedy at its best!

  • Rational100 - 2012-06-25 18:34

    Econ 101... U cannot buy influence to a multilateral body using $'s bcos the US can counter that by simply printing more of their money and dumbing it to the same institution. This has been happening since the 1940's when the US instituted the Marshall Plan to Europe using $'s that were then used to stimulate the same US economy as the countries ploughed them back to buy US goods and services. Anyone who still cannot comprehend this at this day and age is either dull or officially CED ( Currently Economically Disadvantaged).

  • glen.e.huysamer - 2012-06-25 18:49

    I wonder who us getting the backhand here, and who in South African politics is in line for a fat IMF job in the future. Let us just give our money away and call it a loan. I wonder, can South Africa's poor go for a loan to the IMF. A few billions given away to Cuba, I mean that was just a gift, now a few billion to the IMF, but there is no text books in certain schools, we could not pay off the e-tolling debacle, our hospital suppliers don't get paid on time. Eskom has to lend international money, and charge South AFrican citizens ten times more than two years ago. Millie pap has gone up three hundred percent over ten years, our farmers get no subsidy. Special taxes on fuel= almost 50% of the retail price. Is the ANC fleecing South Africa? And is this loan to the IMF a scam to legally; illegally wash public money out of South Africa. It is all to suspicious for the majority of South African citizens, it seems as if the deal makers have looked to far down the neck of Jonny Walker.

  • mastersvoice - 2012-06-25 19:08

    Our International Relations Minister is suffering from the same infliction most ANC "leaders" are suffering from - stupidity!

  • Lesiba C Mmotlana - 2012-06-25 19:30

    until R S A lead by a well Educated President,money will b used to support n help its people of S A,R16bn to buy recognition!!!!sis

  • fretam - 2012-06-25 21:01

    shame ! the poor taxpayers' money being used to buy influence. but the taxpayers themselves remain poor, homeless, jobless etc.Talk of the E-toll debt,who gon pay that ?

  • Mandy Casey - 2012-06-25 21:40

    Five members of brics contributed $75 together, we only gave $2? Would not want to go and eat diner with these guys - when the bill comes ... $2 is not even the tip for the waiter.

  • Tony - 2012-06-25 21:46

    Like it or not, we are living in a global village. Like it or not, we have to negotiate with international trade partners on a daily basis, to ensure our economy ticks over. It takes more than just reading Wikipedia to understand how things work globally. It is important for SA to show commitment to global financial stability by assisting financially, whether we like it or not. This is not Monopoly, this is the real thing.

      Rational100 - 2012-06-26 06:59

      However this is not "NEGOTIATION"!....If SA thinks its negotiation then they have failed the first test of negotiation..."Never play all your cards at first instance". This was just a case of SA being bullied by other BRIC members for their selfish end. As we speak Brazil is challenging SA in the international arena on poultry anti-dumping stance...guess who is likely to yield.... SA! Why bcos we are an immature weakling in global politics. China wants to Internationalise their currency .. Renmimbi and one avenue is thru the IMF ....what will SA gain? Again very little. YOU WILL NEVER UNSEAT THE EU FROM HEADING THE IMF AS THIS WAS A COMPRISE WHEREBY THE USA WOULD PERMANENTLY HEAD THE WORLD BANK!! .....wake up and smell the coffee pleaseee!!

  • Mandy Casey - 2012-06-25 21:47

    Five members of brics contributed $75 to the pot, za only gave $2? I would not want to have diner with these guys, when the bill comes ... $2 is not even the tip for the waiter.

  • Carlo Gieljoumie - 2012-06-26 00:18

    Truly a joke a third world country feeding a lazy first world country the Greeks will know how to spend our hard earned tax Zuma is just another IMF puppet

  • tumelo.mabua - 2012-06-26 07:52

    Is influence a priority at this stage? How about this Europeans live within their means? WTH!

  • thembanlilitha.batyi - 2012-06-26 07:52

    Wethu s.a was buying their way in2 G20

  • marumobongani - 2012-06-26 08:28

    it shows most people are not interested in investments you better cry now and laugh later not the otherway around

  • mthulisi.msimanga - 2012-06-26 09:17

    People with pedestrian knowledge on international relations and global economics should stop making frivolous comments. If this is not your strongest topic rather look for Juju stories and waffle all you want there.

      sally.lewitt - 2012-11-12 04:20

      Well said Mthullsi.. One has to see the bigger picture and the long term benefits in our economy, difficult as it may seem.

  • dean.berzen - 2012-06-26 10:41

    This $2bil could have been used to payoff the toll roads, which government say they cannot afford, however they can afford to give R16bil to the IMF, g jump in a black whole you dumb government

  • Rational100 - 2012-06-26 11:01

    I will say this again, most people still think the world will only notice and be kind to you if u act kindly...and they are wrong! In the past few years however, China has bullied everyone into submission with unruly behavior from a terrible human rights record to unfair trading....guess what? ..by so doing they have become a Superpower and very soon they will dictate to all of us how to bow to them....watch the space!

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