Cape Town - South Africa's commitment
of a $2bn loan to the International Monetary Fund (IMF) crisis fund
was in the national interest, Deputy President Kgalema Motlanthe said on
Responding to questions in the National
Assembly, he said the commitment that the IMF secured from some of
its members at the G20 leaders summit in Mexico in June to increase
its resources by $456bn, was intended to create contingency funding
in the event of further deterioration in the global economic
The funds could be used by any of the
members of the IMF to stave off the risk of another financial crisis.
South Africa's commitment to
contributing $2bn to the fund was informed by the need to promote
global financial stability and prevent a downturn in the global
economy, which would have adverse consequences for South Africa's
growth and employment prospects, given its trade and financial
exposure to the Eurozone and global markets.
"Thus, it is in our national
interest to strengthen IMF resources," he said.
The funds used for this purpose would
be considered part of South Africa's foreign reserves.
The funds would be invested and earn
interest, and would only be drawn down in emergency circumstances.
If the funds were drawn down, they
would ultimately be repaid and would continue to earn interest over
South Africa's commitment was intended
to promote global economic policy co-ordination and co-operation,
"South Africa's participation in
this resourcing exercise anticipates that all the quota and voting
reforms agreed upon in 2010 will be implemented in a timely manner."
Thus, South Africa's resource
commitment was intended to promote reforms in the governance of the
IMF in particular, and of international financial institutions in
South Africa's contribution was part of
$75bn committed by the BRICS (Brazil, Russia, India, China, and SA)
grouping and was intended to enhance peer leadership among this group
of developing nations.
The relative contributions per country
were Brazil $10bn, Russia $10bn, India $10bn, China $43bn, and South
"The resource commitment by South
Africa and the other BRICS members, in anticipation of the
implementation of the 2010 International Monetary Fund reform
agreement, will strengthen their leadership in advocating for the
reform of the governance of the IMF," Motlanthe said.
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