Johannesburg - The European crisis is threatening South
Africa's economy as well this year, but government has the right economic
policy to weather the storm.
On Friday Christine Lagarde, managing director of the
International Monetary Fund (IMF), declared government’s focus on job creation
the right approach in the current global economic climate.
“South Africa’s policy of investing in labour-intensive
industries is appropriate.”
After a meeting with Finance Minister Pravin Gordhan,
Lagarde said that South African policymakers are vigilant about the European
crisis.
Gordhan said that Lagarde and he both held the view that the
European monetary crisis, insofar it could spill over to South Africa and
Africa, would remain one of this year's most important economic issues.
Lagarde warned that 2012 will be a difficult year for the
global economy - that things wouldn't be a walk in the park.
She said that South Africa would be smart to forge new trade
links on its own continent in order to survive the crisis, but that it should
not write off its traditional trading partners in Europe.
“It's already difficult to open business channels. It's good
to get new trading partners, but it is just as important to keep the current
channels open.”
Lagarde said Africa was certainly not sucking hind teat at
the IMF. “Africa is an essential part of the global economy and has strong
growth potential.”
But she said it was crucial for the growth to be inclusive
as well as to create jobs, especially for young people. She said that despite
criticism from certain quarters she was not ashamed of the IMF’s performance
history in Africa.
“The IMF is working for 187 members. We must be prepared to
support all our members and not only the important players or those at the
centre of the crisis.”
Lagarde said South Africa and other developing countries
could contribute to a solution for the crisis by raising their voices about how
their economies are affected.
“This sends Europe an important signal that there are other
countries worried about the crisis and which have a stake in its resolution.”
According to Lagarde, the IMF will probably re-adjust its
forecast that the global economy will grow 4% this year downward.
She does not however believe that the euro will succumb this
year.
“There are problems within the eurozone regarding sovereign
debt and the banking system, which are being addressed, but the monetary unit
itself will not disappear in 2012 - not at all.”
On Friday Lagarde also met Trevor Manuel, who chairs the
National Planning Commission, as well as Economic Development Minster Ebrahim
Patel. She was to meet President Jacob Zuma in Bloemfontein. This is Lagarde’s
first visit to South Africa in her position as managing director of the IMF.
- Sake24
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