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Bangkok - The United Nations Conference for Trade and Development (Unctad) has said the South African government should take steps to weaken the rand.
"South Africa's currency is very strong, so it's very difficult to recover properly from the recent financial recession and to do things like tackle the country's unemployment problem," Dr Supachai Panitchpakdi, general secretary of Unctad, told Sake24 last week.
Unctad sees South Africa's unemployment in a serious light, and Panitchpakdi said the South African government shouldn't allow the rand to remain so strong because this aggravates the problem.
"Things like increasing interest rates sharply in order to bring the rand down should be looked at. If the rand is strong, you can't create jobs locally and you import too much. It may be a good idea to weaken the currency."
Panitchpakdi, a former head of the World Trade Organisation (WTO), said it was still too early to say whether the world economy is on the recovery path.
He said governments that want to recover from the economic crisis and avoid its recurrence must focus on getting their fundamental economic principles right.
"Open economies, transparency, good regulations – those are good ideas. Another lesson that has been learnt is that a country must not overburden itself with debt. That applies to private sectors as well as governments. The recovery of the world economy is still very vulnerable."
Asia is new global economic pivot
Panitchpakdi said that in future a more balanced role between governments and markets is essential.
"Governments must give guidance and sometimes even take action. Markets that are left alone without regulations can struggle to work and get out of control, as happened in the West shortly before the recent crisis."
Panitchpakdi says that the world's economic recovery is to a large extent dependent on economic growth in China.
"If growth in China is delayed, the recovery in the world's economy will be delayed. Up to 50% of the economic recovery of a country like Germany depends on the growth of the Chinese economy."
Thailand's Prime Minister Abhisit Vejjajiva said the world's economic pivot has moved permanently after the recession.
"The West and the European Union are no longer the pivot of the world economy. The pivot is now Asia."
Vejjajiva says that the countries of Asia, including Thailand, are making large investments to improve infrastructure like railways and power, so that they can benefit from the region's economic growth.
Africa's trade in goods with developing countries outside Africa increased from $34bn in 1995 to $283bn in 2008.
Developing countries outside Africa's contribution to the continent's external trade rose from 8% in 1980 to 29% in 2008, it was found. A large portion of this is thanks to China. Trade between South Africa and China increased from $25bn in 2004 to $93bn in 2008.
- Sake24
"South Africa's currency is very strong, so it's very difficult to recover properly from the recent financial recession and to do things like tackle the country's unemployment problem," Dr Supachai Panitchpakdi, general secretary of Unctad, told Sake24 last week.
Unctad sees South Africa's unemployment in a serious light, and Panitchpakdi said the South African government shouldn't allow the rand to remain so strong because this aggravates the problem.
"Things like increasing interest rates sharply in order to bring the rand down should be looked at. If the rand is strong, you can't create jobs locally and you import too much. It may be a good idea to weaken the currency."
Panitchpakdi, a former head of the World Trade Organisation (WTO), said it was still too early to say whether the world economy is on the recovery path.
He said governments that want to recover from the economic crisis and avoid its recurrence must focus on getting their fundamental economic principles right.
"Open economies, transparency, good regulations – those are good ideas. Another lesson that has been learnt is that a country must not overburden itself with debt. That applies to private sectors as well as governments. The recovery of the world economy is still very vulnerable."
Asia is new global economic pivot
Panitchpakdi said that in future a more balanced role between governments and markets is essential.
"Governments must give guidance and sometimes even take action. Markets that are left alone without regulations can struggle to work and get out of control, as happened in the West shortly before the recent crisis."
Panitchpakdi says that the world's economic recovery is to a large extent dependent on economic growth in China.
"If growth in China is delayed, the recovery in the world's economy will be delayed. Up to 50% of the economic recovery of a country like Germany depends on the growth of the Chinese economy."
Thailand's Prime Minister Abhisit Vejjajiva said the world's economic pivot has moved permanently after the recession.
"The West and the European Union are no longer the pivot of the world economy. The pivot is now Asia."
Vejjajiva says that the countries of Asia, including Thailand, are making large investments to improve infrastructure like railways and power, so that they can benefit from the region's economic growth.
Africa's trade in goods with developing countries outside Africa increased from $34bn in 1995 to $283bn in 2008.
Developing countries outside Africa's contribution to the continent's external trade rose from 8% in 1980 to 29% in 2008, it was found. A large portion of this is thanks to China. Trade between South Africa and China increased from $25bn in 2004 to $93bn in 2008.
- Sake24
