From: "Patrick Bond" <pbond-AT-wn.apc.org>
Date:          Thu, 19 Dec 1996 13:44:44 +0000
Subject:       Re: M-I: Re: International solidarity (was "secular trends ..."


Chris wrote
> The crunch issue came for me in the post apartheid
> days when formulas were being discussed in the trade union circles of the 
> anti-apartheid movement in this country. They said almost all the 
> right things....
> The gap and the gap in Jon's piece IMO is that there must now also be political
> demands at a *world* level. The post apartheid reconstruction of Southern Africa
> required ... a campaign for a massive reconstruction fund backed by the IMF and 
> the World Bank...

Patrick in Jo'burg:
Just as a point of info, here's the statement by social movement and labour 
leaders in reaction to the 17/10/96 visit by IMF managing 
director Camdessus. The trade unions and mass community groups 
boycotted meetings set up with Camdessus, and he was given an extremely 
hostile reception by progressive ANC parliamentarians and two demos 
by CANSA. Note the demand that the World Bank shut down its office 
here. (There is now a funding proposal circulating to make CANSA 
a permanent secretariat; if anyone has $20k to spare, or some good donor contacts, please 
let us know!)...

                             STATEMENT BY THE
              Campaign Against Neoliberalism in South Africa

                       On the South African visit by
                  IMF Managing Director Michel Camdessus

                              16 October 1996

As members of popular organisations and activists of the
Democratic Movement, we have come together to launch a "Campaign
Against Neoliberalism in South Africa" and, in particular, to
express apprehension at the visit (17-19 October) by the Managing
Director of the International Monetary Fund, Michel Camdessus.
Neoliberalism is the "free market" approach to economic and
social policy that large banks, corporations and their allies in
the IMF, World Bank, World Trade Organisation and Northern
governments are insisting all countries adopt.

Camdessus' brief South African tour was recently announced by
Finance Minister Trevor Manuel:  "We have invited him to extend
the good relations that we have with the IMF... He wants to have
discussions with the trade union movement, student organisations
as well as the normal constituency such as business people and
government leaders."

The background for the visit includes a history of IMF support
for apartheid, including loans of more than US$1 billion to the
South African regime during the late 1970s (in the wake of
financial panic caused by the Soweto uprising) and early 1980s
(when the gold price collapsed and the regime was most urgently
in need of external monetary support). From exile, the ANC
condemned the IMF for propping up apartheid. The IMF then
assisted the regime with its increasingly neoliberal economic
policies during the late 1980s, and designed South Africa's Value
Added Tax during the early 1990s, leading to mass popular
protest. In 1993 the IMF granted a large loan which included
secret "conditionalities" that ensured that a democratic South
Africa would not waver from inherited undemocratic economic
policies, as well as informal conditions that the new government
retain the National Party Finance Minister and Reserve Bank
governor.

Against this background of hostility to democratic aspirations
and development, we must make the following points about the
Camdessus visit:

1. The Finance Ministry's attempt to establish "good relations"
with the IMF follows its promotion of a macroeconomic strategy
in June 1996 which bears an uncanny similarity to the IMF's 11
new "principles for economic success," also termed the "11
Commandments." The Growth Employment and Redistribution strategy
-- emphasising cuts in government expenditure (particularly
"consumption" expenditure which will threaten social services),
continuing high real interest rates, export-led growth and trade
liberalisation, privatisation and permission for increased
capital flight from South Africa -- mimics the free-market,
monetarist policies that across the world favour the interests
of powerful conglomerates and banks at the expense of workers,
the poor, women, youth and other marginalised social forces. The
warm reception received by the SA delegation to the IMF/World
Bank Annual Meeting in Washington earlier this month follows
months of close collaboration in designing SA economic and
development policy, marking a fundamental departure from policies
outlined in the Reconstruction and Development Programme. The
fact that just four months into the new strategy, some of the
economic model's most crucial variables -- job creation, the
exchange rate, interest rates -- have dismally failed to meet
government targets, is both a reflection of the more general
bankruptcy of IMF-style orthodox policies and a reminder that the
strategy must be completely renegotiated with government's major
popular constituencies.

2. Many had feared a steady drift away from the social justice
values and redistributive policies expressed in the RDP and their
replacement with neoliberal principles and programmes. Reflecting
this, some government officials -- particularly in the Finance
Department and Reserve Bank -- appear to now entirely ignore the
RDP warning that "the IMF, World Bank and GATT affect our
neighbours and South Africa in different ways. In the case of our
neighbours, they were pressured into implementing programmes with
adverse effects on employment and standards of living...
Relationships with international financial institutions such as
the World Bank and IMF must be conducted in such a way as to
protect the integrity of domestic policy formulation and promote
the interests of the South African population and the economy.
Above all, we must pursue policies that enhance national self-
sufficiency and enable us to reduce dependence on international
financial institutions" (1.4.17, 6.5.16).

3. In most developing countries, the IMF and World Bank have come
to direct economic policies and have thus undermined national
sovereignty largely through the leverage they enjoy as creditors.
This has not been the only mechanism for exerting leverage in
South Africa, and indeed the neoliberal influence over economic
and social policy has often occurred in the absence of ongoing
lending. Perhaps just as importantly, the IMF and World Bank have
the ability to psychologically influence prospective foreign
investors, in a context in which foreign investment is
incorrectly seen by a small group of government policy-makers and
advisors as the overarching factor for economic growth. Since the
1980s, South Africa has succeeded in attracting merely large
amounts of "hot money" foreign investment into speculative stock
and bond markets (leading to subsequent bouts of currency
volatility), with virtually none of the direct foreign investment
that might challenge existing monopolistic conditions, transfer
technology, or create jobs and products for consumption in the
local market. We believe, therefore, that the move towards close
relations with the IMF, premised upon attracting what the
Minister of Water Affairs correctly termed the "mythical foreign
investor," should be viewed with alarm by all those in South
Africa committed to sustainable, people-centred development. This
is especially so when we consider the role the IMF and the World
Bank have played elsewhere.

4. Across the Third World, Structural Adjustment Programmes
imposed by the IMF and World Bank to obtain the repayment of
foreign debt have led to famine, environmental destruction, and
the dismantling of health, education, infrastructural and social
welfare programmes. These programmes nearly always include the
same set of measures:  currency devaluation, decontrol of
exchange rates, higher interest rates, financial deregulation,
trade liberalisation, privatisation, wage cuts, reduction in the
public service through budget cuts and massive retrenchments,
labour market deregulation, and the like. The social costs --
typically including large increases in the prices of basic goods
and food, intensified poverty, deterioration of public services,
and rising unemployment -- are nearly always borne by those
people, especially women and children, who never received any
benefits from the borrowings. Structural Adjustment Programmes
have also made small economies vulnerable to transnational
corporations that exploit cheap labour (often imprisoned in
union-free export processing zones devoid of health and safety
regulations with wages that sink to US$1 per day) and that dump
toxic wastes and poisons produced in the rich industrialised
countries.

5. Debt repayment has become an important mechanism for
transferring wealth from the people of the South to financiers
of the North. According to the United Nations, developing
countries paid US$1,662 trillion in debt servicing between 1980
and 1992. This amount is three times the original amount owed in
1980. Yet in spite of the above transfers the total Third World
debt still stands at over US$1,3 trillion. It is not commonly
known that the Third World has repaid almost a trillion dollars
of principle over and above US$771 billion in interest. In Sub-
Saharan Africa the ratios of foreign debt to Gross National
Product rose from 51% in 1982 to 100% in 1992, and of foreign
debt to total exports from 192% in 1982 to 290% in 1992, a period
during which the Third World debt crisis was allegedly resolved.
The external debt of the Third World has become an eternal debt
and stands as the largest immediate obstacle to growth and
sustainable development. It is therefore crucial that progressive
forces in South Africa add their voice to the calls made
internationally to cancel Third World debt as the first step
towards building equitable and just relationships between and
within different parts of the world. The meagre gold sales
belatedly proposed by Camdessus to help finance extremely limited
debt relief -- and only for those countries which religiously
adopt the IMF's 11 Commandments -- are far too little, far too
late, and it is a reflection of the exploitative character of
Northern political leadership of the IMF that even these gold
sales were not approved at the last meetings.

6. With equal dismay, we learn through the press that the World
Bank is now on the verge of making its first loan to South Africa
since 1967. The Bank has, since 1994, offered advice to several
key ministries charged with implementing the Reconstruction and
Development Programme, as well as contributing to the Finance
Ministry's Growth, Employment and Redistribution plan. The Bank's
own Commandments differ little from the IMF's, and it is no
surprise that government's underperforming infrastructure, land
reform, and housing policies all follow directly from Bank
advice. The Bank has apparently now sold Minister Manuel a US$67
million loan to improve the competitiveness of South African
firms, a dubious proposition in view of the Bank's notorious,
self-confessed tendency towards overoptimism regarding Third
World exports. Consistent with the RDP, the South African
government should renew its previous self-reliant policy of
avoiding World Bank loans. And given its record to date, the Bank
should close its Johannesburg office and cease dispensing its
unpopular neo-liberal economic and social policy advice.

7. In the light of the near-universal failure of IMF and the
World Bank policies in the developing world, we wish to urge
extreme caution upon Finance Minister Manuel. Rather than naively
providing Camdessus legitimacy to sell IMF policies to critics
in trade unions and social movements, Minister Manuel should take
up the mantle of leadership by using IMF and World Bank platforms
to call for the cancellation of Third World debt, including the
inherited US$18 billion apartheid foreign debt. Indeed Manuel
should be using these opportunities to call for the
democratisation and transformation of the World Bank and IMF into
agencies which serve the interests of poor people and workers,
rather than continually undermining our constituencies for the
benefit of international banks and corporations.

8. If Camdessus is really interested in meeting critics, he
should make himself available for a publicly televised debate
through which the concerns raised here can be made directly to
the IMF Managing Director, as well as to Minister Manuel. Indeed,
we are convinced that the only good that can come of Camdessus'
visit is a transparent discussion of the enormous costs of IMF
policies. Those policies are being adopted under the "home-grown"
rubric in South Africa, and it is therefore crucial for our
citizens to understand how many other countries have also
surrendered their economic sovereignty to the IMF and World Bank,
and the enormous financial and social costs they pay as a result.
Finally, it is crucial for all progressive, democratic South
Africans to record their determination that the IMF not
recolonise our country, our continent and developing countries
across the world.

CANSA has been established to help identify, arrest and eradicate
the cancer of neoliberalism that increasingly threatens to
reverse South Africa's socio-economic transformation. Beginning
with dozens of prominent members from progressive groups in civil
society, the campaign intends to recruit support from trade
unions, non-governmental organisations, students, community-based
organisations, women's and youth groups, environmental
organisations, churches and other democratic forces. It will
encourage and provide resources to supporters for domestic and
international efforts to challenge concentrations of economic
power and to promote people-centred development. For more
information, contact Stiaan van der Merwe at 011-339-7253 (fax
403-1485) or Zaida Harneker at 011-339-1811 or 837-6071 (fax 339-
8084). 

                      Signatories to the
        Campaign Against Neoliberalism in South Africa

Individual endorsements:
(Individuals sign in their own capacity; organisations are listed for 
identification purposes only, not as endorsers;
list updated to 17 October.)
 Gillian Addison, Group for Environmental Monitoring
 Asghar Adelzadeh, National Institute for Economic Policy
 Chris Albertyn, Environmental Justice Networking Forum
 Jenny Albrecht, Foundation for Contemporary Research
 Stephanie Allais, South African Students' Congress
 Mercia Andrews, Trust for Christian Outreach and Education
 Brian Ashley, Alternative Information and Development Centre
 Marjorie Billing, New Women's Movement
 Patrick Bond, National Institute for Economic Policy
 Debby Byrne, Transport and General Workers' Union
 Phiroshaw Camay, Cooperative for Research and Education
 Madode Cuphe, Masifundise Education Project
 Lungi Daweti, Centre for Democratic Communications
 Art de Langa, Society for New Economics
 George Dor, National Institute for Economic Policy
 Rita Edwards, Trust for Christian Outreach and Education
 Greg Hussey, South African Health and Social Welfare Services
 Godfrey Jack, South African National Civic Organisation
 Martin Jenson, Trade Union Library and Education Centre
 Dot Keet, University of the Western Cape Centre for Southern 
African Studies
 Cecil Kganakga, National Community Radio Forum
 Wolfgang Kistner, Ecumenical Advice Bureau
 Oupa Lehulere, Khanya College
 Charley Lewis, Cosatu Information Technology Unit
 Hassen Lorgat, Public Services International
 Bobby Maake, Cosatu Information Technology Unit
 Ernest Maganya, Institute for African Alternatives
 Jabu Mahlangu, Centre for Democratic Communication
 Maxwell Malan, End Racism and Sexism through Education
 Althea MacQuene, International Labour Resource and Information 
Group
 Andre Marais, Alternative Information and Development Centre
 Frank Meintjies, Initiative for Participatory Development
 Ronnie Mokwatsane, Masifundise Education Project 
 Yves Monten, Rural Development Services Network
 Dickson Motha, South African Plantation and Agricultural Workers 
Union
 Lumke Mtimde, National Community Radio Forum
 Victor Munnik, Environment and Development Agency Trust
 Nirmala Nair, Trust for Christian Outreach and Education
 Neil Nair, South African Municipal Workers Union
 Beyers Naude, Ecumenical Advice Bureau
 Neil Newman, Alternative Information and Development Centre
 Hugh Noble, University of South Africa
 Roseline Nyman, National Labour and Economic Development Institute
 Roben Penney, Environmental Monitoring Group
 Tebogo Phadu, RDP Council
 Alex Pongolo, Masifundise Education Project 
 Mark Povey, Development Research Institute
 Kgagelo Ramodite, National Health and Allied Workers Union
 David Sanders, University of the Western Cape Public Health 
Programme
 Vishwas Satgar, National Labour and Economic Development Institute
 Ighsaan Schroeder, Khanya College
 Selby Shezi, National Institute for Economic Policy
 Fiona Tregenna, South African Students' Congress
 Molefe Tselo, Ecumenical Service for Socio-Economic Transformation
 Stiaan van der Merwe, Ecumenical Advice Bureau
 Lou Wilkins, Cosatu Information Technology Unit
Patrick Bond
National Institute for Economic Policy
PO Box 32848 Braamfontein 2017 South Africa
(2711-403-3009 * fax 339-6395)
or
51 Somerset Road
Kensington 2094 South Africa


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