[Debate] (Fwd) Numsa v Reserve Bank's shy sadomonetarists
pbond at mail.ngo.za
Wed May 27 14:58:28 BST 2009
(Fair sentiments: disgusted and disturbed.)
NATIONAL UNION OF METALWORKERS OF SOUTH AFRICA
153 Bree Street c/o Gerard Sekoto, Newtown, Johannesburg, 2001
Tel: 011 689 1700 | Fax 011 833 6330
alexm at numsa.org.za
Reserve Bank refuses to accept Numsa memorandum – 27 May 2009
Numsa is disgusted that despite initially agreeing to allocate someone
to receive Numsa’s memorandum, the South African Reserve Bank has now
done an about turn and has refused to accept it.
Meanwhile more than 2000 marching Numsa members are standing outside the
Bank frustrated and angry at the Governor’s refusal to accept it. Numsa
is always open to engagement and is disturbed that the door has been
closed on them.
Below are the contents of the memorandum that the Governor has refused
For further details contact
Alex Mashilo at 082 9200 308
The Governor By hand
Mr Tito Mboweni
370 Church Street
Memorandum to the Governor, South African Reserve Bank (SARB)
Since our last picket a month ago, we have not seen any drastic changes
in the economic picture both locally and internationally. In fact the
picture is worsening. Stats SA statistics show that company liquidations
are up by 54,6%; the country's GDP continues to plummet, decreasing by
6,4% in the first quarter of 2009.
Central banks across the world continue to lower their rates as a way of
stimulating their economies. Our rates are still consistently higher
than our competitors. We are disturbed that your intransigence in
drastically lowering these rates is negatively affecting the livelihoods
of ordinary South Africans.
Since September 2008 more than 30 000 metalworkers have lost their jobs.
About 40000 metalworkers are on short time or lay-off.
Because of this crisis, the National Union of Metalworkers of South
Africa (Numsa) called an urgent Numsa Job Security Conference from March
12-14 2009. Delegates heard inputs from government, employers and
debated responses to the jobs crisis.
Part of the reflection of Numsa in this conference was the welcome ANC
commitment in its Manifesto in respect of interest rates which declares
"The ANC government will ensure that macro-economic policy is informed
by the priorities that have been set out in this Manifesto. Fiscal and
monetary policy mandates including management of interest rates and
exchange rates, need to actively promote creation of decent employment,
economic growth, broad-based industrialization, reduced income
inequality and other developmental imperatives".
Numsa and Cosatu is not convinced that the Reserve Bank is heeding this
fundamental approach of the African National Congress. Internationally
we have seen a much more robust approach to the lowering of interest
rates with particular reference to what obtains in the following countries;
· United States from 2% to just above 0%
· Australia from 6.8% to 3%
· Canada is at 0.5%
· China at 5.31%
· Denmark at 2.25%
· India at 5.0%
· Korea at 2%
· Malaysia at 2%
· The UK where the interest rate is at 0.5% coming from as high as 5
percent in October last year.
It is common knowledge that the South African economy is in a crisis
which is amplified by the data provided from Stats SA which suggest that
manufacturing has declined by more than 11 percent in the first quarter
It is in this context that the Numsa Job Security Conference resolved to
picket the SA Reserve Bank's special meeting of the Monetary Policy
Committee from April 29-30 2009 and to urge the SARB to drastically
lower interest rates as one of many measures to ease the current job
loss bloodbath. Our reasons for calling for this drastic course of
action are as follows:
1. An increasing number of our members are under serious financial
distress because of short-time, layoffs and retrenchments. Their
household debt is soaring. Their inability to pay off household debt
will also translate into a burden on our financial system.
2. At a social level, many of our members are suffering from depression,
others are contemplating suicide, relationships are under strain,
students and school-children are dropping out of school because of lack
3. While the consequences of point 2 above impact on the individual
family, they also have wider consequences for our health, education and
social welfare system and will put them under severe stress.
4. Most of the advanced, developed countries have drastically lowered
their interest rates in response to this economic downturn.
5. Countries that compete with South Africa have very low interest rates
compared with ours. This makes the cost of capital for those wanting to
create new jobs or to save current jobs, very high and renders us
6. Instead of linking interest rates to inflation rates, Numsa believes
that the target must be with employment imperatives and industrial
growth and development.
7. The operational independence of the SARB must not undermine the fact
that there should be more accountability on the side of the SARB so that
when policy considerations are being made there is an inclusion of
government departments responsible for growth and development as well as
the views of civil society and trade unions.
8. SARB must regulate the inflows and outflows of financial liquidity,
particularly speculative investment.
We further demand that the commercial banks must be tightly regulated
and closely monitored instead of being left in the state of lawlessness,
the so-called self-regulation. There is no historical evidence in our
country that these banks have ever taken the plight of the workers and
the poor into consideration. It is a well known fact that the South
African banks are concerned with profits and nothing else. Banking
services in South Africa are as a result amongst the most expensive in
the world. In this the workers and the poor have suffered high banking
charges and interest rates.
South African Reserve Bank (SARB)
Governor, SA Reserve Bank National Union of Metalworkers of South Africa
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