[Debate] (Fwd) Numsa v Reserve Bank's shy sadomonetarists

[Patrick Bond]

(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 
to accept.

For further details contact

Alex Mashilo at 082 9200 308

NUMSA Spokesperson



----------------------------------------------------------------------------------------------------------------------------

The Governor By hand

Reserve Bank

Mr Tito Mboweni

370 Church Street

Pretoria 0002


Dear Sir



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 
that;

"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 
of 2009.

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 
of funds.

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 
internationally uncompetitive.

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.

Signed: ________________________

South African Reserve Bank (SARB)


Signed: ________________________

Governor, SA Reserve Bank National Union of Metalworkers of South Africa 
(NUMSA)