9 January 2002
The South African Communist Party welcomes government's announcement of a commission of inquiry to investigate the recent fall in the rand's exchange value. The commission might help to clarify some of the factors behind the rand's precipitous depreciation, and it might even help to bring to book individuals involved in illegal speculative activity. Whether there has been any illegality as such, we do not know, what is obvious is that, once more, a few have got to be even wealthier at the expense of our country at large.
However, the SACP does not share the opinion of some commentators that this commission of inquiry on its own will get to the bottom of our currency problems. Moreover, without prejudging Advocate John Myburgh's independence, abilities, or eventual performance, we note that the head of this commission is someone associated with a major mining house engaged in extensive foreign activities. It is surprising how, in the media debate, when anyone with ANC-affiliations is ever appointed to head a commission of inquiry there is a hue and cry about independence. But now, when someone drawn from the milieu of big capital is appointed, there is silence. Yet, it is precisely the behaviour of big South African corporations with major off-shore holdings that needs to be most closely scrutinised in this matter.
However, explanations for the rand's decline should not be reduced to conspiracy theories. Addressing our currency problems requires an overall approach to our economy. The SACP has noted with concern the chorus of voices urging government to respond with a rescue package including an IMF loan, the removal of remaining exchange controls, raising of interest rates and a commitment to accelerated privatization. The SACP views such proposals, emanating as they do from economists linked to major banks, as self-interested, ideologically driven attempts to lock us further into a policy framework that will be incapable of delivering development orientated growth.
We welcome the fact that government has not been pushed into a panic reaction. At the same time, we believe that the rand+IBk-s decline does require a measured and carefully considered response. This needs to include the mobilization of defensive measures to insulate the productive economy from the destabilizing effects of speculative movements in currency markets, and a response to the inflationary pressures that will be generated by the present decline in the value of the rand.
As the SACP it is our considered opinion that a solution must be found in the direction of measures to limit the scope for speculative activity, rather than in further exposing ourselves to the vagaries of speculative markets and once again attempting to appeal to sentiment.
There is no doubt that as a country and a people, we face major challenges on the economic front. Our ongoing debates and discussions on issues like industrial policy, restructuring of the financial sector, state-owned enterprises and the building of cooperatives have all been given added urgency by the recent developments in currency markets.
CONTACT
Mazibuko Kanyiso Jara (surname Jara)
Department of Media, Information and Publicity
South African Communist Party
Tel - 011 339 3621
Cell - 083 651 0271
Email - sacp1@wn.apc.org