Letter: Driven to the alms of the IMF - Financial Mail

17 September 2020 - Rob Rose is correct that South Africa is on the way to an IMF bailout (‘Like it or not, SA lurches towards IMF’, 24 August). This has been years in the making.

Rob Rose is correct that South Africa is on the way to an IMF bailout (‘Like it or not, SA lurches towards IMF’, 24 August). This has been years in the making.

While Mr Rose may be correct that the ‘left’ of the ANC and its alliance are aggrieved at the prospect of losing economic sovereignty – and, with it, the latitude to meddle with the Reserve Bank and undermine property rights – it is as well to recall that these are positions that have been advocated by the supposedly reformist president. And the economic trauma stemming from the health crisis seems to have given the government as good as no pause to reconsider the perilous course it has embarked on.

Expropriation without compensation remains on the agenda, BEE continues to be central to government thinking, cadre deployment will be done ‘better’, and a new incarnation of South African Airways will be launched into the sky. Watch out, too, for prescription of savings and pensions.

Indeed, our recovery – if it be such – will be ‘state-led’; although there is nothing to suggest that the state has the capacity to do so.

So, if anything, the pandemic period has confirmed the inevitability of a recourse to the IMF. And if that can be used to prompt overdue reform, it may ultimately prove beneficial.

The real question is just how much damage will have been inflicted by the time that happens – and whether ideological thinking will compound it by running down blind alleys a la Venezuela in an effort to delay the moment of reckoning. The most frightening prospect is, of course, large-scale property seizures, and printing money to try and inflate the country out of trouble.

Business and South Africa’s people would do well to think about this, and how they will respond.

Terence Corrigan

Project Manager, Institute of Race Relations

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