"take the rumour that the G7 will create a large Latin American rescue fund; at the time of writing the gossip says either $30 or $40 billion for Brazil or $100 for all Latin America...
"So what? At the beginning of the summer, Latin American nations had more than $150 billion in foreign exchange reserves; Brazil alone had more than $70 billion. If that was not enough to prevent a crisis, why would another $30 billion, or even $100 billion make a big difference?
"The truth is now it is pretty much every country for itself."
This is illustrated by the experience of the South African delegation visiting the IMF earlier this month, as reported in the latest issue of SouthScan. It is well known that Africa has essentially dropped off the capitalist map. There was a bit of an exception for South Africa. That now, despite all the post apartheid fine words, has gone too.
>SA economy Manuel discovers IMF is
>leaving SA to stew in economic crisis
>South Africa's economic managers are sandwiched between a rock and a
>hard place. Having consistently rejected unilateral measures to defend
>the beleaguered economy against the tremors of global financial
>instability, they returned from the annual International Monetary Fund
>and World Bank board of governors meeting in Washington with the
>discomfiting realisation that international remedial action to address the
>crisis was not yet on the cards.
>
>Despite growing pressure to more rigorously regulate capital flows,
>Finance Minister Trevor Manuel and Reserve Bank governor Chris Stals
>instead have looked to guidance from the international front. Their
>posture rested on two elements - a concerted global response to the crisis
>and their government's persistence with policies in line with the now-
>discredited 'Washington Consensus'.
>
>The Washington confab, though, declined to take up that cudgel,
>concentrating instead on readying a bale-out for the wobbly Brazilian
>economy and confirming the disarray among policy makers about the
>nature of the global economy and financial markets.
>
>An irritated Manuel reacted by accusing the Group of Seven
>industrialised countries of displaying "a paucity of leadership", and
>complained that the G-7 viewed the crisis as an ailment confined to
>emerging markets.
>
>"Japan is not coming forward with anything and Europe is focused on
>aligning economies before the introduction of the Euro next year and so is
>not looking at doing something substantial," he said.
>
>The upshot, he said, was that Pretoria would stay the course with its
>conservative economic policies and resist "short-term populist measures
>that have long-term implications". But this, say local economists, would
>do little more than keep the economy bumping along the bottom. This
>year's growth rate is expected to barely clear the 0.5% mark and the
>outlook for 1999 appears similar.
>
>As wounding for Manuel and co. was the disregard shown for SA (and
>Africa in general) at the Washington meetings. The SA team staged
>briefings in almost empty rooms, where those non-South Africans who
>did attend were more concerned about SA's crime rate than its macro-
>economic record. Finance director-general Maria Ramos complained that
>the Johannesburg Stock Exchange was the 12th largest in the world (in
>terms of market capitalisation), but was being overlooked in favour of
>Latin America exchanges.
>
>The reality encountered in Washington seemed a back-handed
>endorsement of SA's (as of now) failed bid at last month's Non-Aligned
>Movement summit to marshal developing countries into a common front
>able to influence the management of the global economy (SouthScan
>v13/18 p141).
>
> SOUTHSCAN
>A Bulletin of Southern African Affairs
>___________________________________________
> PO Box 724 London N16 5RZ England.
> Tel: +44 171 923 1467
> Fax: +44 171 923 2545
> e-mail: southscan at gn.apc.org
>__________________________________________
> Copyright reserved in all countries
> Quotation only with credit
>
> http://www.gn.apc.org/southscan
> http://www.oneworld.org
>===========================================
> Vol. 13/21 16 Oct 1998
>===========================================
Chris Burford
London.