Anyhow, below you'll find a statement from a conference in Durban today where at least some leftists got to confront the bureaucrats head-on a bit on these matters... Perhaps LBOites can help answer the questions posed at the end?
> From: Chris Burford <cburford at gn.apc.org>
> Subject: S Africa: exchange controls/Tobin tax?
>> These
> >include agreed rules on competition and on the free movement of capital.
> >But this week Trade and Industry Minister Alec Erwin, as well as Deputy
> >President Thabo Mbeki, were hinting strongly at the need for regulation
> >of capital movements.
>
------- Forwarded Message Follows ------- Date: Sat, 5 Sep 1998 16:42:17 -0200 (GMT) To: debate at sunsite.wits.ac.za From: David Hemson <dhemson at pixie.udw.ac.za> Subject: debt conference
STATEMENT ON APARTHEID DEBT
Conference on the Apartheid Debt convened by the Social Policy Program and Political Science Department, University of Durban-Westville
This Conference on the Apartheid Debt had a stimulating debate on the question of South Africa's debt and the constraints on development. We heard speakers from the Mozambican Department of Finance, the South African Finance Department, Prof Ben Turok of the Parliamentary Portfolio Committee, and Prof Michael Samson of the Economic Policy Research Institute, who presented papers on the issue of debt.
We meet after the conclusion of the NAM where it was argued by President Mandela that "one of the most immediate challenges that faces the developing countries is the need to remove the burden of the unbearable debt". We also were informed by the statement of the Vice President, Thabo Mbeki also at NAM that the market "has no inherent mechanism, intrinsic to itself, as a result of whose functioning this objective will be achieved". It was this contradiction that was vigorously debated as human need was placed against the dictates of financial markets. In South Africa it was pointed out that the forward thrust of development is now clearly being blunted by budgetary constraints. There are reports of urgent water schemes being cancelled, hospitals closed, and funds being denied for development projects. The Reconstruction and Development Program is mentioned less often and poverty and inequality are increasing.
All this is leading an urgent search for the additional resources needed and a debt policy to release the resources for development. The question is how to break with this burden of the past which is none of the making of those who were oppressed under apartheid. The public debt accumulated under Apartheid has been catapulted into the public debate by the stress which the South African economy is experiencing through the falling rand and rising interest rates. The repayment of debt is now at the centre of budget, as more than 20% of revenue is being allocated to servicing debt. One of the speakers pointed out that the entire proceeds of income tax is going to servicing debt alone.
There was some debate whether South Africa really has a debt problem as such; but what was clearly agreed is that the weight of debt servicing is crippling social development. At the moment R42,5bn is budgeted for cost of servicing government debt, an amount far greater than has been allocated to the development programs of the RDP. We noted that the Finance Director General, Maria Ramos, has said, "We would be very reluctant to consider using government spending to stimulate the economy because of the interest costs further down the line." In these words, the debt problem is presented of sufficient magnitude to be hampering growth and development.
The Conference felt that finance policies have to be re-examined to eliminate the burden of the apartheid past. One speaker presented a strategy of drastically reducing the apartheid debt by a combined fiscal, financial, and political strategy which would place the responsibility of paying off the debt on those who had benefited from it. Student participants strongly argued for the outright cancellation of the public debt both external and internal and committed themselves to campaigning to this end. The present funding of civil service pension was also strongly questioned and the prevailing view was that the funding of civil servants pensions should be immediately reduced and that there should be new arrangements for long-term funding.
The questions discussed at the conference boiled down to the following:
What can be the moral obligation of the present post-apartheid generation to meet the debts of the Apartheid regime? Is it possible to challenge and repudiate these debts without a vicious backlash from global markets? Is there the political will to put the needs of the poor as the priority in financial policy?
These issues posed the need for greater public debate and a clearer outline of financial policy. It was widely agreed there was a need for greater research particularly into the measurement of the budget deficit, and into strategies for accelerating development.
...