SOUTH AFRICA CRITICIZES PLANNED G7 GOLD SELL-OFF
South African Finance Minister Trevor Manuel yesterday criticized a decision by the G7 nations to sell off gold reserves to fund Third World debt relief, reports Agence France-Presse. Manuel said South Africa had supported the idea in principle when the IMF first mooted a more limited sell-off in 1996-of five million ounces-which would not have a major impact on the gold price. However, since the issue was discussed at the spring meetings of the IMF and World Bank this year, the situation had changed because of the UK's decision to sell off some of its gold reserves.
"The gold price has fallen somewhat out of bed," Manuel said. "And so talking of continued sales in the present arrangement is a bit difficult." In addition, the G7, meeting in Cologne earlier this month, spoke of the sale of 10 million ounces, which clearly would have a different impact on a very depressed market, Manuel said. "In the Cologne statement they paid lip service," he is quoted as saying. "Faith is not going to buy the bread."
Despite its opposition to the sale of gold, Manuel added, "this government will continue to campaign vigorously for debt relief."
Newly-elected President Thabo Mbeki, in his maiden state of the nation address to Parliament on Friday, also criticized the proposed bullion sell-off due to the impact it would have on gold mining, employment and export earnings not only in South Africa, the world's largest gold producer, but also in the rest of Africa, the story notes.