Open trade to Africa, urges IMF
2004-09-07 19:24
Johannesburg - Developed countries have a responsibility to open their markets to trade with Africa, International Monetary Fund (IMF) managing director Rodrigo de Rato said in Johannesburg on Tuesday.
He called for the speedy conclusion of global trade talks, saying rich countries should open up their markets to Africa by the end of the year.
"The future prosperity of Africa rests upon increased trade," he said as he concluded his first visit to South Africa.
De Rato said he hoped international agreements on removing trade-distorting subsidies would be finalised by the end of the year.
World Trade Organisation delegates in Geneva on August 1 salvaged global trade talks - the so-called Doha trade round - with a compromise deal on reducing the huge government subsidies paid to farmers in the US and Europe.
This should enable poorer countries that cannot afford such huge subsidies to compete in the global market.
When completed, the liberalisation of trade is expected to open markets for agriculture and industrial goods and services for all WTO member countries.
"I want to stress the responsibility of developed countries, not only to provide development assistance, but to open their markets to trade," he said before leaving for Burkina Faso on the next leg of his trip.
The IMF expected to see increased economic growth in sub-Saharan Africa of over 5% in 2005, said De Rato.
He attributed this improvement to certain countries pursuing IMF-recommended macroeconomic and governance policies, as well as general global economic recovery.
During his two-day visit, De Rato met President Thabo Mbeki, Finance Minister Trevor Manuel, SA Reserve Bank governor Tito Mboweni, and business people.
"I have also had the chance to visit Soweto," he said.
De Rato praised South Africa for its "impressive" economic recovery since its first democratic elections in 1994 but cautioned that "formidable challenges" such as joblessness and Aids remained.
The IMF particularly supported the government's policy of privatising state assets, he said.
Asked about the job losses associated with privatisation, he answered that the loss of jobs should be compensated for by increased growth and efficiency in the country as a whole.
The IMF recommended a more flexible labour market to increase employment in South Africa. "It is not good for government to intervene," De Rato said.
He also approved of black economic empowerment and a strong rand.
"The rand is in line with the fundamentals of the economy," he said.
"The competitiveness of South Africa's economy cannot be based on a weak currency."
He said it was "perfectly possible" for government to fulfil its goal of halving unemployment and poverty by 2015 "if growth is sustained".
This was De Rato's second trip to Africa since he took up his post in May.
"It (visiting Africa) is a very important process for me. We devote a lot of our resources to Africa," he said.
- SAPA