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Cosatu condemns rise in lending rates13 - 10 - 06 |
COSATU condemns rise in lending rates
The Congress of South African Trade Unions strongly condemns the decision by the Reserve Bank to raise base lending rates by yet another 50 basis points, to 8.5% - the third such increase since June.
At a time when there is a small but welcome reduction in the level of unemployment, with 544 000 new jobs being announced, the Monetary Policy Committee’s policy will snuff out the glimmer of hope of increasing economic growth, especially in manufacturing industry. This policy will destroy still more jobs and sabotage prospects of halving unemployment and poverty by 2014.
The Reserve Bank is trapped within a misguided strategy of inflation targeting. This sees rising inflation as the sole challenge, at a time when by far the biggest problems the economy faces are not inflation but high unemployment, mass poverty and sluggish growth. Inflation targeting is a policy adopted by countries with developed economies and unemployment below 10%. It is totally unsuitable for a developing economy like South Africa, which has massive problems of unemployment and poverty.
The government must scrap this anti-developmental, neoliberal policy and implement a strategy that makes fast growth, job creation and poverty reduction its top priorities.
Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets
Braamfontein, 2017
P.O.Box 1019
Johannesburg, 2000
SOUTH AFRICA
Tel: +27 11 339-4911/24
Fax: +27 11 339-5080/6940/ 086 603 9667
Cell: 0828217456
E-Mail: patrick@cosatu.org.za