Repudiate these debts

SA’s credit rating has been downgraded to junk, and the rand has crashed to 19 to the dollar. The downgrading was not unexpected given the economic mismanagement by both the apartheid and postapartheid governments. As a comparison, the exchange rate back in 1980 was $1.50 to R1.

Businesses other than food stores and pharmacies, are now closed for the duration of the Covid-19 emergency. So why have the JSE and SA’s foreign exchange markets not also been closed, as they were after then president PW Botha’s disastrous Rubicon speech fiasco in 1985?

The Treasury and Reserve Bank have mismanaged the main indicator of our economy by allowing the rand to become casino money and the marker for “emerging markets” all over the world.

Almost all forex activity is purely speculative. The US is projecting an unemployment rate of 32% as the economic depression deepens. As markets rush for cover, it is madness for SA to remain the forex marker for countries such as Argentina, Turkey or Zimbabwe. The global South is facing a debt catastrophe, but Covid-19 is the trigger for capitalism’s greatest financial crisis.

SA’s repudiation of illegitimate, odious debts such as the arms deal, World Bank plus other foreign and domestic loans to Eskom and other state-owned enterprises would be a starter.

President Cyril Ramaphosa and his advisers must urgently confront these issues. They might also consider that the German “economic miracle” after World War 2 followed repudiation “forgiveness” of 90% of Nazi Germany’s debts. Terry Crawford-Browne

Via e-mail