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Friday, June 03, 2005

From: www.southafrica.info

BANKS DO IT!!!???

BUSINESS NEWS
Manuel calls for international ubuntu
Posted Fri, 03 Jun 2005

Appealing for an international "ubuntu", Finance Minister Trevor Manuel told the World Economic Forum that African countries should not be punished for skills deficits when poverty reduction was considered.

"Countries are required to provide detailed statistical analysis. Because you don't have the skills base in place, the only thing you can do is thumbsuck and hope that you're not caught out. It's wrong to ask that of good, honest, well-governed countries."

Manuel said there was a different approach, the African peer review mechanism, "a baring of the soul" where a country tells its peers to evaluate it against certain criteria, and suggest where improvement was required.

"Then you can deal with the deficits. Then you don't have to introduce new layers of conditionality. And if we can approach life like that, then I think we accept, we in South Africa talk about ubuntu, we accept the credentials, we accept the bona fides of our partners and we lay a basis for strong partnership," said Manuel on donor aid.

Manuel, who was speaking on debt relief, said too much of what was currently recorded as aid remained in the donor country under the guise of technical assistance.

He said this was a "fundamental problem" because it never reached recipient countries, while enriching professionals close to governments of donor countries.

"We want a different method of recording the aid. In the same way as we campaign for an extractive industries transparency initiative, we want a donor aid transparency initiative. Let's record the figures for what they are," Manuel said, to applause.

Earlier, Tanzania's President Benjamin Mkapa, distinguished between bilateral debt and the debts owed to international financial institutions.

While debt to the World Bank, for example, could be discussed, Mkapa felt that debt relief in the context of bilateral relations could help create an environment for the private sector to flourish.

This might mean improving legislation prohibiting the repatriation of profits, for instance.

"There is no doubt that some debt relief in Africa will enable countries to better the atmosphere, the environment, the climate, for investment and trade with the outside world."

Graham Mackay, chief executive of SABMiller, said his company did not specifically take into account a country's credit rating, and shun it if was a bad borrower.

"The effect on the evaluation of whether to invest by a company such as mine is pretty indirect."

Mackay said the company looked at the overall business and financial climate, with direct intervention by government and fiscal management two issues that would help determine investment.

Steve Booysen, Absa's chief executive, said when a country accepted debt relief, its credit rating by international ratings agencies could be downgraded.

"Investors worldwide use country ratings to determine their own risk appetite in making investments in a country."

Sapa

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