Businesses, unions want state to peg rand value at R10,50/$

This is the first concerted effort by business and the labour movement to exert more pressure on the government to devalue the rand.

They also called on the government to promote more “buy-local” procurement policies, but denied that they wanted protectionism.

Call for protection

The Congress of South African Trade Unions (Cosatu), the Federation of Unions of SA (Fedusa), the National Council of Trade Unions (Nactu) and manufacturers of car parts, electronics, glass, petroleum and steel said they would lobby the government to change aspects of industrial policy.

They want the government to intervene aggressively in the economy to lower interest rates, introduce protection for the manufacturing sector, ensure a stable currency and harness its R800bn infrastructure spend to promote employment and develop SA's industrial base.

The textile industry has had to compete with cheap Chinese imports for market share, and was cited as one of the industries that needed protection.

Cosatu general secretary Zwelinzima Vavi said that “a progressive approach is needed to attend to the issue of a weak currency”.

He suggested that the rand should be pegged at R10,50/US$.

Vavi said SA had made a mistake when it left “things absolutely to the market” as it was now facing a “crisis of deindustrialisation”.

Signatories

Signatories to the declaration included the PG Group, PG Bison, Sasol, Hulamin, Desmond Equipment, Bell Equipment, Amka Products, Consol Glass, ArcelorMittal, Altron and the National Association of Automotive Component and Allied Manufacturers, the industry body that manufactures automotive components.

Stewart Jennings, CE of the PG Group, said the rand should be “linked to a basket of currencies” to protect local industries, especially in manufacturing, which now accounted for 16% of gross domestic product.

Jennings said that both the manufacturing and tourism sectors would benefit from a competitive currency.

“We have been looking north to solve our problems, and we need to look at the east and other developing countries,” he said.

Jennings also said that he found it “very difficult to engage with the National Treasury” on the issue, and called for this department to be “realigned” to operate more sensitively to the needs of the industry.

Job losses

Statistics released last week showed the economy had shed more than 171000 jobs in the first quarter of this year.

Last week, Trade and Industry Minister Rob Davies said in his department's budget speech to Parliament that the wholesale, retail trade and manufacturing industries had been hit hardest by job losses.

Nactu's Manene Samela said that there was a need to “deepen engagement” with business that would “strengthen the resolve to save jobs”.

Fedusa spokesman Asley Williams supported the sentiments, calling for “labour intensive jobs (to) be created to alleviate the poverty levels”.

The labour federations represented altogether about 2,7-million members.

Source: Business Day