Numsa is disgusted that despite initially agreeing to allocate someone to receive Numsa's memorandum, the South African Reserve Bank has now done an about turn and has refused to accept it.

Meanwhile more than 2000 marching Numsa members are standing outside the Bank frustrated and angry at the Governor's refusal to accept it. Numsa is always open to engagement and is disturbed that the door has been closed on them.

Below are the contents of the memorandum that the Governor has refused to accept.

Text of memorandum:

The Governor (By hand)
Reserve Bank
Mr Tito Mboweni
370 Church Street
Pretoria 0002

Dear Sir

Memorandum to the Governor, South African Reserve Bank (SARB)

Since our last picket a month ago, we have not seen any drastic changes in the economic picture both locally and internationally. In fact the picture is worsening. Stats SA statistics show that company liquidations are up by 54,6%; the country's GDP continues to plummet, decreasing by 6,4% in the first quarter of 2009.

Central banks across the world continue to lower their rates as a way of stimulating their economies. Our rates are still consistently higher than our competitors. We are disturbed that your intransigence in drastically lowering these rates is negatively affecting the livelihoods of ordinary South Africans.

Since September 2008 more than 30 000 metalworkers have lost their jobs. About 40000 metalworkers are on short time or lay-off.

Because of this crisis, the National Union of Metalworkers of South Africa (Numsa) called an urgent Numsa Job Security Conference from March 12-14 2009 . Delegates heard inputs from government, employers and debated responses to the jobs crisis.

Part of the reflection of Numsa in this conference was the welcome ANC commitment in its Manifesto in respect of interest rates which declares that;

"The ANC government will ensure that macro-economic policy is informed by the priorities that have been set out in this Manifesto. Fiscal and monetary policy mandates including management of interest rates and exchange rates, need to actively promote creation of decent employment, economic growth, broad-based industrialization, reduced income inequality and other developmental imperatives".

Numsa and Cosatu is not convinced that the Reserve Bank is heeding this fundamental approach of the African National Congress. Internationally we have seen a much more robust approach to the lowering of interest rates with particular reference to what obtains in the following countries;

• United States from 2% to just above 0%
• Australia from 6.8% to 3%
• Canada is at 0.5%
• China at 5.31%
• Denmark at 2.25%
• India at 5.0%
• Korea at 2%
• Malaysia at 2%
• The UK where the interest rate is at 0.5% coming from as high as 5 percent in October last year.

It is common knowledge that the South African economy is in a crisis which is amplified by the data provided from Stats SA which suggest that manufacturing has declined by more than 11 percent in the first quarter of 2009.

It is in this context that the Numsa Job Security Conference resolved to picket the SA Reserve Bank's special meeting of the Monetary Policy Committee from April 29-30 2009 and to urge the SARB to drastically lower interest rates as one of many measures to ease the current job loss bloodbath. Our reasons for calling for this drastic course of action are as follows:

1. An increasing number of our members are under serious financial distress because of short-time, layoffs and retrenchments. Their household debt is soaring. Their inability to pay off household debt will also translate into a burden on our financial system.

2. At a social level, many of our members are suffering from depression, others are contemplating suicide, relationships are under strain, students and school-children are dropping out of school because of lack of funds.

3. While the consequences of point 2 above impact on the individual family, they also have wider consequences for our health, education and social welfare system and will put them under severe stress.  

4. Most of the advanced, developed countries have drastically lowered their interest rates in response to this economic downturn.

5. Countries that compete with South Africa have very low interest rates compared with ours. This makes the cost of capital for those wanting to create new jobs or to save current jobs, very high and renders us internationally uncompetitive. 

6. Instead of linking interest rates to inflation rates, Numsa believes that the target must be with employment imperatives and industrial growth and development.

7. The operational independence of the SARB must not undermine the fact that there should be more accountability on the side of the SARB so that when policy considerations are being made there is an inclusion of government departments responsible for growth and development as well as the views of civil society and trade unions.

8. SARB must regulate the inflows and outflows of financial liquidity, particularly speculative investment.

We further demand that the commercial banks must be tightly regulated and closely monitored instead of being left in the state of lawlessness, the so-called self-regulation. There is no historical evidence in our country that these banks have ever taken the plight of the workers and the poor into consideration. It is a well known fact that the South African banks are concerned with profits and nothing else. Banking services in South Africa are as a result amongst the most expensive in the world. In this the workers and the poor have suffered high banking charges and interest rates.

National Union of Metalworkers of South Africa (NUMSA)

Statement issued by NUMSA, May 27 2009

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