Workers storm South African Reserve Bank

The National Union of Mine Workers of South Africa today marched on the Reserve Bank of South Africa to deliver a memo protesting the conservative monetary and fiscal policies of the Reserve Bank. The Reserve Bank Governor Toto Mboweni refused to receive the memo from the protesting workers. After hours of waiting outside the SARB, the protesters broke down a police barrier and threatened to storm into the bank.

Workers at the site of protest noted that tens of thousands of metal workers had lost their jobs as a result of the interest rate and inflation targeting policies pursued by the bank. Workers were incensed that the Governor who has his roots in the labour movement refused to meet with them to receive the memo. Numsa is threatening to bring the economy of the country to a standstill if the Governor does not change his attitude. According to one striker, “We did not elect this government to treat it with kid gloves. If it fails to meet our demands we will protest and act!”

The bank responded with disdain to the workers. NUMSA claims that it was in possession of an e-mail from the Bank in which it agreed to receive the memo. SARB spokesperson Samantha Henkeman said the bank had not sent anyone to collect the memorandum, "And we're not going to be sending anyone down," she said. Clearly the South African Reserve Bank takes its orders from the ruling capitalist class and not from the labour movement, the working class or the poor.

In the face of a capitalist onslaught on the poor the bourgeois media is already preparing the public for qa situation in which the working class will have to pay the cost of the recession which South Africa has finally admitted. Despite having had an unofficial unemployment rate of 23% (More realistically at 33%) throughout 2008 the South African government went into Mbeki style denial, and just as Mbeki denied that HIV causes AIDS, and denied the involvement of anyone other than Zuma in the arms scandal, the government denied a) that the country was in recession and b) that its inflation and interest rate policies were adding fuel to the fire of recession.

Marxists welcome NUMSA taking action to fight the neo-liberal policies of the Reserve Bank that fuel unemployment, but it must go further and demand the end to the independence of the central bank and nationalisation of the entire banking sector, so it can be run in the interests of workers. Mbeki's government did all it could to attract foreign capital and this did not solve the problems of the poor in South Africa. The government can not control what it does not own, only by nationalising the bank and running them under a democratic plan to boost industry and create jobs will workers and the unemployed be protected against the hardships of this economic crisis.

Text of memorandum that the Governor has refused to accept:

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