Press Release: Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of His Visit to South Africa
March 10, 2010Press Release No. 10/77
March 10, 2010
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Johannesburg at the conclusion of his visit to South Africa:
“I wish to thank President Zuma, Minister of Finance Gordhan, Minister of Economic Development Patel, Minister of Trade and Industry Davies, Minister for Rural Development and Land Reform Gugile Nkwinti, Deputy Governor Mminele, and their colleagues, for the extensive discussions that we had. I also participated in a stimulating discussion on the challenges facing African economies with the students and professors at the University of Witswaterand. In addition, I had an enlightening dialogue with representatives of the private sector. My visit to South Africa, the host of the 2010 FIFA World Cup, included a visit to a local youth soccer clinic that promotes awareness among young teens of HIV risks through soccer inspired activities, helping these children grow to be healthy while giving them an opportunity to unlock their potential in this wonderful sport.
“During my visit to South Africa, I had productive discussions with the authorities on the country’s economic outlook and the challenges to be met. The South African economy has weathered the immediate effects of the global crisis mainly due to sound macroeconomic policies, its flexible monetary and exchange rate regime, and a well supervised financial system. Fiscal policy has also been appropriately countercyclical, striking the proper balance between supporting output and preserving medium-term sustainability.
“Economic activity has rebounded, and we expect growth of around 2.5 percent in 2010. However, South Africa continues to face challenges in addressing high levels of unemployment and income inequality. And while recent growth has made significant inroads into unemployment, the recession has been a setback, and unemployment remains too high.
“Against this backdrop, our exchange of views covered a wide range of topics. There was broad agreement on the need to sustain the current countercyclical measures to nurture the recovery, while preserving price and external stability as private demand recovers. Higher spending on public investment should also boost growth over the medium term. But additional reforms are also needed to accelerate growth and jobs creation and to reduce inequality. These include promoting competition to improve productivity and lower prices in those sectors where a handful of enterprises dominate. Quick implementation of the wage subsidy scheme announced in the recent budget speech could also help promote employment, particularly if it were focused at the low-skilled workers and new job market entrants.
“The success of South Africa has important implications for the rest of Africa. As a member of the G-20, it has a leadership role to play in advancing prosperity across the continent and making the voice of Africa heard in the international arena. The continued success of the South African economy will help to further strengthen this leadership role.
“Again, I would like to thank the authorities for their hospitality and all those I met for very frank and open discussions.”