An alliance between South Africa\u2019s ruling party and labour unions is pushing for the mobilization of domestic pension funds to drive economic growth and urging caution about borrowing money from international financial institutions.<\/p>\n
A discussion document dated 25 May, prepared for meetings of the alliance members, cited the use of so-called prescribed assets during the apartheid era to fund infrastructure.<\/p>\n
South Africa has been ruled by the African National Congress, which is in an informal alliance with the Congress of South African Trade Unions and the South African Communist Party, since white-minority rule ended in 1994.<\/p>\n
Attempts to fuel growth \u201cmust include a large drive toward domestic resource mobilization from both the public and private sectors,\u201d according to the document seen by Bloomberg and verified by Cosatu.<\/p>\n
Measures taken must include \u201camong others, impact investments, interchangeably developmental and productive-asset investment requirements,\u201d it said.<\/p>\n
The alliance encouraged the use of both privately managed pensions and civil-servant retirement funds administered by the state-owned Public Investment Corp.<\/p>\n
South Africa\u2019s economy is forecast by the country\u2019s central bank to contract 7% this year as a result of the coronavirus outbreak and the loss of the last investment-grade rating on the nation\u2019s debt.<\/p>\n
While South Africa has shunned the use of funds from institutions such as the International Monetary Fund in the democratic era, labour groups have now backed the government\u2019s approach to the lender to seek $4.2 billion from its Covid-19 relief facility.<\/p>\n
\u201cInternational finance should therefore only be accepted if the conditions do not undermine, compromise or subvert South Africa\u2019s national sovereignty, democracy or independence,\u201d the document said.<\/p>\n
It should \u201cneither interfere with our domestic development policies and goals nor our fundamental right to self-determination,\u201d it said.<\/p>\n