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Gordhan: Protectionism a risk to global growth

JOHANNESBURG, SOUTH AFRICA Nov 26 2009 08:21

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Trade protectionism is a serious risk to global economic growth as countries emerge from recession, Finance Minister Pravin Gordhan said on Wednesday.

In a speech prepared for delivery to the American Chamber of Commerce in South Africa, Gordhan also said Africa's economic powerhouse, which climbed out of recession in the third quarter of this year, needed to address the "very real and human costs" of the crisis after nearly one million jobs were lost.

Gordhan said South Africa's exports and imports were expected to decline by roughly 20% in 2009 compared with 2008 and that there was "quite a bit" to lose from a rise in protectionism.

"Trade protectionism is a serious risk to global economic growth. Enhancing fair and balanced trade is essential to growing incomes and ridding the developing world of poverty," he said.

Gordhan reiterated that the "carry trade" phenomenon, which has seen the rand currency surge more than 20% against the dollar this year on a wave of appetite for high yielding currencies, was a matter of concern for South Africa.

While the currency's strength has raised fears it could hit exports, both the government and the central bank have repeatedly said the exchange rate will continue to be determined by market factors, without interference from the authorities. -- Reuters

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the problem with prav's feelings is that while protectionism is a risk to global growth, you don't join the free market with an unemployment rate that is so high that even with massaging the numbers, it's still 25%. you keep your markets as closed as possible until your unemployment rate is half that for a sustained amount of time.... and *then* do you open up.

funnily enough, this is exactly what the east asian economies did before letting western companies play in their pond, and why china waited so long before joining the wto.

imagine that.

ursa negro on November 26, 2009, 10:16 am

i am just a little curious. it is common knowledge that a complete removal of all protectionism cannot be implemented by virtue of the fact that pure capitalism does not exist. so which protectionist measures would Gordhan remove? what support would there be for industries that have been reliant in them?

If no protectionist measures were removed, but rather that some measures were relied on to a lesser extent than is the status quo, would that satisfy the problem of protectionism, or be a compromise that would not be much of a difference?

Tumi Ramafoko on November 26, 2009, 4:45 pm

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Gordhan: Protectionism a risk to global growth

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