24 December 2008

One of the Consequences of the Financial Meltdown

Is that it has shown to the world that the Neoliberal economic policies of the IMF and world bank are not applied to Europe and the US.

As such, the parties in power in many parts of the world are becoming far less receptive to "soak the poor" policies that have been foisted upon them by international institutions like the IMF and World Bank.

We are the fruits of that revalation going on in South Africa right now, where South African labor unions have extracted changes in policies from the ruling ANC.

The Congress of South African Trade Unions (COSATU) is getting commitments to poverty reduction in exchange for their support of Jacob Zuma in his confrontation with Thabo Mbeki, and now they want a change in focus for the next government.

Of course, moneyed interests are not amused:
Investors fear the left has gained influence over the African National Congress in the past year and believe it might pressure the government to ditch policies that helped spur nearly a decade of growth in Africa's biggest economy.
Of course those policies haven't benefited a majority of the population. The argument is that by keeping social programs sparse, and any minimum wage low, that growth would eventually trickle down.

It hasn't in South Africa, or anywhere else.

In fact, what is arguably the best example of a formerly poor society becoming well off, Singapore.

Its leader in its formative years, Lee Kwan Yoo, made it clear to its capital class, that it would be unacceptable to take it all, that some of the profits had to find its way to everyone.

Fundamentally, if South Africa wants to follow this path, we aren't talking going Sweden. Simply by raising the minimum wage, improving the access to health care, and making sure that public school is free, available, and universal, you can improve the lot of everyone.


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