Charity begins at home

President Jacob Zuma had committed $2 billion of South Africa's reserves to the IMF at the G20 summit, a meeting of the world's greatest economies, in Los Cabos, Mexico.


These funds will remain part of our foreign reserves, currently standing at just under $48 billion. 


Participating countries with no way out of a financial crisis would be able to access these funds through a temporary loan, with conditions.

The funds were committed based on the premise that South Africa's voting power and quota shares in the IMF would be reformed, as agreed to in 2010. It now seems we have to pay to get what was already agreed upon 2 years ago. 

Cosatu has demanded to know which ANC conference resolutions gave the government a mandate for such a contribution to the IMF. It is not clear whether even the ANC (national executive committee) was even consulted over the decision.

In an announcement late Monday, the IMF said China was offering $43bn, Brazil, Russia, India and Mexico $10bn each, $5bn from Turkey, and smaller sums from a handful of other up-and-coming economies. 

China's contribution was the most keenly awaited. The world's second-largest economy has the largest pile of foreign reserves, $3.2 trillion. Although this seems like an enormous of amount of money the reality is that it equates to just over 1.3% of their foreign reserves whereas South Africa's commitment is almost 4% of our total reserves. Someone has to relook at their maths before we jump in boots and all.

China's contribution fell below only Japan's $60bn and German's $54.7bn, but was ahead of France and all other donors. 

The largest economy, the United States, is not contributing, despite its huge voting power on the IMF board. 

While Washington has insisted Europe has enough resources to resolve its problems itself, it is also clear that the deeply divided Congress is in no mood, given the US economic problems, to contribute rescue funds for others. 

I personally think the United States has it right. Charity begins at home. With 24% official unemployment and nearly 50% of the population living in poverty do we really have the right to commit funds from our piggy bank when so many of our own people are living on the breadline.

If the $2 billion is so easily allocated, then maybe we could have avoided the e-tolling debacle and paid off some of our own bills.