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The South African government in it's infinite wisdom is looking to go to the International Monetary Fund for a loan. Here's a summary of what happened in Greece when that country did that
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In 2010, after going int recession with the rest of the world, Greece approached the European Union and IMF for some money. They received a total of $330 billion.
This money came with conditions as follows:
They had to cut 15,000 public-sector jobs
loosen their labour laws to make it easy to dismiss workers
lower the minimum wage by 20%...
They had to cut 15,000 public-sector jobs
loosen their labour laws to make it easy to dismiss workers
lower the minimum wage by 20%...
The government also had to freeze and cut salaries for any remaining public sector workers. Bonuses were either cut or scrapped. In the private sector, the legal maximum number of people companies could retrench each month was doubled
The retirement age was increased. This was done by introducing a requirement that a person must work for 40 years before qualifying for full pension. Pensions were also adjusted so that they now reflect a worker's average working pay rather than their final salary.
Vat was increased by 2%. Other taxes were increased by 10%. The public sector was to be shrunk through other means, such as retrenchment of workers and the privatisation of state-owned companies. The IMF and Eurozone further demanded budget cuts of 325m euros
Some of these measures may seem reasonable, that is until one looks at how they affected the people. For example, unemployment went from 12% in 2010 to about 28% in 2015, with youth unemployment exceeding 60%
In 2013, Greeks were 40% poorer than they were 5 years earlier, despite the IMF loans. By 2014, they were poorer than they were in 2003. By 2015, a third of the population was classified as poor or 'at risk of poverty or social exclusion'.
Major depression rose from 3% to 8% of the population by 2011. The suicide rate rose by 35% between 2010 and 2012. Researchers found that suicides among those of working age coincided with the IMF-mandated government austerity measures.
It should not be hard to see what the IMF will demand for their money. The first time SA went to the IMF in the 90s, they were told to do away with their Social Programmes & privatise, which led to an 8% rise in unemployment & the end of manufacturing sector in the country.
