South African Finance Minister MR Trevor Manuel has responded coolly to a plan by the leaders of the Group of Eight industrialised nations to help reduce the debt of the world's poorest countries, announced during their summit in Cologne at the weekend.
The primary reason for Mr Manuel's cautious reaction is the proposal to finance it through the sale of 10-million ounces of gold by the International Monetary Fund, a move which he fears will have a detrimental impact on South Africa's gold industry.
With the mining industry already hit by the falling price of gold, precipitated by Britain's announcement of its intention to sell half its gold reserves, Mr Manuel fears that further sales will reinforce the downward trend with potentially disastrous consequences for the industry.
Since the beginning of May, when Britain first declared its intention to sell a major proportion of its reserves, the price of gold has dipped from nearly $290 an ounce to under $260 an ounce.
Mr Manuel's attitude must be seen in the context of a steady decline in number of employees in the gold mining industry. Since the mid-1980s it has plummeted from the 500,000-plus mark to below 300,000, a process which has moved in tandem with the steady fall in the dollar price of gold.
Retrenchments have been kept at a low level in recent months by productivity deals between mining corporations and the National Union of Mineworkers and by restructuring in the industry which has seen amalgamations and the emergence of huge corporations.
But there is palpable anxiety that closure of shafts, if not of mines, will be inevitable if the price does not improve or continues to fall.
The spectre of massive retrenchments in a country which already has a serious unemployment problem is beginning to haunt politicians, mining magnates and trade union leaders and miners themselves.
Mr Tony Twine, of Econometrix, contextualises the implications of large scale retrenchment: "In general one wage earner feeds eight mouths. In the mining industry the ratio is probably worse."
As a country which is classified as an "upper middle income" rather than a developing nation by the World Bank, South Africa would not be a beneficiary under the G8-IMF debt relief plan. Thus, there is no potential benefit for South Africa to offset the adverse economic cost which South Africa is likely to incur as a major gold-producing country if the plan is implemented as it stands.
The South African government has no desire, however, to be categorised as a nation deserving of debt relief. Though government debt is fairly substantial - about 55 per cent of GDP - only a minute 5 per cent of it is foreign debt. Thus, South Africa would gain little if it were included as a country worthy of forgiveness under the G8 plan.
As economic analyst Mr Rolf Gous points out, Mr Manuell and Finance Director-General Ms Maria Ramos, have no desire for South Africa to classified as country deserving of debt relief.
