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DEPUTY MINISTER OF FINANCE, DR DAVID MASONDO WARNS AGAINST DEBT STEALING FROM THE POOR AT DUT’S DEBT RELIEF WEBINAR

DEPUTY MINISTER OF FINANCE, DR DAVID MASONDO WARNS AGAINST DEBT STEALING FROM THE POOR AT DUT’S DEBT RELIEF WEBINAR

The Durban University of Technology (DUT) in collaboration with the Gandhi Development Trust, Active Citizens Movement, The Institute of Healing Memories, Religions for Peace South Africa and the Ahmed Kathrada Foundation hosted a two-hour webinar under the theme: Societal Impact of COVID-19 and Debt Relief Campaigns on Zoom yesterday evening, Wednesday 8 July 2020.

Leading this online session was Dr Vasu Gounden, a trustee of the Gandhi Development Trust. This webinar was attended by esteemed guests including the Deputy Minister of Finance, Dr David Masondo, Professor Prabhat Patnaik, Economist and Political Commentator, CEO of Nelson Mandela Foundation, Mr Sello Hatang, Dr Ela Gandhi of the Gandhi Development Trust and various church leaders.

Representing DUT, was Professor Sibusiso Moyo, Deputy Vice-Chancellor: Research, Innovation and Engagement.

In her speech, Prof Moyo said DUT is very happy to partner with the Gandhi Development Trust, Active Citizens Movement, The Institute of Healing Memories, Religions for Peace South Africa and the Ahmed Kathrada Foundation to bring this seminar to life.

“This dialogue is very important at this time, with the COVID-19 pandemic. What it means in terms of debt relief for countries, especially African countries which usually suffer the most in terms of debt. In discussions with Dr Ela Gandhi and our partners one of the things we wanted to do is to make sure we publicize widely this campaign around COVID-19 and debt relief, to respective organisations to gain support and momentum,” said Moyo.

Furthermore, she said they aim to look at poverty levels as to what it means for youth, over 70% are out of school learning remotely but in some parts of the world they cannot have access to education.

Moyo added that moving forward, they are looking at collaborative work, on the education front, coming from higher institutions, she said they need to ask themselves what role they can play to assist education institutions and society at this time.

“At DUT we have been trying to help with frontline workers producing products, in terms of masks and also protective wear to reduce the spread of the pandemic. That is not enough, we know that economically, we know students might struggle to pay fees as their parents might lose jobs or have lost jobs because of the change and the impact of the pandemic. The World Bank did predict that the economic activities in Sub-Saharan Africa is expected to drop by 3% in 2020, which will be the sharpest decline on record,” said Moyo.

Deputy Minister of Finance, Dr David Masondo mentioned that he had to step out of Parliament in order to engage on the topic and had to excuse himself from the dialogue after his presentation.

Masondo acknowledged Prof Patnaiks great work, mentioning that he had read a lot of his work, including the issue around Imperialism.

“The debt issue has been rising even before COVID-19. The World Bank study which was titled Global Ways of Debt Causes and Consequences, it estimates that the debt is 230% of the GDP, that was in 2018. The COVID-19 has just worsened the debt situation. In our country in South Africa our debt to GDP was 60% and we project that it will grow to 80%. The study shows that for the last 50 years the debt has been increasing. I think the debt has not only been increasing for government but also for companies and households for the last 50 years because of the falling profit rates, companies have been forced to borrow more and because of the productive sector of the economy, the profitability has been declining,” said Masondo.

He said there has been a shift towards finance, which is why a lot of people have been talking about SA’s economy being financed.

He stressed that it is not by accident that in the country, if you look at the GDP composition, finance has been increasing compared to other sectors of the economy.

“The falling real wage, has forced workers who are employed to borrow more. If you look at households’ debt has been growing as opposed to their assets. The economy has not been growing, the profits has been declining, the government has been forced to borrow more. Why should we worry about the debt? If you look at the debt within countries, as this debt is increasing, governments are forced to shift expenditure from basic services, infrastructure of poor communities to servicing the debt,” said Masondo.

Prof Patnaik said that concept of debt cancelation requires absolute urgency.

“If you take the total debt of the 77 poor countries, the total debt is R750 billion dollars, the total GDP of G20 countries is R78 trillion dollars. The debt of the 77 countries is less than 1% of the GDP of the G20. The debt write-off is going to make the countries of the south strong, powerful to resume their growth process,” said Patnaik.

Nelson Mandela Foundation CEO, Hatang touched on the role of civil society to ensure that funding that is made available is spent in the right way. He said COVID-19 has exposed the global realities, especially inequality.

“COVID-19 has hold the mirror so close to our faces to say this abnormal. You cannot have so few with so much and so many with nothing. Those who are poor did not start now, they have always been poor. We have ignored them but COVID-19 is saying deal with them. The first thing we need to do as civil society is to be accountable to self, be more transparent,” said Hatang.

In recent times, he said it was heart-breaking to see that the funds allocated to COVID-19 relief has not been going there, leaving the poor suffering.

In closing, the lifelong champion of the poor, Dr Gandhi thanked the speakers for the important factors they brought to the table and expressed that this is an ongoing campaign.

Gandhi said the next step would be for the partner organizations to come together to look at the gender issue, justice, corruption, flight of capital, to see how they can bring all this together to increase their knowledge on what is happening.

She urged the religious leaders to use the information from these sessions in their services so that this information could reach as many people as possible.

Pictured: Some of the speakers who shared their knowledge at DUT’s debt relief webinar

Simangele Zuma

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