||National planning minister Trevor Manuel is apparently being considered as co-chair of the global Green Climate Fund. This week in Mexico City, he helps design what will be the world’s biggest-ever replenishing pool of aid money, responsible for a promised $100 billion of annual grants by 2020, more than the International Monetary Fund (IMF), World Bank and allied regional banks put together.
The fund is now in the hands of an interim three-year trustee, the World Bank, and like the Global Environmental Facility that mainly supports conservation projects, it may remain there.
This prospect enrages civil society’s Climate Justice lobby. In a major study, Friends of the Earth International this month attacked the Bank’s increased coal financing ($3.75 billion for Eskom a year ago) and promotion of counterproductive carbon trading.
Manuel chaired the Bank and IMF Board of Governors in 2000, as well as the Bank’s Development Committee from 2001-05. He was United Nations Special Envoy to the 2002 Monterrey Financing for Development summit, a member of Tony Blair’s 2004-05 Commission for Africa, and chair of the 2007 G-20 meetings. Manuel was appointed UN Special Envoy for Development Finance in 2008, headed a 2009 IMF committee that successfully advocated a $750 billion capital increase, and served on the UN’s 2010 High Level Advisory Group on Climate Change Finance. No one from the Third World has such experience, nor has anyone in these circuits such a formidable anti-colonial political pedigree.
Despite periodic rhetorical attacks on “Washington Consensus” economic policies (part of SA’s “talk left walk right” tradition), since the mid-1990s Manuel has been loyal to the neoliberal, pro-corporate cause. Even before taking power in 1994, he was named a World Economic Forum “Global Leader for Tomorrow,” and Euromoney magazine judged him African Finance Minister of the year in 1997 and 2007.
However, his Washington-friendly economic policies failed. As trade minister from 1994-96, Manuel’s extreme trade liberalisation demolished the clothing, textile, footwear, appliance, electronics and other vulnerable manufacturing sectors, as he drove tariffs below what even the World Trade Organisation demanded.
Just after moving to the finance ministry in 1996, he imposed the “non-negotiable” neoliberal Growth, Employment and Redistribution policy (co-authored by World Bank staff), which couldn't achieve a single target aside from inflation.
In 1999, Manuel’s decision to allow the country’s biggest corporations to move their financial headquarters to London assured a ballooning current account deficit. That in turn required Manuel to arrange such vast financing inflows that the foreign debt soared from the $25 billion inherited during apartheid to $80 billion by early 2009.
At that stage, The Economist named South Africa the most risky of 17 emerging market peers. “We are not in recession, Manuel quickly declared. Although it sometimes feels in people's minds that the economy is in recession, as of now we are looking at positive growth. Yet at that very moment, February 2009, the SA economy was shrinking by a stunning 6.4 percent (annualized), and indeed in retrospect, had been in recession for several months.
Given his bias and miserable record, many within SA’s community, labour, environment and AIDS-treatment movements would be happy to see the back of Manuel. His own career predilections may be decisive. Often suggested as a candidate for the top job at the Bank or IMF, Manuel recently confirmed his disgust with the way governing evolved after Jacob Zuma booted Thabo Mbeki from the SA presidency.
In a public letter last month, for example, Manuel told Zuma’s main spokesperson, Jimmy Manyi, “your behaviour is of the worst-order racist” after a (year-old) incident in which Manyi, then lead labour department official, claimed there were too many coloured workers in the Western Cape in relation to other parts of SA. Manyi had earlier offered a half-baked apology, but suffered no punishment.
Manuel’s disillusionment apparently began in December 2007, just prior to Mbeki’s defeat in the African National Congress leadership vote at Polokwane. After his finance ministry job was threatened by Zuma assistant Mo Shaik’s offhanded comments, Manuel penned another enraged open letter: “Your conduct is certainly not something in the tradition of the ANC… You have no right to turn this organisation into something that serves your ego.”
In mid-2009, Shaik – whose brother Schabir was convicted of corrupting Zuma in the infamous R43 billion arms deal – was made head of the SA intelligence service and Manuel was downgraded to a new, resource-scarce, do-little planning ministry.
It is easy to sympathise with Manuel’s frustrating struggle against ethnicism and cronyism, especially after his targets’ apparent victories. However, former ANC MP Andrew Feinstein points out that Manuel knew of arms-deal bribes solicited by the late defense minister Joe Modise. In court Feinstein testified (without challenge) that in late 2000, the finance minister advised him to halt his corruption probe, saying, “It’s possible there was some shit in the deal. But if there was, no one will ever uncover it. They’re not that stupid. Just let it lie.”
Nevertheless, the myth of Manuel’s finance wizardry and integrity continues. And after all, systemic politico-moral and economic scandals by World Bank presidents Paul Wolfowitz and Robert Zoellick suggest that global elites are already scraping the bottom of the financial leadership barrel.
Yet it is tragic that as host for the 2011 world climate summit, SA leads the (non-petroleum) world in carbon emissions/GDP/capita (twenty times higher than even the US), and that Manuel’s last budget countenanced more than $100 billion for financing new coal-fired and nuclear power plants in coming years.
Manuel's leadership of the Green Climate Fund adds a new quantum of risk. Indeed his history of collaboration with Washington-London raises the prospect of “default” on the North’s payment of its climate debt to the South. If Pretoria’s leading friend of the Bretton Woods Institutions pushes more money into the World Bank, we will all suffer what might soon be called subprime carbon finance, and hence bankrupt climate-change mitigation and adaptation.
(Patrick Bond is with the UKZN Centre for Civil Society.)