The IMF can do what the ANC can't

Mystic Twilight

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Take a look at what happened to Argentina yesterday before you wish for a IMF bailout.

Even if the IMF's "recipe" is correct in any particular case, and the evidence on that isn't great, IMF structural reform programs don't stick if the reforms aren't supported (or at least believed to be necessary) by a reasonable proportion of the population. That would be highly unlikely to be the case in South Africa.
If I understand correctly, Venezuela currently doesn't have an IMF bailout since their previous one was repaid. So the flip-side to becoming Argentina with IMF backing is Venezuela. Damned if you do, damned if you don't.
 

ɹǝuuᴉM

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The IMF will not be approached until the following sources of income to the ANC's trough feeding taxpayer sponsored bowls are depleted:
PAYE
VAT
NHI
Prescribed Assets
Customs Duties
Licensing Fees
Transfer Duties
SARB Printing Presses

I highlighted the most important one as the ANC is laying the foundation to ensure your pension funds are used to prop up the failing SOE's under the guise of "social redress/equality". There is a reason the ANC wants their hands on the SARB so badly - they need the SARB to ensure the Prudential Authority is under their puppetry.
Very good post! Some posters fail to see South Africa's "special" status. Keep in mind, in South Africa the majority of economy was 'taken over' from the previous government! The "new" government contribute little to the growth and economic expansion.
 

Nicodeamus

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Take a look at what happened to Argentina yesterday before you wish for a IMF bailout.

Even if the IMF's "recipe" is correct in any particular case, and the evidence on that isn't great, IMF structural reform programs don't stick if the reforms aren't supported (or at least believed to be necessary) by a reasonable proportion of the population. That would be highly unlikely to be the case in South Africa.
That is fair, but at this point I don't see any other option for SA. We have to somehow service our enormous state debt and in the past few years the tax revenues have been less than predicted.
 

JayM

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The IMF will not be approached until the following sources of income to the ANC's trough feeding taxpayer sponsored bowls are depleted:
PAYE
VAT
NHI
Prescribed Assets
Customs Duties
Licensing Fees
Transfer Duties
SARB Printing Presses
They could of course just take money straight out of depositors' accounts. Much simpler.
 

rietrot

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It's a stupid idea to take out another credit card when we've maxed out our existing one.

More bailouts is not the answer. Especially $ denominated ones were we can't inflate out of it. Not that we should specifically try and inflate out of debt.
 

JayM

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It's a stupid idea to take out another credit card when we've maxed out our existing one.

More bailouts is not the answer.
A balance transfer from a 20% card to a 10% one would make sense though...
 

John Tempus

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It is open season for international scalpers from China to the IMF (non profit motive my ass) to rape and pillage SA.

A resource rich country that is in turmoil is the breeding ground to make profit from. Chaos is lucrative.
 

LCBXX

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An IMF bailout will not happen as it would be the signal to the ANC (and SACP) that the NDR has failed. Government would rather split Eskom than accept a bailout, which is what I think investors are eyeballing. First to split would be transmission.
 

rietrot

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Imf loans will be dollar nominated and we will pay it back in rands as we don't have a printing press for dollars. (This is the biggest problem.)

This won't be to settle old debt, like moving a balance over to a cheaper facility. This will be just more bailouts of the SOEs.

Sure the IMF can have rule, t's and c's. Geuss what? We already have rules. Corruption, fraud, theft... It is already illegal.

This is throwing the anc a new shovel to help them dig their hole deaper and they will do it if they think they can skim something off the top.
 

R13...

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It's a stupid idea to take out another credit card when we've maxed out our existing one.

More bailouts is not the answer. Especially $ denominated ones were we can't inflate out of it. Not that we should specifically try and inflate out of debt.
You typically need the IMF when you lack the foreign reserves to pay for imports - that's what happened with Pakistan recently. You can't print your way out of that one unfortunately as Zim and others tried and failed, not sure why the populists in the ANC, their alliance partners and EFF don't see it. Likely because those are the intellectually deficient as there are many people in the ANC and government who understand the process but they get drowned out by the populists. That's why signing up on that nuclear deal would have been suicide but Zuma and his cronies were bent on doing it because they stood to benefit in their personal capacity.
 

rietrot

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You typically need the IMF when you lack the foreign reserves to pay for imports -
If you lack foreign reserves it is because you have been running a trade deficit for too long. It is basically going broke, because you've spend more than you earn.

Sure an IMF loan can give you some access to dollars, but you'll have to pay back the dollars with interest, so we'll have to do something profitable with it. Not bailout eskom.
 

ɹǝuuᴉM

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If you lack foreign reserves it is because you have been running a trade deficit for too long. It is basically going broke, because you've spend more than you earn.

Sure an IMF loan can give you some access to dollars, but you'll have to pay back the dollars with interest, so we'll have to do something profitable with it. Not bailout eskom.
To see that one fact one must have a half functioning brain! Read my lips: You are expecting to much.
 

R13...

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If you lack foreign reserves it is because you have been running a trade deficit for too long. It is basically going broke, because you've spend more than you earn.

Sure an IMF loan can give you some access to dollars, but you'll have to pay back the dollars with interest, so we'll have to do something profitable with it. Not bailout eskom.
Say you use it to bailout Eskom, then make sure you have electricity for industry who make export products to run and earn back dollars which you use to pay back the dollar interests. The IMF will not give you the loan unless you commit to their terms of making sure the loan has a hope of being serviced. Mind you I'm not for IMF loans as they tend to trap you in a debt trap you can never escape.
 

Milano

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All this talk about an IMF bailout; how likely is that to happen in any case though?
Inevitable. The sheer size of the loan required can only be offered by the IMF irrespective of what the repercussions might be. SA could try go it alone but those repercussions will be far worse than any resulting from an IMF bailout. So like it or not an IMF bailout is the best case scenario. Anything else will be worse. There is no good scenario going forward. Too late.
 

Tander

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Inevitable. The sheer size of the loan required can only be offered by the IMF irrespective of what the repercussions might be. SA could try go it alone but those repercussions will be far worse than any resulting from an IMF bailout. So like it or not an IMF bailout is the best case scenario. Anything else will be worse. There is no good scenario going forward. Too late.
Loan required for Eskom and the other SOEs?
 

R13...

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And by the way most SA government debt is Rand denominated.
 
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