President Jacob Zuma criticised the rating agencies in Parliament yesterday and accused them of inconsistencies in their approach to evaluating economies showing a bias to those in Europe as compared to developing countries.
Zuma said while the government took the agencies and their work “very seriously” because it was one of the mechanisms it used to evaluate its work; there were concerns about how the rating agencies were operating.
He was answering questions in the National Council of Provinces.
ANC MP Boingotlo Nthebe asked Zuma about the thinking behind the establishment of the Brics’ own rating agency.
Zuma said the Brics association of countries – Brazil, Russia, India, China and South Africa – had decided to discuss this matter of rating agencies and felt it was necessary to have their own agency, partly because the manner in which the rating agencies have operated so far “leaves some concerns particularly to developing countries”.
“Members will appreciate that the concentration of rating doesn’t seem to be well balanced according to view of Brics,” said Zuma.
He said: “For example there is less said in countries that are faced with difficulty since the global meltdown. We don’t hear all the time, ratings being made on them.
“You know, for example, that the entire Europe has been in difficulties for a long time, there are no rating agencies that visit those countries from time to time to rate them. But if the developing countries have difficulties; they come, rate, make public statements continuously,” said Zuma.
Zuma said despite China being the second biggest economy in the world, there was a lot more negative stuff said about that country than other big countries.
He said this was besides the fact that the views of the economists in the world were not exactly the same and that some people who were part of the rating agencies were in some cases, from a particular school of thought.
Zuma said the Brics countries were “very prominent” in their regions “and they therefore think that they need a rating agency that will be moving from the understanding and the philosophy of these countries as to how the economy should be”.
He said this was the reason the Brics countries have taken a decision that they could rate themselves and perhaps rate others as well in addition “so that a complete balance view is indeed taken into account when ratings are made”.
The Brics countries announced at the end of their eighth Summit in India last week that they were planning to set up an independent rating agency
Zuma’s appearance in Parliament began in the usual fashion; EFF MPs seeking to block him from addressing the House.
EFF MP Tebogo Mokwele was the first up, as soon as Zuma begun his responses, to object to the president’s address saying he was “not honourable enough” to address MPs.
Mokwele said Zuma undermined the Constitution, lied to Parliament and violated his oath of office.
Mokwele was supported by other EFF MPs who, one after the other rose on a point of order. In the end, the EFF MPs were dragged out of the House by parliament security, with one member, Younus Vawda, voluntarily walking out.