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Sapa-AP

International condemnation of the latest US stimulus plan was surprising, a top US government financial official said yesterday during a visit to South Africa.

Last week Finance Minister Pravin Gordhan was among those criticising the US plan to buy $600 billion (R4.1 trillion) worth of government bonds to make loans cheaper and get Americans spending.

Gordhan said the dollars would flow into developing countries’ financial markets, increasing the strength of their currencies with devastating consequences for their exports.

“I was surprised by some of the reaction,” said Fred Hochberg, the chairman of the US Export-Import Bank. “This is an effort to make sure the American economy remains strong.”

Hochberg said US consumers had for some time been “the engine that has driven the world’s economy”.

China, Germany and Brazil have also said the US move could harm the world, though Beijing said it was understandable given the slow recovery.

The debate comes ahead of a Group of 20 (G20) summit in Seoul at which the US and the world’s other major economies will discuss reducing trade and current account gaps.

Gordhan said the decision by the US “undermines the spirit of multilateral co-operation that G20 leaders had fought so hard to maintain during the current crisis”.

Hochberg’s bank is a US federal credit agency charged with increasing US exports. It gives loans to help American firms doing business abroad.

Hochberg arrived in South Africa yesterday for two days of talks on funding US participation in transportation and power projects.

He said countries like South Africa were well-placed because of their strong currencies to invest in infrastructure, which often required imports.

South Africa’s “economy has been growing notwithstanding an impaired infrastructure”, Hochberg said, adding that the growth would be even more robust if electricity supplies were stable and improvements were made in the road, rail and port network needed to get goods to export markets.