A South African government minister has warned that auto industry bailouts in rich nations could harm the economies of developing countries.


Reuters reported that South Africa’s Deputy Trade and Industry Minister Rob Davies has said that the vast sums of money being made available to rescue industries in advanced countries were far beyond anything that developing countries could contemplate.


“We need to make sure that those disbursements do not mean that if there is going to have to be job layoffs, plant closures, these will fall disproportionately on plants and branches in the developing world,” Davies told Reuters after a lecture at Geneva’s Graduate Institute.


South Africa’s auto industry has already been hit by a slump in demand at home and abroad, with exports declining sharply this year following growth in 2008.


Davies said that South Africa has already shed 36,500 jobs in the auto sector and in mining between July and February.


He said the industrial bailouts now under discussion in countries such as the United States and France were not classic counter-cyclical spending to deal with a downturn, but subsidies to support particular industries which could have the effect of determining where factories remain open and where they shut, Reuters reported.