3 April 2009
The South African government welcomes the broad display of unity and
commitment by leaders of the G20 to restore global growth and build the
foundation of a sustainable, balanced and inclusive recovery into the
future.
The South African delegation, led by President Kgalema Motlanthe, presented
four points for consideration at the G20 London Summit which took place on 2
April 2009. These are: stabilising global finance, countering the global
recession; deploying resources to support demand and sustaining investment in
developing countries and laying the foundation for a sustainable recovery.
The G20 communiqué provides a road map that requires a global solution to
the greatest challenge that faces the world today. Since the last G20 Summit,
governments have taken action across a broad front, inspired by the commitments
we made together on 15 November 2008 in Washington. However, these actions have
not been well co-ordinated and have not yet achieved the needed
breakthrough.
The London Summit starts from the belief that for growth to be sustained it
has to be shared; and that the global plan for recovery must have at its heart
the needs and jobs of hardworking families, not just in developed countries,
but in emerging markets and the poorest countries of the world too. The Summit
also provides that our global response must reflect the interest, not just of
todayâs population but of future generations too.
The Summit pledged, amongst others, to restore confidence, growth and jobs;
to repair the financial system so as to restore lending; strengthen financial
regulation; fund and reform our international institutions; and to promote
global trade and investment and reject protectionism.
South Africa supports agreements reached, and these include trebling the
resources available to the IMF to $750 billion and supporting a new Special
Drawing Rights (SDR) allocation of $250 billion. Also agreed upon was
supporting at least $100 billion of additional lending by the Multilateral
Development Banks, ensuring $250 billion for trade finance and using additional
resources from agreed IMF gold sales for concessional finance for the poorest
countries. These measures constitute an additional $1,1 trillion of support to
restore credit, growth and jobs in the global economy.
The Summit acknowledged that the major failures in the financial sector and
in financial regulation and supervision were the fundamental causes of the
crisis, and that a focus on rebuilding trust is crucial to restoring confidence
in the global financial system. A declaration was agreed upon to strengthen the
financial system, which includes the establishment of a new Financial Stability
Board. It is crucial that countries accept that for this process to work, a
concerted and collaborative effort is required. These new efforts at
strengthening global regulation should be linked to a strengthened multilateral
centre where collaborative and inclusive approaches can be built.
The strengthening of global financial institutions was also highlighted as
imperative to global confidence and economic recovery. The summit agreed upon
making available $850 billion of resources through these institutions, to
support growth in emerging markets and developing countries, by helping to
finance counter-cyclical spending, bank recapitalisation, infrastructure, trade
finance, balance of payments support, and social support.
The summit undertook to reform the mandates, scope and governance of the
global financial institutions to reflect changes in the world economy. In
particular, emerging and developing economies, including the poorest, must have
greater voice and representation.
Reinvigorating world trade and investment is another factor seen as
essential to restoring global growth. The summit agreed to ensure that the
historic mistakes of protectionism in previous eras will not be repeated. It
reaffirmed the commitment made in Washington, to refrain from raising new
barriers to trade or investment, imposing new export restrictions, or
implementing World Trade Organisation (WTO) inconsistent measures to stimulate
exports.
The summit also reaffirmed historic commitments to meeting the Millennium
Development Goals, and to achieving respective Overseas Development Aid (ODA)
pledges, especially to sub-Saharan Africa. This includes commitments on Aid for
Trade, debt relief and the Gleneagles commitments. These measures are seen as a
positive global action in addressing the global financial crisis and are
welcomed by South Africa.
For more information please contact:
Thoraya Pandy
Cell: 082 416 8416
Thabo Masebe on
Cell: 082 410 8087
Issued by: National Treasury
3 April 2009
