Remarks by President Zuma at the G20 Working dinner
26 June 2010
Let me begin by recognising the efforts of world leaders in responding efficiently to the global economic crisis that has affected all our economies.
These efforts have done much to avert an even deeper global recession. They have resulted in the stronger signs of recovery that we are seeing today.
As Africa we bring to the G20 Summit the key message that we must, together as the developing and developed worlds, promote stronger and more effective and equal international partnerships for growth and development.
Africa is open to meaningful partnerships and engagement towards ensuring sustainable development, and to meet the United Nations Millennium Development Goals.
This evening, I would like to make five points that I believe will help us in promoting the equitable growth we seek:
Firstly, it must be noted that the Sub Saharan region has remained resilient despite the financial crisis.
Most countries in the region were able to protect pro-poor and pro-growth public spending.
However, more than a third of countries in Sub-Sahara Africa remain on the periphery of international capital markets and thus dependent on official forms of external financing, from the IMF and multilateral banks.
That is why we call for this forum to take the voice of the developing world seriously in the development and implementation of new financial standards and rules.
The second point is that the decision we took as the G20 in Pittsburgh to provide fiscal support to our economies to lift the world economy out of recession was correct and timely, and it worked.
However some of the measures we took had unintended consequences. This is because they were inward-looking and therefore displayed protectionist features.
We must guard against protectionist policies and political pressure to maintain financial support to domestic industries indefinitely.
The other is pressure to impose more stringent conditions on the financial sector. We must resist these protectionist tendencies.
The third point is that there is a concern that volatile capital inflows into some emerging economies could result in high prices that cannot be justified by economic activity.
This is largely a consequence of low interest rates in advanced economies, contrasted with higher interest rates in emerging markets.
The fourth point is that exits from current fiscal and monetary support measures must be dependant on the prevailing economic circumstances of the member countries.
Actions agreed to here in Toronto must be country-specific with timetables determined by country conditions.
We promote exit strategies that take into account the potential impact on smaller, emerging market economies.
What is more important is for G20 members to set national fiscal consolidation paths over the medium term.
In South Africa, we have set a three year fiscal consolidation path, following a substantial economic stimulus that we provided to assist the domestic recovery.
Over the medium term, as tax revenues recover and spending growth moderates, the deficit will be reduced to more sustainable levels.
We project a decline in the deficit from 6.7 percent of GDP this year to 4.1 percent in 2012.
Lastly, to recover the ground lost in the achievement of the Millennium Development Goals, the G20 needs to be instrumental in promoting equitable growth across the world.
Africa, with its one billion people market offers very good opportunities for investments that could lead to growth.
The world markets need to take advantage of such opportunities.
With the changing economic landscape and the growth of the emerging markets of the South, Africa is no longer dependent only on the developed North.
What we are asking for is within our rights, it is not privileges.
That is why we call for meaningful equal partnerships so that we can enhance cooperation.
We look forward to fruitful discussions during this Summit.
I thank you.