WeeklySA_AdminEqual: For nations to flourish, equality and prosperity must be available to everyone regardless of gender or race
By Monk Nkomo
The erosion of multilateralism has presented a threat to global growth and stability at a time of global uncertainty and escalating tension which now called for members of the G20 to work together, according to President Cyril Ramaphosa.
He was addressing the G20 Finance Ministers’ and Central Bank Governors’ meeting under South Africa’s G20 Presidency at the Cape Town International Convention Centre .
‘’Multilateral cooperation is our only hope of overcoming unprecedented challenges, including slow and uneven growth, rising debt burdens, persistent poverty and inequality, and the existential threat of climate change’’.
Ramaphosa said just under a week ago, G20 Foreign Ministers met in Johannesburg to share perspectives on the global geopolitical environment and outline the priorities and tasks of the G20 Sherpa Track for 2025.
The meeting of foreign ministers reaffirmed the role of the G20 as the premier forum for international economic cooperation.
At this time of heightened geopolitical contestation , a rules-based order was particularly important as a mechanism for managing disputes and resolving conflict.
‘’As the G20, we need deliberate and coordinated efforts to focus on inclusive growth based on responsive trade and investment to grow the incomes of poor nations and the poorest in society. We need to ensure equal access to opportunities, especially for women and young people. For nations to flourish, equality and prosperity must be available to everyone – regardless of gender, race, religious beliefs or economic status. The pursuit of equality is an imperative for wealthy and poor countries alike’’.
That is why South Africa had placed solidarity, equality and sustainability at the centre of its G20 Presidency.
This meeting underscored the collective responsibility of the G20 for the effective stewardship of the global economy, fostering the conditions for sustainable, resilient and inclusive global growth, as a critical element of the broader multilateral system. It will provide further substance and strategic direction in advancing this collective responsibility.
The G20 Finance Track had been playing this vital role for 25 years.
Ramaphosa added : ‘’At crucial points in our recent history, it has been able to galvanise actions with significant impact. It was this forum that in 2008 engineered the world’s response to the global financial crisis and mobilised the necessary financial support to enable the recovery. It was this forum that in 2008 engineered the world’s response to the global financial crisis and mobilised the necessary financial support to enable the recovery’’.
The G20 played an important part in responding to the Eurozone crisis and in maintaining global financial support and stability during and in the aftermath of the COVID-19 pandemic. This is a forum which had created the current global financial safety net, with the IMF at its core, and whose stewardship had proved critical to global stability for a quarter of a century.
This meeting of G20 Finance Ministers and Central Bank Governors, like those that have come before, carried a weighty responsibility.
‘’It needs to forge consensus on the actions we must take collectively to build a global economy that is more resilient, more sustainable and more equal. As it has done in the past, it needs to raise its level of ambition to achieve specific, concrete and impactful outcomes with lasting consequences. In undertaking this task, the Finance Track needs to work in concert with the Sherpa Track’’.
The success of the G20 over the years, Ramaphosa said, had relied on alignment and collaboration between the two tracks. While each track may have specific areas of focus and expertise and their own working arrangements, they shared a common mission: to enable sustainable, resilient and inclusive global growth.
The G20 was founded on the principle of cooperation. It is vital to ensuring that the rights and interests of the vulnerable were not trampled beneath the ambitions of the powerful.
‘’We are not moving quickly enough or boldly enough to address these global challenges. We must collectively target a step-change in our efforts to improve the lives of all of our people and to protect future generations’’.
Ramaphosa said one of the greatest impediments to growth, development and stability, was the persistence of inequality within and between countries. The pursuit of the UN Sustainable Development Goal on reducing inequality is as much of an economic imperative as a social imperative.
In line with the original mandate of the G20 to promote strong, sustainable, balanced and inclusive growth, South Africa had identified four priorities for its G20 Presidency.
The first priority was to take action to strengthen disaster resilience and response. The increasing rate of climate-induced natural disasters was disproportionately affecting countries that could at least afford the costs of recovery and rebuilding.
Ramaphosa noted that when repeated disasters lead to widespread damage of infrastructure, economic activity was disrupted and livelihoods were destroyed. Innovative financing and insurance mechanisms must be put in place by the global community – including international financial institutions, development banks and the private sector – to scale up funding for disaster prevention and post-disaster reconstruction.
The second priority was to ensure debt sustainability for developing economies. In recent years, low- and middle-income countries had seen their levels of sovereign debt and the cost of servicing that debt rose substantially. The combined external debt stock of low-income countries more than doubled in the decade to 2022. Debt service costs were increasingly crowding out spending on education, healthcare and other social services, as well as infrastructure needed for economic development.
The work of the International Financial Architecture Working Group and other working groups would be particularly important in improving the Common Framework for Debt Treatment, accelerating the reform of multilateral development banks and strengthening capital flows to emerging markets.
‘’Our G20 Presidency will be addressing the high cost of capital faced by developing economies as one of the main barriers to sustainable growth.’’
Ramaphosa said he had the honour of meeting seven former African Heads of State and Government last week who had started the African Leaders Debt Relief Initiative. This initiative focused on the challenges that many African countries were facing in servicing their national debt.
‘’They would like to see greater urgency in addressing the debt and solvency challenges many countries face and determine clear solutions to mobilise low-cost financing for development. I welcome and support their endeavours’’.
