G20: greater cooperation required
Bathandwa Mbola and Chris Bathembu
3 April 2009
Greater cooperation and collaboration is now required by leaders of the G20 to restore global growth, especially on the African continent.
On his return from the G20 Summit, Finance Minister Trevor Manuel said leaders had demonstrated political will to end the global economic crisis; however, what was needed now was cooperation.
"What we need now is to work together and build the foundation for a sustainable, balanced and inclusive recovery into the future," Manuel told reporters in Pretoria on Friday.
He said a "fair amount" had been achieved at the G20 summit and a global response was now needed.
"What the world was looking for was a global response by the G20. We committed ourselves to that and we feel coming out of the meeting, a fair amount has been achieved."
He said the communique issued by the G20 at the conclusion of the summit provided a road map that requires a global solution to the greatest challenge that faces the world today.
Global recovery plan
The leaders of the world's most powerful economies have pledged $1.1-trillion to restore credit, economic growth and jobs in the world economy.
"Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale," the leaders said in a joint communique issued after the summit.
The communique also agreed to reform the two international financial institutions – the International Monetary Fund (IMF) and the World Bank to assist developing nations.
The meeting further resolved that the emergency resources account of the IMF, which is the emergency lender for nations in financial crisis, will be expanded to $750-billion.
It further agreed that an additional $250-billion will be given for a new Special Drawing Rights - an international reserve asset used by the IMF to supplement the existing reserves of member countries.
According to the communique, $100-billion of additional lending will be given to multilateral development banks as well as $250-billion support for trade finance.
Additional resources from IMF gold sales for finance for the poorest countries were also agreed upon by world leaders. Both IMF and World Bank economists have forecast that the world economy will shrink in 2009 for the first time since World War II.
Manuel emphasised that now that governments had agreed on a plan to restore global growth, it was time for banks to resume lending and enable people to do business.
African representative
As the only African country at the summit, Manuel said South Africa presented four points for the Summit’s consideration in an attempt to restore global growth and development.
These were: 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.
"There were appeals to remember Africa, to make new inroads against poverty, to turn previous aid pledges into reality," he said, adding that there was a commitment to ensure that developing countries received finances particularly in infrastructure.
Manuel said the agreement had also put emphasis on saving jobs and rescuing struggling economies, especially those of poverty-stricken nations.
For South Africa, which has so far avoided a recession, he said the government will not immediately seek loans from the IMF or other world financial institutions, adding that they would only ask for a loan when the need arises.
Source: BuaNews
