Shaun Benton
13 September 2006
South Africa is preparing to take over the chair of the Group of Twenty (G20) from Australia in 2007.
The G20 is a forum of developing and developed countries that discusses the global financial system and plays an increasingly important role in world trade negotiations.
The 20 countries/regions that comprise this informal forum, through their finance ministers and central bank governors, represent two-thirds of the world's population and 85% of the world's gross domestic product.
The members are: Australia, Argentina, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa, Saudi Arabia, Turkey, the United Kingdom, the United States and the European Union. Heads of the International Monetary Fund and the World Bank are also present at G20 meetings.
Reform agenda
South African Finance Minister Trevor Manuel says the reform of the Bretton Woods
financial institutions - which include the International Monetary Fund (IMF) and the World Bank - has been placed on the G20 agenda by the current chair, Australia, and that South Africa will take this forward when it assumes the chairmanship next year.
Manuel and visiting Australian Treasurer Peter Costello were addressing the media after holding discussions in Cape Town on Monday.
Their meeting comes ahead of key meetings of the IMF and World Bank in Singapore this weekend, which both ministers will be attending.
Energy security
Another key G20 issue, Manuel said, was energy security - which was on the agenda of the 2006 G8 summit in St Petersburg, Russia in July.
Manuel said that global imbalances in energy supply and demand were "shaped by the fact that countries which are demanding more oil and petroleum products don't have it, or don't have sufficient, and there are the countries which have it in abundance and don't require it."
A "series of security issues" flowed directly from these imbalances, Manuel said.
Costello said those countries that were large importers of energy needed to be assured of continuity of supply, and that the trading system was sufficient to ensure liquid markets "at reasonable prices", which was key to avoiding confrontation over scarce resources.
Costello welcomed the fact that the oil price "seems to have stabilised," but indicated that with oil prices being largely driven by demand, this would continue to affect pricing, and thus there needed to be continued investment to boost global supply.
Climate change
Climate change will also feature in G20 discussions in 2007, Manuel told reporters, adding there was concern around carbon emissions from rapidly growing countries like China, which is set to receive the bulk of funds from the Global Environment Facility.
Another two issues that South Africa will put on the G20 table are international financial stability - which Manuel described as "a global public good" - and "fiscal space", especially for the world's poorer countries, which have limited options around state spending.
Countries with smaller revenue bases were battling to meet their Millennium Development Goals, Manuel said, adding that development and growth should not be dependent on the "whim of the donor".
Related to this, Manuel said, were certain financial trends. "Will wealthy countries merely dredge poor countries of their skills and finance?" he asked, adding that a better understanding of this would be in the interests of the world.
Climate change
Costello left South Africa on Tuesday after a three-day visit during which he examined development challenges facing the region, engaged with donor and business communities and visited Australian-funded aid projects.
On Monday, he announced that Australia would be contributing a further R120 000 to the Matie Community Service Clinic in Khayamnandi near Stellenbosch in the Western Cape, which he visited with Manuel.
Source: BuaNews
