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.
Address by President JG Zuma to Plenary Session on the reform of the International Financial Institutions
Toronto, Canada 27 June 2010
We have spoken a lot in the past about the need to speed up the reform of international institutions.
It is time for us, the leaders to take the initiative in regard to the reform of the IMF. We are called upon to provide leadership and the political will to follow through with IMF reform. I would like to make a few quick points on our views on this matter.
Our reform of the World Bank shows that the slow movement on IMF reform is not necessary.
As Leaders we need to demonstrate political will by ensuring that the necessary compromises are reached for us to deliver on our Pittsburgh commitments.
Failure to move regarding the IMF and other urgent reforms of the International Financial Institutions endangers the goodwill earned through the effective action of the institutions in response to the crisis.
The IMF is a quota-based institution. Quotas determine the amount of resources that could be made available by the IMF.
Our strongly held view is that quotas must shift to developing economies as their need for the IMF resources is higher.
The shift must essentially be from developed countries to developing countries. We must ensure that no emerging and low income countries lose quotas as a result of these reforms.
We must play a greater role in providing strategic direction to the IMF.
We must also ensure that an equitable representation is achieved in the Board of the IMF to reflect appropriate regional representation.
This could be achieved through reforming the composition of the Board as was done at the World Bank, to afford an additional chair for sub-Saharan Africa.
We also wish to argue that the appointment of the head of the IMF must be based on merit without regard to nationality or gender.
These institutions belong to all of us. The appointment of the heads from Europe and the USA is a long-standing practice, but it has no basis in the Articles of Agreement.
As Leaders, we must just take this decision as the Finance Ministers are expecting leadership from us on this matter.
Our firm decision on this matter is important for the credibility and legitimacy of the G20.
We need to work towards being ready to deliver a package of the IMF reforms at the South Korea Summit.
The IFIs have risen to the challenge of the crisis. If we act now on the reform issues, we can consolidate their new vitality.
We have a good opportunity to take this matter forward in a manner that will seriously assist the movement towards a more just economic order in the world.