G20 must unite for inclusive growth and economic stability, says Ramaphosa

Multilateral cooperation is the only hope of overcoming unprecedented global economic challenges: slow and uneven growth; rising debt burdens, persistent poverty, inequality and the existential threat of climate change, according to President Cyril Ramaphosa.

Addressing the G20 finance ministers and central bank governors in Cape Town yesterday, Ramaphosa said the gathering should forge consensus on actions to be taken to collectively build a resilient, sustainable and equal global economy.

The meeting is expected to lay the base for some of the world’s leading and emerging economies to find common ground on how to spur economic growth and fight high inflation.

Present are several world delegates, including China, Russia and the European Union.

Working together

The G20, said Ramaphosa, was founded on the principle of cooperation.

“At this time of global uncertainty and escalating tension, it is now more important than ever that members of the G20 to work together.

“The erosion of multilateralism presents a threat to global growth and stability.

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“We know from the experience of past decades that a fair, transparent and inclusive rules-based international order is an essential requirement for economic stability and sustained growth,” said Ramaphosa.

One of the greatest impediments to growth, development and stability was the persistence of inequality among countries.

“The pursuit of the UN sustainable development goal on reducing inequality, is an economic imperative,” said Ramaphosa.

‘Equality and prosperity for all’

“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,” he said.

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South Africa has placed solidarity, equality and sustainability at the centre of its G20 presidency.

Priorities

In line with the original mandate of the G20 to promote strong, sustainable, balanced and inclusive growth, Ramaphosa said SA has identified four priorities for its G20 presidency, which included:

• Taking action to strengthen disaster resilience and response; and
• Ensuring debt sustainability for developing economies.

“The increasing rate of climate-induced natural disasters is disproportionately affecting countries that can least afford the costs of recovery and rebuilding.

“When repeated disasters lead to widespread damage of infrastructure, economic activity is disrupted and livelihoods are destroyed.

“Innovative financing and insurance mechanisms must be put in place by the global community.

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“This should include international financial institutions, development banks and the private sector – scaling up funding for disaster prevention and post-disaster reconstruction,” he said.

Debt and sustainability

On debt sustainability for developing economies, Ramaphosa said in recent years, low- and middle-income countries “have seen their levels of sovereign debt and the cost of servicing that debt rise substantially”.

The combined external debt stock of low-income countries more than doubled in the decade to 2022.

“Debt service costs are increasingly crowding out spending on education, health care 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, will be particularly important in improving the common framework for debt treatment – accelerating the reform of multilateral development banks.

“Our G20 presidency will be addressing the high cost of capital faced by developing economies, as one of the main barriers to sustainable growth,” he said.

Ramaphosa met seven former African heads of state and government to discuss the African Leaders’ Debt Relief Initiative.

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