South Africa will add two key issues to the agenda of the group of 20 (G20) when it takes over the helm as chair in November from Australia — financial stability and creating fiscal space, said Minister of Finance Trevor Manuel on Monday.
He was speaking at a joint press conference at Parliament with Australian Treasurer Peter Costello — who began a three-day visit to South Africa on Sunday.
Asked what he meant by “fiscal space”, Manuel said that there was a trend “towards squeezing out the policy space on budgets” so poor countries, which did not have much of a revenue base, could not deal with bigger issues. Thus policies for growth and development were “at the whim of the donor”.
Noting that South Africa would be taking up the chair at the G20 Melbourne conference in Australia, Manuel said one of the things that Australia had done successfully itself was to introduce a compulsory savings scheme, which had provided “an enormous pool of money for investment”. This included a fair amount being spent on infrastructure.
Good work at the G20 by Australia in its year in the chair had been research into skills and finance and how wealthier countries were dredging poor countries of their skills base. This research would not have been completed when South Africa takes the helm, he said, but South Africa would encourage the G20 to continue with this programme.
Manuel said reform of the Bretton Woods institutions “is a matter that will live with us … It will never be quite complete”, noting that Australia had put the matter on the G20 agenda.
The body — of developed and developing nations — would also have to look increasingly at climate change, including the matter of China each year building a coal-fired power station that produced as much power as the United Kingdom as a whole, Manuel noted.
Costello, meanwhile, said this weekend’s meeting in Singapore of the World Bank and International Monetary Fund would represent “a good chance to improve the governance in the IMF”. — I-Net Bridge