Finance Minister Pravin Gordhan. (David Harrison, M&G)
There have been glimpses of stronger growth numbers, but the real challenge is how to put growth on a sustainable footing to avoid the turbulence the world has been witnessing, said Finance Minster Pravin Gordhan.
He was speaking at a media briefing in Pretoria on Monday on the outcomes of the G20 summit held in St Petersburg last week.
Gordhan told media there was a unanimous view that strong, sustainable and balanced growth was needed to ensure certainty in the market.
In this regard, targeted reforms were put forward by member countries, to ensure "fiscal stability, boost investment, increasing productivity and labour force participation, and address internal and external imbalances".
All advanced countries put forward strategies that are geared towards maintaining or lowering the debt-to-gross domestic product (GDP) ratio of over the medium term, as well as a number of other strategies.
The St Petersburg Action Plan said Canada, France, Germany, Italy, Korea and Spain have "explicitly commited to reduce debt as a share of GDP through country specific-targets for the debt-to-GDP ratio beyond 2016, while the United Kingdom said it will set a debt target once the … rise in debt has been addressed".
'Downward path'
Japan plans to "reduce the public debt-to-GDP ratio after achieving a primary surplus by fiscal year 2020"; and the US budget projects "that federal debt held by the public will be on a downward path over the next decade".
There was agreement for an urgent need to push ahead with structural reforms, said Gordhan.
Argentina will channel additional social and institutional savings to infrastructure and productive projects, as well as making use of new investment programmes such as Pro.Cre.Ar and the "inciso k" to encourage ownership of housing.
Brazil is to support tax incentives and innovative financing initiatives to tackle bottlenecks, increase competitiveness, create jobs and promote growth through public-private partnerships.
China on the other hand said it will accelerate the development of the service sector and raise its value-added contribution to the GDP by 4 percentage points by 2015, and increase spending on research and development to 2.2% of GDP.
India continues with its infrastructure programme, including the Delhi-Mumbai industrial corridor link and the construction of two new ports developed through a public-private partnership starting this year.
Improve infrastructure
Japan plans to establish national strategic special zones and complimentary regulatory reforms to attract overseas investment, while Russia looks to streamlining its regulation and easing administrative burdens to improve its business environment.
South Africa said a third coal fired power plant was intended to address its energy constraints and the country was in the process of authorising shale gas exploration. To improve investment, South Africa plans to speed the assessments of water and mining projects.
The UK aims to increase its capital spending by £3-billion from 2015-2016 annually, while the US plans to improve infrastructure, both through enhanced public and greater private investment.
The countries also committed to a number of measures designed to enhance productivity and competition, with the European Union for example saying it plans to integrate its single market by setting out "specific actions to boost European competitiveness and unlock economic growth and jobs".