Growth needs to be sustainable, says Gordhan

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".

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertisting

Odd drop in how Covid-19 numbers grow

As the country hunkers down for a second week of lockdown, how reliable is the data available and will it enable a sound decision for whether South Africans can leave their homes on April 16?

Mail & Guardian needs your help

Our job is to help give you the information we all need to participate in building this country, while holding those in power to account. But now the power to help us keep doing that is in your hands

Press Releases

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders