SA welcomes IMF steps to reform

Monday, November 15, 2010

Pretoria - South Africa's Finance Minister, Pravin Gordhan, said the reform of the International Monetary Fund (IMF) was an important step towards Africa's voice being heard on the world stage.

"There are two additional chairs that the Europeans will make available and a six percent change in quota ... It's the most substantial change that the IMF has gone through," Gordhan told reporters at a briefing on Monday after last week's G20 meeting in Seoul.

Before departing for the two-day summit last week, the minister said that South Africa would push for a sub-Saharan chair on the board of the IMF.

"The question is, who will occupy those chairs? Our President [Jacob Zuma] made a plea that one be reserved for sub-Saharan Africa. We now have three chairs in the World Bank, we think that Africa needs to have three on the IMF as well," explained Gordhan.

The quota system review should be complete by 2013 and allocations made in 2014.

The minister said the meeting acknowledged the need for strengthened participation between countries in formulating policies, as ultimately, economies were interlinked.

"Despite the many views, the G20 is still quite cohesive," said Gordhan.

Unemployment and development around the globe is another matter that was discussed at the meeting.

"Growth cannot take place when only a few benefit. There should be shared growth. Unless we get the balance right, we are not going to bring developing countries and least developing countries to a point where they benefit," said the minister.

On the matter of financial sector reforms, Gordhan said there was consensus that countries begin to look at their currency systems differently, especially in light of the prevailing crisis.

"The G20 was not able to say the specific things that we are going to do about some of the currency dynamics... [but] you will find in six months a lot of debate around this issue," said Gordhan, reassuring that the massive capital inflows will not last forever.

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