Address global economy imbalances, says Zuma

Thursday, November 3, 2011

Pretoria - While the current financial crisis has shown that change is inevitable, the world cannot attain higher growth without addressing the root causes of imbalances in the global economy, says President Jacob Zuma.

"We believe that this current crisis should lead to a realisation that change is inevitable. Balanced growth is just as important as strong and sustainable growth. We cannot realistically attain higher and more equitable growth, without addressing the root causes of imbalances in the global economy," said the President.

Speaking at a B20 meeting hosted by the French Chamber of Commerce and Movement of the French (MEDEF) on the side-lines of the G20 Summit in Cannes, France, Zuma said South Africa welcomed the Euro zone roadmap to stability and growth, which included commitment to enhance fiscal policies and setting out institutional and policy reforms to support growth.

The B20 is a forum for business leaders.

He said large deficit and surplus countries need to show stronger commitment to strengthening the fiscal policy environment. They should also show more commitment to refraining from protectionism as well as support investment and enable interventions in developing low-income countries.

"This will contribute enormously to promoting development, poverty reduction and decent work," he said, adding that emerging economies and least developed nations would continue to be subjected to "harmful and excessive" economic volatility until an agreement was reached within the G20.

"In many respects, the least developed countries are innocent bystanders, who have been caught up in the economic turmoil. We feel strongly about the need to open up the world markets in order to stimulate the recovery of the global economy."

The participation of low-income countries in global trade was crucial for their growth and poverty reduction said Zuma, adding that he was confident that tangible progress would be made in Cannes.

Zuma urged international business to invest in job creation in Africa.

"In South Africa, we are putting in place our plans for growth through an ambitious New Growth Path framework. We are also encouraging more investment in agriculture, mining, tourism and the green economy," he said, adding that South Africa had signed an agreement with 26 other African countries to create a free trade area.

Zuma reminded business that South Africa would be hosting the 17th Conference of Parties of the United Nations Framework Convention on Climate Change at the end of this month.

"We hope to make significant progress in Durban. We must ensure the implementation of the decisions of the 16th conference of the parties in Cancun. We need a firm agreement going forward on the second commitment period of the Kyoto Protocol.

"We need a more coherent approach to the challenge of adaptation and mitigation, especially for small island developing states and other vulnerable countries. Finally, we need a clear commitment to the establishment and the funding of the Green Climate Fund," said the President.

Zuma, who is accompanied to the G20 by Finance Minister Pravin Gordhan, will attend the summit until tomorrow.