BUSA calls for G20 leaders to commit to market stability

Monday, March 30, 2009

Johannesburg - South African business expects the Group of 20 countries meeting in London later this week to renew their commitment to enhancing the stability of global financial markets.

This is important for developing countries in particular, said Business Unity SA Chief Executive Officer (CEO) Jerry Vilakazi who was briefing the media ahead of the summit.

Mr Vilakazi said African countries needed to be better represented in global financial institutions like the World Bank and the International Monetary Fund (IMF) to meet the challenges of the 21st century.

"We must seek to ensure [that] developing countries are better represented, if leaders fail at this, they would have failed to meet their constituencies."

South Africa will be the only representative from Africa at the summit scheduled for Thursday.

The G20 includes the world's biggest industrial and developing countries, making up 85 percent of the world economy. Leaders will aim to boost confidence that global leaders are united in tackling the world economic crisis.

Among the key issues expected to be discussed are reviving the world economy, restoring lending, tougher rules for banks, a bigger role for the IMF and more help for developing countries.

BUSA said the summit would also provide an opportunity to strengthen global cooperation in light of the global economic crisis.

"It will also allow political leaders to assess progress with previous attempts to resuscitate global economic growth and explore further interventions that can ameliorate the impact of the current global recession especially on developing countries like South Africa," he said.

According to the African Development Bank, Africa's growth rate was expected to dip below 3 percent this year, the lowest since 2002. However, the dip in investments is what is most concerning and necessitates dialogue.

Mr Vilakazi said the economic outlook for South Africa had deteriorated in the past couple of months.

"The key concern for Busa is the deceleration of growth which is disproportionately effecting the poor and threatens to erode South Africa's industrial base."

Deputy Chief Executive Officer Raymond Parsons said it was likely that the economy would get back on its feet in 2010 coinciding with the 2010 FIFA World Cup.

He said it was possible that the country had absorbed most of the economic downturn so far adding that the only way to address the problem was for government, labour and business to work in an integrated fashion.

The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU