Zuma cautions against trade protectionism, currency devaluation

Friday, April 15, 2011

Boao, China - President Jacob Zuma has called on developing and developed countries not to move towards trade protectionism or to significantly devalue their currencies.

"If these occur, it would merely result in a race to the bottom and undermine all G20 efforts to achieve strong, sustainable and balanced growth," said Zuma, while addressing the opening ceremony of the Boao Forum for Asia Annual Forum Conference 2011 hosted in Boao on Hainan Island.

Zuma also called on the US, EU nations and Japan to adopt "responsible" macro-economic policies to ensure the stability of both the domestic economies and the world.

"We are saying this against the background that South Africa is a front runner in risk management, as evidenced by the minimal impact of our financial systems during the crisis that unfolded in 2008 and 2009," said Zuma.

He said the Brics grouping had the potential to become a powerful platform in promoting economic growth and inclusive development in the world and called on developing countries to co-operate on the key issues of sustainable development, peace, trade and energy security.

To foster inclusive economic growth, he said, South Africa was expanding its social services and had made 2011 the year of job creation.

South Africa last year also launched the New Growth Path to spur economic growth and create jobs by targeting six sectors - agriculture, manufacturing, mining and beneficiation, the green economy and tourism.

Zuma said an annual increase of four percent annual growth in South Africa over the next three years would create 900 000 jobs, mainly in the trade, construction and business services sectors.

"As long as people lack adequate education and health care, infrastructure, access to land, capital, finance and market institutions, they simply cannot take advantage of growth. They are trapped in a vicious cycle of poverty," said Zuma.

Also speaking at the conference's opening ceremony, Brazilian President Dilma Rousseff said Brazil supported inflation targeting and fiscal stability, but hastened to add that there could be no long-term development without effective social programmes. 

Rousseff said Brazil's recent experience demonstrated that increased social spending could boost economic development by enlarging the country's domestic consumer market.

She singled out Brazil's, social support programme, Bolsa Familia, the expansion of housing, improvements in electricity supply to rural areas and the expansion of loans which helped to create 15 million jobs in the formal sector in the first three months of this year. 

This has helped to create a massive domestic consumer market and had lifted 36 million of Brazil's 190 million people out of poverty, while increasing the size of the middle-class.

Brazil was currently boosting its bio-fuel programme, refurbishing its airports and expanding its offshore oil deposits, which had bolstered the oil sector and created opportunities for suppliers - such that 25 percent of all investments in offshore oil deposits were now in Brazil.

Russian President Dmitry Medvedev said Russia was tackling inclusive growth through increased focus on innovation, investment, infrastructure development and by modernising its institutions.

Chinese President Hu Jintao said Asia has been at the forefront of global recovery following the global financial crisis in 2008 and added that Asia's development achievements were the result of the industrious and talented people living there.

Despite structural and development challenges in Asian economies, Hu said Asians were committed to social and economic development reforms and were open to learning from others, adding that it was important to respect each countries' respective development paths.

In the next five years, China would encourage its businesses to invest overseas as well in projects in its own country that would improve its people's livelihoods, he said.

China would, among other things, step up infrastructural development in neighbouring countries to deepen regional integration and would implement its resource efficient policy and cut intensity of greenhouse gases.

Zhou Wenzhong, secretary general of the Boa Forum for Asia, said in his annual report on the progress of Asian economic integration that Asia had become the "world's growth engine", contributing more than 45 percent to global growth last year, which had helped the world recover from the global financial crisis. 

However, he said despite its remarkable achievements, Asia faced serious challenges, namely rising inflation and food prices. 

Also speaking at the conference's opening ceremony, former Japanese prime minister Yasuo Fukuda said he "regretted" that the accident [referring to the Fukushima nuclear plant] has caused anxiety from neighbouring countries. 

Fakuda, however, cautioned that it was too early and people should not take an immediate decision to abandon nuclear power, following the leaks at Fukushima nuclear power station after last month's earthquake in Japan. However, he added that safety standards should be improved. - BuaNews