Slow global growth a top concern at G20 summit
SLUGGISH global economic growth was of concern to all at the Group of 20 (G20) leaders at the summit held in Brisbane, Australia, Finance Minister Nhlanhla Nene said at a media briefing yesterday.
“Leaders noted that the world economy is not growing fast enough due to the lack of global demand and supply constraints,” Nene said. “They agreed while there might be scope in some countries to still use macro-economic policies to stimulate and support the economy, a bigger boost will have to come from countryspecific structural reforms.”
The G20 represents the 19 most advanced economies.
He said talks centred on strategies that would contribute to the objective of adding a further 2 percentage points to baseline growth estimates over the next five years.
Nene said there was “robust discussion” regarding calls for the reformation of international financial institutions, particularly the International Monetary Fund (IMF).
“It was agreed that the international financial institutions needed to be reformed to reflect the fact that the emerging markets and developing economies now account for the largest share of global growth,” he said. “This shift in the structure of the global economy must be reflected in… institutions such as the IMF and the World Trade Organisation.”
President Jacob Zuma led the South African delegation to the summit, which took place at the weekend. He was accompanied by Nene and International Relations Minister Maite Nkoana-Mashabane.
Talks centred on strategies that would contribute to adding to baseline growth estimates…
Nene said: “Our continent has an infrastructure funding gap of about $93 billion (R1 trillion) per annum. We are, therefore, happy that issues of accelerated infrastructure investment through designing appropriate funding instruments, carefully structured public-private sector partnerships, and project development facilities received a lot of attention at the summit.”
Infrastructure investment has been a signature issue under the Australian G20 presidency, with the objective of establishing a multi-year global infrastructure facility as part of the Brisbane action plan.
Nene said the summit announced the establishment of the hub, which complements continuing efforts to reduce barriers to infrastructure development in most G20 nations.
“The hub will be open to all member countries, as well as to non-G20 members. It is intended to also attract private sector financing, to complement efforts by the public sector. Further details on the operations of the hub will be finalised soon, and it will be ready to operate in… 2015,” he said.
The government has a huge national infrastructure plan that was adopted in 2012. It aims to transform the economic landscape, while creating significant numbers of new jobs and strengthening the delivery of basic services.
The government plans to invest R827bn over three years from 2013 in building new and upgrading new infrastructure.
The biggest chunk of the investment in infrastructure will continue to come from Eskom, which will invest R205.1bn over three years to 2015 in new power stations, Medupi and Kusile, which are expected to start producing electricity in 2014 and 2015 respectively.
Nene said the task team on private sector financing of infrastructure had been able to narrow its focus to areas that would have the greatest impact. The possible two that were actionable immediately were:
Encouraging private sec- tor financing and participation in infrastructure.
The steering of development finance institutions to focus more on “crowding in” private sector investment.