S. Africa lobbies G20

08:29, October 11, 2010      

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When the leaders of the world's 20 largest economies meet next month in the Republic of Korea (ROK) for economic policy coordination, South African officials will be lobbying hard for the views of developing countries to be taken more seriously by the nations of the developed world. It will be a move strongly backed by China, the new economic strongman on the block.

Both countries were powerful advocates of the Group of 20, which largely replaces the role of the existing Group of Eight (G8), a forum for the industrialized nations that has long dominated the world economy.

The shift from G8 to G20 is designed to reflect the changing global economy with emerging economies such as China, India and Brazil as well as the ROK.

While the Group of Eight will continue their consultations on matters of common importance such as security, global economic issues will largely be handled by the G20, which currently accounts for nearly 85 percent of the world's gross domestic product.

It was a theme close to South African President Jacob Zuma's heart when he paid a formal State visit to China in August, meeting President Hu Jintao and Premier Wen Jiabao. The African also lobbied hard to join BRIC, the quartet of emerging economies made up of Brazil, Russia, India and China, to form BRICSA. He has visited all the four countries over the past year and says his supplications were well-met.

President Zuma was accompanied by a delegation of government leaders and more than 300 senior corporate executives from South African employment sectors including agro-processing, energy, mining, financial services, manufacturing, construction, health, hospitality, technology and transport.

During a speech at Renmin University of China in Beijing, he said: "Ten years ago, the countries in the developed world were South Africa's largest trading partners. Last year, China became South Africa's largest trading partner. Twenty years ago it would have been unthinkable. Twenty years ago, it would have been unthinkable for Africa to host the FIFA 2010 soccer World Cup. South Africa has just completed hosting one of the most successful soccer World Cup tournaments ever, thereby demonstrating that our country can compete with the best in the world. These developments show emerging economies succeeding against predictions and odds. That the world is changing is not in dispute. It is an irrefutable fact that economic power is in a process of shifting from North to South and West to East. China, for example, is once again assuming its historic position as a major power in the world."

President Zuma told China Daily that there were dramatic changes afoot in the world order. He said: "The objective reality is that today no major decision on issues of global governance, such as reforms of the United Nations, the WTO (World Trade Organization) Doha development rounds, climate change, global financial issues related to G20, rebalancing the world economy and addressing the global financial crisis can be taken without the consent of the developing world.

"The OECD Development Center estimates that measured in terms of real domestic buying power, the developing countries will have a larger share of the world economy than the OECD countries by the year 2012. By the year 2030, developing countries will have 57 percent of the world economy and the current OECD countries 43 percent. If we measure the contribution of different parts of the world to economic growth, the developing world contributed almost 70 percent of world growth last decade, measured in terms of domestic buying power. China alone contributed nearly 30 percent. Although countries like China, Brazil, India and South Africa have an increasingly important role, it cannot be forgotten that they are still developing countries that have not yet overcome the challenges of poverty and inequality. As the leaders here have recently pointed out, it is unrealistic to expect a country like China to attempt to take over as the locomotive of the world economy."

President Zuma said China and South Africa were disappointed in the lack of urgency in bringing international institutions in line with the newly-emerged character of the world economy. "For example, the International Monetary Fund, which has had to play a central role in addressing the global financial crisis, has not yet been allowed to restructure itself better to represent the realities of the international system today. We hope that the G20 meeting in South Korea will show very significant progress in the reform of the IMF. So, while the replacement of the G8 by the G20 is the key focus for global economic cooperation and was an important step in the right direction, there is still a lot more to do to bring the international system in line with current global economic realities."

During President Zuma's visit the two sides signed seven inter-governmental agreements regarding mineral resources, energy, environmental management and transportation. Sixteen business deals were also signed. Currently, the number of Chinese enterprises investing in Africa as a whole exceeds 1,600. In 2000, China-Africa trade surpassed $10 billion. It is expected to exceed $110 billion this year and grow by 20 percent in the next three years. By the end of 2008, China's investment in Africa reached $26 billion, with most funds going to South Africa, Sudan, Zambia and Algeria.

As President Zuma told anyone who would listen while he was in China: "No serious organization can ignore a continent with a population of 1 billion."

Source:China Daily


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