Media Statement:  President Kgalema Motlanthe concludes Deliberations at the Group of 20 Leaders Summit on Financial Markets, Washington DC, United States

South African President Kgalema Motlanthe, supported by the Finance Minister Trevor Manuel and a high level delegation, today, SATURDAY 15 November 2008, concluded deliberations at the Group of 20 (G-20) Leaders Summit on Financial Markets, Washington DC, United States.

The G-20 Leaders Summit on Financial Markets was hosted by the President of the United States of America George Bush, following a meeting of the Finance Ministers and Central Bank Governors of the G-20 in São Paulo, Brazil on Sunday 9 November 2008, during which the causes of, and policy responses to, the global financial crisis was discussed and perspectives on scenarios going forward shared. 

South Africa, as the only G-20 member country from Africa, was asked to convey an African perspective by the African Finance Ministers, who recently met in Tunis, to consider the impact of the crisis for our continent. 

The G-20 Leaders Summit on Financial Markets also takes place when African economies were making significant progress, and are now threatened by the global financial crisis.  As a result, the current crisis has the potential to exacerbate the impact of the recent volatility in food and commodity markets.
            
In this regard, the G-20 Leaders Summit, which includes key developed and emerging market countries, agreed on:

• A strengthened system of international financial governance, in which the IMF and World Bank play a central role. This must occur with a much more inclusive governance structure for both institutions, and for other relevant institutions, so that developing countries are effectively represented.  This would entail far better representation for Africa countries in the international financial institutions than is currently the case.  These institutions must be accountable and transparent; 

• A coordinated initiative to support interventions in domestic economies, through expansionary fiscal and monetary policy, as is appropriate.  This will be done within a sound and responsible economic framework.  In order for this to succeed, the international financial institutions must be properly funded so that they can support investment to maintain robust economic growth and poverty reduction of developing countries.  In light of the damage already done to developing countries in Africa by volatile food and fuel prices, and the potential damage that might be done by the effects of the financial crisis, it is essential that the commitments to increase aid flows to Africa are fully fulfilled;

• The international financial system should fall under proper surveillance, oversight and supervision, this would involve a considerable reform of the current situation, and would require all countries to subject themselves to agreed and transparent roles; and

• On the importance of making every effort to avoid any rise in protectionism and that we support the soonest possible balanced, fair and development-oriented conclusion of the Doha Development Round of multilateral trade negotiations.  

 President Motlanthe said that, while the financial crisis originates in the rich countries, it perpetuated a sudden and sharp increase in the borrowing costs of developing countries and in many cases their currencies have fallen dramatically too.

In conclusion, President Motlanthe welcomed the steps already taken by the World Bank and the IMF and called upon them to keep up the admirable promises to increase aid to Africa and ready themselves to provide appropriate support to avoid contagion. 

President Motlanthe is expected to arrive back to South Africa on Sunday, 16 November 2008.

For enquiries please contact Matome Sam Bopape on +27823185251

Issued by The President
Union Buildings, Tshwane

15 November 2008