Global Economic Risks Take Center Stage at G20 Finance Ministers Meeting

A growing concern over geopolitical and trade wars prevailed at the G20 finance ministers and central bank governors’ meeting aimed at tackling challenges the world faces.

Finance ministers believe that strengthening multilateral cooperation is the only way to address existing and upcoming risks to the global economy, adding that it is vital to pursue growth-oriented macroeconomic policies and ensure fiscal sustainability.

The ministers and governors highlighted that the discussions were constructive and productive, saying all issues, including global economic outlook, macroeconomic stability, the international financial architecture, financial inclusion and others, were addressed.

Furthermore, finance ministers pointed out that most of the global challenges stem from conflicts, geopolitical and trade tensions, supply chain disruptions, high debt levels, and extreme weather events.

In a media briefing, the Deputy Finance Minister, Dr David Masondo said they will encourage public and private investments, taking productivity and reforms, and safeguard central bank independence to maintain price stability.

“A renewed pledge was made to strengthen multilateral cooperation to address emerging and existing risks to the global economy,” Masondo said.

Addressing the issue of the independence of central banks, SA Reserve Bank Governor Lesetja Kganyago said there had been contestations about central banks around the globe; pronouncements were also made in Europe. He also said that the issue of central bank independence was addressed at a meeting of central bank governors at the IMF in Washington in April.

“Unfortunately, there were no communiqués at that time. But this time, because there is a communiqué, you are seeing it. The last time we had a communiqué was in Brazil last year at the G20 and the IMF, which is another forum where these things are discussed; it came out strongly in the conversations about central banks’ independence,” said Kganyago.

Meanwhile, the Norwegian Finance Minister, Jens Stoltenberg commended South Africa’s hosting of the G20 during a difficult period, citing that they have agreed on some of the main principles and that include climate change and the importance of climate financing, among other things. He also stressed the need to curb debt problems in many countries around the world, through developing a system that will introduce minimum taxation, to prevent big companies from tax invasion.

According to reports, Norway is one of South Africa’s key trading partners within the Nordic region and shares common ground in relation to multilateralism, democracy and human rights.