17 November 2014
The G20 Leaders’ Summit in Brisbane, Australia, has committed to improving the G20 countries’ GDP by at least an additional 2% by 2018.
Speaking at the end of the summit which ran from 15 to 16 November, South African President Jacob Zuma said the G20 countries also agreed to enhance investment and trade, significantly increase job creation, as well as implement a growth strategy with the aim of reducing inequality and poverty.
“This year’s G20 Summit was organised differently as it focused mainly on measures to achieve economic growth globally and to create jobs by lifting the world’s GDP by 2%. Australia, as the current chair of the G20, has kept the agenda of the Summit focused on issues related to the global economy, development, growth and trade,’ said Zuma.
Current developments in G20 countries
During the Summit, G20 member countries briefed their peers on the current developments in their respective regions. In this regard, South Africa provided an African perspective on a number of issues such as the global economy and trade, infrastructure development, inclusive growth, the global financial situation and combating the scourge of Ebola, amongst others.
On the current global economic situation, President Zuma said G20 countries need to, amongst others actions, accelerate infrastructure development especially in Africa in order to sustain global growth. “This will help lift intra-Africa trade and contribute immensely toward enabling our continent to industrialise and to create jobs in high value sectors, so that Africa can produce value – added manufactured goods,’ he said.
G20 Global Infrastructure Hub
The G20 Global Infrastructure Hub, knowledge-sharing platform between G20 governments, the private sector, development banks and other international organisations established during the Summit, will act as a conduit to promote intra-Africa trade and form linkages with other G20 countries.
The Summit also agreed that International Financial Institutions (IFIs) needed a relook, as emerging markets and developing economies now account for the largest share of global growth.
“This shift in the structure of the global economy must be reflected in the governance structures of the International Monetary Fund (IMF) and World Trade Organisation (WTO),’ said Zuma.
International tax system
G20 leaders also made a commitment to modernise the international tax system, as this was critical to ensuring fairness, and to secure countries’ revenue bases. Commenting on this recommendation by the leaders, Zuma said although tax loss attributable to base erosion and profit shifting has not been quantitatively measured, there are indications that developing countries suffer severe tax revenue losses due to these practices.
“All countries with open economies stand to benefit when multinationals pay their fair share of taxes. We support the work done by the [Organisation for Economic Co-operation and Development] to co-ordinate international efforts to curb base erosion and profit shifting.
“We have already implemented measures in our domestic tax legislation in relation to base erosion and profit shifting. We are fully committed to resolving outstanding technical and policy issues and to finalise these by the end of 2015,’ Zuma said.
Agreement to exchange information
South Africa is among 51 countries that signed the Agreement on Automatic Exchange to Financial Information in Berlin, Germany, in October 2014. In this light, Zuma said South Africa is on the way to realising the agreement and by 2017, the country would have systems in place to share information.
“We feel strongly that we must continue to contribute towards strengthening tax administration capacities of developing and low income countries to fully participate in this reform agenda,’ Zuma said.
South Africa called for open channels of communication amongst regulators across borders. Recently, South Africa asked the Financial Stability Board and other international Standard Setting Bodies to make concerted outreach efforts to consult with and include the experiences of emerging market and developing countries, as well as other non-G20 countries.
On trade, Zuma said the African continent wants to move from being a net exporter of raw materials to exporting value-added goods through beneficiation and manufacturing. “In this regard, Africa has adopted an ambitious industrialisation, infrastructure development and market integration programme,’ he said.
On Ebola scourge in some parts of West Africa, Zuma said South Africa and Senegal made a presentation to the leaders on the need to work together in addressing the serious challenge posed by the epidemic.
In a statement, G20 leaders pledged to contribute more resources in curtailing the outbreak of Ebola and thanked international organisations such as the United Nations, World Bank, IMF and others, for their support and contributions. The leaders recognised the need to support international efforts to contain and control the epidemic.
As is usual during the G20 Leaders’ Summit, Brazil, Russia, India, China and South Africa (BRICS) held a meeting on the side-lines to discuss the agenda of the G20 Summit and to provide input on issues such as economic growth and development and the role that business can play in stimulating economic growth. The BRICS leaders also thrashed out infrastructure development in Africa and the topical issue of the current Ebola epidemic.