EDITORIAL: Clear upside for SA’s reputation at G20 finance meeting

Interviewed by Business Day at the first meeting of G20 finance ministry and central bank deputies of SA’s G20 presidency in December, Treasury director-general Duncan Pieterse said the benefits for SA of hosting the global forum weren’t just narrow economic spin-offs such as tourism.

“It’s more about reputation, in terms of demonstrating our ability to mediate big, difficult global conversations. There’s a certain credibility and legitimacy that comes with that,” Pieterse said.

In the event, Pieterse and his drafting committee co-chair, deputy Reserve Bank governor Rashad Cassim, managed this week to pull off a mediating effort that achieved a communique approved by all of the G20 finance ministers and central bank governors who met in Durban this week.

It was the first time this year that the finance track leaders reached this kind of consensus. Earlier meetings in February and April ended with only a chairperson’s statement reporting on proceedings. Likewise the main sherpa track of the G20 and other ministerial tracks such as the foreign ministers, all of which have been beset by tensions.

The consensus outcome this week came thanks to some pretty bland language on hot button issues such as climate change, tariffs and economic imbalances between the US and China.

Even so, it is no mean feat. It will hopefully help to offset some of the recent negative press on SA, particularly out of the US, where US president Donald Trump has in the past couple of weeks imposed a 30% tariff on SA, complained that he hadn’t “been well” since his meeting with president Cyril Ramaphosa and reportedly denied SA envoy Mcebisi Jonas a visa.

But looking beyond SA’s narrow interests makes the communique even more remarkable. At a time when Trump has been attacking US Federal Reserve chair Jerome Powell, and central banks have come under political pressure elsewhere, the G20 finance leaders this week affirmed the importance of central bank independence, saying this was crucial to achieving the goal of price stability.

At a time when multilateralism has been under attack, the communique agreed on the “importance of strengthening multilateral co-operation to address existing and emerging risks to the global economy”.

Even more significantly, it specifically mentioned the importance of the World Trade Organisation and of agreed-on rules for global trade — at a time when Trump’s tariffs have clearly flouted those rules, as have some of the retaliatory tariffs by countries such as China. The leaders did recognise however that the WTO needed reforms. It also affirmed commitment to a strong International Monetary Fund despite mutterings from the US.

It had been feared the US would absent itself altogether. But although the US wasn’t represented in Durban by its finance ministry and central bank bosses, their deputies were at the table in person this week.

Whether Trump will attend the leaders’ summit in Joburg in November remains unclear however, as do the US intentions for its G20 presidency next year. As unclear is whether the leaders’ summit will attain any sort of consensus. The political divides are usually a lot more toxic than the divides on the economic and financial stability issues that are the focus of the finance track. It seems unlikely SA’s G20 year will end with a communique in November.

Meanwhile, however, the finance track has continued with its work, much of which is technical and detailed but important for the world’s economy and its financial system. That includes work on sovereign debt and banking regulation, cross-border payments and taxation, sustainable finance and financial inclusion, and other key issues that need global co-ordination and co-operation.

It’s a sprawling agenda and the work tends to move along slowly from year to year. But this week’s meeting seemed to take it forward, not backward, for SA and the G20.