The world has been watching the important role that South Africa has been playing in the International Court of Justice (ICJ) in the Hague with regard to the culpable genocide taking place in Gaza. Their direct interactive engagement in this case has resulted in that country acquiring many followers all over the world. It is this ability on the part of South Africa that has led analysts to start deliberating about what kind of international role that South Africa will need to play after it becomes President of the G 20.
It needs to be mentioned that the G 20 is a group of 19 countries as well as the African Union and the European Union. Between them they represent 85% of the global economy, 75 % of world trade and 67 % of the global population. The G20 in the contemporary world has achieved a reputation as the premier multilateral forum for international economic cooperation.
The importance of this responsibility will be best understood by the fact that during its G20 presidential year, South Africa will not only host a summit of heads of state and government but will also be responsible for organizing and chairing about 200 meetings of Ministers and Officials. These will originate from the G20 members, invited countries and international organizations like the International Monetary Fund and the World Bank. The meetings will focus on issues such as the challenges facing the global economy and whether the current arrangements for global economic governance are able to respond effectively.
The G20 Presidency will therefore provide South Africa, according to Professor Danny Bradlow, Senior Research Fellow, Centre for Advancement of Scholarship, University of Pretoria, with an opportunity to promote reforms in global economic governance.
However, analysts are suggesting that South Africa will be facing some constraints which they have to overcome. They will be inheriting an agenda from Brazil, the current G20 Chair, which will require response to developments in the current dynamic and complex global environment.
In this regard South Africa will have to monitor what has emerged from the several IMF and World Bank meetings that have taken place in April in the USA. They will, in this context, have to identify the least common denominators and will have to be able to suggest some achievable objectives for the G20 next year. This denotation is important because there was a great deal of discussion about the inability of current arrangements to adequately address global challenges like climate, public health, inequality, poverty and digitalization.
However, these discussions were unable to agree on how to prioritize these challenges. Regrettably, the views of the rich states, which prioritized issues like carbon emissions, dominated the discussions but there was no consensus on the principles of adaptation and mitigation with regard to the dire effects of climate variability.
For example, the World Bank highlighted the fact that, in the 2023 financial year, it increased the funds loaned for climate-related purposes by more than 20%, allocating 41% of all its lending to climate related issues. Such a claim has however not matched with the survey carried out by its borrower countries. This portrays that climate ranks number 11 on the list of priorities of its borrower states. Health, education, agriculture and food security, and water and sanitation rank much higher. Nevertheless, at least two gaps have also become obvious in their discussions. The first relates to IMF reform. The second concerns the relationship between international organizations and their member states.
Socio-economic strategists are underlining that South Africa during its forthcoming Presidency will have to aim in filling these gaps. Such an effort will require it to encourage the G20 to commission two studies on the scale and scope of the challenges that the international community faces, and propose some responses. In this regard Danny Bradlow has observed that South Africa should take on an anticipatory role and convince the G20 to commission these studies in 2024 so that it can begin discussing policy responses in 2025.
Economic analysts are suggesting that such an approach could prove to be effective as, in such a scenario, the multilateral development banks could be brought within the matrix of G20-commissioned studies. There is a growing belief that the need for IMF reform is becoming more urgent against a backdrop where they are having to find solutions to difficulties they are facing in dealing with the macroeconomic effects of issues like climate, gender and inequality. It is also true that the IMF, in its own way, is trying to resolve on-going problems. It has created a Resilience and Sustainability Trust that is providing financing to 18 countries, primarily for adaptation. This is a good step but we need to go further, widen and diversify the perspective.
Changes are taking place but that is being made in an opaque and unpredictable way. This dynamic has led economic analysts to observe that the IMF has not made publicly available the principles and procedures it uses when deciding what aspects of these “new” issues to take on. This implies the need to be more transparent.
This has led Danny Bradlow to comment that the IMF “cannot accurately assess the full impacts of these issues unless it understands how communities, workers, businesses and civil society organizations will respond to the social and environmental impacts of specific policy and fiscal initiatives with macroeconomic implications. It cannot gain this information without consulting these groups”. Such an observation connotes that the IMF needs to engage more with a broader range of stakeholders than it normally does when it tries to find acceptable answers to more traditional macroeconomic and financial stability concerns. These new issues, therefore, have raised questions about the appropriate form for the relationship between the IMF and its Member States.
It would be correct at this point to remember that at the Spring meetings, the Development Committee of the World Bank and the IMF “reiterated the importance of accountability mechanisms in enhancing development outcomes and stimulating internal learning and feedback”. However, in the contemporary era the IMF remains the only international financial institution without an independent accountability mechanism.
The second existing gap relates to the fact that developing countries are spending more on repayment of external debt service than on health and education- both extremely significant for moving forward and overcoming emerging challenges. This is undermining their efforts to deal with climate change, inequality and sustainable development goals. What is regrettable is that this is causing a net outflow of funds from what economists’ term as the global south to the global north.
This scenario assumes an interesting backdrop because the amount of funding committed to new development financing initiatives by rich countries is paltry compared to what’s needed. This has led, for example, for Finance and Economic Ministers from Brazil, Germany, South Africa and Spain to propose a global tax on billionaires. This last suggestion has its own dimension. However, it will not be easy to undertake such a measure. Straight away, difficult questions will rise about the denotations related to state sovereignty and also about the strategy of the institutions of global governance.
Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance, can be reached at
