G20 ends with a whimper

2011-11-05 14:44

European leaders go cap in hand to emerging economies France’s year-long G20 term stumbled to a messy end at the Cannes summit this weekend as President Nicolas Sarkozy’s dreams of reforming world finance were torpedoed by the euro zone debt crisis.

The leaders of the world’s most powerful economies cobbled together a list of promised measures to boost growth and reinforce the International Monetary Fund (IMF), but the statement was short on detail and all eyes were fixed on Rome and Athens.

There, Italy’s Prime Minister, Silvio Berlusconi, was forced to accept IMF oversight of his budget-cutting programme, and Greece’s George Papandreou scraped through a confidence vote after swallowing EU bailout terms.

The summit, which took place on Thursday and Friday on Cannes’ rain-swept seafront, marked the end of France’s turn as head of the G20 bloc of major economies, and the start of Mexico’s stint.

It was in symbolic terms an embarrassment for Europe, with its leaders begging cap in hand for cash from China and other major emerging economies to fund elaborate bailout plans for the Mediterranean fringe.

The younger powers agreed to boost the size of the IMF’s war chest, raising the prospect that the Old Continent will find its budgets under scrutiny from its former colonies.

The final statement put no final size on even this promise of aid, postponing decisions to a future finance ministers’ meeting.

As Mexico takes over as leader of the G20, developing countries are pushing for more attention to long-term changes aimed at making the global economic system more equitable, increasing investment in Africa, making farming more productive, and stimulating investment and trade.

“The key issue is not to allow the G20 to be overwhelmed by the crisis in Europe,” said Mac Maharaj, spokesperson for President Jacob Zuma. Instead, “it should attempt to come up with a plan that incorporates bringing about growth in developing countries”.

A G20 panel produced a list of priorities ahead of the Cannes meeting that included improving conditions to attract investment in infrastructure to Africa, increasing food security and regulating capital flows.

Mexico is expected to make employment and the needs of poorer countries a priority during its year-long tenure as G20 president.

“There’s a recognition that lack of jobs for young people brings social challenges and a decline in social cohesion,” said South African finance minister Pravin Gordhan.

“The public around the world has been making it clear that these are challenges that require urgent attention.”

President Jacob Zuma arrived back in South Africa after attending the G20 summit in Cannes, France, the presidency said yesterday.

“Zuma said South Africa was pleased with the summit’s commitment to renew efforts to combat unemployment and promote decent jobs,” the presidency said in a statement.

The summit made a commitment to focus on the youth especially and others adversely affected by the global financial crisis.

“The focus on job creation is in line with South Africa’s own domestic focus on economic transformation to promote inclusive growth and decent jobs,” said Zuma.

Zuma said he was encouraged by the work being undertaken to resolve the euro zone crisis, which had the potential to seriously and negatively affect the global economy.

He also used the summit as a platform to assure the world that South Africa was ready to host COP17 next month.

– Sapa-AP and AFP 

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