Economic troubles need a global strategy

2013-06-04 00:00

IN the past week, we saw discussions about the decline of our economic growth, and the Department of International Relations and Co-operation’s budget vote on our insufficient global diplomacy. We also welcomed the appointment of a Brazilian and a Kenyan as heads of the global trade and economic development agencies, respectively.

The task team established to map out South Africa’s response to the global economic crisis said it back in 2008: that unfortunately there is very little we can do about the contagion effect of the crises in Europe and North America on our economy, as our economies are integrated.

Unless we argue coherently that there was something that we should have done, as advised by the task team, our noise about the GDP figures is just noise. We certainly could have done better in resetting our global strategy to harness opportunities in trade and investment, especially in the global south, as we were advised. Those who continue to grow, including Germany and emerging powers, have done this.

So, as we respond to the GDP figures, we need to rejig our global strategy. Opportunities that exist go beyond investment destinations, to a changing economic-governance environment. President Jacob Zuma has a responsibility to lead us in this, but it is a government-wide exercise, requiring responses from business and civil society.

The appointment of Brazil’s former permanent representative to the World Trade Organisation (WTO), Carvalho de Azevêdo, as the new head of the same organisation, is an opportunity to register progress in the expansion and strengthening of the multilateral trade system, which is always going to be to our benefit. A change of leadership creates new energy for progress. The appointment of an experienced diplomat from the global south, at a time when economic growth is confined in the global south, has immense opportunities for South Africa. This includes the reinvigoration of stalled trade negotiations. South Africa and Brazil have worked well together to promote south-sensitive outcomes through Azevêdo and our representative, Faizel Ismail. Such a relationship can produce much more in multilateral trade negotiations if harnessed properly. The WTO’s primary duty is to ensure that producers, importers and exporters of goods and services are able to conduct their services optimally to the benefit of economies. The world accepts that the WTO must achieve inclusive, sustained and equitable growth and development, and must achieve poverty eradication. We need this now more than ever, but I doubt that we will derive optimal benefits if we do not study this closely, identify opportunities and tailor our strategies to that end.

Two weeks ago, the United Nations confirmed the appointment of Dr Mukhisa Kituyi, Kenya’s former trade minister, as the new head of the UN Conference on Trade and Development, a pre-eminent UN agency for economic development and a driver of the economic diversification agenda. It was described in 1979 by Princeton’s world-renowned Professor Robert Rothstein as the most important driver of a new international economic order because of its influence on global efforts towards economic competitiveness and diversified economic production systems. It has also distinguished itself for being headed by independent-minded eminent people. On top of improving internal governance, Kituyi is expected to enhance the organisation’s ability to generate alternative ideas on the global economy. This includes ideas about how to stimulate inclusive and development-friendly economic growth, models of sustainable development, macro-economics and finance in a post-crisis environment. Again, South Africa can benefit immensely from this only if it rethinks its strategy to harness opportunities that emerge. Any discussion of the state of the economy that fails to see that our economy is only a small piece in a bigger puzzle of the world economy, and that its state is linked to this, is cheap politics or ignorance. We have got to learn the lessons and build an even more resilient and development-friendly economy. Let the elections environment not cause us to take our eyes off the ball.

• Siphamandla Zondi is the executive director of the Institute for Global Dialogue.

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