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Mail & Guardian
2 days ago
- Business
- Mail & Guardian
G20 finance track calls for IMF reform, revitalising the World Trade Organisation, inclusive global growth
South Africa heads the G20 in 2025. (@G20org/X) South Africa's G20 During the third meeting of G20 finance ministers and central bank governors last week, the finance track supported the restructuring of the international financial architecture with enhanced country risk evaluation. 'We reaffirm our commitment to a strong, quota-based, and adequately resourced IMF at the centre of the global financial safety net. We have advanced the domestic approvals for our consent to the quota increase under the 16th general review of quotas, and we look forward to finalising this process with no further delay,' a communique at the end of the meeting stated. 'We acknowledge the importance of realignment in quota shares to better reflect members' relative positions in the world economy while protecting the quota shares of the poorest members. We acknowledge, however, that building consensus among members on quota and governance reforms will require progress in stages.' Last week's meeting was part of a series of forums held under South Africa's year-long G20 presidency and ahead of the main summit of G20 leaders in Johannesburg in November. The finance track delegates backed a declaration agreed in April, for the development of a set of principles guiding future discussions on IMF quotas and governance, to be concluded by the next IMF spring meeting in 2026. According to the G20 finance track, IMF reforms are meant to enhance its efficiency and effectiveness — essential for generating 'strong economic growth and creating more and better jobs'. Critics have spoken of 'excessive imbalances' in IMF representation, calling for reforms that could lead to country-specific reforms and multilateral coordination 'in a way that contributes to an open global economy and without compromising sustainable global growth'. Think Tank 20, a G20 working group composed of international think tanks, recently made In June, Youth 20 (Y20) working groups issued their While acknowledging the importance of the IMF in global financing, the finance track conceded that building consensus among members on quota and governance reforms will take time because Global South countries negotiate their demands against Global North priorities. The track outlined the factors affecting global economic growth, financial and price stability — heightened uncertainty and 'complex challenges' including wars, geopolitical and trade tensions, disruptions to global supply chains, high debt levels and frequent extreme weather events and natural disasters. 'In light of high public debt and fiscal pressures, we recognise the need to raise long-term growth potential by pursuing growth-oriented macroeconomic policies, while building fiscal buffers, ensuring fiscal sustainability, encouraging public and private investments and undertaking productivity-enhancing reforms,' the communique said. It also recommended central bank independence and revitalising the World Trade Organisation (WTO). The G20 central bank governors committed to ensuring price stability, data-driven policy adjustment and policy consistency with their respective mandates. 'We will continue to pursue efforts that advance prosperity and recognise the importance of the World Trade Organisation to advance trade issues, and acknowledge the agreed-upon rules in the WTO as an integral part of the global trading system,' the communique said. 'We recognise the WTO has challenges and needs meaningful, necessary, and comprehensive reform to improve all its functions, through innovative approaches, to be more relevant and responsive in light of today's realities.' The finance ministers and governors urged the international community to support vulnerable countries whose debt is sustainable but which face liquidity problems, and encouraged IMF and the World Bank to work on feasible options to support these nations. The finance track also underscored the importance of 'sustainable finance' by ensuring 'robust, resilient and effective coordination' between multilateral development banks, climate funds and others in support of national priorities. 'Scaling up co-financing and mobilising private sector resources by improving efficiency and promoting the use of innovative financial instruments is essential for developing countries' risk-sharing in country-led climate investments,' said the communique. The ministers and governors reaffirmed their commitment to addressing vulnerabilities and promoting an open, resilient and stable financial system, which supports economic growth, and is 'based on the consistent, full and timely implementation of all agreed upon reforms and international standards, including Basel III'. The finance track backed the G20 roadmap for enhancing cross-border payments; regional financial action task forces to combat money laundering; and implementation of partnerships on financing micro, small and medium enterprises. The finance ministers and central bank governors highlighted the importance of pandemic prevention, preparedness and response and called for more support for the pandemic and global health funds to strengthen medical infrastructure. 'We emphasise the importance of effective and efficient health spending and domestic resource mobilisation, given the current reduction in donor assistance, as well as the need for better coordination and alignment of external and domestic funding flows,' the communique stated. The finance ministers and central bank governors' will meet in October in Washington DC in preparation for the November summit and handover of the G20 presidency from South Africa to the United States.
Mail & Guardian
15-07-2025
- Business
- Mail & Guardian
G20 think tanks call for an overhaul of IMF and World Bank financing model
South Africa heads the G20 in 2025. (@G20org/X) The G20 A 'This includes support for the development of multi-currency cross-border payment systems, swap lines between diverse countries, loans from multilateral development banks in local currencies and regional arrangements for payments in local currencies,' it said. It called for a revised IMF debt sustainability framework — jointly with the World Bank in the case of low income countries — that incorporates assets created by debt; the costs of climate change and biodiversity collapse, and accounts for policy actions and investments to mitigate those vulnerabilities. 'The G20 should encourage credit rating agencies to enhance the transparency of their rating methodologies and models and give due consideration to local economic conditions in the countries that they are rating,' the communique added. It wants the G20 to facilitate overhauling the IMF's governance model by promoting efforts to find a global agreement on quotas and ensuring that 'no individual country should have veto power'. The communique summarises priorities collected from local and international think tanks led and coordinated by the Institute for Global Dialogue, the South African Institute of International Affairs and Institute for Pan-African Thought and Conversation. As part of the G20's multiple groups, such as Business20, Civil20, Urban20, Women20, Startup 20, the T20 communique will inform the declaration of heads of state at November's summit. The communique also recommends that the G20 empower the World Trade Organisation (WTO) to preserve multilateralism while reforming the global trade system. While not addressing It points the G20's attention to digital inequality and the limited statistics required to create universal evidence-based policies on AI systems, and recommends setting up a digital public infrastructure fund and for the group to 'play a leading role in advocating for global forums on digital technology for sustainable development'. 'The G20 should support the development of enabling national and regional integrated data governance frameworks that are holistic, rights-promoting, equitable and just. Data governance is a cross-cutting issue that will require the review of existing institutional arrangements that are not fit-for-purpose for this dynamic and complex environment,' it says. The G20 should also coordinate action to curb income and wealth concentration — particularly through the implementation of a global wealth tax and its inclusion in the United Nations Tax Convention — and champion reform of multilateral development banks and financial institutions reform to improve the access of vulnerable countries, the communique says. It calls for the promotion of value-addition and fair benefit-sharing in the critical minerals value chains, for equitable green industrialisation. Founded in 1999, Initially spearheaded by finance ministers and central bank governors during the 1999 Asian financial crisis, the platform was elevated to the level of heads of states during the 2009 global financial crisis. From its inception the G20 members have grappled with challenges to the international finance system and ways to achieve global financial stability. In a 2023 UN sustainable development goals report, secretary general Antonio Guterres called for 'a paradigm shift' to move G20 discussions towards 'practical solutions', noting that only 12% of the targets were on track, with 50% operating at optimal performance level. For the past four years, G20 presidencies have been held by Global South countries — Indonesia in 2022, India in 2023, Brazil in 2024 and South Africa in 2025, with a collective aim to reform global financial institutions and trade agreements for more inclusion and balanced trade. During South Africa's presidency, The theme has Rubio equated South Africa's 'solidarity, equality & sustainability'' 2025 theme to the diversity, equity and inclusion policies vehemently opposed by the Trump administration. South Africa's G20 sherpa, Zane Dangor, has downplayed any
