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First Post
16-07-2025
- Business
- First Post
Trade, tariff, debt and more: G20 finance ministers have a tough task to deal with at Durban meet
In the G20 finance ministers' meeting in South Africa starting tomorrow, debt stress, development finance, and trade are set to dominate the agenda. The meeting comes at a time when US President Donald Trump's tariffs have upset the world order and rattled countries the world over. read more South African President Cyril Ramaphosa (C) delivers his opening remarks during the G20 Finance and Central Bank Deputies and Ministerial Meeting at the Cape Town International Convention Centre (CTICC) in Cape Town on February 26, 2025. (Photo: Rodger Bosch/AFP) Group of 20 finance officials meet in South Africa from Thursday amid trade tensions, a global economic slowdown and Washington's threat to withdraw from multilateral organisations. President Cyril Ramaphosa has sought to leverage Africa's first G20 presidency to promote an African agenda, with topics including the high cost of capital and climate change. Here are the key issues to be discussed: Debt stress Nearly two dozen countries in Africa are already in or at high risk of debt distress, the International Monetary Fund said. Debt-servicing costs crowd out spending on services like infrastructure development, health and education. Launched in late 2020, the G20 Common Framework is a platform aimed at speeding up and simplifying the process of getting overstretched countries back on their feet. But progress has been slow. STORY CONTINUES BELOW THIS AD Making the platform more efficient is one target for South Africa. Ramaphosa launched an Africa Expert Panel in March whose role is to galvanise efforts, chief among them debt relief. Panel chair Trevor Manuel told Reuters it had already begun to make detailed recommendations on improving the framework. 'One of the reforms is that the opportunities in the Common Framework should be available to all middle-income countries as well,' said Manuel. Financing for development With aid and development-finance cuts and a pivot by wealthy countries to defence spending, traditional funding sources for developing nations have become scarcer. South Africa is looking to shore up favourable finance for poorer nations. It wants to strengthen and improve the role of multilateral development banks in financing for development. Washington, meanwhile, could potentially withdraw from more global institutions — including these banks. Some analysts believe Washington's withdrawal from multilateralism could leave a space for China to occupy, but it is unclear if Beijing aims to do that. Lending to Africa from China has slowed to a trickle leaving an $80 billion financing gap. Meanwhile, US and European grants —accounting for 25 per cent of the region's external financing— face cuts as Washington suspends foreign aid and European capitals redirect funds toward defence. Just energy transition President Donald Trump's administration has withdrawn from the Just Energy Transition Partnership (JETP) — a key focus for South Africa that is designed to help developing countries transition away from coal to cleaner energy. Launched in 2021, JETPs aim to funnel money from governments, multilateral lenders and the private sector to renewable energy projects in a way that benefits local communities. On Monday, the G20's financial stability watchdog said it had developed a new plan to tackle climate risks but it had paused further policy work in light of the U.S. retreat from climate action. STORY CONTINUES BELOW THIS AD Mobilising funding for climate disasters affecting the Global South was a key agenda item for South Africa's presidency. Trade Trump's tariff threats have disrupted the global economy and the response will dominate the agenda even as US Treasury Secretary Scott Bessent skips the gathering. US plans for tariffs on Canada, Europe and Mexico as well as threats to impose further levies on BRICS member countries including China, India, Russia, Brazil and G20 host South Africa, further heighten tensions between the world's largest economy and other G20 nations. Communique Director General of Treasury Duncan Pieterse said in a statement on Monday that he hoped to issue the first Communique under the South African G20 presidency at the end of the meetings. The G20 was last able to take a mutually agreed stance to issue a Communique in July of 2024. (This is an agency copy. Except for the headline, the copy has not been headed by Firstpost staff.)
The Sun
05-05-2025
- Business
- The Sun
Trade protectionism disrupts global trade - ASEAN+3
KUALA LUMPUR: Rising trade protectionism impacts global trade, causing economic fragmentation that affects trade, investment, and capital flows throughout the region, as concluded in the 28th ASEAN+3 Finance Ministers' and Central Bank Governors' Meeting (AFMGM+3). The meeting was held on May 4, 2025, in Milan, Italy, under the co-chairmanship of Malaysia's Finance Minister II Datuk Seri Amir Hamzah Azizan, Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour, China's Finance Minister Lan Fo'an, and the People's Bank of China governor Pan Gongsheng. The ASEAN+3 Macroeconomic Research Office (AMRO) director, the Asian Development Bank (ADB) president, the ASEAN Secretariat deputy secretary-general, and the International Monetary Fund (IMF) deputy managing director were also present. In a joint statement, AFMGM+3 said that near-term prospects may also be affected by other external risks, including tighter global financial conditions, growth slowdown in major trading partners, and reduced investment flows. 'We call for enhanced regional unity and cooperation as we endeavour to weather the heightened uncertainty. Our current policy priority is to reinforce long-term resilience while maintaining flexibility to address near-term challenges, including rising protectionism and volatile global financial conditions. 'On the fiscal front, this means rebuilding policy buffers while continuing to provide well-targeted support to sustain growth while implementing structural reforms. We will also carefully recalibrate monetary policy based on domestic conditions,' said the group. AFMGM+3 emphasised that they will maintain exchange rate flexibility as a buffer against external shocks. 'Our export markets and sources of growth have become increasingly diversified over the years, with domestic demand and intraregional trade now serving as key drivers of growth,' it said. The group said that amid rising uncertainties and long-term structural shifts, they reaffirm their full commitment to multilateralism and a rules-based, non-discriminatory, free, fair, open, inclusive, equitable, and transparent multilateral trading system, with the World Trade Organisation at its core. 'We will enhance macro-economic policy dialogue, promote regional financial cooperation, and ensure stable and unimpeded industrial and supply chains, to jointly safeguard regional economic and financial stability. 'We fully support the robust implementation of the Regional Comprehensive Economic Partnership (RCEP) Agreement,' it said. They urge international organisations to uphold multilateralism and promote free trade, analyse and monitor the potential impact of trade tensions on the global economy, and support their members in providing policy advice to manage the negative shocks that may arise. 'We will promote greater intra-regional trade and investment flows to strengthen the region's resilience against external shocks, to adjust to pre-existing and new challenges, and to support sustainable and equitable economic development. 'Given our financial market interlinkages, we are closely monitoring regional financial market conditions,' it said. AFMGM+3 stated that the meetings reaffirm their resolve and commitment to ensure that financial systems and markets remain resilient despite uncertainty, while maintaining open communication among members in light of rapidly evolving developments.
