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Developed nations ‘must be responsible’

Pravin Gordhan criticised developed nations yesterday for “self-justifying” comments that emerging market countries were to blame for the turmoil their economies were facing.

While finance ministers and central bank governors from the Group of 20 (G20) that met in Sydney over the weekend had had “constructive” talks about global co-operation, comments by some officials in advanced economies had caused concern, Gordhan told legislators in his Budget speech in Cape Town.

Finance Minister Pravin Gordhan delivers his 2014 Budget speech in Parliament in Cape Town on February 26, 2014. South Africa cut this year's growth forecast to 2.7 percent, saying deep challenges persisted after a 2009 recession. Picture: Mike Hutchings. Credit: Reuters

“We remain concerned about the self-justifying narrative from certain quarters in the developed world – the idea that emerging markets are the ‘problem’, that they must ‘get their house in order’ and that global co-operation for a more humane and sustainable future is a project for another day,” he said. “These are voices from precisely those places where huge regulatory failures led to the financial earthquake we have experienced.”

“We live in a world where particularly big economies can have hugely positive effects on the world economy and small economies,” he said, adding that every nation took responsibility when the G20 met to discuss the financial crisis in April 2009. “In that context, emerging markets played a very important role; they carried 50 percent of global growth, they now are responsible for one-third of the global [economy], so they are not insignificant in terms of their contribution to global economic welfare.” – Bloomberg

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