Johannesburg - President Jacob Zuma will fight for the falling rand at the G20 summit in St Petersburg, Russia, on Thursday and Friday.
Zuma landed in Russia Wednesday, the presidency said.
On Tuesday Zuma’s office said he would call for more carefully considered collective action by major world economies to prevent the sort of global financial volatility which has driven down the rand from about R8.20 to the US dollar to R10.20 in a year.
The presidency said South Africa had benefited from the US Federal Reserve pumping $85 billion into financial markets every month as foreign investors had bought huge amounts of South African government bonds at fairly low yields and equities.
But the Federal Reserve governor’s hints that this quantitative easing might stop had caused emerging market currency volatility. “Decisions taken by countries based solely on their own national interest can have serious implications for other nations,” the Presidency said.
“There must be a greater recognition that we live in an interconnected world. ‘Decoupling’ is not an option for either developing or developed economies. The solution to all these challenges – turbulence in financial markets, the fragile and uneven economic recovery – lies in better global co-ordination of efforts.”
So South Africa was joining the call by emerging markets and developing countries for more carefully considered global collective action in response to the global economic crisis; and more inclusive and representative governance arrangements in the management processes of international institutions.”
The Presidency said it believed the summit would focus on measures to boost sustainable, inclusive and balanced global growth, including the creation of decent jobs.
Governments around the world faced the dilemma of whether they should implement austerity or stimulatory measures to tackle the global economic slowdown.
“South Africa has taken the view, as the whole G20 has, that countries with fiscal space should spend more,” one official said.
The official added the G20 had not focused enough on the problem of income inequality within countries that had grown over the past four decades. “Globally we’ve seen a smaller and smaller share of GDP accruing to labour,” he said, adding the G20 needed to better understand the causes of this growing inequality.
Independent Foreign Service, Sapa