Date: 28/09/2011
Source: The National Treasury
Title: SA: Gordhan: Briefing by the Minister of Finance, on the IMF/World Bank annual meetings, Washington

South Africa participated in the International Monetary Fund/ World Bank Annual
Meetings held in Washington from 23 to 25 September 2011. South Africa also
chaired the meeting of the G24 (made up of the developing countries in the IMF and
World Bank), and a meeting of the Commonwealth Finance Ministers.

These meetings took place in a context of a global economy that, as noted in the
Communiqué of the IMF’s International Monetary and Financial Committee “has
entered a dangerous phase, calling for exceptional vigilance, coordination and
readiness to take bold action from members and the IMF alike”.

The interconnected nature of the global economy gives rise to contagion effects, and
with Europe being at the epicentre of the global economy, these effects are all the
more severe. The contagion has already manifested through fiscal, financial and
sovereign channels, heightening downward risks faced by emerging markets and
developing economies in particular, and impacting on their future growth prospects.
Weaker global demand might affect commodity prices and levels of global trade
across the world.

In this context, South Africa recognises possible implications for policy options at our
disposal, particularly with Europe being a major trading partner.

We welcome efforts of European countries to address the sovereign debt crisis and
restore confidence. However, more needs to be done to address weaknesses in
bank balance sheets and to accelerate further structural reforms to ensure stronger,
sustainable growth in the Euro area. The USA has also committed to implementing
measures to ensure fiscal sustainability over the medium term.

The BRICS finance ministers also met in Washington and committed to speeding up
structural reforms to sustain growth and advance development domestically, and
contribute to global rebalancing. Their openness to consider providing support

through the IMF to address challenges in global financial sustainability has
highlighted the shift in identity that is taking place between traditional borrowers and
creditors in the global system.

Key outcomes of the Annual Meetings included:
 The need to relook at the adequacy of the IMF resources and the role of the
Fund in crisis management
 A need to assess the current financing tools of the Fund and Multilateral
Development Banks (MDBs) and their adequacy for supporting developing
and low-income countries (particularly in Sub Saharan Africa)
 A more integrated and even-handed approach is necessary to the Fund
Surveillance Framework
 Further work on a flexible, balanced approach to capital flows drawing on
country experiences
 Job creation was highlighted as a priority for both developed and developing
countries. There was also unanimity in the need to find innovative solutions to
address this

South Africa supports global measures that recognise the urgency of taking action to
stabilise the world economy, and urges consistent, integrated, and coordinated
responses to revitalise global growth and address financial sustainability.