Development agenda for the G20

When South Africa takes over the rotating chairmanship of the G20 later this year, it will be the fourth consecutive developing country to do so. It will also be the third consecutive member of the BRICS group of major emerging economies, and the first African country to take the lead. Finally, Africa's economic priorities – along with those of developing countries more broadly – ​​will feature prominently on the G20 agenda.

But in an increasingly divided world of closed domestic politics and a growing disdain for multilateralism, making progress on such an agenda will not be easy. And things could get even more difficult. South Africa's G20 presidency begins at the end of the biggest election year in world history - a year in which half of G20 members will go to the polls. Votes in some countries – particularly the United States – could further strengthen the trend towards protectionism and away from multilateral cooperation, including key reforms of international financial institutions such as the World Bank and the International Monetary Fund. A successful G20 presidency will require South Africa to revive political cooperation among the group's members. To this end, it will have to overcome geopolitical differences to strengthen the dialogue between the different "clubs" of the G20, especially the advanced economies and their emerging counterparts. Fortunately, South Africa is relatively well positioned for this: among the established BRICS members – Brazil, Russia, India, China and South Africa – it has the least strained relations with the US and the European Union. But finding a way to bridge the gap between the great powers is only the first step. South Africa will also need to engage the newer BRICS members (Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates), and ensure that the voice of the African Union - which became a permanent member of the G20 last year - is heard. By fostering greater cohesion among developing countries, and achieving greater cooperation within the G20, South Africa will raise its profile within all these "clubs."

The details of the agenda are key. It must be broad and ambitious, taking into account the priorities and aspirations of all G20 sub-groups, and must include measurable commitments. There are several issues that can and should be considered, from easing the pressure of excessive debt to committing more resources to climate action. But one goal is unquestionable: economic growth. Achieving "strong, balanced, sustainable and inclusive growth" has been the official overall goal of the G20 since 2009. And for good reason: growth is key to supporting poverty reduction, fair redistribution, debt sustainability, long-term investments in climate change mitigation and the green transition, and social stability.

But the 2020s are shaping up to be a decade of slow growth – what IMF managing director Kristalna Georgieva recently called the “lukewarm twenties”. The fund estimates that global economic growth will reach 3,2% this year and 3,3% in 2025, and slow thereafter, resulting in an average real growth rate of 3,1% for the decade. This is low by historical standards – in the 2000s and 2010s, global growth averaged 3,9% and 3,7% – and implies slower convergence between high-income countries and their middle- and lower-income counterparts in the coming years . So what does it take to boost growth in the medium term? Global aggregate demand must be supported (at a non-inflationary level). Resources, including manpower, must be used efficiently and sustainably. The global trading system must remain open and rules-based. And the international financial system must meet the needs for short-term adjustments and long-term investments. All this will require a universally agreed multilateral policy framework. In order to design such a framework, it is necessary not only to establish clear political priorities and identify the most effective measures for their achievement, but also to develop detailed institutional procedures for the exchange of information. Moreover, policy interventions must be properly timed and careful to avoid negative externalities. With both developed and developing countries facing the prospect of slow growth in the medium term, the growth agenda is something everyone can agree on. A focus on avoiding zero-sum policies – including the negative consequences of misaligned or even “prosperity at the expense of neighbours” policies – should help. In fact, a well-designed growth agenda, supported by a shared commitment to cooperation, can produce results that no country could achieve alone. The Republic of South Africa should play the role of an "honest mediator" in this process. If he does his job right, he can restore the G20's status as a leading forum for international political cooperation and improve multilateral governance more broadly, including ensuring that reforms of international financial institutions remain on the agenda. Careful preparation for her presidency will be crucial for South Africa – and for the G20.