Pretoria - Minister of Finance Pravin Gordhan has shown government's hand
on the contentious issue of a proposed global banking tax and higher liquidity
requirements, saying South Africa will not support a uniform levy across the
world or measures that are unfriendly to some countries.
Speaking in
Pretoria ahead of a key G20 meeting in Toronto this weekend, Gordhan said the
meeting is a crucial one as global responses to the financial crisis have
become less coordinated, with individual interests starting to dominate again.
On what will likely be a heated debate around currencies, he said the key was
to ensure balance in the currency market.
Gordhan
said South Africa had raised the banking issues with the financial stability
board and has requested an appropriate system which provides country-friendly
measures within the global framework.
It has been
said South African banks could be short of as much as R600bn if proposed
liquidity measures are implemented - and these together with higher capital
requirements and levies will lead to lower lending in an economy desperate to
grow its infrastructure.
Gordhan
said South Africa should not be punished as the country did not create, cause
or deepen the financial crisis.
"SA
will be encouraging everyone to work together to move to a cohesive
framework," he said.
Gordhan
added South Africa and Canada were not in favour of a global banking tax as
their systems were stable. A proposed bank levy need not be uniform, but
there could certainly be levels of cooperation in other areas.
On the
currency debate, he said while certain players are saying they did not
want their
currencies to appreciate too much or become too volatile or
uncompetitive, this was true for everyone. The key would be to come to
a coordinated pact
and ensure all currencies are at levels allowing each country to
be competitive on a global scale.
"We
must find win-win formulae that satisfy everyone and not just some
people," he said.
Gordhan
feels the 2010 FIFA World Cup will help bring Africa to the fore on the global stage,
with the ability to host this event improving confidence. But he added that fiscal
consolidation is key and a balanced approach to fiscal spending must still
ensure the growth-friendly elements of any global plans are not sacrificed.
Gordhan
noted SA's unemployment stats released on Tuesday "are depressing to say
the least" - they showed the country added to the 870 000 formal and
non-formal sector jobs lost in 2009 by another 79 000 formal jobs in the first
quarter.
"The
level of job creation must improve phenomenally," he said, pointing out
that the problem of 75% of young people being without jobs was serious.
Gordhan said harder work is called for by all stakeholders to help improve the
situation.
"Job
creation and poverty alleviation must be at the centre of discussions - it will be
one of the key challenges at the G20," he said.
- I-Net Bridge