Top US treasury official lauds SA's global clout
Wolin stresses G20's role in economic co-ordination
November 5, 2009
By Ethel Hazelhurst
Global financial reforms needed close international partnerships, US Deputy Treasury Secretary Neal Wolin said yesterday in Johannesburg.
On the last leg of a three-nation trip to sub-Saharan African countries, Wolin said he had met incoming Reserve Bank governor Gill Marcus and was scheduled to meet National Treasury director-general Lesetja Kganyago.
Wolin, who has just visited Rwanda and Tanzania, said South Africa "has a significant role" to play in the global reform process: "You come to the table with a great deal of credibility. Your banks are solvent and have been well managed with little exposure to toxic assets and South Africa's financial regulation is strong."
He stressed the growing importance of the Group of 20 (G20) advanced and developing economies on the international stage. "The shift towards the G20 reflects the critical importance of emerging economies like South Africa, India, Brazil and others. To be credible and effective, global economic co-ordination in the 21st century must take place in a broad and inclusive forum."
He discussed the role of US consumers as drivers of global economic growth - a role they were no longer able to play. "Some of the world's largest economies relied upon the American consumer as the primary engine of growth. Americans made it easy. For far too long, we bought too much and saved too little - running up large external deficits and international debt."
Meanwhile, "other nations relied too heavily on exports, running large external surpluses, building up large foreign exchange reserves and leaving themselves vulnerable to a collapse in demand. The imbalanced growth model of recent years is not just undesirable, it's unsustainable".
He said Americans were now spending less and saving more. "The US deficit will decline as our stimulus spending winds down over the next year. The combination of increased saving and a falling deficit means that the US and US consumers can no longer be the driving force of global expansion."
South Africa, "as a key member of the G20 and as a nation with important trade relationships with China and other large economies, has an opportunity to step up to the plate and be a leader in pushing for a more balanced, sustainable model for global economic growth", he noted.
He also said the US did not see itself as competing with China in Africa. "In many cases we are working together." But he said that China should engage "in a transparent way, consistent with international standards".
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