G20 leaders say global stability is threatened by declining cooperation 27/02/2025

G20 leaders say global stability is threatened by declining cooperation / Photo: © AFP

By AFP - Agence France Presse

G20 leaders say global stability is threatened by declining cooperation

The erosion of multilateralism threatens global growth and stability, President Cyril Ramaphosa warned on Wednesday at a G20 finance meeting in South Africa, marked by the absence of the US Treasury Secretary.

Two days of negotiations between finance ministers and central bank presidents from the world's major economies began a week after a meeting of G20 foreign ministers was snubbed by US Secretary of State Marco Rubio, who complained of its “anti-Americanism”.

“The erosion of multilateralism poses a threat to global growth and stability,” said Ramaphosa in his opening speech.

“At this time of heightened geopolitical contestation, a rules-based order is particularly important as a mechanism for managing disputes and resolving conflicts,” he said.

The G20, a group of 19 countries plus the European Union and the African Union, is divided on key issues from Russia's war in Ukraine to climate change, with world leaders scrambling to respond to Washington's drastic policy shifts since the return of US President Donald Trump.

“Multilateral cooperation is our only hope of overcoming unprecedented challenges, including slow and uneven growth, rising debt burdens, persistent poverty and inequality, and the existential threat of climate change,” said Ramaphosa.

Italy's Foreign Minister, Giancarlo Giorgetti, echoed the call, warning that geopolitical tensions risk further slowing down the global economy, especially in the poorest countries.

“Protectionism, trade barriers, and political uncertainty threaten growth and global value chains, increasing production costs and inflation and weakening economic resilience,” he said.

South Africa holds the rotating presidency of the G20 this year and has chosen the theme “Solidarity, Equality, Sustainability”.

US Treasury Secretary Scott Bessent said on February 20 that he would not attend the Cape Town meeting because he was too busy.

A few days earlier, Rubio had accused the G20 hosts of choosing an “anti-American” theme. This followed Trump's criticism of land reforms in South Africa aimed at correcting inequalities perpetrated during the apartheid era.

The United States was represented at the Cape Town meeting by the head of the Federal Reserve, Jerome Powell.

The Group of 20 brings together the world's largest economies, which together account for around 85% of global GDP, to discuss international economic and financial stability.

- Dangerous world

Although some countries chose not to send their finance ministers, those of Great Britain, Switzerland, and France were present, as was the head of the European Central Bank, Christine Lagarde.

Britain's finance minister, Rachel Reeves, would stress at the talks that increased defense spending was necessary for economic growth, the UK Treasury said in a statement.

“It is clear that we are facing a more dangerous world,” Reeves said. “National security will always be the first responsibility of this government and is the bedrock of economic growth.”

British Prime Minister Keir Starmer pledged on Tuesday to increase defense spending to 2.5 percent of the economy by 2027, as uncertainty reigns over Trump's commitment to European security at the same time as he holds talks with Russia over its war in Ukraine.

Ramaphosa said South Africa's priorities for its year at the head of the G20 include strengthening the resilience of the poorest countries to deal with natural disasters.

“The increasing rate of climate-induced natural disasters is disproportionately affecting countries that can least afford the costs of recovery and reconstruction,” he said, calling for ‘innovative financing and insurance mechanisms’ to increase funding for disaster prevention and reconstruction.

Another priority is to help developing economies deal with debt repayments, he said.

“Debt servicing costs are increasingly undermining spending on education, health, and other social services, as well as the infrastructure needed for economic development,” he said.

The UN Development Program said in a statement ahead of the meeting that rising debt service payments in the poorest countries have reached alarming levels and called for “bold and immediate” action to overhaul the lending system.

Interest payments exceed 10% of government revenue in 56 developing countries, almost double the figure of a decade ago, he said.

Without better access to more effective debt relief, many developing countries risk long-term solvency crises, he warned.

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