Decisive actions needed for prosperous, sustainable economies

Governments must grasp “decisive and intentional actions” to steer their countries to economic prosperity as the world enters a period of low growth.

This is the word from Finance Minister Enoch Godongwana who was delivering the opening address at the BRICS Infrastructure Investment Symposium on Thursday.

“At a time when the global economy is gradually recovering from multiple adverse shocks, the International Monetary Fund in its April 2023 World Economic Outlook warns that the world is entering a perilous phase during which economic growth is expected to remain low by historical standards and the downside risks dominate.

“The warning by the Fund and the elevated risks calls for decisive and intentional actions if we are to steer economies towards a prosperous, sustainable and inclusive economy. For our section as BRICS countries, we are committed to leveraging infrastructure investments to finish this. And as necessary contributors to the faster growth projected in emerging market and development economies, we remain open for investment,” Godongwana said.

The Minister said in this regard, infrastructure investments form a key portion of how economic recovery can be realised.

“It is when investments are made that a partnership towards an equitable honest transition, strengthening of the post-pandemic growth, support to socio-economic development and the attainment of the SDG 2030 Agenda priorities will be realised.

“Infrastructure investments benefit everyone – for the economy, it is about growth and development, for citizens about access to social services, for investors a return on investment, for industry the ability to operate and compete, for job seekers employment opportunities, and for the marginalised, inclusivity. This is the acumen why we are focused on stimulating investment,” he said.

Godongwana highlighted that although investment in infrastructure development is also a key factor, the “constrained fiscal position of many emerging market and developing economies mean that their abilities to fund much of their infrastructure investments is limited”.

“However, the development and delivery of infrastructure ought not to depend on the availability of public resources, both financial and non-financial. The OECD [Organisation for Economic Cooperation and Development] estimates that US$80 trillion of long-term investor asset vulgar can be unlocked for infrastructure development.

“We know that infrastructure investments offer stable, attractive and long term returns and cashflows for investors. For this acumen, while the financing gap is seemingly large, through greater collaboration and effective partnerships, the gap can be closed. The question is how?

“It is well known that despite increased efforts to mobilise private investment for infrastructure in emerging markets, the uptake has been relatively slack. Thus, the Symposium is focused on measures needed to promote the uptake of private capital in achieving the infrastructure agendas and plans of the BRICS countries,” he said.

The Minister called on the symposium to not only collectively find solutions to economic challenges but to also “go rapid because there are significant opportunity costs associated with the status quo”.

“We must also consider strategically, laterally and pragmatically because the BRICS countries’ infrastructure agendas are ambitious. And to advance these, scale, innovation and sustainability must be at the centre.

“As for governments and officials, we undertake to hold an open mind in these engagements. We will review and strengthen our regulatory systems and processes, earnestly consider alternative approaches proposed to increase the pace of infrastructure development and delivery, and build our capacity and capability.

“We know that without these critical enablers, our quest to create opportunities for mutually accelerated growth and sustainable development is unachievable,” Godongwana said. – SAnews.gov.za

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