Key Takeaways:
– President Cyril Ramaphosa warns that the decline of multilateralism threatens global growth and stability.
– The G20 finance meeting in South Africa was skipped by U.S. Treasury Secretary Scott Bessent.
– The G20 is deeply divided on issues like Russia’s war in Ukraine and climate change.
– South Africa is prioritizing global solidarity, equality, and sustainability during its G20 presidency.
– The U.S. and South Africa are at odds over land reforms and G20 priorities.
– Britain’s finance minister emphasized the need for increased defense spending amid global uncertainty.
Multilateralism Under Threat
President Cyril Ramaphosa opened the G20 finance meeting in Cape Town with a stark warning: the erosion of multilateralism is endangering global growth and stability. Representing South Africa, which holds the G20 presidency this year, Ramaphosa stressed the importance of a rules-based international order, especially amid rising geopolitical tensions.
“Multilateral cooperation is our only hope of overcoming unprecedented challenges,” Ramaphosa said. He listed these challenges as slow economic growth, rising debt, persistent poverty, inequality, and climate change.
However, the meeting highlighted deep divisions within the G20. The group, which includes 19 countries, the European Union, and the African Union, is struggling to find common ground on key issues. From Russia’s war in Ukraine to climate change, member states are increasingly at odds.
A Divided G20
The G20 finance meeting came a week after a G20 foreign ministers’ meeting was boycotted by U.S. Secretary of State Marco Rubio. Rubio accused South Africa of promoting an “anti-American” agenda. This criticism followed President Donald Trump’s attacks on South Africa’s land reforms, which aim to address inequalities rooted in the apartheid era.
Rubio also criticized South Africa’s G20 theme of “Solidarity, Equality, Sustainability,” calling it problematic. U.S. Treasury Secretary Scott Bessent added to the tension by skipping the Cape Town meeting, citing a busy schedule.
Meanwhile, Britain’s Finance Minister Rachel Reeves attended the meeting and emphasized the need for increased defense spending. Reeves argued that a “more dangerous world” requires stronger national security measures to support economic growth.
British Prime Minister Keir Starmer recently pledged to boost defense spending to 2.5% of the economy by 2027. This move reflects concerns over President Trump’s commitment to European security, especially as Trump engages in talks with Russia over its ongoing war in Ukraine.
U.S.-South Africa Tensions Flare
The strained relationship between the U.S. and South Africa took center stage at the G20 meeting. Rubio accused South Africa of using the G20 platform to promote policies that are “bad for America.” He specifically criticized South Africa’s land reforms, which aim to seize private property without compensation to address historical injustices caused by apartheid.
Ramaphosa defended South Africa’s priorities, saying its G20 theme reflects the need for global solidarity, equality, and sustainability. He emphasized that these values are essential for addressing the world’s most pressing challenges.
Britain’s Defense Spending Push
At the G20 meeting, Britain’s Finance Minister Rachel Reeves made a strong case for increased defense spending. Reeves stated, “It’s clear we are facing a more dangerous world,” and called national security the “bedrock of economic growth.”
Reeves’ comments align with British Prime Minister Keir Starmer’s recent pledge to increase defense spending to 2.5% of the economy by 2027. This decision reflects growing concerns about global instability, particularly as President Trump’s commitment to European security remains uncertain.
Britain’s stance highlights the broader debate within the G20 about how to balance economic growth with security concerns. As geopolitical tensions rise, many countries are reconsidering their spending priorities.
South Africa’s Priorities
As the G20 president, South Africa has outlined its key priorities for the year. Ramaphosa emphasized the need to strengthen the resilience of poorer countries, particularly in the face of climate-induced natural disasters.
“The increasing rate of climate-induced natural disasters is disproportionately affecting countries that can least afford the costs of recovery and rebuilding,” Ramaphosa said. He called for innovative financing and insurance mechanisms to support disaster prevention and reconstruction efforts.
Another priority for South Africa is helping developing economies manage their debt burdens. Ramaphosa noted that low- and middle-income countries are struggling with rising sovereign debt and higher borrowing costs. “Debt service costs are increasingly crowding out spending on education, healthcare, and other social services,” he warned.
The UN Development Programme has also sounded the alarm on debt levels in developing countries. It reported that interest payments now exceed 10% of government revenue in 56 developing countries, nearly double the number from a decade ago. The agency urged “bold, immediate” action to overhaul the borrowing system.
The Way Forward
The G20 meeting in Cape Town underscored the challenges of maintaining global cooperation in an increasingly divided world. As the world’s largest economies, G20 members play a critical role in shaping international economic and financial stability.
However, the absence of key U.S. officials and the deepening rifts between member states raise questions about the G20’s ability to address urgent global challenges. Ramaphosa’s warning about the erosion of multilateralism serves as a stark reminder of what’s at stake.
Without stronger cooperation, the world may struggle to tackle slow growth, rising debt, and climate change. As the G20 continues its discussions, the pressure is on world leaders to put aside their differences and work toward common solutions.