Ramaphosa urges G20 leaders to act against inequality ahead of meeting
President Cyril Ramaphosa said on Monday that inequality makes the world "less stable, fuels conflict and undermines" democracy, urging G20 leaders to recognise the extent and urgency of the problem of inequality, and to act accordingly.
Ahead of the start of the G20 Summit in Johannesburg on November 22, Ramaphosa wrote in his weekly letter to the nation that it will be the first time the G20 will focus on inequality and consider an in-depth report of this nature.
He explained that when South Africa took over the Presidency of the G20 nearly a year ago, it identified equality as one of the pillars of its term, alongside solidarity and sustainability.
"We chose to focus on equality because it is essential to a more stable, prosperous and sustainable world. If the G20 is going to live up to its mission to tackle pressing global economic and financial issues, then it needs to significantly and urgently reduce inequality," he said.
He highlighted that global wealth inequality is stark.
"The world's richest 10% account for more than half of total global income. These people account for a staggering 74% of total global wealth. The human cost of these inequalities is severe; one in four people globally face moderate or severe food insecurity," he pointed out.
Ramaphosa pointed out that it is the reason why he appointed an Extraordinary Committee of Independent Experts on Global Inequality as part of the country's G20 Presidency.
The Committee, chaired by Nobel Laureate and renowned economist Joseph Stiglitz, handed over its findings last week.
Ramaphosa said the report examined the causes and consequences of inequality and makes important recommendations.
He explained that among the committee's recommendations is the establishment of a permanent international body on inequality.
"This would be modelled along the lines of the Intergovernmental Panel on Climate Change (IPCC), which has been vital to global efforts to measure and respond to the climate emergency.
"In a similar way, the proposed International Panel on Inequality would bring focus to bear on inequality and measure, monitor and report on global and national trends in inequality among and within countries. It would be mandated to advise governments, multilateral bodies and institutions and the G20 on effective policy responses," he said.
The report suggests policy levers that governments around the world can use to reduce inequality.
"It is noteworthy that South Africa already has a number of these policies in place. These include progressive taxation, minimum wage legislation, public expenditure on free or subsidised healthcare, zero-rating essential foodstuffs and strong social protection systems," he said.
Another important part of the country's response to inequality is to promote debt sustainability, especially for developing economies, Ramaphosa highlighted.
The interest on sovereign debt repayments, particularly in Africa, is stifling public spending and economic growth. It is widening the gap between countries and within countries, he added.
Ramaphosa said this is one of the reason South Africa is using its G20 Presidency to advocate for the reform of the global financial architecture.