Global economic turmoil should not affect 2010

"Financially speaking South Africa is in good standing and we will deliver on our promise of hosting the biggest soccer event," said the minister, adding that the current economy was stronger than what is was 10 years ago.

"Increasingly we are showing resilience to global economic dips. I have no doubt that we will register a decent gross domestic product."

Mpahlwa was speaking at the end of a two-day meeting between the South African government and its international investment council members at the International Investment Council in Mossel Bay.

To ensure a successful event, the government promised FIFA that certain guarantees would be met before the event; these include the construction of stadia which are on par with international standards and improved transport networks and airports, among others.

"All our guarantees are well in place," he said, adding that both the FIFA and the IIC were satisfied with the country's progress.

Markets around the world have been experiencing turmoil exacerbating fears of a global recession.

According to the International Monetary Fund (IMF), world growth is expected to achieve little pickup in 2009, with a 25% chance that the global economy will record 3% or less growth in 2008 and 2009. This is equivalent to a global recession.

The minister said while there was no way he could say the economy would not feel some impact of what was taking place globally, he allayed concerns by saying now was the time to commit more vigorously to pursuing economic objectives.

"We remain confident that we have measures that can, to some extent, shield us from this global turmoil."

Mpahlwa said the government's response to the tightening economic conditions was to speed up industrial development, continue promoting small, medium and micro enterprises (SMMEs), and further strengthen the state's capacity to unlock the country's economic potential.

The IMF reported that sub-Saharan Africa will continue to experience its best period of sustained growth since independence.

In its biannual survey of the world economy issued last week, the IMF said that developing countries have become significantly more integrated into the global economy in recent years.

However, the report warns that the region will not fully escape the global economic turmoil that is expected to create a global slowdown in growth.

The economy of the sub-Saharan Africa region grew by 6.8% in 2007, mainly due to domestic demand, improvements in macroeconomic stability and economic reforms in most countries. Nevertheless, IMF expects world growth to slow to 3.7% in 2008.

The IMF said the region's main policy challenges were therefore "to maintain progress toward increasing integration with the global economy and to reduce poverty in the context of a less-friendly global environment."

Article published courtesy of BuaNews.