South Africa's access to the global financial safety net

Abstract

ABSTRACT The rapid globalisation of the world economy has heightened the exposure of many economies to global economic developments. Small open economies have become particularly vulnerable to global shocks, a situation which has increased their need for emergency funding during times of crisis. The global financial safety net (GFSN) is a financial backstop at the international level which provides support to countries during periods of financial stress. However, access to the GFSN is ‘unequal’ and ‘uneven’, with emerging and developing economies being particularly disadvantaged. This paper provides an overview of the GFSN and analyses South Africa's access to the GFSN in a comparative setting. The analysis reveals South Africa's unequal access to the GFSN, relative to upper-middle income and high-income countries. Finally, the paper highlights some measures to strengthen the country's financial backstop at the international level to enhance South Africa's resilience against international financial shocks.