G-20 leaders promise projects, policy reforms to boost economic growth
Criticized for being long on promises and short on delivery, leaders of the Group of 20 major economies set a target of lifting global economic output by at least 2% over five years -- an ambitious goal that would add $2 trillion to the world economy and millions of new jobs.
To achieve that, the U.S. and other G-20 countries presented more than 800 specific projects and policy reforms that would, for instance, build more roads, improve trade and bring more women into the workforce.
“We will monitor and hold each other to account for implementing our commitments,” the leaders said in a joint statement at the end of a two-day summit here on Sunday.
Progress would be analyzed by the International Monetary Fund and the Organization for Economic Cooperation and Development. The IMF’s managing director, Christine Lagarde, said of the review process: “We’ll make sure we keep their feet to the fire.”
Still, nobody is expecting 100% implementation or can even say whether most of the 800-plus infrastructure projects and policy initiatives will fly because many of them will need to be funded or approved by politicians in their respective countries.
And it is unlikely that the new plan will help boost near-term economic growth -- something that President Obama and his administration are keen on, given their concerns about the current slow and uneven recovery of the global economy.
With the U.S. now the main engine of global economic growth, Treasury Secretary Jacob J. Lew laid out American economic priorities for the G-20 in a speech a few days before the summit, challenging Europe and Japan in particular to do more to strengthen their stagnant economies.
Details of individual country proposals to boost growth have not been released, but it was evident that U.S. officials did not get stronger commitments from Germany, Europe’s biggest economy, to unleash investments to stimulate demand.
Nor was there definitive word that Japan, the world’s third-largest economy, would delay plans for a critical sales-tax increase, though there were indications that Prime Minister Shinzo Abe would do that in light of concerns that more tax increases could further crimp the recovery efforts there.
Australian Prime Minister Tony Abbott, host of this year’s G-20 summit, had made the 2% growth increase his singular focus, but the summit is likely to be remembered for other things, especially the tension stirred by the presence of Russian President Vladimir Putin, who came under fire from Obama and other leaders for Russia’s continued support of separatists fighting in Ukraine.
On the economic front, some of the summit’s notable achievements came in areas that in the past had been treated as peripheral to the main focus of the G-20.
As an outspoken skeptic of global warming, Abbott had sought to keep climate change off the G-20 agenda. But Obama gave a major speech Saturday in Brisbane in which he highlighted the new U.S.-China deal to cut carbon emissions and called on the world to join in the effort.
A day later, the final G-20 leaders’ statement encouraged nations to provide targets for reducing greenhouse gases before a global climate conference in Paris next year -- although the language was watered down to say only “for those parties ready to do so.”
The G-20 leaders also committed to do all they can to contain the Ebola outbreak. Though lacking in specifics, analysts called it significant.
“It’s the first time the G-20 has taken up health issues directly,” said John Kurton, co-director of the G-20 research group at the University of Toronto, who was in Brisbane to follow the proceedings.
As well, leaders endorsed an anti-corruption action plan despite initial resistance from the Chinese. Saying the G-20 was committed to improve transparency, the statement calls for nations to share information that would make it easier to know the true owner of shell companies that are sometimes used to launder money and evade taxes.
Anti-corruption groups credited G-20 leaders for recognizing the importance of collecting information on the true owners, also known as beneficial owners.
“But the fact that the word ‘public’ is still missing from both beneficial ownership registers and country-by-country reporting standards shows that G-20 leaders aren’t fully committed to finding the strongest solutions,” said the Financial Transparency Coalition.
