G-20 leaders agree on US$2-trillion boost to growth
BRISBANE, Australia (AP) — Under pressure to jolt the lethargic world economy back to life, leaders of G-20 nations yesterday finalised a plan to boost global GDP by more than US$2 trillion over five years. The fanfare, however, was overshadowed by tensions between Russian President Vladimir Putin and Western leaders.
The communiqué from the Brisbane summit of Group of 20 wealthy and emerging nations revealed that the plan for jumpstarting growth includes investing in infrastructure, increasing trade and the creation of a global infrastructure hub that would help match potential investors with projects.
Leaders also aim to reduce the gap between male and female participation in the workforce by 25 per cent by 2025, saying that would put 100 million more women in employment and reduce poverty.
Speaking at the end of the summit, Australia’s Prime Minister Tony Abbott said countries will hold each other to account by monitoring implementation of their commitments to boost growth.
The G-20, criticised in recent years as being all talk and no action, was urged to deliver measurable results this year. Perhaps in response, the group said the International Monetary Fund (IMF) and OECD will also play a role in monitoring progress and estimating the economic benefits of the growth plan.
IMF Managing Director Christine Lagarde dismissed concerns that countries might fudge their growth figures, saying that while the monitoring isn’t scientific, it’s a thorough and detailed process.
“We’ll make sure they keep their feet to the fire,” she said.
The G-20 communiqué says if the US$2 trillion initiative is fully implemented, it will lift global GDP by 2.1 per cent above expected levels by 2018 and create millions of jobs.
Abbott said countries agreed on more than 800 new measures to spur the global economy, which the IMF describes as facing a “new mediocre”.
“People right around the world are going to be better off,” he said.
But the G-20, which represents around 85 per cent of the global economy, faces an uphill struggle to implement its plan after international agencies downgraded their global growth forecasts in recent months. Growth in China and Japan has weakened and Europe is teetering on the brink of another recession.
And experts warned that the countries would need to comply with every one of the 800 measures to achieve the 2.1 per cent target, a virtually impossible task, given the difficulties they will inevitably face in pushing some of the policies through in their home countries.
“There are two questions: whether the specifics are credible and whether the political backing by leaders is convincing,” said Thomas Bernes, an analyst with the Centre for International Governance Innovation, a Canadian-based think-thank.
Abbott said the group had been most productive on the issue of trade, calling it the “key driver of growth”. The leaders adopted reforms to streamline customs procedures and reduce regulatory burdens.