As the leaders of the G20 nations meet in Brisbane, there’s a lot of hope that some traction will be gained on trade facilitation measures, infrastructure investment, and tax policy coordination. At a time when the global economy continues to experience mixed fortunes, the Brisbane Action Plan is likely to lay the foundation for a multi-year approach to drive growth and create employment opportunities.
The might of the forum can be gauged from the fact that it commands about 85% of the global GDP and about 65% of the world’s population. In February, G20 finance ministers and central bank governors had committed themselves to developing new measures with the aim of raising the level of G20 output by at least 2% above the currently projected level in the next five years.
This, the IMF, OECD and World Bank estimate, will boost global output by over $2 trillion with the promise of millions of additional jobs. Moreover, the G20’s multi-year Global Infrastructure Initiative (GII) would stimulate public and private sector infrastructure investment—the OECD estimates that over $700 trillion investment in infrastructure is needed in the world by 2030.
The Brisbane summit, however, will also have to address a host of challenges. Global trade growth has slowed again in the first half of this year, especially in the European Union and Japan, and even the emerging markets in Asia are adjusting to slower growth. The leaders at the summit will have to find a workable strategy to bring growth back on track.
The trouble spots:
Emerging markets in Asia are adjusting to slower growth
The Euro area shows signs of a slow and fragile recovery
Russia, Eastern Europe weakness reflect the impact of geopolitical tensions
Growth slows down sharply in Latin America, particularly in Brazil
Japan’s recovery has slowed