First, the G-20 grouping has realised the significance of inclusiveness, and therefore, has identified it as an important instrument of economic growth. So , the commitments of the 2014 Brisbane Action Plan (BAP) now need to be implemented in the most inclusive manner possible, such as providing employment to the youth, strengthening gender equality in employment, energising the SME sector and developing productive capacity and market access for low-income, developing countries (LIDC).
Even as unemployment is increasingly becoming a global menace, especially after the global financial crisis, most advanced countries have been left with less-than-2% growth projections. It will be a hard battle to increase youth employment by 15% by 2025. This then needs to be accompanied by new measures to boost the status of jobs-generating SMEs, as well as programmes to increase the participation of women in the workplace by 25% by 2025, as promised in 2014.
The summit also promises to promote access to electricity for the more than 1 billion people who now do without. Leaders will support the 17 new Sustainable Development Goals (SDGs) launched at the UN in September 2015. As part of the SDGs, there will be a focus on energy for the first time. In the wake of the Ebola epidemic, the leaders may set their eyes on the third SDG: health. But the G-20 is currently struggling to implement its 2009 commitment, to end fossil fuel subsidies and to mobilise climate finance to help make the UN’s landmark climate change summit in Paris in December 2015 a success.
The second challenge is on the implementation front; the G-20 countries shoulder a huge responsibility. Their respective leaders need to take proactive measures to implement necessary steps, and not just make a thousand promises as was done at the BAP summit. They should introduce some new mechanism to monitor the delivery of the most important BAP commitments. They may look at international organisations such as the OECD, WTO and ILO to assist in other fields. They could take the help of civil society organisations, notably, the new Women’s Twenty. Leaders will further endorse and perhaps enhance the capacity of the newly-created Women’s Twenty, the SME forum, to further institutionalise the G-20.
Third, on the climate change front, the G-20 may convene energy ministers’ meetings and trade ministers’ meetings regularly as energy emissions and resource management are serious concerns and need to be effectively dealt with. The world economy can’t live without industrialisation. So, you have a trade-off there. Industrialisation needs energy, and industrialisation also emits and spoils the environment. To strike a balance, the G-20 need to take a major call. Similarly, trade issues, like those in agriculture, forming a part of developing countries’ mainstay for livelihood, have been on the back-burner for a long and need to be reignited through annual trade ministers’ meetings. Arousing the passion for employment and trade benefits, particularly in the agriculture sector, will be more environment-friendly. This will minimise release of pollutants and the effect of emissions. Therefore, the argument that climate change threatens the global financial stability will find prominent recognition in the meeting and agenda.
Any expectation of success at this meeting must also factor in current geopolitical events as tackling the shocks from the conflict in West Asia, terrorism and the Syrian refugee crisis is proving quite difficult, and divisive. Many refugees have landed on the shores of Turkey, and as the chair of this round of the G-20 meeting, it will find it too sensitive an issue.
Lastly, there exists number of other challenges. For a number of other work streams within the G-20, including financial regulation, international tax, and international financial architecture, leaders must play their active part in the summit. Some of the major issues, such as fiscal sustainability, spillover-sensitive monetary policy and market-oriented exchange rates, will prominently figure in the discussion. Stronger, more harmonised financial regulation and supervision needs to be implemented to provide confidence.
Leaders will again endorse reform of international financial institutions and trade liberalisation even as major plurilateral and regional agreements, such as the Trans-Pacific Partnership, take shape. Developed countries would like to project it as being compatible with the WTO’s Doha Development Agenda whereas some developing nations would characterise it as a sinister move to curtail the rise of emerging economies and weakening of South-South cooperation. To further improve domestic resource mobilisation, anti-corruption measures, economic efficiency and fairness, G-20 leaders will have to thresh-out the modalities of adopting the OECD’s framework on base erosion and profit-shifting.
As the theme of the summit broadly focuses on inclusiveness, implementation and investment (3Is), India has a lot to learn and deliver, especially in the MSME sector, as 93% percent of India’s employment is in the informal sector, of which MSMEs are a large chunk.
The author is former senior faculty, IIFT, and professor, LBSIM, New Delhi