“Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy”
The Group of Twenty (G20) is a forum that has played a vital role in responding to the global financial crisis of 2008 and strengthening the global financial architecture. In 2009, former British Premier, Mr Gordon Brown, orchestrated a deal wherein world leaders agreed on a $1.1 trillion injection of financial aid into the global economy. Since then, the G20 has mobilized trillions of dollars in fiscal stimulus, rebuilt confidence in the international financial system, and committed to prevent a retreat into protectionism and beggar-thy-neighbour policies. The reforms launched by the G20 leaders have made international financial institutions more reflective of a changing world, including the historic 2010 International Monetary Fund quota and governance reform package.
Since its creation in 1999, the Group of Twenty (G20), which brings together the world’s 19 leading industrialised and emerging economies and the European Union, has been an important player on global stage as a premier forum for global economic governance. At present, the dark clouds of an impending financial crisis are hovering over the skies of the world economy, as the IMF had already predicted that 2016 will be the fifth consecutive year in which global growth will be below the 3.7 percent average. In this era of mounting challenges, the role of G20 gets even more important. It was in this backdrop that the G20 summit opened in idyllic Chinese city of Hangzhou on Sep 4. The two-day summit brought together the leaders of the world’s largest economies with a heavy agenda on global economy and also on climate change.
The Hangzhou Summit
During the Summit, leaders of the G20 member states, guest countries and international institutions discussed various topics – from more effective global economic and financial governance to international trade and interconnected development. At the Summit, the world’s leading economies spoke out against a return to protectionism and defended the unfashionable concepts of free trade and globalisation, warning that the listless global economy needs an urgent reboot. It is important to remember that G20 nations conduct 80 percent of global trade and generate about 85 percent of the global economic output and if they work together to frame a beneficial structure serving both domestic and global economies, future global economic growth prospects would be much brighter than otherwise.
1. Resolving Excess Capacity in Industrial Sectors
The leaders recognized that excess capacity in steel and other industries is a global issue that requires a collective response. G20 leaders called for the formation of a Global Forum to take steps to address steel excess capacity and encourage adjustments. Excess capacity is a global problem, and the Global Forum will provide an opportunity to help find a global solution.
2. Refraining from Unfair Currency Practices
G20 leaders reaffirmed their commitments to refrain from competitive devaluations and not target exchange rates for competitive purposes.
3. Supporting a Modern, Fair International Tax System
G20 leaders reiterated their support for international tax cooperation and called for timely, consistent and widespread implementation of the Base Erosion and Profit Shifting (BEPS) package which will help ensure a fair and efficient global business taxation system. They also called for all relevant and interested countries and jurisdictions that have not yet committed to the BEPS package to do so and join the G20/OECD Inclusive Framework on BEPS.
4. Strengthening Cooperation on Anticorruption
Recognizing the detrimental effects of corruption and illicit finance, G20 leaders reinforced a wide range of ongoing efforts through the adoption of a new two-year G20 Action Plan. The G20 called on relevant international organization to make recommendations to improve implementation of international transparency standards for the purposes of tackling corruption, tax evasion, terrorist financing and money laundering.
5. Moving Forward at the WTO
G20 leaders called for all members to ratify the WTO Trade Facilitation Agreement by the end of 2016. The Agreement aims to eliminate bureaucratic delay for merchandise shipped around the world, stimulate trade growth, and contribute positively to other efforts, including on food security.
6. Promoting Innovation and the Digital Economy
Building on the G20’s major breakthrough in Antalya in 2015 to affirm important voluntary, peacetime norms of responsible state behaviour in cyberspace, G20 leaders this year made additional groundbreaking policy commitments aimed at promoting innovation and the digital economy as one of the most important drivers of global economic growth and development.
7. Free Flow of Data and Internet Governance
The G20 endorsed a blueprint on innovative growth that affirms the importance of preserving the global nature of the internet as an engine for growth, and expressed the G20’s commitment to the free flow of information, ideas, and knowledge across borders, freedom of expression, and the multi-stakeholder approach to internet governance.
8. Broadband Opportunity and Net Neutrality
The G20 called for policies to promote expanded broadband access for all citizens, in particular for education. The leaders reaffirmed the goal of ensuring the next 1.5 billion people are connected to the Internet by 2020. The G20 also endorsed a digital economy cooperation initiative which affirms the importance of creating the right conditions for expanded broadband access, including net neutrality policies to prevent anti-competitive blocking, throttling or prioritization of data.
9. Protecting Intellectual Property and Cybersecurity
The G20 recognized the key role of effective protection and enforcement of intellectual property rights to development of the digital economy and affirmed their 2015 commitment that G20 members should not conduct or support cyber-enabled theft of intellectual property. Building on these cyberspace commitments in Antalya, this year the G20 committed to address security risks, threats and vulnerabilities in the digital economy, including through application of risk-based cybersecurity approaches.
10. Addressing Climate Change
With the official deposit on September 3 of the US and Chinese instruments to join the Paris Agreement, countries representing around 40 percent of global emissions have now joined the Paris Agreement, and more than 55 countries have already joined or have committed to work to join this year, putting the Agreement’s entry into force well within reach. In addition to working together to bring the Paris Agreement into force in 2016, G20 leaders maintained strong momentum on climate action at the Hangzhou Summit.
The G20 looked forward to successful outcomes in key negotiations at the Montreal Protocol and International Aviation Council Organization (ICAO).
The G20 also recognized the importance of collaborating with the private sector to scale up green finance. This complements ongoing work to improve climate financial disclosure.
11. Global Refugee and Migration Crisis
G20 leaders acknowledged the historic numbers of people displaced around the world, and reaffirmed their call for global efforts in addressing the root causes and effects. In particular, leaders noted the World Bank’s efforts to work with other international organizations and its shareholders to complete a global crisis response platform to provide support to refugees and host communities in both low and middle income countries.
12. Promoting Sustainable Development
Recognizing the historic global consensus reached with the adoption of the 2030 Agenda for Sustainable Development (2030 Agenda) and the Addis Ababa Action Agenda one year ago, G20 leaders affirmed their strong commitment to implementing the 2030 Agenda. Leaders also endorsed the G20 Action Plan on the 2030 Agenda, including the High Level Principles, which outline concrete collective actions that will advance global efforts to eradicate extreme poverty and build an inclusive and sustainable future.
13. Increasing Mobilization of Domestic Resources for Development
Leaders affirmed their support for the principles of the Addis Tax Initiative (ATI), a partnership launched in 2015 to help developing countries better mobilize and effectively use domestic resources to achieve the Sustainable Development Goals (SDGs) by strengthening their capacity to finance their own development.
14. Promoting Financial Inclusion
G20 leaders endorsed a set of high-level principles and additional indicators for digital financial inclusion. Recognizing the potential impact on financial inclusion resulting from a decline in correspondent banking relationships which can limit the availability of banking services to businesses and communities, leaders also called on G20 members, the IMF, and the World Bank to intensify their support for domestic capacity building to help countries improve their compliance with global anti-money laundering and countering the financing of terrorism and prudential standards.
15. Advancing Food Security and Nutrition
Leaders reaffirmed their commitment to continue to prioritize the G20’s work on food security, nutrition, sustainable agriculture and rural development. Leaders also welcomed the work of the Global Agriculture and Food Security Program (GAFSP), which promotes sustainable agriculture to reduce hunger and malnutrition in some of the world’s poorest countries.