G-20 Summit: Leaders face pressure to deliver on growth

Leaders of the top 20 industrialized nations gather in Brisbane for their annual G20 summit. -- PHOTO: REUTERS
Leaders of the top 20 industrialized nations gather in Brisbane for their annual G20 summit. -- PHOTO: REUTERS

BRISBANE (AFP) - Australia made a last ditch call on Sunday for the G-20's powerful leaders to use all policy levers to rehabilitate global economies and generate prosperity, which could see their target of two per cent growth bettered.

The world's top industrial nations have vowed to boost their combined economic output by some US$2 trillion (S$2.6 trillion) above the currently projected level in the next five years, via domestic policy reforms.

The idea at the G-20 leaders' summit in Australia has been to flesh out how - with the process due to be announced later Sunday in the "Brisbane Action Plan".

"Well, it certainly is the case that two per cent target that we announced in Sydney (this year) has been met, but it will go further," Australia's Treasurer Joe Hockey told national television. "We cannot rest. The world needs growth."

On Saturday, President Barack Obama made clear the United States cannot "carry the world economy", and that other G-20 nations must do more to spur growth and create jobs.

Buoyed by unemployment at its lowest level since July 2008, the US economy is motoring at a time when other parts of the global engine room, notably Europe and Japan, are starting to splutter.

"So here in Brisbane the G-20 has a responsibility to act, to boost demand and invest more in infrastructure and create good jobs for the people of all our nations," said the US president.

Hockey said moving beyond the two per cent target would be possible if EU leaders start pumping billions of dollars into the stalling euro zone economy, a measure he suggested could be imminent.

The treasurer added that G-20 leaders would not be let off the hook when it comes to delivering on their promises to cut red tape and encourage private infrastructure investment to boost growth.

"What we have done is we've commissioned the IMF and the World Bank to monitor and report back on the performance of individual countries," he said.

"So for the first time ever, we've put a number on the ambition, so it is not words, it's a number."

In a report ahead of the summit, the International Monetary Fund said the world economy faced stiff headwinds from sluggish growth in Europe and Japan and a slowdown in emerging economies.

It trimmed its growth forecast for the year to 3.3 per cent, from 3.4 per cent, citing geopolitical tensions and volatility in financial markets.

Host Australia has worked hard to keep the G-20 focus this year on economic matters, including cracking down on global tax avoidance.

But the summit in Brisbane has been shadowed by Russia's actions in Ukraine and a headline announcement by the United States on climate change.

Hockey said he did not accept that climate change was one of the biggest impediments to economic growth, a view that flies in the face of many other G-20 powers.

"No. Absolutely not. We cannot afford to deal with climate change if governments are in recession or if countries are facing huge structural challenges," he said.