BRISBANE (AFP) - G-20 leaders representing the bulk of the world’s economy on Sunday committed to reform measures to lift their collective growth by an extra 2.1 per cent by 2018, despite evidence of a slowdown in some major nations.
The pledge – known as the Brisbane Action Plan - will push their combined growth beyond the two per cent they were initially targeting in the drive to rehabilitate sluggish global economies and generate jobs.
“This will add more than US$2 trillion (S$2.6 trillion) to the global economy and create millions of jobs,” leaders including US President Barack Obama and Chinese counterpart Xi Jinping said in a summit declaration after weekend talks in Australia.
The communique also agreed to a global initiative to help address a US$70 trillion gap in infrastructure needed by 2030 to improve productivity, by cutting red tape and matching private investment with capital projects.
A hub to coordinate the G20’s work on infrastructure by bringing together governments, the private sector, multinational development banks and other international organisations will be headquartered in Sydney.
The world’s most powerful industrial economies also backed a global crackdown on tax avoidance by multinational companies.
“The benefits of that growth will be felt worldwide, not just in G-20 member nations,” Australian Prime Minister Tony Abbott, the G-20 host, said of the 2.1 per cent target.
“The Brisbane Action Plan and individual country growth strategies and employment plans have been made public so people around the world can see our commitments, hold us to account and witness our progress.”
On Saturday, President Barack Obama said 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.
Australian Treasurer Joe Hockey said moving even further beyond the two per cent target would be possible if EU leaders start pumping billions of dollars into the stalling euro one economy, where Germany and France have only narrowly escaped recession.
New European Commission chief Jean-Claude Juncker has previously outlined a reform agenda, including a 300 billion euro (S$488 billion) investment package to boost growth, employment and competitiveness. Exact details have yet to be presented.
- A commendable effort -
In a report ahead of the G-20 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 global growth forecast for the year to 3.3 per cent, from 3.4 per cent, citing geopolitical tensions and volatility in financial markets.
IMF chief Christine Lagarde said the G-20 this year had been “very productive”.
“Decisive policy action by all is key to making growth strong, sustainable, balanced and inclusive, and to create needed jobs,” she said in a statement after the Brisbane summit. “I strongly welcome the determination of G-20 members to implement growth strategies that we calculate would lift their collective GDP by at least 2.1 per cent by 2018.
“This is a commendable effort, with significant benefits for the global economy. Implementation is now critical, with a strong accountability framework to monitor progress, supported by the IMF.”
Host Australia has worked hard to keep the G-20 focus this year on economic matters, including cracking down on global tax avoidance. The leaders pledged to keep working to strengthen financial institutions, protect taxpayers from having to fund bailouts of “too big to fail” banks while addressing shadow banking risks.
“These important reforms mean the global financial system is far more resilient than it was at the time of the crisis,” their summit declaration said.
- Climate change -
The G-20 leaders also backed “strong and effective action” on climate change while throwing their support behind the UN’s Green Climate Fund, aimed at helping poorer countries deal with the problem.“We support strong and effective action to address climate change,” the leaders said in the communique. “We reaffirm our support for mobilising finance for adaptation and mitigation, such as the Green Climate Fund.”
The announcement comes after Japan confirmed on Sunday plans to give up to US$1.5 billion to the Green Climate Fund, joining a US pledge of US$3 billion to mitigate the impact of global warming on poor nations.
In their declaration, G-20 leaders said they aimed to support sustainable development, economic growth, and certainty for business and investment and would press for an agreed outcome at climate talks in Paris next year.
Obama and European leaders had come together in Brisbane to demand that the G-20 commit to collective action against climate change, a counter to the pro-growth agenda pushed by Abbott. The Australian prime minister had resisted some language on climate proposed for the communique, with one European diplomat likening the negotiations to “trench warfare", but Obama breathed new life into global talks on greenhouse emissions with a surprise pact with China last week.
Abbott said on Sunday that while all members wanted to take action against climate change, they wanted to do it in ways that strengthened growth and boosted employment.