Australia made a last ditch call Sunday for the G20’s leaders to use all policy levers to rehabilitate global economies and generate prosperity, which could see them better their target of lifting growth by two percent.
The world’s top industrial nations have vowed to boost their combined economic output by some two trillion dollars above the currently projected level in the next five years, via domestic policy reforms.
The idea at the G20 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 percent 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 G20 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 G20 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 percent target would be possible if EU leaders start pumping billions of dollars into the stalling eurozone economy.
New European Commission chief Jean-Claude Juncker has previously outlined a reform agenda, including a 300 billion euro investment package to boost growth, employment and competitiveness. Exact details have yet to be presented.
– Won’t be let off hook –
The treasurer added that G20 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 percent, from 3.4 percent, citing geopolitical tensions and volatility in financial markets.
Host Australia has worked hard to keep the G20 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 G20 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.
The G20 leaders discussed free trade at a dinner meeting on Saturday, with Sunday’s meetings examining economic resilience, financial regulation, tax, the growth agenda and energy issues.
A report on Saturday said an overhaul of the global energy market could be a surprise outcome of the summit with plans for a new agency to protect against oil and gas supplies being used as foreign policy tools.
If approved, it would lay down principles of governance for all participants in energy markets and sit above both the OPEC cartel and the International Energy Agency.