With less than five months to go until the Brisbane G20 Summit, Australia has the unenviable task of corralling the world’s largest and most disparate economies to enact painful but necessary structural reforms as part of an ambitious plan to boost global economic growth.
The plan emerged from the G20 Finance Ministers Meeting in Sydney earlier this year, when the G20 nations agreed to implement policies to grow their collective GDP by more than 2 percent over the next five years, potentially adding $2 trillion and tens of millions of jobs to the global economy. Each country agreed to deliver a comprehensive growth strategy in Brisbane, outlining a clear and credible pathway to boosting their economic activity. So how have they done so far?
If last week’s mid-point meeting in Melbourne was anything to go by, the group is either just barely meeting expectations or slowly falling off target. Australia convened the joint G20 Sherpas and Finance Deputies meeting on June 23 to compare draft strategies and take a closer look at the specific reforms drawn up so far. But a number of media reports suggest that Australian officials may not be entirely impressed with the effort of some of their counterparts.
Australia’s G20 Finance Deputy, Barry Sterland, has described a mismatch in the level of detail provided by countries. Although around 700 policy measures have been produced, Sterland told The Sydney Morning Herald that “not all of the measures are equally robust.” Treasurer Joe Hockey was less diplomatic. “I don’t want to name and shame at the moment but I will,” he told The Financial Times, suggesting that some members have been less than enthusiastic in their commitment to pursue the type of structural reforms that will have a positive spillover effect on the global economy. China, which is widely expected to take over the G20 presidency from Turkey in 2016, reportedly made a strong submission in its draft proposal. Just who exactly is lagging behind, though, wasn’t mentioned.
Some foot dragging is perhaps inevitable given most of the policy areas where progress is most needed are also the most contentious: freeing up labor markets, removing barriers to trade, and pushing greater investment and competition reform. But with finance ministers set to meet in Cairns in late September, individual growth strategies will need to be finalized by then if world leaders are to have enough time to draw them all together into one cohesive action plan at the G20 Leaders Summit in November.
Some are debating whether Australia should have pushed for a clear numerical target (2 percent growth), something which had been resisted by G20 members in the past. Measuring success (or failure) is made all the more easier with numbers and those earlier projections of a $2 trillion boost to the world economy could end up making even a modest agreement look like a disappointment.
But in an informal grouping of disparate economies with no permanent secretariat and no real enforcement power, Australia set a narrow agenda of promoting stronger economic growth and employment, increasing the likelihood that world leaders can embrace a clear set of achievable goals when they meet in Brisbane. Convening a mid-point meeting in Melbourne was itself a first in the G20’s history and provides a useful forum for monitoring progress and adding some much-needed momentum to the agenda. Hockey has also been enthusiastic in involving international organizations like the OECD and IMF to assess the G20’s individual growth strategies, outsourcing some of the burden of the presidency in the process.
There is still time for progress to be made and with so many meetings crammed into the last few months of the year it really is anyone’s guess how things turn out by November. Australia has certainly raised expectations but ensuring everyone follows through with effective action will be the key challenge for the remainder of its presidency of the G20.