World Economy

G20 Says Will Overcome Global Economic Challenges

G20 Says Will Overcome Global Economic ChallengesG20 Says Will Overcome Global Economic Challenges

As global trade growth remains below pre-crisis levels, G20 leaders reaffirmed their strong commitment to better coordinate efforts to reinforce trade and investment through adjusted growth strategies.

The Antalya Action Plan, comprising the adjusted growth strategies and implementation, schedules for key commitments, reflects G20’s determination to overcome global economic challenges, Bernama reported.

In concluding the Antalya G20 summit, leaders also reiterated their commitment to achieve its collective gross domestic product by an additional 2% by 2018 as announced in Brisbane last year.

Throughout the two-day deliberations, the summit took note of the uneven global economic growth which fell short of expectations despite the positive outlook in some major economies.

Risks and uncertainties in financial markets remain and geopolitical challenges are increasingly becoming a global concern while a shortfall in global demand and structural problems continue to weigh on actual and potential growth.

To achieve strong, sustainable and balanced growth, G20 leaders said they would continue to implement sound macroeconomic policies in a cooperative manner while their monetary authorities would ensure price stability and support economic activity.

“We reiterate our commitment to implement fiscal policies flexibly to take into account near-term economic conditions, so as to support growth and job creation while putting debt as a share of GDP on a sustainable path,” the leaders said, stressing their commitment to promote global rebalancing.

Against the background of risks arising from large and volatile capital flows, G20 will promote financial stability through appropriate frameworks, including by ensuring an adequate global financial safety net.

 To Lift Potential Growth

Its growth strategies will include measures to support demand and structural reforms to lift actual and potential growth, create jobs, promote inclusiveness and reduce inequalities.

“We have made significant progress towards fulfilling our commitments since last year, implementing half of our multi-year commitments.

“Analysis by the International Monetary Fund, the Organization for Economic Cooperation and Development and World Bank Group indicates that our implementation so far represents more than one third of our collective growth ambition. “Yet, we also acknowledge that more needs to be done,” they said.

 Lifting SMEs

In terms of investments, G20 has developed ambitious country-specific investment strategies which would contribute to lifting the aggregate G20 investment to GDP ratio, by an estimated 1% by 2018.

“We also considered alternative financing structures, including asset-based financing and simple and transparent securitization to facilitate better intermediation for small and medium enterprises and infrastructure investment,” they said.

Leaders also welcomed the Joint Action Plan on SME Financing, the G20/OECD High-Level Principles on SME Financing as guidance and the establishment of the private sector-led World SME Forum, a new initiative that will serve as a global body to facilitate the contributions of SMEs to growth and employment.

In enhancing the resilience of the global financial system, the grouping has completed further core elements of the financing reform agenda in finalizing the common international standard on total-loss-absorbing-capacity for global systemically important banks.

 Shadow Banking

“We will continue to monitor and if necessary, address emerging risks and vulnerabilities in the financial system, many of which may arise outside the banking sector,” they said.

In this regard, G20 will further strengthen oversight and regulation of shadow banking to ensure resilience of market-based finance, in a manner appropriate to the systemic risks posed.

“The G20 represents 80% of the world economy, you can’t make it happen in any other forum. Although the G20 is not a decision-making forum, but once a consensus is reached you can carry it forward wherever a decision has been made,” OECD Secretary-General Angel Gurria said.

The communiqué also backed India on the issue of quota reforms of the International Monetary Fund and called for early reforms. “We remain deeply disappointed with the continued delay in implementing the IMF quota and governance reforms agreed in 2010. The 2010 reforms remain our highest priority for the IMF and we urge the United States to ratify these reforms as soon as possible,” it said.