World Economy
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G-20 Vows $2t Global Growth Push

G-20 Vows $2t  Global Growth PushG-20 Vows $2t  Global Growth Push

G20 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 percent 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 percent they were initially targeting in the drive to rehabilitate sluggish global economies and generate jobs, AFP reported.

"This will add more than $2 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 $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 organizations will be headquartered in Sydney.

Global Crackdown

The world's most powerful industrial economies also backed a global crackdown on tax avoidance by multinational companies, while stressing the

importance of energy security to hitting the growth goals.

"The benefits of that growth will be felt worldwide, not just in G20 member nations," Australian Prime Minister Tony Abbott, the G20 host, said of the 2.1

percent target.

World Bank chief Jim Young Kim said higher and more inclusive growth was essential to cut poverty and reduce inequality, welcoming the commitments as "a much-needed boost to G20 countries and beyond".

Energy Security

The member countries agreed that energy security must become a G20 priority, noting that stability in the markets was "critical" to their growth.

The long-term stability of oil markets is seen as crucial to ensuring the success of reforms promised by the G20, so that it can meet its aim of lifting

its combined economic growth by 2.1 percent over the next five years.

A summit in Brisbane had a session dedicated to global energy issues for the first time, with G20 members representing more than 80 percent of the

world's energy consumption, 60 percent of oil and gas production and over 90 percent of coal output.

"Increased collaboration on energy is a priority," they said in a summit declaration.

"Global energy markets are undergoing significant transformation. Strong and resilient energy markets are critical to economic growth."

They asked energy ministers to meet and report back in 2015 on options that could feed discussions on reform of the international energy system.

Benefit for Poor

Rights groups such as The Civil Society 20 group, or C20, want assurances that the poor will benefit the most from the plans, estimating that the additional growth could lift one billion people out of poverty if it was poured into the poorest 20 percent of G-20 households.

Tax avoidance by big, multinational companies was expected to be high on the agenda, particularly in light of the recent leak of documents suggesting that hundreds of big companies such as Pepsi and IKEA had organized tax-lowering deals with Luxembourg.

The tiny European nation's neighbors reacted angrily to the news, noting that they have had to impose harsh austerity measures on their own citizens to keep government budgets afloat following the global recession.

 

Financialtribune.com