World Economy

Ministers Urge G20 to Work for Inclusive Growth

WEF leaders say globalization is good.WEF leaders say globalization is good.

At the World Economic Forum Annual Meeting 2017, ministers of G20 countries called on members to continue on the path of inclusive growth, warning against protectionism. 

“If you want to get more inclusive growth, you need more free trade,” said Wolfgang Schauble, federal minister of finance of Germany, which holds the G20 presidency. Schauble added that the G20 should be redoubling efforts to promote inclusive growth as part of free trade, CNBC reported.

Nicolas Dujovne, minister of treasury of Argentina, said that, after being closed to international trade, his country will embrace globalization. “The new administration is opening the economy and wants to open up and receive the benefits of globalization to generate more inclusive growth,” he said, acknowledging that trying to avoid competition and openness is not good for Argentina. Argentina will take over the G20 presidency after Germany. 

Mehmet Simsek, deputy prime minister of Turkey, said that protectionism is bad for global growth. He added that inclusive growth–a key focus of the 2015 Turkish G20 presidency–is important for creating jobs and reducing income inequality. “Evidence shows that inequalities constrain global growth,” he said. 

While too early to comment on the incoming US administration’s policies, Pravin Gordhan, minister of finance of South Africa, said that, he expects the US to continue to play a key role in enabling global growth and creating the right framework for inclusivity. “Collective determination can lift global growth and ensure all economies benefit at the right time,” he said.

 Responding to a warning from Theresa May, the UK prime minister, to not threaten Britain for leaving the European Union, Schauble countered, “We don’t’ want to punish the UK [for Brexit].” He explained: “We’re not happy with the decision and I don’t think it’s good for the UK or Europe … We need to minimize the damage to the EU and UK.” Schauble added: “If you want to make our economies stable, we all agree the direction is for more growth inclusiveness and sustainability.”


Globalization is good. That’s the message leaders of developing countries want to send from the Davos forum to US president-elect Donald Trump, who takes office on Friday.

Any return to protectionism, they fear, could bring the sky down on decades of trade-based economic growth that has lifted countless millions out of poverty. And for all the problems of blue-collar workers, globalization has helped to achieve low inflation and low unemployment for Americans too, they argue.

Elected on an anti-immigration, protectionist platform, Trump has already caused ructions on the financial markets of many developing countries with threats to scrap trade agreements and impose “a very big border tax” on some imports.

That message has resonated especially in Mexico due to fears that US companies producing goods there for export will face pressure to withdraw, potentially costing hundreds of thousands of jobs and billions of dollars in export revenue.

“My greatest fear is that the policies the US may put in place will push emerging markets into recession,” Kenyan central bank Governor Patrick Njoroge said. “That would be like the sky falling on our heads.”

The fact is that when the global economy is facing downward pressure, it is hard to make the cake of the global economy bigger.

The most vigorous defense of globalization and trade came from Chinese President Xi Jinping. He likened protectionism to “locking oneself in a dark room” and warned governments not to prioritize their own development at others’ expense.

Analyzing the root causes of the sluggish global economy and the problems for which globalization has been made the scapegoat, Xi pointed to a lack of robust driving forces for global growth, inadequate global economic governance, and uneven global development.

Meanwhile, anti-globalization and populism in the West are related to politics that are wrapped up in economic problems and resulting in growing social fragmentation.

As Xi put it, "Whether you like it or not, the global economy is the big ocean from which you cannot escape. Any attempt to cut off the flow of capital, technology, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks, is simply not possible."

 The 47th World Economic Forum Annual Meeting ended on Friday in Davos-Klosters, Switzerland, under the theme Responsive and Responsible Leadership. More than 3,000 participants from nearly 100 countries attended. 

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