On Sunday (23/02), the first G20 Finance Ministers and Central Bank Governors Meeting was concluded. In a statement, the finance ministers and central bank governors committed to implement policies to grow collective GDP by over 2 percent above the current trajectory over the next five years. Realistically, these policies could mean an extra USD $2 trillion in global economic activity and tens of millions of additional jobs. Each country will deliver a comprehensive growth strategy as part of the Brisbane Leaders Summit in November.
There is no room for complacency. Each country will play a significant part in achieving the common target of the G20. Reform is hard while economic growth and new jobs needs to be earned. It will take concrete actions across the G20 to boost investment, trade, competition and employment opportunities, as well as getting macroeconomic fundamentals right.
Specifically on boosting investment, particularly in infrastructure, the G20 had an extensive discussion about the common challenges that is faced. There is much that can be done to remove constraints to private sector investment by establishing sound and predictable policy and regulatory frameworks.
The G20 also had a discussion on the global economy, particularly with regard to monetary policy and has committed to enhancing cooperation, increasing communication and building resilience in its financial markets and our economies. In particular, it’s about enhancing cooperation and communication between countries as well as building resilience in the economies and financial markets.
In regard to the International Monetary Fund (IMF), the G20 must ratify the 2010 reforms, and encourages the United States to do so before the next G20 meeting.
The situation in Ukraine has been unfolding over the past weekend. Individual Finance Ministers have been monitoring developments, although it is chiefly a matter for the Leaders and Foreign Ministers, especially given the fluidity of the situation. It is clear, however, there will be economic consequences of these developments and, in particular, the IMF remains the institution best prepared to help countries in transition.
The G20 also made solid progress in ensuring companies pay their fair share of tax. A Common Reporting Standard was endorsed, allowing for the automatic exchange of tax information between jurisdictions. This standard will enhance transparency and reduce opportunities for tax evasion and avoidance.