In a few days, the leaders of G20 economies will arrive in Australia for the Brisbane Summit.
Six years ago, the impacts of the global financial crisis reverberated throughout the world. While those crisis years are behind us, we still struggle with its legacy of debt and joblessness.
The challenge for G20 leaders is clear – to lift growth, boost jobs and strengthen financial resilience. We need to encourage demand to ward off the deflation that threatens the major economies of Europe.
The Managing Director of the International Monetary Fund Christine Lagarde has urged us to find new momentum with more growth, more jobs, better growth and better jobs.
This means creating the right conditions for the private sector to succeed. It means having the willingness to use investment in infrastructure to boost growth.
We cannot let recovery stall, which is why I will be asking G20 leaders in Brisbane to do more.
At the 2011 G20 Summit, leaders discussed the necessity of political will. Leaders understood that the G20 is at its most effective when we commit to action together and when we exert our collective political will to deliver on those commitments.
In 2014, we have worked towards an ambitious shared objective – to lift G20 GDP by at least an additional two per cent above the current trajectory by 2018. To achieve this goal, G20 members have identified almost 1,000 new measures in their domestic growth strategies.
Over the course of 2014, G20 members have challenged each other to find reforms that matter and that will deliver the biggest impacts.
While there will remain a role for accommodative monetary policy, the G20 must adopt the sort of structural economic reform that drives long-term growth. These reforms are difficult, but for those economies that pursue them, growth has begun to return. This is true of both Britain and the United States.
The fiscal stimulus provided by the G20 during the global financial crisis helped prevent the collapse of the world economy. Since then, some governments have exhausted their fiscal capacity. New sources of investment must be found. There is a big role here for the private sector.
Encouraging greater levels of investment in every G20 nation is essential to address the
$1 trillion annual infrastructure investment gap.
In September, G20 nations agreed to establish a Global Infrastructure Initiative – a multi-year agenda to improve investment environments, plan and prepare infrastructure projects better, and improve long-term finance.
We recognise the need to address youth unemployment and are working to boost workplace participation, because these issues are critical to economic growth. In Brisbane this month, we’ll consider setting ourselves a goal of reducing the current gap in workforce participation between men and women in G20 economies by 25 per cent by 2025. Narrowing the gender gap by this amount would bring more than 100 million additional women into the workforce worldwide.
Economic growth needs to be built on sound foundations. Building the resilience of the financial sector has been at the heart of the G20’s work since the global financial crisis. It’s work to protect taxpayers from having to bail out globally important banks, make derivatives markets safer, and improve oversight of the shadow banking sector – the financial institutions that act like banks, but without the same level of supervision.
The outcomes of the recent ‘stress test’ of Europe’s banks showed that we’re on the right path and that our actions are making a difference.
Now is the time to draw a line under the global financial crisis. With a membership that is responsible for almost 85 per cent of global GDP and three-quarters of world trade, the G20 can play a crucial role in doing that. But we will only succeed if leaders use of their collective influence and capacity for action, and implement the necessary domestic reforms to boost confidence.
The G20 exists because it can deal with big problems that are beyond the capacity of nation states to deal with individually.
Reaching agreement on how to deal with such problems is a test of the strength of the G20 partnership.
When Australia assumed the G20 presidency a year ago, our aim was for G20 leaders to come together in Brisbane prepared and equipped to deliver real actions and real economic reforms that would make a real and measurable difference to the global economy and to the peoples of the world.
When the summit concludes, I trust leaders will have agreed a body of work that addresses the fundamental issues facing the global economy, and that commits each of us to action at home. (Courtesy Australian High Commission in Brunei Darussalam)