Rethinking Bretton Woods | Wed, Sep 21, 2016
A new study co-authored by Aldo Caliari and Nancy Alexander, and published by the Heinrich Boell Foundation, reviews the outcomes of the G20 Hangzhou Summit, held on September 4-5, 2016.
Many observers are cynical about big global Summits which can produce lots of hot air and empty promises. In fact, cynics in search of a cause will find empty G20 promises with regard to unmet commitments to roll back protectionism (which has increased), eliminate fossil fuel subsidies, or implement a range of national economic reforms.
But, it would be folly to undermine the importance of the G20 Summit in Hangzhou, China on September 4-5, 2016. It came at a time when “the impetus toward further economic integration has stalled and in some respects gone into reverse. Globalization is no longer driving world growth,” as Martin Wolf comments in the Financial Times. To some extent, globalization is a scapegoat for other problems such as technology-induced job loss. However, it is also true that there is a rising public consensus that globalization is over-sold and that solutions to crises, such as rising inequality and global warming, must be at the center of global leadership and policy-making.
The Hangzhou Action Plan acknowledges that “support for our efforts to foster further growth hinges on whether the benefits of such growth are shared broadly and reach the poor and more vulnerable segments of society.” Indeed, the Leaders’ Communiqué declares that “…we, the G20, as the premier forum for international economic cooperation, forge a comprehensive and integrated narrative for strong, sustainable, balanced, and inclusive growth…” (para. 6, emphasis added.)
The G20 has staked its reputation on increasing its GDP growth by more than 2% over trajectories by 2018. It urged each member nation to help realize this collective commitment by implementing their own growth strategies which focus on increasing investment, lifting employment and participation, and enhancing trade and competition in the context of sound macroeconomic policies.
This commitment is not being realized despite the G20’s resolute focus on improving and implementing its Growth and Investment Frameworks. To the contrary, financial market volatility has risen and rates of growth and investment as well as trade have slowed to a degree that many policy-makers find alarming. In addition, although the G20 and its partner organizations have taken important steps toward financial reform, vested interests have prevented more far-reaching implementation that is needed to protect the world from another financial crisis.
In addition to financial reform, the G20 has many other inter-related mandates pertaining to investment, energy, infrastructure development, employment, anti-corruption, international taxation, food security, and trade. The 2016 Summit addressed sustainable development goals for the first time, launching the G20 Action Plan on the 2030 Agenda for Sustainable Development.
As a result of reviewing the G20 Leaders’ Communiqué and some of the 100+ documents appended to it, this paper emphasizes key outcomes in the following areas:
•Infrastructure, Energy and Climate
•The Enhanced Structural Reform Agenda
•Trade and Investment Openness
•Industrialization and Innovative Growth
•Financial Regulation and Green Finance
•International tax cooperation and debt
•International Financial Architecture
•G20 Action Plan on Agenda for Sustainable Development