G20 host Australia urges central banks to avoid 'surprises'
Australian Treasurer Joe Hockey (L) and CEO of Wesfarmers, and B20 Chairperson, Richard Goyder, speak at the Joint G20 and B20 Infrastructure Roundtable in Sydney, on February 21, 2014 - by Dan Himbrechts
Australian Treasurer Joe Hockey said he wants the summit to stay focused on ways to stimulate growth and create jobs in the aftermath of the 2008 financial crisis, adding he was confident of tangible results.
"I must say there is tremendous goodwill in all the meetings I have attended," he told reporters before Saturday's meetings began.
But the fallout being felt by emerging economies, which have suffered sharp capital outflows and losses to their currencies as a by-product of the Federal Reserve easing back its mammoth stimulus programme, remains a lightning rod issue.
Countries led by Indonesia and South Africa, which is not attending the Sydney meeting along with Mexico and Brazil, have called on the US to provide more clarity on its wind-back and better communication to subdue the impacts on emerging markets.
US Treasury chief Jacob Lew said the US had to act in its own best interests.
"My focus as US treasury secretary has to be on the core strength of the US economy and I think the world economy does better when the US economy is doing well," he was cited as saying Friday by the Australian Financial Review.
- Policy of 'no surprises' -
But Hockey called for a policy of "no surprises", saying central banks in the world's most advanced nations should give each other better notice of policy changes to avoid market turbulence.
"I think if there is a policy of no surprises in relation to monetary policy activity and that central banks around the world have reasonable warning of what may be events that create market volatility, I think that's not unreasonable," he said, voicing support for emerging markets.
"I think that's what central bank governors are aiming for."
Bilateral meetings were held Saturday morning ahead of a session on the global economy in which delegates were to discuss the latest reports from the OECD, IMF and World Bank.
The OECD warned Friday that declining global productivity would usher in a new and extended era of low growth unless reforms are accelerated.
These include freeing up labour markets, encouraging infrastructure investment and undertaking the structural reforms needed to boost domestic demand.
Hockey has been pushing his fellow ministers to agree to faster global growth targets and a draft of the communique due to be issued Sunday cited by Bloomberg said they would agree on "concrete measures" to achieve this.
It said collective gross domestic product could be raised by "at least two percent" above current projections over the next five years, although this could not be confirmed.
OECD data released Thursday showed growth in advanced economies slowed down slightly in 2013 to 1.3 percent from 1.5 percent in 2012.
Hockey said he was confident the meeting would provide results with "a general mood of intention to deliver real outcomes".
"All the finance ministers and central bank governors I have spoken to understand that whilst the globe is facing some challenges, that there is some level of international market volatility," he said.
"Through greater cooperation, realistic goals, and importantly a tangible process for achieving those goals, we can have very real outcomes this weekend."
But he admitted that some of his counterparts -- notably Germany -- were reluctant to put their names to a global economic growth target.
"I understand that there is some reluctance from some to have a goal or a target or an ambition, but we need to reach high to deliver more," he said.
"There needs to be a tangible plan presented by each jurisdiction that helps to achieve our collective goal. "
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