G20 works to nail down growth targets
The G20 Finance Ministers and Central Bank Governors pose for official group photo, in Sydney, on February 22, 2014 - by Saeed Khan
Australian Treasurer Joe Hockey reported much good will among officials from the world's top economies to reach consensus on a raft of issues ahead of the G20 leaders' summit in Brisbane in November.
Hockey has been pushing ministers to agree to faster global growth targets with private sector investment as a central plank, and a draft of the communique, cited by Bloomberg, said they would agree on "concrete measures" to achieve this.
The draft stated 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.
Hockey said he did not want to comment on specifics before the talks end later Sunday.
"There is a lot of good will but I don't want to preempt the discussions," he said.
Not everyone is on the same page however with Germany voicing opposition to setting an overall growth target, while Indian central bank governor Raghuram Rajan also expressed reservations.
"I think it's important for all of us to be more ambitious about growth and do what is necessary," Rajan told the Australian Financial Review, but questioned to "what extent collective exaltation will move us more".
The newspaper said he emphasised that the drive for growth-boosting policies was a "domestic political battle and we all have to fight our own battles and push forward".
- Push for reforms -
Hockey stressed the need for structural reforms to drive growth.
"If we want to have -- not just job creation, but job security -- then we all have a responsibility to undertake structural reform," he said.
Ahead of the meeting the IMF said more coordinated work was needed to keep output expanding and boost demand, as the world economy still struggles to leave behind the financial crisis that began in 2008.
Officials in Sydney have been focusing on how to free up labour markets, encourage infrastructure investment as well the structural reforms needed to spur domestic demand.
Hockey said there was general agreement within the G20 that large pools of private-sector money around the world needed to be tapped to fund much-needed infrastructure projects.
The officials are also considering the next steps needed to reform the IMF while drawing up a roadmap on financial regulatory reforms.
- 'Game changer' -
Ways to close tax loopholes was also on the agenda with the OECD on Sunday delivering a new global standard on exchanging information to help crack down on offshore tax evasion.
Organisation for Economic Cooperation and Development chief Angel Gurria called it "a real game changer".
The new measures involve countries obtaining information from their financial institutions and exchanging the details automatically with other jurisdictions on an annual basis.
"This new standard on automatic exchange of information will ramp up international tax cooperation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion," said Gurria.
The shockwaves being felt by some emerging economies from the Federal Reserve easing back its mammoth stimulus programme, which has seen a flight of capital and currency volatility, has also been a key area of discussion.
Countries led by Indonesia, South Africa, and Brazil have called on the US to provide more clarity on its wind-back and better communication to subdue impacts on emerging markets.
Hockey said there had been extensive talks on how communication could be improved.
"We've had extensive discussion of the impact of tapering on emerging economies," he said. "It was an excellent round of discussions."
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