G-20 leaders reveal details of global growth plan

By , on November 17, 2014

economy growth

BRISBANE, Australia — Under pressure to jolt the lethargic world economy back to life, leaders of G-20 nations on Sunday finalized a plan to boost global GDP by more than $2 trillion over five years by investing in infrastructure and increasing trade. The fanfare, however, was overshadowed by tensions between Russian president Vladimir Putin and Western leaders.

The communique from the summit of Group of 20 wealthy and emerging nations revealed that the plan for jumpstarting growth includes the creation of a global infrastructure hub that would help match potential investors with projects. Leaders also aim to reduce the gap between male and female participation in the workforce by 25 percent by 2025, saying that would put 100 million more women in employment and reduce poverty.

Speaking at the end of the summit in Brisbane, Australian Prime Minister Tony Abbott said countries will hold each other to account by monitoring implementation of their commitments to boost growth.

The G-20, criticized in recent years as being all talk and no action, was urged to deliver measurable results this year. Perhaps in response, the group said the International Monetary Fund and OECD will also play a role in monitoring progress and estimating the economic benefits of the growth plan.

The G-20 communique says if the $2 trillion initiative is fully implemented, it would lift global GDP by 2.1 percent above expected levels by 2018 and create millions of jobs.

Abbott said countries agreed on more than 800 new measures to spur the global economy, which the IMF describes as facing a “new mediocre.”

“The G-20 has delivered real, practical outcomes and, because of the efforts that the G-20 has made, this year, culminating in the last 48 hours, people right around the world are going to be better off,” he said.

But the G-20, which represents around 85 percent of the global economy, faces an uphill struggle to implement its plan after international agencies downgraded their global growth forecasts in recent months. Growth in China and Japan has weakened and Europe is teetering on the brink of another recession.

And experts warned that the countries would need to comply with every one of the 800 measures to achieve the 2.1 percent target, a virtually impossible task, given the difficulties they will inevitably face in pushing some of the policies through in their home countries.

“There are two questions: whether the specifics are credible and whether the political backing by leaders is convincing,” said Thomas Bernes, an analyst with the Center for International Governance Innovation, a Canadian-based think-thank.

Abbott said the group had been most productive on the issue of trade, adopting reforms to streamline customs procedures and reduce regulatory burdens.

“Trade is a key driver of growth, perhaps the key driver of growth and we’re focused on domestic reforms to facilitate trade as well as the importance of a strong global trading system,” he said.

Despite Abbott’s push to keep the summit focused on the economy, the meeting was largely overshadowed by tensions between Putin and Western leaders over the escalating conflict in Ukraine, where Moscow is supporting pro-Russian rebels in the country’s east.

Putin departed Australia before the communique was issued. He told reporters he left ahead of a final lunch with fellow leaders because he wanted to be rested before returning to work, according to a translation of his comments by an Australian Seven News journalist allowed into a press briefing that excluded most foreign media.

Australia, Japan and the U.S. issued a statement condemning Russia for its actions in Ukraine, and Canadian Prime Minister Stephen Harper reacted to an offer of a handshake from Putin by responding, “I guess I’ll shake your hand, but I have only one thing to say to you: You need to get out of Ukraine.”

Abbott has been particularly strong-worded in his criticism of Russia since a Malaysia Airlines plane was shot down in July over a part of eastern Ukraine controlled by Russian-backed separatists, killing all 298 passengers and crew. Australia lost 38 citizens and residents in the MH 17 disaster.

Abbott at point said he planned to “shirt front” – or physically confront – Putin over the disaster.

Asked at the conclusion of the summit about where things stood with the Russian leader, Abbott responded that they’d had a “very robust” discussion about the situation in Ukraine.

“I utterly deplore what seems to be happening in eastern Ukraine,” Abbott said. “I demand that Russia fully cooperate with the investigation, the criminal investigation of the downing of MH17, one of the most terrible atrocities of recent times.”

The G-20 also tackled the tricky issue of tax evasion by multinationals, declaring that profits should be taxed in the country where they are earned. There has been an ongoing effort by governments to crack down on the practice of big companies such as Google and Amazon moving profits earned in one country to other countries with lower tax rates.

The G-20 endorsed a global common reporting standard for the automatic exchange of tax information, which will begin by 2017 or 2018.

Associated Press writer Rod McGuirk contributed to this report.