The recently concluded G20 Summit in Brisbane, Australia (15th -16thNovember 2014) will certainly be remembered as one of the most fruitful in the group’s short history of one-and-a-half decade. The leaders of countries like the United States, China, Russia, Australia, India, Indonesia, the United Kingdom, France, Germany, Canada, Brazil, South Africa, Japan, Mexico, Italy, Turkey, South Korea, Saudi Arabia, Argentina, and the European Union, joined hands and did goal-setting.
It is unusual for the globe’s top 20 countries, generally at odds with each other on one or the other issue, to adopt a comprehensive Brisbane Action Plan to deal with a host of issues that confront us as a member of humanity. The leaders of the top 20 economies concluded the Summit with agreements to close tax loopholes used by multinationals, improve trade, encourage the setting of early emissions reduction targets, strengthen banks, reform energy markets including gas, and coordinate a stronger response to the Ebola epidemic.
For starters, the G20 has set a target of increasing at least an additional 2% of GDP of member countries by 2018. This is expected to add more than US$ 2 trillion to the global economy and create millions of jobs. In fact, the group has called for as many as 800 new domestic policy reforms to boost growth in member countries.
Dubbing it as an ambitious target would be to underestimate the potential of the developing economies and losing the sight of recovery in developed markets even if it is sluggish at present.
A positive resilient approach, which the G20 has adopted, is better suited to deal with current economic woes. The International Monetary Fund will be overseeing the progress on the reform front and will channel its efforts to push it within member countries.
During his speech, our Prime Minister pressed for fair tax regulation and ease of business, which found its way into the communiqué. The Action Plan states that steps are being taken to ensure tax systems are fair in all the countries such that they are taxable where the economic activities have been derived.
The G20 communiqué hails progress on the Base Erosion and Profit Sharing Action Plan. The work is scheduled for completion next year. The focal point is to ensure transparency in the process to weed out illegal practices. The Action Plan also proposed creation of a global infrastructure hub with a four-year mandate. India has been pressing for using the surplus funds to be used for infrastructure development. The hub is slated to create a nodal platform for knowledge sharing between different connected agencies of the G20 countries.
On empowerment of women, the G20 leaders have issued a strong message to achieving the ultimate goal of complete gender equality through empowerment of women. The communiqué says that leaders agreed to the goal of reducing the gap in workforce participation rates between men and women in their respective countries by 25% by next 10 years. The goal is to bring 100 million more women into the workforce by then.
Climate change remains one of the most contentious issues between the G20 member countries and it was not different in Brisbane. Intense and back-channel diplomacy between the member states, particularly with Australia were carried out. Australia has the highest per capita carbon emission footprint in the world.
Finally, however, a clear decisive stand to reduce carbon footprints was adopted with countries pledging to prepare for a deal in 2015 Paris Climate Change Summit. The leaders also urged for reform of energy markets. A Green Climate Fund, with an initial support of $3 billion from the United States and $1.5 billion from Japan has been proposed. On Ebola front, the G20 called on international institutions to assist countries in dealing with economic impact of the epidemic and pledged its commitment to respond to the West African health crisis.
For India, the Summit was a win-win situation as the Action Plan’s goals match ours. India is committed to boost its economic growth rate, create jobs, pull millions out of poverty, push greater gender equality, spur infrastructure development, reform energy markets and get access to cleaner energy technologies, act against tax havens. The G20 leaders hailed the deal between India and the United States to break World Trade Organization impasse over food security subsidies.