‘G20 to go long on rhetoric, short on economic policy’

AFP, BEIJING: G20 leaders will meet in China this weekend in a climate of economic uncertainty and sluggish global growth—but the absence of an urgent crisis means the forum will be short on breakthroughs, analysts say.
Eight years after the first G20 summit in Washington, when countries coordinated a response to the financial meltdown, Beijing has set a modest agenda for the Hangzhou gathering—focusing on making the world economy “innovative, invigorated, interconnected, and inclusive”.
But as countries’ economic needs diverge—the US is mulling a rate hike, Japan is toying with fresh easing, Germany is sceptical of fiscal stimulus, Chinese overcapacity remains huge, and Britain has voted to quit the EU—the prospects for major unified action are dim.
“At the moment there’s simply not a lot of common overlapping interests between the major economies,” Christopher Balding, professor of economics at Peking University HSBC Business School, told AFP.
The G20 is made up of the world’s leading industrialised and emerging economies, which together account for 85 per cent  of the world’s gross domestic product and two-thirds of its population.
But its failure to deliver on past pledges has raised questions about the credibility of future promises.
Compliance with vows made in 2015 has fallen to a low of 63 per cent , according to analysis by the University of Toronto.
“Ongoing economic malaise has been accompanied by the unwillingness of G20 members to sustain their commitment to the structural reforms needed to meet the growth pledge,” said Tristram Sainsbury and Hannah Wurf of the G20 Studies Centre at Australia’s Lowy Institute in a report.
Despite repeated promises to achieve the G20’s mission of strong, sustainable, balanced growth, members are “not achieving any of those three terms”, Sainsbury told AFP.
Every year since 2011 the IMF has revised downwards its economic forecasts made at the beginning of the year as hopes for recovery have disappointed.
This summer it again cut its forecast for global growth in 2016 to 3.1 per cent . It is a far cry from the sunny pledges of the Brisbane Action Plan two years ago, when G20 leaders set a goal of lifting collective GDP an extra 2.1 per cent  beyond baseline IMF predictions by 2018.
Leaders said at the time that doing so would add $2 trillion and millions of jobs to the world economy.
“The best way to think of the forum is a dinner party that happens to include leaders of 85 per cent  of the world economy around the table making pledges,” said Sainsbury.

G20 to go long on rhetoric, short on economic policy

AFP, BEIJING: G20 leaders will meet in China this weekend in a climate of economic uncertainty and sluggish global growthbut the absence of an urgent crisis means the forum will be short on breakthroughs, analysts say. Eight years after the first G20 summit in Washington, when countries coordinated a response to the financial meltdown, Beijing has set a modest agenda for the Hangzhou gatheringfocusing on making the world economy innovative, invigorated, interconnected, and inclusive. But as countries economic needs divergethe US is mulling a rate hike, Japan is toying with fresh easing, Germany is sceptical of fiscal stimulus, Chinese overcapacity remains huge, and Britain has voted to quit the EUthe prospects for major unified action are dim. At the moment theres simply not a lot of common overlapping interests between the major economies, Christopher Balding, professor of economics at Peking University HSBC Business School, told AFP. The G20 is made up of the worlds leading industrialised and emerging economies, which together account for 85 per cent of the worlds gross domestic product and two-thirds of its population. But its failure to deliver on past pledges has raised questions about the credibility of future promises. Compliance with vows made in 2015 has fallen to a low of 63 per cent , according to analysis by the University of Toronto. Ongoing economic malaise has been accompanied by the unwillingness of G20 members to sustain their commitment to the structural reforms needed to meet the growth pledge, said Tristram Sainsbury and Hannah Wurf of the G20 Studies Centre at Australias Lowy Institute in a report. Despite repeated promises to achieve the G20s mission of strong, sustainable, balanced growth, members are not achieving any of those three terms, Sainsbury told AFP. Every year since 2011 the IMF has revised downwards its economic forecasts made at the beginning of the year as hopes for recovery have disappointed. This summer it again cut its forecast for global growth in 2016 to 3.1 per cent . It is a far cry from the sunny pledges of the Brisbane Action Plan two years ago, when G20 leaders set a goal of lifting collective GDP an extra 2.1 per cent beyond baseline IMF predictions by 2018. Leaders said at the time that doing so would add $2 trillion and millions of jobs to the world economy. The best way to think of the forum is a dinner party that happens to include leaders of 85 per cent of the world economy around the table making pledges, said Sainsbury.