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A relentless focus
on global economic and financial prosperity
Julia Gillard, prime minister, Australia
From "The G20 Mexico Summit 2012: The Quest for Growth and Stability,"
edited by John Kirton and Madeline Koch, published by Newsdesk Media Group and the G20 Research Group, 2012
To download a low-resolution pdf, click here.
The G20 has already transformed the lives of many of the world's poorest people. It must now agree on and implement critical reforms across economies to ensure ongoing stability in the years ahead
Australia has been a champion of the G20 from its inception, first as a meeting of finance ministers and central bank governors and then when the forum was elevated to a leaders' summit in 2008. The G20 has since proved its effectiveness to the world by ameliorating the destruction wrought by the global financial crisis, averting a global economic depression and saving an estimated 21 million jobs. Four years on, the G20's responsibilities to solve global economic challenges have not changed. While it has made progress in addressing the current vulnerabilities in the world economy, Australia would like to see the adoption and implementation of a number of critical reforms to ensure ongoing stability and growing prosperity in the years ahead.
The recent announcement of an additional $430 billion resources for the International Monetary Fund (IMF) would not have been possible without the cooperation and leadership of the G20. This strengthening of the global firewalls to build on European firewalls is a significant achievement that points to the effectiveness and relevance of the forum. A strong IMF that can meet the needs of all its members is a necessary condition for global stability.
Adequate IMF resources themselves are not enough to guarantee global stability and growth. While all should acknowledge the growing number of policy actions taken by authorities worldwide, particularly in Europe, the G20 must use this breathing space wisely if it is to further reduce risks and resolve the remaining vulnerabilities in the global economy.
Market confidence is vital to a self-sustaining recovery. That is why I fully support Mexican president Felipe Calderón's priorities of economic stabilisation and structural reform as foundations for growth and employment at the Los Cabos Summit. There is still much work to be done, including by Europe. Fortunately, the leaders of the world's major economies laid much of the groundwork in the 2011 Cannes Action Plan for Growth and Jobs. Leaders will need to discuss their progress and fill out more detail at June's summit as a starting point for our Los Cabos Action Plan.
The G20 must deliver on a highly interdependent set of policy challenges. This includes sustainable government finances, a strong global financial system and deeper structural reforms by all of the world's big economies. It is the challenge of structural reform that can be lost in the day-to-day financial market headlines. It is also the most difficult to coordinate. Even if countries have a shared set of fiscal and financial reforms that are agreed upon and well understood, it is often the case that structural reform priorities are quite different across economies. Whether it is product and services markets, labour markets, taxation or skills and education, all have some reform priorities that need to be addressed. Australia's point has been that those reforms should be explained through the prism of how they support growth and jobs.
These reform decisions can be very difficult politically, and very complex in policy terms, particularly when viewed across economies. That is exactly why G20 leaders must have the discussion: we must also be able to explain these reforms to our people in a meaningful way. And G20 leaders must hold each other accountable. If we do not pave the way for growth and jobs through sustained reforms, there is a strong likelihood that we will continue to lurch from crisis to crisis.
Trade is a key priority in securing global economic stability and growth. There are pressures to ‘keep jobs at home', despite it being counterproductive for growth and jobs in the long term and contrary to the messages the G20 has been sending since 2008. This is why I stood up for a renewed G20 commitment to resist protectionism at the Cannes Summit in 2011. Open trade is a public good that helps us all. By ensuring that markets remain open and allowing trade to grow, economic activity (and the jobs that come with it) will increase. This not only provides income and skills, but is also fundamental to people's dignity, health and quality of life.
With the growing recognition of the effectiveness of the G20 comes a natural tendency for countries to seek to inject topics of concern into the agenda where they can be given effective leader-level attention. However, at its core the G20 must remain an institution that is tightly focused on the big financial and economic items of the day. By providing a global meeting place for leaders, the G20 allows us to deliver on the things that matter for people across the globe. For it to lose definition or focus will only serve to dilute its effectiveness when it is most critically needed. Already one can see how the G20 has transformed the lives of many of the world's poorest. In the two short years since G20 leaders launched the Seoul Development Consensus for Shared Growth, we have worked to help low-income countries fight poverty through work on food security and economic resilience.
I am proud of our work on the G20 development agenda and of Australia's contribution. Last year, we joined with Indonesia and Italy to secure the G20 leaders' agreement to reduce the global average cost of sending remittances from just over nine per cent to five per cent by 2014. This has the potential to produce additional annual flows of up to $15 billion to the people that need it most. This year, we are continuing our fight against global food insecurity by partnering with other G20 members, including Canada and the United Kingdom, as well as the Bill and Melinda Gates Foundation, to spur private investment in new products and innovations that will help us feed an additional two billion people by 2050. These outcomes are a vital contribution to achieving the Millennium Development Goals.
Australia will continue to do its bit to ensure the G20's ongoing agility and relevance. We will use our membership of the G20 troika once Russia assumes the chair in 2013 to enhance our engagement with G20 colleagues and non-G20 members, particularly those in the Asia-Pacific region, to ensure that the voices of those with an interest in the G20's actions are taken into account. And we will work closely with Russia as it takes up the G20 presidency to ensure that the momentum for medium-to long-term initiatives can be sustained through 2013 to 2015, with Australia having the privilege of hosting the G20 in 2014.
My vision for 2014 is for a summit that further advances our ability to create and sustain the economic conditions that drive growth and improve living conditions. I see a meeting that upholds the G20 as a reflection of new geopolitical realities, where major developed and emerging economies work together to make a difference for the world's peoples. I see a responsive, leader-led forum unfettered by bureaucratic trappings with an agenda owned by members but exercised in the interests of all. The G20 is a unique group that can only maintain its relevance and ‘earned legitimacy' through a relentless focus on global economic and financial prosperity that improves people's living standards. That would be a contribution that Australia would be proud to have as part of its legacy.
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