This year we have been focusing on the three I’s of Inclusiveness, Implementation, and Investment for Growth. While we have considerably enhanced our inclusive growth efforts, our efforts related to Implementation and Investment for growth needs to be accelerated in light of the challenges posed by repeated downward adjustments to global growth projections. As per the preliminary implementation status of Brisbane commitments shared by the IOs, while around one third of the commitments have been completed and progress is being made on majority of the remaining commitments, considerable challenges stem from the fact that implementation is lagging in relatively larger economies, hence significantly affecting the growth impact. I would also like to use this opportunity to thank the IOs for their effort and look forward to final quantitative estimates on implementation status and the growth impact of the revised adjusted growth strategy. I suggest that the final quantitative assessment is made available well in time so as to give sufficient time to members to seek clarifications, if any and work on the strategies in case they find it relevant. We acknowledge that the Accountability Assessment exercise this year is far more rigorous and will considerably strengthen the credibility of the exercise.
Coming to the third I , ie. Investment, I ask the members if our efforts on this front have been satisfactory? Given the potential of infrastructure investment to simultaneously address our demand side and supply side constraints, India has been reiterating the need for improved global long term financing for infrastructure projects and the need for better policy coordination at international level for stable macroeconomic settings and improved business climate. Recent episodes of market volatility and currency movements again pose a lingering question on the need for global safety nets for addressing market concerns. I strongly believe that ad hoc, individual, reactionary measures can contain the adverse impact of such events only for a limited period. These cannot provide a sustainable solution which can happen only by global policy coordination.
As for Growth Strategies, one major addition to this year’s adjusted strategies has been the voluntary reporting on issues of secular stagnation, fiscal policy composition, inclusive growth and domestic policy spillovers. This gives members sufficient opportunity to explain and remind the group about the specific setting in which their domestic policies operate including the structural diversity. The new commitments received in adjusted strategies also confirm our perception of the document as a living document. However, as per the preliminary assessments carried out by the IOs and peer review, these new commitments might not be ambitious enough for meeting our 2 in 5 objective. Though final assessments are in process, I would suggest members to revisit their commitments to see if they qualify on the original parameters of being new, realistic and ambitious. I also encourage members to utilize the opportunity presented by adjusted strategies for informing the group about their prospective policy actions that can have significant spillovers on other members.
Given the significant amount of space that the issue of declining potential output in major economies occupied in this year’s FWG discussion, I suggest that our efforts for goods movement and capital liberalization should be complemented by skilled labor mobility. This will be of considerable help to countries facing demographic challenges due to ageing populations.
I suggest members to work out an effective communication strategy which strikes a right balance by convincing various stakeholders about the seriousness of our growth efforts and at the same time suitably explain the challenging global economic scenario in which our strategies are operating.
In addition, if the USP of G20 is collective and coordinated action, then G20 should seek policies which do not place the burden of tackling the impact of negative spillovers of domestic policy actions solely on affected countries. The G-20 should, therefore, seek to strengthen liquidity arrangements via multilateral swap agreements between member countries, possibly coordinated by the IMF. Such well-designed and quickly triggered safety nets should be explored under IMF.