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2014 G20 Agenda | 1
PREPARING THE G20 BRISBANE SUMMIT AGENDA
AN OVERVIEW FROM THE AUSTRALIAN PRESIDENCY NOVEMBER 2014
2014 G20 Agenda | 2
This year the G20 is focussing on longer term economic reform. This is how and why it is doing it. Part 1: Overview - 2014 G20 Agenda
• Promoting stronger economic growth and employment outcomes by empowering the private sector
• Making the global economy more resilient to future shocks, and preventing a repeat of the circumstances that led to the 2008 global financial crisis (GFC)
• Strengthening global institutions to ensure they serve us best in today’s global economy
• G20 Agenda 2014: working arrangements, key events
• The Brisbane Action Plan
• Attracting private sector investment in infrastructure
• Creating jobs and lifting participation
• Removing obstacles to trade and competition
• Growth and development
• Reforming the global financial system
• Strengthening the international tax system
• Strengthening energy markets
• Fighting corruption
• Gross Domestic product G20 members
• Unemployment trends, including youth
• Labour force participation rates G20 members
• Global investment and GDP
• Global trade and G20 members
• Foreign direct investment and G20 members
• Global energy profile
• Remittance costs
• Undernourishment trends
Part 2: Background on 2014 Priorities
Part 3: Facts about the G20 and the global economy
2014 G20 Agenda | 3
Part 1: Overview: 2014 G20 Agenda
“Strengthening growth and creating jobs is our top priority and we are fully committed
to taking decisive actions to return to a job-rich, strong, sustainable and balanced growth path.”
G20 Leaders’ Declaration, St Petersburg, September 2013
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2014 G20 Agenda | 4
The world expects the G20 to commit to practical actions that make a real difference.
“As the chair of the G20 in 2014, I will ask world leaders to come to Brisbane with a commitment to take practical action. It means developed and emerging economies working
together. And it means partnership between governments, private enterprise and the community.”
Prime Minister of Australia, Tony Abbott, December 2013
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2014 G20 Agenda | 5
The G20 is well placed to take strong action to address global economic challenges.
A forum that regularly brings together the leaders of the world’s major economies to enhance international economic cooperation.
Sources: IMF WEO October 2014, WTO online database and UN online database
Further information is available in The G20 - A forum for the 21st Century factsheet on G20.org
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2014 G20 Agenda | 6
Leaders can use their combined influence to deliver economic outcomes to benefit the global community.
Throughout 2014, G20 members have worked together to produce short, non-technical documents to help communicate meeting outcomes. Australia aims to deliver a three page communiqué, written in clear, direct language.
The G20 comes down to a simple idea: the world’s major governments can do more economic good for our citizens when working together.
- Australia’s Prime Minister, Tony Abbott P3
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2014 G20 Agenda | 7
The Brisbane Action Plan will lay the foundations for a multi- year approach to driving growth and jobs over five years.
The global rise of the middle class is creating new economic opportunities
Investment in infrastructure supports economic activity
Promoting more and better jobs is a top priority
Trade as an engine of growth
A dynamic and prosperous global economy underpins growth in living standards
The G20 is shifting the dial on
economic growth
Further information is available in the Strategies for growth factsheet on G20.org
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2014 G20 Agenda | 8
The global economy continues to experience mixed fortunes.
Growth in the US has rebounded
with jobs picking up
Emerging markets in Asia are adjusting to
slower growth to different degrees
Growth in the Middle East has been marked
down
Africa is still doing well, although Ebola
poses risks
The euro area shows signs
of a slow and fragile recovery, but still faces
difficult challenges Source: IMF Oct 2014 http://www.imf.org/external/pubs/ft/weo/2014/02/images/WEOinfo_1099.pdf
Japan’s recovery has slowed
Russia and Eastern Europe weaknesses reflect the
impact of geopolitical tensions
Growth will slow sharply this year in Latin America/Caribbean,
particularly in Brazil, with a rebound expected in 2015
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2014 G20 Agenda | 9
Shifting the dial on growth through structural reform is critical in setting the right foundation to guide the next few years.
This year, the G20 is focussing on: • Promoting strong economic growth and employment
outcomes by empowering the private sector • Making the global economy more resilient to future shocks • Strengthening global institutions
Macroeconomic policies will continue to support demand in the near-term, while structural reforms will increase growth in the medium-term.
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2014 G20 Agenda | 10
The transformations and circumstances of the 21st century need to be reflected in global arrangements.
Asia accounts for a quarter of world output and is projected to account for over half the world economy by 2050. Asia’s middle class could rise to 3.2 billion people by 2030.
The purchasing power of the world’s middle class will continue to grow.
Source: OECD Development Centre based on Kharas (2010)
0
1
2
3
4
5
6
0
1
2
3
4
5
6
1 2 3
Billi
ons
Billi
ons
Asia Pacific
Middle East andNorth Africa
Sub-Saharan
Central and SouthAmerica
Europe
North America
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2014 G20 Agenda | 11
Advanced economies, and some emerging ones, have ageing populations. Demographic change is likely to be a constraint on growth in emerging and advanced economies.
0%
10%
20%
30%
40%
50%
60%
70%
80%
0-14 15-64 65+ 0-14 15-64 65+ 0-14 15-64 65+ 0-14 15-64 65+
WORLD More developedregions
Less developedregions,
excluding leastdevelopedcountries
Least developedcountries
Projected age demographics by region (2010-2050) Governments around the world will face
growing pressure on public finances: - The cost of the social safety nets is
projected to increase rapidly over the coming decades.
- As living standards rise, citizens of many emerging economies will expect greater social safety nets from their states.
- Shrinking labour forces are also likely to
reduce income tax revenue.
Source: UN online database Sept 2014
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2014 G20 Agenda | 12
Over the next 15 years, the urban population will grow by a billion people.
Higher rates of urbanisation will require expansion in infrastructure for water and sanitation, energy, transportation, information and communication.
Source: UN World Urbanisation Prospects Highlights Revision 2014
A majority of the world’s population lives in urban areas.
Urban and rural population of the world, 1950-2050
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2014 G20 Agenda | 13
Heading into the G20 Leaders’ Summit, the global economy is struggling to regain momentum.
The IMF estimated earlier this year that output in the G20 would now be 8 per cent higher per worker if the world economy had continued growing as it did between 1998 and 2005.
The ILO estimates 62 million fewer people had jobs across the G20 by 2013 than if the crisis had not occurred.
Trade growth is still tracking lower than its pre-crisis average of 6 per cent per annum (from 1980-2007). The WTO now expect global trade volumes to grow at 3.1 per cent this year and 4.0 per cent in 2015.
Sources: IMF Macroeconomic and reform priorities and policies for growth and rebalancing Feb and WEO Oct 2014, ILO Global Employment Trends 2014, WTO Press Release Sept 2014 and online database
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2014 G20 Agenda | 14
Several IMF downgrades highlight a persistently fragile and weak recovery. In October 2014, the IMF forecast global growth will be 3.3 percent in 2014 ― unchanged from 2013 ― and rise to 3.8 percent in 2015.
-1
0
1
2
3
4
5
6
-1
0
1
2
3
4
5
6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Apr-14 Oct-14
Source: IMF WEO October 2014
Sep-11 Apr-12 Oct-12 Apr-13
Oct-13
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2014 G20 Agenda | 15
In 2013, global employment was 62 million lower than it would have been compared to pre-crisis trends.
Source: ILO Global Employment Trends 2014
200 MILLION
There are over
people unemployed around the world.
There are over
74 MILLION YOUNG PEOPLE
out of work worldwide, with the global youth unemployment rate over
13%
This is almost three times higher than the global adult unemployment rate.
The crisis-related global jobs gap
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2014 G20 Agenda | 16
And global trade has been slow to recover.
Growth in global GDP and goods and services trade
Global trade growth slowed again in the first half of 2014, consistent with weaker global growth during this period.
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Growth in Global GDP World trade
Source: IMF WEO October 2014
GDP
Trade growth
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2014 G20 Agenda | 17
Emerging and developing economies are driving global economic growth.
Stronger economies make it possible for countries to deliver the opportunities to their citizens that can help lift them out of poverty.
1.3 billion people still live on less than $1.25 a day - more than half of these people are in G20 countries.
Investment / infrastructure
Modernising tax
systems
Strengthening the international
financial system
Helping build better investment
environments
Tax administration in developing countries
Improving access to financial services
Linking development for strong, sustainable and balanced growth
Emerging and developing economies account for more than
⅔ of global growth.
$
Further information is available in the Growth and development factsheet on G20.org
Source: World Bank, G20 and Global Development, 2010
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2014 G20 Agenda | 18
Focus is on empowering the private sector by creating the conditions to help them prosper.
• If private firms were compared to major world economies, they would account for 51 of the 100 largest economies in the world.
• Small and medium enterprise (SMEs) are major creators of jobs, especially smaller and young firms.
P U B
L
I C
R P V A T E
Source: World Bank 2014
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2014 G20 Agenda | 19
G20 members have already put on the table growth strategies that take the G20 within reaching distance of its 2 % goal.
The act of setting this goal – something the G20 has never done before – has galvanised members into action. By the end of September, over 900 measures were on the G20 table, potentially amounting to a GDP gain of 1.8 per cent over business as usual.
According to the IMF, OECD and World Bank, raising G20 output by 2 per cent is equivalent to adding $2 trillion and millions of jobs to the global economy.
Members are working up to the Leaders’ Summit and beyond to bring forward new measures to meet and surpass the goal of an additional 2 per cent by 2018.
Further information is available in the Lifting GDP by more than 2 per cent factsheet on G20.org
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2014 G20 Agenda | 20
The G20 structural reform agenda is focussed on investment in infrastructure, trade, competition and employment.
The Brisbane Action Plan is a multi-year strategy to stimulate growth and boost employment over five years.
G20 members have identified measures to drive economic growth, including: • fostering more investment in
infrastructure • measures to facilitate trade • changes to competition policy • initiatives to improve workforce
participation, especially by women and young people.
Creating more employment opportunities
Reducing barriers to trade
Increasing competition
Improving infrastructure through increased investment Further information is available in the Strategies for growth and Lifting
GDP by more than 2 per cent factsheets on G20.org
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2014 G20 Agenda | 21
Business expects the G20 to make it easier for the private sector to finance and build quality infrastructure.
The G20 is working with business to help close the US$1 trillion global annual infrastructure gap.
The Global Infrastructure Initiative agreed by Finance Ministers in September will enhance the productivity of economies and place them better to meet the needs of the future.
The World Bank estimates that an additional US$1-1.5 trillion in annual investment is required through 2020 to meet growth targets in emerging and developing economies.
Source: World Bank, Infrastructure Unbound, 2014
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2014 G20 Agenda | 22
To boost growth and jobs, the G20’s trade reforms help businesses be more efficient and innovative.
Domestic policies can have a significant impact on the amount of trade that takes place all over the world.
The OECD estimates that actions to reduce global trade costs by
1%
could result in a worldwide
income increase of
US$40 billion
with 65% of the benefits accruing to developing countries.
Made in the World ‘The ability to import matters as much as the ability to export and the ability to move goods around matters more than ever.’
- Australian Prime Minister, Tony Abbott
Further information is available in the Removing obstacles to trade factsheet on G20.org
Source: OECD Press Release 2013
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2014 G20 Agenda | 23
Improving productivity and competition will drive growth and job creation.
Increasing competition ensures economies become more productive and innovative. Productivity is increased by stronger competition. A strong framework for competition helps attract the most efficient firms into markets. Actions to enhance competition include product market reform, reducing regulatory burdens, and lowering barriers to entry for new businesses.
Competition is central to the operation of markets and promotes higher investment and employment.
Further information is available in the Strategies for growth factsheet on G20.org
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2014 G20 Agenda | 24
G20 policies to strengthen labour markets and boost participation are also important sources of growth. Members are including in their growth strategies and employment plans measures to lift the number of women in the workforce and reduce youth unemployment.
G20 Labour and Employment Ministers recommended that leaders adopt the goal of reducing the gap in participation between men and women in G20 economies by 25 per cent by 2025 as a reference for action. This could improve growth prospects well beyond 2018.
Reducing the gap between male and female workforce participation rates by
25% BY
2025 could add
OVER 100 MILLION
WOMEN
to the labour force across G20 countries.
Further information is available in the Lifting employment and workforce participation factsheet on G20.org
Source: OECD, ILO, IMF, World Bank, Achieving stronger growth by promoting a more gender-balanced economy, 2014
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2014 G20 Agenda | 25
The G20 has made substantial progress to strengthen financial institutions and foster global stability.
In 2015, the financial regulation agenda will shift focus from designing standards towards addressing new and evolving risks and vulnerabilities.
In 2014, the G20 completed many financial regulatory reforms agreed in 2010.
BUILDING THE RESILIENCE OF BANKS (BASEL III)
REDUCING THE RISKS AND IMPACTS OF WHEN LARGE
INSTITUTIONS FAIL
TRANSFORMING THE SHADOW BANKING SECTOR
MAKING DERIVATIVES MARKETS SAFER
Further information is available in the Building financial resilience factsheet on G20.org
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2014 G20 Agenda | 26
The G20 is on track to deliver work to address tax avoidance and has taken measures to identify and catch tax evaders.
The international tax system needs to keep pace with technology and changing business practices so governments receive the revenue needed to serve their people.
The G20 is working with low income and developing countries to strengthen their tax administration capacity and support them to participate in and benefit from tax work.
The G20 is closing loopholes in international tax systems and strengthening public finances through its two-year work plan on Base Erosion and Profit Shifting (BEPS). In February 2014, Finance Ministers and Central Bank Governors endorsed a new standard on automatic exchange of tax information to identify and catch tax evaders.
Some multinationals use strategies that allow them to pay as little as 5 per cent in corporate taxes when smaller businesses are paying up to 30 per cent.
Source: OECD website 2014
Further information is available in the Strengthening tax systems factsheet on G20.org
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2014 G20 Agenda | 27
Members continue their work to curb corruption and discuss actions to strengthen investment environments.
Improving the transparency of the public sector and entity ownership cuts corruption, which erodes business and investor confidence.
Investment in corruption-prone countries is almost 5 per cent less than in countries that have little corruption.
The business sector grows 3 per cent more on average each year in low-corruption environments than in high-corruption environments.
5%
3%
Sources: IMF 2013 and World Bank Press Release 2013
US$1.5 trillion worth of public procurement projects are tainted by
Further information is available in the Fighting corruption factsheet on G20.org
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2014 G20 Agenda | 28
Actions to ensure global institutions reflect global economic realities will help them be more effective.
The world needs: - strong financial institutions - a strong global trading system - inclusive energy institutions that reflect the realities of today.
‘Emerging economies should have a voice commensurate with their increasing importance.’
- Australian Prime Minister, Tony Abbott P3
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2014 G20 Agenda | 29
G20 members remain committed to the reform of the International Monetary Fund and the Financial Stability Board.
If the IMF quota and governance reforms agreed in 2010 are not ratified by the end of 2014, we will ask the IMF to develop options for next steps.
Finance Ministers and Central Bank Governors Meeting, April 2014
The G20 wants to ensure these institutions remain effective, legitimate and credible.
We agree that the FSB’s review of the structure of its representation should ensure the FSB remains well prepared to respond to the full range of challenges as we transition from the crisis response phase.
Finance Ministers and Central Bank Governors Meeting,
April 2014 Further information is available in the Building financial resilience factsheet on G20.org
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2014 G20 Agenda | 30
The G20 is working to ensure that the global trading system is as strong as it can be to deliver growth.
In July, G20 Trade Ministers reaffirmed the commitment from St Petersburg to standstill and roll back protectionist measures.
The B20 has told the G20 that it can be difficult to navigate the 200+ FTAs.
Trade Ministers also discussed the need for the various types of free trade agreements to work together in the global trading system and to ensure that outcomes from trade negotiations help businesses worldwide to trade.
Implementing the Trade Facilitation Agreement settled in Bali and progressing the WTO’s forward work plan is vital to strengthening the global trading system.
Further information is available in the Removing obstacles to trade factsheet on G20.org
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2014 G20 Agenda | 31
The global energy landscape is changing.
Energy demand is expected to increase by over one-third by 2035 with the centre of gravity of the global energy system shifting towards the Asia-Pacific region. Strong economic growth and ongoing urbanisation and industrialisation has driven energy demand.
Countries recognise that an affordable and reliable supply of energy is of vital importance to their economic development, yet over 1.3 billion people are still without access to electricity.
Share of world primary energy demand by region
Further information is available in the Strengthening energy markets factsheet on G20.org
Source: IEA World Energy Outlook 2013
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2014 G20 Agenda | 32
Australia has renewed its pledge to do all it can to assist the common effort to lift the G20’s economic growth.
In playing its part towards the common growth goal, Australia is:
Getting our budget under control and improving productivity through investments in economic infrastructure
Removing regulatory burdens and taxes that constrain business
Getting more people into jobs - an emphasis on earning or learning and finding ways to help women get into the workforce
Reducing obstacles to trade, including through cutting red tape at borders and streamlining customs procedures
“ Our plan reflects this Government’s Economic Action Strategy. It focuses on the fundamentals: lowering tax, cutting red tape, investing in infrastructure, encouraging competition and increasing productivity”. Australia’s Prime Minister Tony Abbott, 10 November 2014
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2014 G20 Agenda | 33
The G20 in 2014 identified common interests with engagement groups from business, civil society, labour, think tanks and youth.
• The importance of economic growth to development
• Trade as a driver of growth • Lifting investment in infrastructure • Employment, including female workforce
participation and youth unemployment • Transparency and anti-corruption • Progress on tackling tax evasion
Further information is available in the Working with Partners factsheet on G20.org
Common interests include:
On 3 October, the B20 and C20 Infrastructure Taskforce co-chairs hosted a discussion on infrastructure with a number of Australian civil society and business leaders.
The joint L20 and B20 open letter of 4 November to Australia’s Prime Minister presented common priorities for Leaders to consider:
• ensuring that growth is strong, sustainable and inclusive • investing in infrastructure and encouraging productive private and long term investment • ensuring that growth plans contribute to the creation of quality jobs • raising women’s participation in the labour force to close the “gender gap” • implementing the G20 Employment Ministers’ Safer Workplaces initiative • that company tax should be paid where profits are earned.
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2014 G20 Agenda | 34
The G20 talked to non-member countries to understand their priorities.
The 2014 G20 agenda reflects consultation with a wide range of stakeholders on issues relevant to developing countries, including: – Investment in infrastructure – tax cooperation – financial inclusion and remittance flows – food security and nutrition – UN-led post-2015 development agenda
Raising global growth to deliver better living standards and quality jobs for people across the world is the G20’s highest priority.
Further information is available in the G20 and the World factsheet on G20.org
Stakeholders consulted : – UN – ASEAN – African Union (AU)
and New Partnership for Africa’s Development (NEPAD)
– The Commonwealth – La Francophonie – Caribbean
Community (CARICOM)
– Pacific Island Forum (PIF)
– World Economic Forum (WEF)
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2014 G20 Agenda | 35
Guests help the G20 understand regional economic challenges and the effects of their actions on people around the world.
Mauritania, the 2014 Chair of the African Union
Myanmar, the 2014 Chair of ASEAN
New Zealand
Senegal, the 2013-2014 head of the New Partnership for Africa’s Development
Singapore Spain
Guest countries are participating in member discussions, bringing their views to the G20 table.
Australia has invited :
Further information is available in the G20 and the World factsheet on G20.org
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2014 G20 Agenda | 36
Part 2: Background on 2014 Priorities
2014 G20 Agenda | 37
An Agenda for Growth and Resilience in 2014
Strong, Sustainable and Balanced Growth
Boosting growth through the private sector Employment
Trade
Development
Anti-corruption
Energy
Tax
Investment and infrastructure
Reforming global institutions
Financial Regulation
Building global economic resilience
Fiscal and monetary policy
Diagram source: from ‘An Overview of Australia’s Presidency,’ Dec 2013 available on G20.org
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2014 G20 Agenda | 38
G20 Leaders Summit (Chair: Prime Minister of Australia)
Leaders’ Summit
Sherpa
Sherpa meetings (Chair: Australian Sherpa) Finance
ministerials
Finance Ministers and Central Bank Governors
meetings (Chair: Australian Treasurer, RBA Governor)
Finance deputies
Other ministerials
Promoting stronger economic growth
Finance and Central Bank Deputies meetings (Chair:
Australian Finance Deputy) Building global economic resilience
Employment Ministers meeting (Chair: Australian
Minister for Employment)
Trade Ministers meeting (Chair: Australian Minister for Trade and Investment)
Framework Working Group Co-chairs
Investment and Infrastructure Working Group Co-chairs
Task Force on Employment Co-chairs
G20 Trade Contacts Meeting Chair
Development Working Group Co-chairs
Energy Sustainability Working Group Co-chairs
Anti-Corruption Working Group Co-chairs
Canada Germany Australia Australia Australia Australia Australia
India Indonesia Turkey Russia India Italy
Mexico South Africa
Turkey
2014 Working Arrangements Several G20 members provided leadership ahead of the Brisbane Summit.
Further information is available in the 2014 Working arrangements factsheet on G20.org
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2014 G20 Agenda | 39
15-16 November
Key G20 events in 2014
Finance Ministers meeting: 10 October, Washington
Trade Ministers meeting 19 July, Sydney Labour and Employment Ministers meeting 10-11 September, Melbourne
Finance Ministers Meetings: 22 and 23 February, Sydney 11 April, Washington 20 and 21 September, Cairns 10 October, Washington 13 to 15 November, Brisbane
2014 G20 Agenda | 40
G20 growth strategies outline country-specific reforms and measures to address common challenges
Further information is available in the Strategies for growth and Lifting GDP by more than 2 per cent factsheets on G20.org
Creating more employment opportunities
Reducing barriers to trade
Increasing competition
Improving infrastructure through increased investment
As agreed in April, members have identified practical actions that: • Build on previous G20 commitments
and address identified gaps in policy settings
• Lift and rebalance global demand • Increase growth potential and create
substantial positive spillovers to each other and the world economy.
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2014 G20 Agenda | 41
Attracting private sector investment in infrastructure
The G20’s multi-year Global Infrastructure Initiative (GII) will stimulate public and private sector infrastructure investment. In Brisbane, leaders will consider a mechanism to support the GII.
The GII involves a ‘hub’ working across G20 and non-G20 countries to improve outcomes on infrastructure, including better knowledge sharing and cooperation between governments and the private sector.
The OECD estimates that over $70 trillion in investment in infrastructure is needed worldwide by 2030.
Further information is available in the Lifting private sector investment in infrastructure factsheet on G20.org
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2014 G20 Agenda | 42
Lifting employment and workforce participation
According to international organisations, reducing the current gap in participation between men and women in G20 economies by 25 per cent by 2025 would potentially bring more than 100 million women into the labour force. G20 Employment Plans are feeding into the Brisbane Action Plan
• Policies looking at labour market, social protection, education and lifelong learning will improve the number and quality of jobs.
• Members are supporting youths to find work and placing young people in education and training
The International Labour Organization estimates over 200 million people are still unemployed globally, with sustained high unemployment affecting developed and developing countries.
The global youth unemployment rate is steadily rising
11.5% 12.8% 13.0%
2007 2012 2014
This translates into
OVER
74 MILLION
young people unemployed globally. Source: ILO Global Employment Trends 2014
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2014 G20 Agenda | 43
Removing obstacles to trade and competition
All G20 members have taken trade facilitation actions in their growth strategies. G20 members have identified how they can adjust their trade and economic policies to benefit more from global value chains, including by strengthening customs procedures. In July, G20 Trade Ministers reaffirmed the commitment from St Petersburg to standstill and roll back protectionist measures.
Between 30 and 60 per cent of G20 countries’ exports consist of imported inputs by other countries.
The OECD has found that income from trade in global value chains doubled between 1995 and 2009.
Further information is available in the Removing obstacles to trade factsheet on G20.org
Source: OECD, Global Value Chains Progress Report, 2014 P3
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2014 G20 Agenda | 44
Growth and development
In 2014, the G20 is strengthening the links between work on growth, resilience and development, focused on - attracting investment in infrastructure - securing tax revenue - facilitating remittance flows and broadening
access to financial services.
The group continues working on food security and human resource development.
Narrowing the global development gap and reducing poverty is integral to ensuring a more robust and resilient global economy.
Emerging markets and developing countries require up to US$1.5 trillion a year in investment in infrastructure to finance projects essential for driving development
Source: World Bank 2013
Further information is available in the Growth and development factsheet on G20.org
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2014 G20 Agenda | 45
Building the resilience of the global economy
Since 2008, managing global economic and financial risks has been a key priority for the G20. The G20 is focussed on ensuring the circumstances that led to the global financial crisis are not repeated. Members have made substantial progress to strengthen global institutions and global financial stability.
Reforming global institutions
Reforming the global financial system
Strengthening tax systems
Strengthening energy markets
Fighting corruption
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2014 G20 Agenda | 46
Reforming the global financial system
BUILDING THE RESILIENCE OF BANKS (BASEL III)
REDUCING THE RISKS AND IMPACTS OF WHEN LARGE
INSTITUTIONS FAIL
TRANSFORMING THE SHADOW BANKING SECTOR MAKING DERIVATIVES
MARKETS SAFER
Fixing the fault lines that caused the global financial crisis is now substantially completed. Core financial reforms have:
• Made financial institutions more resilient and banks are better capitalised • Made derivative markets safer • Progressed arrangements to protect taxpayers if large banks fail, including a common international
standard on the total loss absorbing capacity that globally systemic banks must have Shadow banking (i.e. activities of non-bank institutions) is being transformed into resilient market-based financing.
Further information is available in the Building financial resilience factsheet on G20.org
In 2015, the financial regulation agenda will shift focus from designing standards towards addressing new and evolving risks and vulnerabilities.
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2014 G20 Agenda | 47
Strengthening the international tax system
BUILDING THE RESILIENCE OF BANKS (BASEL III)
REDUCING THE RISKS AND IMPACTS OF WHEN LARGE
INSTITUTIONS FAIL
TRANSFORMING THE SHADOW BANKING SECTOR
Automatic Exchange of Information The G20 has also developed a plan for the automatic exchange of information (AEOI) between tax authorities to help to identify and catch tax evaders, to begin by 2017 or the end of 2018.
Measures under the G20-OECD Base Erosion and Profit Shifting (BEPS) Action Plan put in place in 2014 will: - result in clearer reporting of tax information to increase
transparency - identify ways to address the challenges for tax systems posed by the
digital economy - tackle arrangements that exploit differences in taxation structures
between countries - combat practices that shift intangible assets (such as intellectual
property) to other companies.
Further information is available in Strengthening tax systems factsheet on G20.org
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2014 G20 Agenda | 48
Strengthening global institutions
REDUCING THE RISKS AND IMPACTS OF WHEN LARGE
INSTITUTIONS FAIL
TRANSFORMING THE SHADOW BANKING SECTOR
The G20 is considering ways to strengthen energy institutions and enhance collaboration between developed and emerging economies.
It is critical to create a durable international order that underpins global prosperity.
If the IMF quota and governance reforms agreed in 2010 are not ratified by the end of 2014, the G20 will ask the IMF to develop options for next steps.
Blockage in the WTO highlights the need to think about how institutions can deliver better trading opportunities.
The Financial Stability Board is reviewing its representation structure to better respond to the increasingly important role of emerging markets in the global economy and financial system.
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2014 G20 Agenda | 49
Strengthening energy markets
In 2014 the G20 is supporting international efforts to improve the operation of global energy markets and enhance cooperation between emerging and advanced economies. Members are working to:
- strengthen the global energy architecture - build the resilience of gas markets - bolster energy efficiency.
Resilient economies depend on well-functioning energy markets and reliable energy supply.
G20 countries produce 73 per cent and consume 83 per cent of the world’s energy.
Source: IEA 2013
Further information is available in the Strengthening energy markets factsheet on G20.org
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Fighting corruption
The 2015-2016 Anti Corruption Action Plan will strengthen international cooperation, enhance public and private sector transparency and support investment. The G20 is developing high-level principles on beneficial ownership transparency to improve the transparency of company ownership and control.
G20 members are focused on anti-corruption initiatives that improve investment conditions and investor confidence.
Corruption consumes almost 3% of global GDP every year.
Corruption can add up to 10% to the total cost of doing business globally.
Corruption also constrains development – developing countries lose up to US$1 trillion each year in illicit outflows through the proceeds of crime, corruption and tax evasion.
Corruption adds up to 25% to the cost of public procurement in developing countries.
Sources: United Nations 2013 and World Bank 2013
Further information is available in the Fighting corruption factsheet on G20.org
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Further background on the 2014 G20 Agenda is available on G20.org
Overview: 2014 G20 Agenda and the G20
An agenda for growth and resilience – May 2014 Lifting GDP by more than 2 per cent – February 2014 2014 working arrangements – April 2014 Working with partners (update) - October 2014 G20 and the world – October 2014 An overview of Australia’s Presidency – December 2013 The G20 – a forum for the 21st century – September 2014
Lifting growth and creating jobs
Strategies for growth Growth and development Attracting private sector investment in infrastructure Creating jobs and lifting participation Removing obstacles to trade and competition
Building a stronger, more resilient global economy
Reforming the global financial system Strengthening the international tax system Strengthening energy markets and institutions Fighting corruption
https://www.g20.org/official_resources/notes_factsheets
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Part 3: Facts about the G20 and the Global Economy
2014 G20 Agenda | 53
Growth in GDP (PPP) for advanced and emerging market economies
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Per Cent
Advanced economies growth in GDPEmerging market and developing economies growth in GDPWorld growth in GDP
Forecast period
Source: IMF WEO October 2014
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Emerging market and developing economies increasing share of global GDP (PPP)
0%
10%
20%
30%
40%
50%
60%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Per Cent
Advanced economies share of global GDP Emerging market and developing economies share of global GDP
Forecast period
Source: IMF WEO October 2014
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Trends in G20 members’ share of global GDP (PPP)
0.9% 1.0%
3.0%
1.5%
15.8%
17.2%
2.5% 3.4%
6.6%
2.3% 2.0%
4.6%
1.7% 2.0% 3.4%
1.5% 0.7%
1.4% 2.3%
16.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Shar
e of
glo
bal G
DP
2006
2007
2008
2009
2010
2011
2012
2013
Source: IMF WEO October 2014
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Unemployment trends in G20 countries
7.2%
5.2% 6.9% 7.2%
4.5%
10.5% 9.9%
5.4%
3.4%
6.6%
10.7%
4.3% 4.9%
5.5% 5.6%
25.0%
3.2%
9.2%
7.9% 8.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Tota
l Une
mpl
oym
ent R
ate
2006
2007
2008
2009
2010
2011
2012
Global average in 2012
Source: ILO, through World Bank online database 2014
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0%
2%
4%
6%
8%
10%
12%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Une
mpl
oym
ent r
ate
World
High income - OECD
High income - non-OECD
Upper middle income
Lower middle income
Low income
Unemployment trends by region (2000-2012)
Source: ILO, through World Bank online database 2014
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17.5%
11.7%
15.5% 14.3%
9.7%
25.1%
19.9%
8.1% 9.7%
21.6%
35.3%
7.9% 9.4%
14.9%
27.8%
52.0%
8.9%
17.0%
21.3% 16.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Yout
h U
nem
ploy
men
t Rat
e
2006
2007
2008
2009
2010
2011
2012
Global average in 2012
Youth unemployment trends in G20 countries
Source: ILO, through World Bank online database 2014
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0%
5%
10%
15%
20%
25%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Yout
h un
empl
oym
ent r
ate
World
High income - OECD
High income - non-OECD
Upper middle income
Lower middle income
Low income
Youth unemployment trends by region (2000-2012)
Source: ILO, through World Bank online database 2014
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G20 Members’ Labour Force Participation Rates (2012)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Male
Female
Total
Source: ILO, World Bank online database 2014
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G20 members: GDP (PPP, US$’000) per person employed (2012)
29
51
14
50
15
42
53
43
9 11
45 45
20 20
30
15
45
28
49
68
0
10
20
30
40
50
60
70
80
GD
P pe
r per
son
Empl
oyed
(US$
'000
)
Source: World Bank online database 2014
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Investment (public and private) as a percentage of GDP
15%
17%
19%
21%
23%
25%
27%
29%
31%
33%
35%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Investment as a share of GDP (World)
Investment as a share of GDP (Advanced economies)
Investment as a share of GDP (Emerging markets and developing economies)
Forecast period
Source: World Bank online database 2014
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G20 members share of global trade in 2012
Note: trade for the European Union includes intra-EU trade. Source: WTO Database, 2014
0.4% 1.4% 1.3%
2.4%
9.5%
33.1%
3.6%
6.9%
2.3% 1.0%
2.6%
4.4% 2.8%
1.7% 2.3% 1.3%
0.6% 1.0%
3.6%
10.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Shar
e of
glo
bal t
rade
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Share of global trade for developed and developing and transitioning economies (2000-2013)
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Developed economies Developing and transitioning economies
Source: UNCTAD Database, 2014
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Trade restrictive measures introduced by G20 members
Source: WTO Trade Restrictive Measures, November 2014
0
20
40
60
80
100
120
140
Mid-Oct 10 toApr 11
(6 months)
May tomid-Oct 11(6 months)
Mid-Oct 11 tomid May 12(7 months)
Mid-May tomid-Oct 12(5 months)
Mid-Oct 12 tomid-May 13(7 months)
Mid-May tomid-Nov 13(6 months)
Mid-Nov 13 tomid-May 14(6 months)
Mid-May 14 tomid-Oct 14(5 months)
Other
Export
Import
Trade remedy
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G20 members: foreign direct investment
10
49
81 68
348
279
6 33 28 18 13 4
38
71
9 8 12 13
48
236
0
50
100
150
200
250
300
350
400
Net
FDI
inflo
ws (
US$
bill
ion)
Net inflows (Balance of Payments, current US$)
Source: World Bank online database 2014
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Energy supply (S) and consumption (C) moves from developed to developing world
Source: IEA Key World Energy Facts, 2014
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Use of oil falls as gas, coal and nuclear continue to grow
Source: IEA Key World Energy Facts, 2014
10.5
1.8 0.9
16
46.1
24.6
0.1
10
2.4 4.8
21.3
31.4 29
1.1
0
10
20
30
40
50
Biofuels andwaste
Hydro Nuclear Natural gas Oil Coal Other*
Shar
e of
glo
bal e
nerg
y (%
)
*Includes geothermal, solar and wind.
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Average cost of remittances by region (2013-14)
8.9
7.1 7.3 6.7
9
7.6
12.3
7.9
6 6 6.2
7.9 8.3
11.3
0
2
4
6
8
10
12
14
Perc
ent
Total average cost of sending about US$200 equivalent
Third Quarter 2013
Third Quarter 2014
Source: World Bank, Migration and Development Brief, 2014
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0
5
10
15
20
25
30
35
Shar
e of
pop
ulat
ion
unde
rnou
rishe
d
Undernourishment by region
1990-1992
2012-2014
MDG target
Change in levels of undernourished (1990 – 2014)
Source: FAO 2014
share above target
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