Can G20 leaders improve the outcomes of globalization?

Prof. Dr Moustafa El-Abdallah Al Kafry

Can G20 leaders improve the outcomes of globalization?

World leaders gather to talk tough issues at G20 summit - Türkiye News

Prof. Dr Moustafa El-Abdallah Al Kafry

The leaders of the G20 are seeking new formulas and new treaties to improve the distribution of wealth or soften protectionist measures, and to find solutions to dispel the growing mistrust of their citizens about globalization and free trade. G20 leaders of developed and emerging countries have reiterated their determination to fight “populist attacks” on globalization through more communication on the benefits of free trade, said Christine Lagarde, managing director of the International Monetary Fund.

At their summits, G20 leaders usually discuss globalization, the biggest dilemma for heads of state facing rising populism and hostility to globalization that their citizens believe is not in the interest of ordinary people. Xi has not announced specific measures taken by leaders to liberalize trade, while the United States and the European Union accuse China of wrongdoing while setting up barriers to access to its vast market.

German Chancellor Merkel stressed during the summit that globalization is not limited to “positives, it also causes increasing differences between communities and between populations … Combating differences is important to ensure a sustainable relationship between growth and social justice). Canadian Prime Minister Justin Trudeau supported it. (The G20 leaders all acknowledged in Hangzhou that there was a crisis of confidence and that people did not feel the benefits of globalization.)

China plays a more important role in the global economic system:

Since the world’s eyes turned to China to help it emerge from the 2008 financial crisis, Beijing has felt it deserved to play a more important role in the global economic system commensurate with its status as the world’s second largest economic power. The G20 summit is the largest and highest ever hosted by China. The summit may not be a coronation ceremony, but Chinese President Xi Jinping intends to show the world and his domestic political rivals and China’s economic rivals that China is a strong country. It is capable and willing to play an important role in leading the global economy. The 11th annual summit in Hangzhou, China 2016, aims to discuss policies aimed at boosting the global economy, which China is hosting for the first time. [1]

At the opening ceremony of the conference in the Chinese city of Hangzhou, Chinese President Xi Jinping said the global economy faces the threat of escalating protectionist measures imposed by countries on the entry of foreign goods into their territory. The Chinese president’s comments came after talks with US President Barack Obama, who described them as “very constructive”. In his opening speech, Xi stressed the need for the 20 major economies to play their part in safeguarding economic growth. He said the global economy was “at a critical juncture” and was hampered by factors such as slowing demand, large volatility in financial markets and weak trade and investment. “Growth factors arising from technological progress are beginning to slow down, while another technological and industrial revolution seems to be on its way,” Xi said. At the political and military level, China will continue to protect its sovereignty and maritime rights in the South China Sea.[2]

Meeting global economic challenges requires implementing the 2030 Agenda for Sustainable Development and achieving inclusive development, supporting the industrialization of Africa and the least developed countries, expanding access to clean energy, promoting financial inclusion, and encouraging young people to start their own businesses. These measures will help reduce injustice and imbalance in global development, for the benefit of all peoples and nations, and achieve growth. (The G20 must play its full part in order for the global economy to be on the path to prosperity and stability, the G20 must be changing, assume the leading role, ignite global economic growth and honor its commitments. [3]

While stressing the need to change the G20 and transform it from a forum for discussion to a real working mechanism. The G20 must adapt to the new reality and look for a way forward. The Chinese president called on G20 countries to establish an open world economy and abandon new tariff protectionist measures in trade, and stressed the need to further simplify and liberalize trade and investment. [4]

In the final communiqué of the summit at its 11th annual session in Hangzhou, China 2016, the leaders of the G20 summit adopted more than 48 items in which they pledged to coordinate policies and use all necessary monetary, financial and structural tools, whether individually or collectively, to achieve growth, and noted that monetary policies must continue to support economic activities and ensure price stability. The summit leaders also adopted a package of policies and measures to achieve strong, sustainable, balanced and inclusive growth, dubbed the “Hangzhou Consensus”, which is based on four main pillars: vision, integration, openness and inclusiveness. [5]

  1. Vision: Finding new forces to drive growth, opening new horizons for development, and using the economies of the Community of African countries in more innovative and sustainable ways to better reflect the common interests of all present and future generations.

2- Integration: The GUUAM countries will formulate innovative growth concepts and policies based on the coordination of fiscal, monetary and structural policies and strengthen the interdependence between economic, labor, employment and social policies, as well as ensuring that supply-side reforms are linked to the demand side and the actual needs of the market, that short-term policies are linked to medium- to long-term policies,  and that economic growth is linked to social development and environmental protection.

  1. Openness: G20 leaders will strive to build an open world economy, reject protectionism, and boost international trade and investment by further strengthening the multilateral trading system and ensuring that there are wide-ranging opportunities for expansion of growth in a global economy.

4- Inclusiveness: The leaders of the G20 countries affirmed their keenness to work for economic growth to serve the needs of all and benefit all countries and peoples, especially women, youth and disadvantaged groups, and pledged to seek to create more quality jobs, address inequality and eradicate poverty in an inclusive manner.

The G20 will continue to work to prioritize food security, nutrition, sustainable agricultural growth and rural development as an important contribution to the implementation of the 2030 Agenda for Sustainable Development. The leaders of the G20 countries expressed their keenness for the ministers of agriculture of the countries of the group to meet periodically to work together to facilitate sustainable agricultural development steps and develop sustainable food value chains with the aim of achieving food security, rural development and poverty alleviation.

The final communiqué of the eleventh summit of the Group of Twenty touched on many important challenges affecting the global economy, including the exit of the United Kingdom from the European Union, which led to increased concerns for the international economy, as the leaders of the group stressed their country’s ability to deal with this new situation and its financial and economic consequences, expressing their hope that in the future they will see the United Kingdom act as a close partner of the European Union.

Faculty of Economics – Damascus University

[1] – where a number of world leaders (leaders of the world’s 20 largest economies) gathered,

[2]

http://www.bbc.com/arabic/business/2016/09/160904_g20_leaders_discuss_economy

[3]– Speech by Chinese President Xi Jinping at the opening ceremony of the summit.

[4]  – http://arabic.sputniknews.com/russia/20160904/1020061933.html

[5]  – The final communiqué of the G20 summit pledges an open world economy,

 https://www.albawabhnews.com/2103373

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