The final communiqué from the two-day meeting of Group 20 finance
ministers and central bankers in Sydney said they would take
concrete action to increase investment and employment, among other
reforms. The group accounts for around 85 percent of the global
"We will develop ambitious but realistic policies with the aim to
lift our collective GDP by more than 2 percent above the trajectory
implied by current policies over the coming 5 years," the G20
Australian Treasurer Joe Hockey, who hosted the meeting, sold the
plan as a new day for cooperation in the G20.
"We are putting a number to it for the first time — putting a real
number to what we are trying to achieve," Hockey told a news
conference. "We want to add over $2 trillion more in economic
activity and tens of millions of new jobs."
The targeted acceleration would boost global output by more than the
world's eighth largest economy Russia produces in a year.
The deal was also something of a feather in the cap of Hockey, who
spearheaded the push for growth in the face of some skepticism,
notably from Germany.
"What growth rates can be achieved is a result of a very complicated
process," Germany's Finance Minister Wolfgang Schaeuble said after
"The results of this process cannot be guaranteed by politicians."
Australia is acting as president of the G20 this year, following
Russia in 2013 and ahead of Turkey next year.
While shifting the focus to reforms that would lift and sustain
global growth in years to come the group acknowledged that monetary
policy would need to "remain accommodative in many advanced
economies and should normalize in due course."
The growth plan borrows wholesale from an IMF paper prepared for the
Sydney meeting, which estimated that structural reforms would raise
world economic output by about 0.5 percent per year over the next
five years, boosting global output by $2.25 trillion.
The IMF has forecast global growth of 3.75 percent for this year and
4 percent in 2015.
As yet there was no road map on how nations intend to get there or
repercussions if they never arrive. The aim was to come up with the
goal now, then have each country develop an action plan and a growth
strategy for delivery at a November summit of G20 leaders in
"Each country will bring its own plan for economic growth," said
Hockey. "Each country has to do the heavy lifting."
Agreeing on any goal is a step forward for the group that has failed
in the past to agree on fiscal and current account targets. And it
was a sea change from recent meetings where the debate was still on
where their focus should lie: on growth or budget austerity.
Financial markets had been wary of the possibility of friction
between advanced and emerging economies, but nothing suggested the
meeting would cause ripples on Monday.
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"The text of the communiqué indicates that the standard U.S. line
that what is good for the core of the world economy is good for all
seems to have won out," said Huw McKay, a senior economist at
Westpac, noting there was nothing that could be taken as
"inflammatory" about recent volatility in markets.
YELLEN MINDFUL ON TAPERING
There was a nod to concerns by emerging nations that the Federal
Reserve consider the impact of its policy tapering, which has led to
bouts of capital flight from some of the more vulnerable markets.
"All our central banks maintain their commitment that monetary
policy settings will continue to be carefully calibrated and clearly
communicated, in the context of ongoing exchange of information and
being mindful of impacts on the global economy," the communiqué
There was never much expectation the Fed would consider actually
slowing the pace of tapering, but its emerging peers had at least
hoped for more cooperation on policy.
Hockey said there had been honest discussions among members on the
impact of tapering and that newly installed Fed Chair Janet Yellen
was "hugely impressive" when dealing with them.
The G20 also stated that it "deeply regrets" that progress on giving
emerging nations more say in the International Monetary Fund had
Major emerging powers including India, China, Brazil and Russia,
have long lobbied for increased voting power in the IMF to reflect
their growing share of the world economy, but the changes agreed in
2010 have been blocked by the U.S. Congress.
The G20 urged the United States to ratify the reforms before the
next meeting of policy makers in April.
The group is also progressing with plans to "make sure multinational
companies pay their fair share," said U.S. Treasury Secretary Jack
Big budget deficits and revelations that companies such as Apple and
Google use structures that lawmakers have labeled "contrived" to
avoid billions of dollars in taxes, have led to growing calls to
close corporate tax loopholes. The companies say they follow the
existing tax rules.
(Additional reporting by Cecile Lefort,
Ian Chua, Jane Wardell, Gernot Heller and Matt Siegel; writing by
Wayne Cole; editing by John Mair and Tomasz Janowski)
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