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Analysis

The G20 Brisbane Summit:
Expectations, Results and the Road Ahead

Caitlin Gillespie, Antonia Tsapralis, Theodora Mladenova, Jose Isla Gomez,
Artur Pereira and Casimir Legrand, G20 Research Group
November 17 2014

The Run-Up to the Brisbane Summit

As the Brisbane G20 Summit drew near, all eyes turned toward Australia and the agenda it had constructed. The Australian G20 presidency explained that the summit had three main objectives: to boost growth employment, to create a resilient economy and to strengthen global institutions. All three of these objectives provide a unique opportunity to reconstruct global economic growth, particularly through the 2% growth target, a projected economic increase in growth trajectory above baseline forecasts to be achieved through mandates that would be embedded in the Brisbane Action Plan.

While the Australian presidency tried to motivate an economic governance agenda, many leaders and G20 scholars remarked that there were geopolitical issues that stretched beyond an economic growth framework that required attention. At a press conference held by the Centre for International Governance Innovation (CIGI) and the G20 Research Group, CIGI fellow and University of Waterloo professor Bessma Momani said that there were "too many great concerns among the people of the world who want big issues on the table." Consequently, issues that affect the entire international community, such as the implementation and reconstruction of infrastructure, climate change, the mitigation of Ebola and prevention of future epidemics, tax avoidance, the Ukraine crisis and the flaring of the ISIS tension were some of the most compelling conflicts plaguing today's world that G20 scholars and many leaders wanted to see be brought forward at the table.

Climate change in particular received a lot of attention before the summit. At an address at Queensland University on the morning before the summit began, US president Barack Obama announced that the US will be spearheading a $3 billion campaign to the Green Climate Fund and encouraged other states to get on board. He firmly said there is no excuse for countries not to come together on this issue and praised Japan for pledging $1.5 billion to the fund.

The co-mingling of all these competing issues highlighted the full extent of the burden of what the leaders needed to accomplish as they sat down at the G20 table — the reconciliation of pressing political issues with the Australian presidency's economically intended agenda.

Delivering on Its Agenda

At first glance of the communiqué on November 16, it appeared the Australian G20 presidency had achieved at least one of its main goals — a short and concise communiqué. It was, in fact, a three-paged document listing all the action items under the presidency's three main themes. In his address to the media after the summit, Australian prime minister Tony Abbott also announced that "this year the G20 has delivered real, practical outcomes" and executed the "strong, bold ideas" it set out to achieve.

Starting with its ambitious 2% growth target, the G20 signed off on a peer-reviewed growth package that consists of more than 800 new country-specific growth strategies that will, if implemented, raise the growth projections by 2.1% by 2018. As Abbott mentioned, these measures include increasing competition, relieving the private sector of unnecessary regulation and increasing female participation in the labour force. On this last measure, G20 leaders pledged to reduce the gender gap between female and male workforce participation by 25% by 2025. However, as pointed out by Christine Lagarde, managing director of the International Monetary Fund (IMF), "an action plan is great, but it also needs to be implemented." Working alongside the Organisation for Economic Co-operation and Development (OECD), the IMF has been tasked by the G20 to monitor the implementation of the growth strategies to ensure delivery. Lagarde also clarified an issue regarding the 2% growth target that had been contested prior to the summit, by announcing that the increase is relative to baseline published in the World Economic Outlook presented at the St. Petersburg Summit in September 2013.

G20 leaders also delivered on their plan to develop a global infrastructure initiative that will address the $70 trillion gap in infrastructure over the next 15 years by 2030. To achieve this, leaders agreed on the key mechanism of the Global Infrastructure Hub, located in Sydney and funded both by member governments and the private sector.

In addition, the G20 also carried out many of the other key objectives it had set out to reach. On financial regulation and making the global economy more resilient, leaders committed to strengthening financial institutions, addressing shadow banking risks and making derivative markets safer. Moreover, efforts to reform the international tax system were adopted as expected. Leaders welcomed the current efforts on the Base Erosion and Profit Shifting Action Plan and committed to finalizing the work by 2015, and also endorsed the standard for the automatic exchange of information and committed to its operation by 2017-18.

Many G20 leaders also echoed the successful outcomes of the summit. On tax avoidance, British prime minister David Cameron stressed the importance to the global economy of large companies paying the proper taxes. He called for cooperation among G20 national tax authorities to ensure that transparency initiatives deliver increased growth and job creation. Spain's President Mariano Rajoy stressed the strong commitment to fight tax avoidance, stating that "we are working so there will be no country in which wealth can be hidden without being taxed." France's President François Hollande also stipulated his will and commitment to fight against tax avoidance, by encouraging the proper implementation of the 2018 tax avoidance targets by 90 countries worldwide.
G20 leaders also identified trade as a key driver of growth. They noted the need for domestic reforms as well as the importance of a global trading system to boost global trade. Obama underlined the progress made by the United States on different trade agreements such as the Trans-Pacific Partnership, the agreement with China to extend visas for business people, tourists and students, as well as a bilateral investment treaty between the two countries. Cameron reiterated the importance of trade deals to improve Britain's growth outlook and job creation plan, especially through the proposed Transatlantic Trade and Investment Partnership (TTIP). He noted that TTIP will be imperative for job creation in the UK, and will require a concerted effort by all parties involved to take on the partnership's opponents. Rajoy noted that negotiations between the United States and the European Union are progressing satisfactorily thanks to the will of countries to start acting as soon as possible in order to increase commerce and create jobs. Hollande stipulated that clearance is the main issue regarding TTIP, as well as cultural recognition and the identification of products.

Above and Beyond

Given the growing concern among G20 leaders and rising pressure from the international community, leaders also discussed additional pressing world issues that veered slightly off the Australian's strict pro-growth and economic agenda. According to Tony Abbott, "there were a number of important international issues that were dealt with that Leaders expressed deep concern about." Among these the top contender was Ebola, with a statement released on Saturday evening. In his remarks, Obama reiterated the need for a communal effort from the G20 members in order to address such issues.

Lagarde announced that the IMF had been tasked by the G20 to present the package they had proposed on Ebola to the IMF Board for approval. Several leaders also made pledges to help combat Eloba. Cameron stated that British cooperation with Sierra Leone will be imperative in keeping the global population safe and tackling the Ebola epidemic at its source. Hollande mentioned an additional $300 million to supplement the funds already allocated by the European Union.

In a session dedicated to global energy issues, leaders also managed to sneak in the topic of climate change, which had been lobbied by many leaders, in particular Obama, to be put on the agenda. All the leaders supported strong and effective action to address climate change and work constructively toward the United Nations conference in Paris in December 2015. They also agreed to improve the efficiency of heavy-duty vehicles, viewed as a necessary step in working toward a healthier planet. In his speech at Queensland University, Obama set the tone for the US position regarding this necessary fight against global warming, accentuating the importance of China's recent decision to cap their carbon emissions. Cameron mentioned that individually, nations must take a deeper look at what's going to create a global climate deal, in particular the full participation of the world's worst emitters in China and the United States. Hollande stipulated his commitment towards climate change, as UN leaders will gather in Paris next year to discuss climate change opportunities. Hollande stressed the importance of China's full efforts in climate change initiatives globally. There has also been given USD100 million to green funds in order to aid developing countries in combating climate change. These initiatives will help in preventing a increase in the temperature of 3 to 4 degrees. All the international organizations are behind the French government on climate change and its continued dedication to the UN conference on climate change in 2015.

With regard to current geopolitical issues, Cameron stated that a clear message has been sent over the weekend to Russia on its activities in Ukraine. He said that the crisis will test the stamina of the US and EU, but that he is confident they will collectively be able to meet the test. Cameron and Obama, in a bilateral meeting, agreed to continue to apply pressure and sanctions on Russia and to take further measures if necessary. Cameron said that he hopes that Putin will practise the belief that the Ukraine was a "single political space," as the Russian leader said to him in a bilateral meeting. Rajoy commented the common concern of all countries regarding Ukraine's integrity as a state. However, he said that: "No reproach was made towards President Vladimir Putin in any of the meetings of the Summit." Regarding issues in regions of tension, such as Ukraine and the Middle East, Hollande finds it important for restoring market confidence that these political issues cease — so that consumers can consume and the economy can grow. He also urged Putin to maintain and respect stipulations of the Minsk agreement.
Given the extensive emphasis on these pressing international issues that were not initially on the Australian presidency's agenda, many observers have suggested that their inclusion derailed the G20's focus on its core economic agenda. As Lagarde, who describes herself as "a veteran of the G20," clearly stated the G20 is always hijacked by pressing global issues that may stray off the economic agenda. However, she mentioned that this presidency was remarkable in its flexibility to allow time for discussing these other pressing issues, while still delivering on the set agenda. Moreover, she noted that all these topics have an economic dimension and will affect the global economy, so in fact discussing them does not veer far from the G20's proposed economic agenda.

The Road Ahead

In his final press conference, Turkey's Prime Minister Ahmet Davutoglu congratulated Prime Minister Tony Abbott on the organization of the Brisbane Summit and laid out his agenda for Turkey's presidency in 2015. Davutoglu reiterated Turkey's commitment to monitoring the G20's 2% growth target, but made clear that this growth needs to focus on including low-income developing countries and supporting small and medium enterprises.

He stressed the role of the Global Infrastructure Initiative in fostering future growth and development. Two other priorities for Turkey are harmonizing the relationships among unilateral, bilateral and multilateral trade agreements and encouraging better representation at the World Trade Organization, with the view that this will contribute to growth and development. On the topic of financial architecture, Davutoglu stressed the need to improve the structure of the IMF to make it more representative.

Davutoglu pointed out that one fifth of the world's population has no access to electricity. Turkey will organize a conference on energy investment in Istanbul in May and will host a ministerial-level meeting of G20 members on energy access and energy investment.

The Turkish prime minister concluded by stressing the importance of the G20 summit as a forum for tackling global crises such as Ebola and refugee issues. In light of the UN's post-2015 development agenda, Turkey will declare 2015 a year of global development.

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