G20 leading the way on global growth

Almost a year ago, when Australia assumed the presidency of the G20, I said that the world needed less talk and more action.

The arrival of leaders in Brisbane marked the culmination of a year of action. The Brisbane Summit on Nov. 15 and 16 was an opportunity to finalize our commitments to strengthen the global economy, create jobs and deliver prosperity to billions of people.

With our considerable combined political and economic influence, the G20 nations are ideally placed to act. Our leaders’ summit was the window of economic opportunity that opens just once a year.

Early in Australia’s host year, G20 nations set an ambitious goal: to boost our collective economic GDP by at least 2 percent on current trajectories over five years, through a combination of domestic actions, and shared global commitments. Such a boost would add more than $2 trillion to the global economy and create millions of new jobs worldwide.

The mere act of setting this goal—something the G20 has never done before—served to galvanize members into action.

Over the next several months, G20 nations came up with almost 1,000 measures to drive economic growth. These included more investment in infrastructure, measures to facilitate trade, changes to competition policy, and initiatives to improve workforce participation, especially by women and young people.

The collective focus has paid off. In September, after only seven months of effort, the International Monetary Fund and the Organization for Economic Cooperation and Development estimated that the strategies we had developed would take us 90 percent of the way to meeting our growth goal.

Since then, G20 members have continued to identify new actions, and at the Leaders’ Summit it was confirmed how close we have come to achieving the 2-percent target.

This 2 percent represents a stronger economic future for all of our people and demonstrates the real value that can come from a forum like the G20. Driving growth in the global economy has been at the center of the G20’s efforts this year for the simple reason that growth is key to addressing almost every other global problem—problems that deny people opportunities, stifle private-sector ambition, and constrain quality of life.

As leaders we are duty-bound to address such problems. It is our job, individually and collectively.

The decisions that the leaders were asked to make covered many subjects—jobs, infrastructure, tax, trade, competition, corruption, development and the reform of financial systems. But all are interconnected. And all were on the table because they offer solutions to one big challenge: How do we restore confidence in the global economy now and into the future?

Greater confidence will bring the investment decisions that drive economic growth—which in turn will deliver jobs, opportunity, and higher standards of living for all.

Building confidence requires more than tweaking fiscal and monetary policy settings. It demands structural reforms to improve the efficiency of individual economies, and through them, the global economy.

Over the course of 2014, through persuasion, G20 nations have already achieved collectively what might have been impossible acting alone. Cooperation on this scale, to lift global growth through concerted domestic structural reform, is unprecedented.

We have achieved much in other priority areas, too. We’re on track to deliver the first tranche of tax reforms to combat base erosion and profit shifting, to help ensure that corporations pay their fair share of tax in the jurisdictions where they make their profits.

We’ve agreed to a major, multiyear piece of work to boost private-sector investment in the infrastructure that drives productivity: roads, ports, railways and power stations. As much as $70 trillion worth of additional infrastructure will be needed globally by 2030. No longer can governments alone meet the demand.

It has been a year of action already, but it is not over yet.

In Brisbane, leaders proved to the world that a forum that showed its mettle in responding to the dark days of global crisis could prove it again, this time in actually shaping the economic future.

We can deliver on reforms to financial regulation that will ensure that the circumstances that led to the global financial crisis (GFC) are never repeated and that we are better equipped to deal with future crises.

We can ensure that taxpayers never again bear the cost of bailing out institutions that are deemed “too big to fail,” and we have an opportunity to bring greater transparency to the opaque world of shadow banking and to reform over-the-counter derivatives trading.

We can set a global target to reduce the individual country gaps between male and female workforce participation by 25 percent by 2025.

Most importantly, in bringing much of our post-GFC agenda to completion, we can now focus on what the global economy will need in the years ahead.

Tony Abbott is prime minister of Australia.