A change in perspective needed
Updated: 2013-09-04 07:31
By Fan Yongming and Shen Chen (China Daily)
G20 leaders need to switch focus from developed countries to promote economic recovery and global governance reform
Four issues will be in the spotlight at the upcoming G20 summit in St. Petersburg, Russia: boosting confidence in global economic growth, promoting reform of global governance, increasing unity and cooperation among developing countries, and evaluating China's economic growth trend.
The G20 emerged in response to the unprecedented 2008 international financial crisis, with its top priority promoting global economic growth. Over the years, thanks to the United States' fiscal cliff and the debt crisis in Europe, the G20 has paid more attention to economic recovery in developed countries. However, at this summit, the focus should switch from the developed world to developing countries, especially to emerging economies.
The US Federal Reserve introduced its quantitative easing without any consideration of the adverse effects it would have on other economies. Now it has indicated that it will gradually withdraw from its quantitative easing, it should listen to the opinions of others, especially those emerging economies with uncertain economic prospects.
The leaders gathering in St. Petersburg should come up with a solution that not only boosts market confidence, but also takes the practical interests of all parties into account, so as to achieve steady world economic growth and promote employment. Similarly, the fiscal arrangements in developed countries and financing arrangements in developing countries that relate to the long-term and stable development of the global economy need coordinating.
All parties should also work together to promote reform of global governance. The St. Petersburg summit will examine the implementation of the International Monetary Fund's quota reform to date, and start a new round of quota reform agenda. The role of the Financial Stability Board will be strengthened to maintain effective regulation of global financial system. The summit will also plot out the future for the multilateral trading system represented by the World Trade Organization. All these are major initiatives in global economic governance and are closely linked with the long-term interests of all parties.
While the IMF's quota reform is proceeding according to a general time schedule, there are more uncertainties about the future of the multilateral trading system, as the protracted Doha Round has resulted in some countries being disappointed with the WTO. In order to break the deadlock of the Doha Round and revitalize the multilateral trading system, Roberto Azevedo, the new director-general of the WTO, is trying to push members to finalize an "early harvest" package in trade facilitation, agriculture, export competition. The US and other developed countries should give up their selfish interests and adopt a supportive attitude toward this early harvest package.
Regional cooperation issues closely related to the evolution of the multilateral trading system are also likely to be on the agenda at the summit. Developing countries hope that the regional economic cooperation negotiations dominated by the US and other developed countries, such as the Trans-Pacific Partnership, will not have exclusive clauses and rules under the pretext of building a "comprehensive and high-standard" free trade area so as to ensure the openness, transparency, fairness and inclusive development of various regional economic cooperation mechanisms.
The G20 is essentially a stage for dialogue and consultation, a stage on which the G7 and the BRICS countries are very compelling. It is noteworthy that it has become routine for the leaders of the BRICS countries to hold informal meetings to coordinate their positions on the sidelines of major international gatherings and in doing so they have enjoyed some remarkable achievements. This time, President Xi Jinping will attend an informal meeting with other leaders of the BRICS countries. After the G20 summit, Xi will go to the Shanghai Cooperation Organization summit in Bishkek, capital of Kyrgyzstan. These initiatives show from different perspectives the efforts of emerging countries to strengthen multilevel, all-dimensional unity and cooperation to enable developing countries' interests to be embodied and respected in global economic governance reforms.
The St. Petersburg gathering will be the debut for China's new leadership at a G20 summit. A stable and prosperous China is indispensable for a brighter global economic outlook and much attention will be on how committed they are to further opening-up and reform. The State Council's official approval of the establishment of the Shanghai free trade area has attracted worldwide attention, and there is every reason to believe that the St. Petersburg summit will once again highlight China.
The authors are researchers with the Center for BRICS Studies, Fudan University.
(China Daily 09/04/2013 page8)