平和
和平
평화
ASIA
21 May 2014
Business proposals for economic recovery

Business proposals for economic recovery

Australian business leaders are driving an impressive international initiative to re-energize the global economy in discussions at the OECD Forum 2014 in Paris this week.

Australian business leaders are driving an impressive international initiative to re-energize the global economy in discussions at the OECD Forum 2014 in Paris this week. The message of these business leaders is clear -- they want to work in partnership with government to create the conditions for sustainable economic growth.

This effort will be a crucial input to the meetings of leaders of the world's 20 leading economies, "G20", in Australia later this year, under the chairmanship of Australian Prime Minister, Tony Abbott.

Mr Robert Milliner is leading this business initiative, as Australia's "B20 Sherpa", which is engaging the international business community in the development of policy recommendations for the G20 leaders. Milliner said the OECD engagement program would deliver a set of close to final policy recommendations that promote stronger economic growth and employment outcomes.

More than 100 senior business leaders, including David Thodey, CEO of Telstra, Steve Sargent, CEO of GE Australia & NZ, and Michael Andrew, former global chair of KPMG, are participating in taskforce discussions.

The B20 is working to develop policy recommendations that address the main barriers to economic growth and job creation across the G20 economies, most notably:

(i) Financing growth -- improving the availability of credit to business (especially SMEs) is critical to growth, as is completing post-crisis financial reforms.

(ii) Improving human capital -- while unemployment remains high, many economies are struggling to fill job vacancies because of skill shortages.

(iii) Infrastructure and investment -- many countries are faced with great infrastructure needs as urbanization progresses, or the challenge of maintaining aging infrastructure. Government needs to unblock the infrastructure system to facilitate the involvement of business, which has the necessary financial resources

(iv) Trade -- the priority is to unwind the many non-tariff barriers implemented since 2008, liberalise services trade, and implement the WTO's "Bali Package".

(v) Corruption -- business is just as interested as government in tackling corruption, which is a distortion to a level playing field.

Further details on these initiatives is set out below.

Other discussions at the OECD Forum have highlighted the great risks and vulnerabilities that still hang over the fragile and tepid economic recovery underway.

These B20 initiatives hold great promise to provide a much-needed new spark to global economic growth.

Financing growth, chaired by Michael Smith, CEO of ANZ Banking Group

The availability of credit to business is vital to global economic growth. The G20 Finance Ministers and Central Bank Governors Communiqué in February noted that the core financial market reforms, building resilient financial institutions, ending ‘too-big-to-fail’, addressing shadow banking risks and making derivatives markets safer, should be substantially completed by the November Brisbane Summit.

To ensure that global regulation does not inhibit growth and the creation of jobs, the Taskforce is examining how the core reforms can be implemented in a way that promotes an integrated global financial system, reduces harmful fragmentation and avoids unintended costs. The Taskforce is also examining how to provide greater recognition for emerging market economies in the development of international standards; address issues relating to the implementation of international standards in emerging market economies; facilitate greater infrastructure financing; and remove impediments to trade finance.

Human capital, chaired by Steve Sargent, CEO of GE Australia and New Zealand

Long term unemployment, youth unemployment and jobless growth are key human capital challenges. An employment paradox exists in many countries. While unemployment remains relatively high, many economies are also struggling to fill job vacancies. Workplaces are being transformed by technology, with one report suggesting 47 per cent of job categories could be automated within two decades.

The B20 is considering seven recommendations in five areas: maximising the job creation potential of the private and public sectors, building adaptable and resilient skill sets aligned with future workforce needs, improving alignment of people, skills, jobs and locations, increasing organisation and workforce adaptability and flexibility, and implementing measures to ensure accountability and real progress against targets.

Infrastructure and investment, chaired by David Thodey, CEO of Telstra

G20 countries face a number of common challenges including urban population growth and aging infrastructure. To address these challenges, at least $57 trillion is needed to fund infrastructure investment to 2030, but on current trends approximately $20 trillion will remain unfunded. Challenges persist across the G20, including a lack of bankable projects and barriers to financing.

The infrastructure & investment taskforce is considering five core areas where action can be taken to accelerate the provision of essential economic infrastructure by addressing these common challenges. G20 leaders may be asked to consider reasserting the primacy of infrastructure investment in national growth plans, establishing and publishing national infrastructure pipelines, committing to specific time limits for regulatory and environmental approvals, and creating a global knowledge platform. Business could assist governments by creating a global infrastructure project evaluation tool.

Trade - Andrew Mackenzie, chaired by CEO of BHP Billiton

Growth in world trade has flattened since 2011. While additional tariff protections have been avoided since 2008, G20 nations have increasingly imposed a significant number of non-tariff barriers. Services are becoming a much more important part of world trade although they still only account for 20 per cent despite representing 70 per cent of global GDP.

The B20 has identified five policy solutions to facilitate trade growth including rapidly implementing and ratifying the Bali Package Agreement on Trade Facilitation, reinforcing the standstill on protectionism and winding back barriers triggered by the financial crisis, especially non-tariff barriers, developing country specific supply chain strategies and ensuring PTAs realise better business outcomes.

Anti-corruption, chaired by Michael Andrew, former Global Chair of KPMG.

Through the establishment of the anti-corruption working group, the B20 will identify and highlight to the G20 specific instances in which corruption and a lack of transparency create impediments to economic and employment growth across the four priority areas.

Author

John West
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
Tags: asia, b20, b20 australia, g20, g20 australia, oecd Forum

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