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G20 leaders aim to add $2 trillion to world economic output by 2018

"The central issue is now employment as we always wanted; growth without jobs is meaningless," said Suresh Prabhu.

Written by Vaidyanathan Iyer |
Updated: November 16, 2014 8:09:16 pm
obama Prime Minister Narendra Modi with President of China Xi Jinping, U.S. President Barack Obama and other leaders at the family photo session during the G 20 Summit in Brisbane. (Source: AP)


Leaders of the Group of 20 countries on Sunday agreed to take a variety of measures to add an extra $2 trillion or 2.1 per cent to world economic output and create millions of jobs by 2018. Despite host Australia pitching hard to keep climate change outside the G20 agenda, US President Barack Obama brought conviction to its inclusion by announcing a $3 billion climate change fund for developing countries on Saturday. Japan followed suit by committing another $1.5 billion.

Suresh Prabhu, sherpa to Prime Minister Narendra Modi said, the incremental 2 per cent growth will come mainly from India, besides China. “The central issue is now employment as we always wanted; growth without jobs is meaningless,” he said. India will also significantly benefit from the higher growth as the global market opens up.

Another key area that India and other developing countries stressed upon was tackling shortfalls in investments and infrastructure, because these are critical to job creation. Accordingly, besides supporting the Global Infrastructure Initiative, the G20 leaders decided to strengthen public investment and create a more favourable climate for private sector investment in infrastructure.

On the inclusion of climate change in the G20 agenda, Prabhu said India too was facing an enormous challenge because of the past emissions. Without answering a direct question if India too would face increasing pressure on cutting emissions, following a deal between the US and China, he said within developing countries India must pitch for common but differentiated responsibilities.

The Indian sherpa was also satisfied that there is focus now on the development agenda of the Doha round of trade talks. “We had taken a firm but disciplined stance on the Bali package saying it cannot be implemented in a piecemeal fashion. Today, that has been appreciated by all,” Prabhu said. Two days ahead of the summit, India and the US reached an understanding that New Delhi’s food security concerns would be addressed even as India decided to sign the Trade Facilitation Agreement.

The G20 communique took specific note of this. “We welcome the breakthrough between the US and India that will help the full and prompt implementation of the Trade Facilitation Agreement and includes provisions on food security. We commit to implement all elements of the Bali package and to swiftly decide a WTO work programme on the remaining issues of the Doha Development Agenda to bring negotiations back on track,” the communique said.

India and the other countries in the BRICS group also pushed hard for long-pending governance and share holding reform of the global institutions such as the World Bank and the International Monetary Fund. “These institutions must reflect the current realities of the structure of the global economy,” said Prabhu.

The G20 also agreed to include India’s demand for cutting the costs of remittances as a priority. At present, remittances attract at times charges of as much as 10 per cent. “Indian is the single largest recipient of remittances to the tune of $70 billion,” said Prabhu. The idea is to bring the costs down to 5 per cent from 10 per cent.

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