International business leaders on Sunday called on the G20 to commit to an ambitious policy reform agenda that would drive economic growth and create jobs.
Richard Goyder, B20 Australia Chair, said business is asking G20 members to implement reforms that encourage private sector investment and boost employment across the world. The B20 leads engagement with G20 governments on behalf of the international business community.
"The B20 has been speaking to G20 finance ministers and central bank governors about the urgent need for policy support in five key policy areas -- infrastructure, finance, trade, human capital and transparency," Goyder said.
"We have developed a set of 20 mutually reinforcing recommendations for the G20 which if implemented would exceed the target of 2 percent growth above trend over the next five years -- that means more trade, better infrastructure, safely regulated, accessible and affordable finance, and human capital in the right place, at the right time with the right skills."
This week, the OECD downgraded growth forecasts for a number of leading economies, including the United States, Japan, France, Germany and the euro area.
"Clearly public and private investment is what maintains and builds the future productive capacity of the global economy, but global FDI inflows are almost half their pre-crisis peak," he said.
"Trade, which has been the growth engine in the post-war period, has been flat over several years and is still below pre-crisis levels -- 3 trillion U.S. dollars lower today than what we would expect based on the long-term trend.
"Against this backdrop of slowing economic growth, with interest rates at record lows and government stimulus at capacity, we need ambitious policy reform to drive investment and jobs."
Goyder said the B20 was seeking commitments that would reinvigorate the multilateral trading system and encourage the private sector to invest in economic infrastructure.
"If our four trade recommendations are implemented, it could add 3.4 trillion U.S. dollars to the GDP and 50 million trade related jobs to the global economy.
"Similarly, closing the global infrastructure gap could create 100 million jobs and generate 6 trillion U.S. dollars."
Goyder said that regarding the finance agenda, the B20 is asking international regulators to complete the core regu1atory agenda in 2014 and to pause, take stock and align the regulatory agenda in 2015 to ensure that it is coherent, consistent and working as intended.
He said the challenge for governments in addressing these issues is that it will require domestic structural reforms with different implications for existing policy and political agendas.
"In looking at the G20 agenda and likely responses we need to understand the subtlety of domestic agendas as well as global macroeconomic settings and the broader geopolitical climate, we have to find a way to talk about global issues within a domestic context, to mould the two together," he said.
"This is where the strength of the international business community can be leveraged to support governments in communicating the importance of G20 initiatives domestically."
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