Some international meetings end up being all talk but no action. The Group of 20 (G20), representing the bulk of the world economy, can avoid this by setting up a "global economic coordination system" to enhance its effectiveness, a Chinese think tank has suggested.
Despite a pledge to rehabilitate sluggish global growth, the G20 economies "have a common goal, but insufficient cooperation," and their commitment can be followed up with implementation and better coordination, said the latest report from the Chongyang Institute for Financial Studies at Renmin University of China (RDCY).
G20 leaders last year at the Brisbane Summit set an ambitious goal to lift their GDP by at least an additional 2 percent by 2018. An IMF-OECD analysis revealed that the commitment, if fully implemented, will deliver 2.1 percent, adding more than 2 trillion U.S. dollars to the global economy and creating millions of jobs.
"Additional economic growth must come from new growth engines, and they should be fostered by additional institutionalized policy frameworks," said the RDCY, a Beijing-based think tank.
Founded in 1999, the G20 has grown in stature and become a key stage for the leading developed and developing countries to discuss topics with global implications. But its non-treaty-based nature has triggered concerns that such pledges might not be fully delivered.
"Additional and sustainable economic growth can come from mapping out a five-year development vision and setting up joint working groups on policies pertaining to investment, trade, innovation, agriculture, tourism, energy, resources and other areas," noted the report released during the three-day Global Governance and Open Economy: 2015 G20 Think Tank Summit, which brings together experts and reporters from around the world.
The world economy is confronted with risks for sustainable growth with global trade expanding at an anemic pace and divergences in monetary policies among nations, and the G20 has been called on to solve those global challenges, Chen Yulu, president of Renmin University of China, said at the summit.
The International Monetary Fund (IMF) earlier this month trimmed its global economic growth projection to 3.3 percent in 2015 from a forecast of 3.5 percent made in April, alerting the global markets to risk of financial volatility and asset price fluctuations.
If the G20 intends to achieve its economic growth target, it has to change the status quo of having a common goal but insufficient cooperation, and a global economic coordination system must be established to address the low growth, high debt and high unemployment facing many economies, said Chen, former advisor to the Chinese central bank.
An executive secretariat could be established for the G20 to better coordinate work between members, and China could serve as the venue for the secretariat's office, according to a proposal by the RDCY, a co-organizer of the think tank summit, which was held in Beijing prior to this year's G20 summit in Antalya, Turkey.
Unlike many other international organizations, the G20 has no permanent staff of its own, and its chair rotates between members each year.
G20 members can create a "joint policy toolkit" to fulfill their goals, such as a global food price stabilization fund to address wild swings in food prices, and they can explore a reward and punishment system similar to the European fiscal compact enforcing the budget discipline, the report said.
Implementation of the G20's pro-growth target is critical, and in an inter-connected world, efforts should be made to promote trade liberalization, avoid trade protectionism, and encourage cross-border investment, Harold McGraw III, Chairman of the International Chamber of Commerce, said at the event.