On its 70th anniversary on October 1st 2019, the People’s Republic of China (PRC) will proudly celebrate the material successes of a lifetime and show them off to the rest of the world. It has many, well beyond the vagaries of economic cycles and notwithstanding the current shift to a more moderate pace of economic growth. The first and foremost is undoubtedly its severe challenge to the liberal perspective regarding the role of economic and political freedom for economic growth.
As the US-China trade war rages, and fears of a new conflict in the Gulf loom, world leaders meet in Osaka (June 28-29) at the G20 Summit. Beyond today's crises, the Summit will be a litmus test for the G20 countries’ ability to tackle key global challenges: from financial stability to climate change, from trade protectionism to aging populations and the future of work in the digital age. Will the sense of urgency prevail over growing divisions?
As the world’s premier forum on international economic governance, the G20 plays an important role in global rule-making. Born out of crisis, the G20 has morphed into the inner sanctum of world governance. Given that Africa has been a rule-taker since its decolonisation, its limited participation in this grouping (only South Africa is a full member) runs the risk of perpetuating this situation.
Major technological transformations such as artificial intelligence, big data, FinTech, the Internet of Things and Industry 4.0 are putting the global economy on a new track. These innovations will bring immense economic opportunities as well as dramatic changes in industries, employment and required skills that will create major challenges for individuals, businesses and governments.
The implications of aging societies have been rising on advanced economy agendas for a long time. The challenges posed by a shrinking labor force, potential declines in productivity and a growing number of retirees which, in turn, threaten the sustainability of pension systems and public finance in general are cases in point. In the recent past, several middle- and low-income countries have also been increasingly exposed to the aging of their populations.
The G20 has the potential and responsibility to lead the world in developing more sustainable economic systems and life styles. Today’s patterns of consumption and waste generation are unsustainable. They contribute to social inequalities and the environmental degradation that is polluting our oceans, heating up the planet, threatening species survival, and contributing to the spread of disease.
During the Think 20 (T20) hosted by Japan in 2019 to prepare analyses and policy proposals for the G20, a specific working group of think tank experts (Task Force n.2: TF2) devoted its discussions and proposals to the issue of the adequacy of the International Financial Architecture. This has always been a traditional and central theme of the G20. The guiding idea of this Task Force has been to concentrate its analyses and advice on the most urgent and novel aspects and problems that mark the evolution of global financial markets and institutions.
After turning 10 in the Southern Cone and celebrating anniversary in Buenos Aires, G20 started its second decade of life in Osaka. The G20 was born to deal with the economic crisis and succeeded in the challenge. It was successful in handling the global financial crisis of 2008–2009 and containing its aftershocks. However, despite the importance of today’s global challenges, the world does not seem to perceive them with the same sense of urgency.
International trade is facing many risks, according to the WTO trade forecast of September 2018. Among these are rising trade tensions and global protectionism, as well as increased financial volatility as developed economies tighten their monetary policy. Consequently, the WTO downgraded world merchandise trade growth to 3.9% (2018) and 3.7% (2019) respectively.