The case for rejuvenating the G-20: the time to act together is now.

Author:Schuknecht, Ludger

The G-20 was established by finance ministers and central bank governors of the twenty leading economies in 1999 in response to the Asian crisis. Since then, globalization and digitalization have offered vast opportunities, spurred economic growth, and increased prosperity for many people around the globe. But as the world has become more complex, an increasing number of people feel overwhelmed by these global forces, and some even feel left behind. This has led to a growing skepticism towards globalization, together with an increasing level of distrust aimed at politicians, business leaders, and the media. It has also given rise to right-wing populism that questions the very foundations of liberal democracy.

These developments cannot be ignored. We must make globalization work for everyone and shape it to deliver sustainable and inclusive growth. This requires global economic governance and rules. Given the increasing complexity of economic and political forces and interdependence, the only forum that can achieve something close to global economic governance--or global Ordnungspolitik as we call it in Germany--is the G-20.

Since its inception, the G-20 has contributed to coordinating and stabilizing the global economy. It has catalyzed improvements in financial market regulation in response to the global financial crisis and in international tax rules and tax fairness. And developing and emerging economies have received a greater voice in global governance and in the international financial architecture. The German G-20 presidency in 2017 builds on these achievements.

The German presidency has three key priorities in the area of finance:

* Enhancing resilience: We need to move away from the prevailing debt-financed growth model and focus on structural reforms. We aim at strengthening the resilience of economies through the development of resilience principles and country-specific measures.

* Compact with Africa: We want to promote sustainable development and employment through improving the conditions for investment in the private sector and in infrastructure. In this regard, we encourage individual African countries together with international organizations and partner countries to agree on so-called investment compacts.

* Shaping digitalization: We want tofocus on opportunities and risks of digitalization in the financial sector and improve financial inclusion through digitalization.

In addition, we will progress on standard G-20...

To continue reading