If Brisbane G20 is to succeed, then sticking to key issues of boosting growth, strengthening economic resilience and getting the Leaders to back reforms is paramount, observes Britain’s Stephen Pickford.

The culmination of the Brisbane Summit comes at a time when the G20 needs reinvigorating most, and Australia has set out ambitious aims for its presidency. Whether it will realise those ambitions will help determine if the G20 can successfully evolve into an effective steering group for the global economy in both good times and bad. But some early signs are encouraging.

A Good Start

Australian ministers have made it clear that they want to set an agenda to focus on a few key issues, which would boost the longer-term effectiveness of the G20. The Sydney Finance Ministers and Governors meeting in February suggested that the government is determined to try and change the way the G20 operates – namely by focusing on actions and outcomes, and provoking frank, robust discussions. Given the loss of focus at G20 Summits over recent years, this is extremely welcome.

Growth is the Clincher

Identifying at the February meeting an objective of boosting growth by two per cent sends a strong signal of intent. It also makes a good start in concentrating on the key macroeconomic policies that will be crucial in determining whether the global recovery can be sustained: ensuring that monetary policies are “normalised” gradually, that strengthening of fiscal accounts takes place “flexibly”, and that the cash-richprivate sector is encouraged to invest. The challenge will be to get countries to sign up to national actions to deliver.

Australia is also focusing on getting 
the G20 Mutual Assessment Process to work more effectively. This is potentially a very powerful tool to challenge countries
 to set targets for national policies – and
 to hold them to account for delivering 
on them. But to make Brisbane a real success, Australia will also have to succeed in slimming down the G20 agenda and prioritising its efforts. In order to deliver on its two key policy objectives – boosting growth and employment, and strengthening resilience of the global economy – it needs to concentrate on getting G20 Leaders 
to reach agreement on a small number of key issues, which can only be delivered by heads of the G20 governments. They can then take forward those policies, which willunderpin the global recovery and make it more sustainable: completing financial sector reforms, encouraging investment (especially in infrastructure) and kickstarting IMF reform.

It’s Up to the Head Honchos

Some key issues require political capital that only heads of government can bring. Two particular concerns on the Australian agenda stand out as needing Leaders’ support: 
trade liberalisation and tax reform. Using Brisbane to get G20 Leaders (who represent 85 per cent of the global economy) to sign up to multilateral action to open up world trade and institute international tax rules that ensure companies are taxed where they
 earn revenue would be major steps forward. Both are very challenging – the WTO is currently struggling to make progress on 
truly multilateral trade liberalisation, while the OECD doesn’t have the political clout to get international agreement to harmonise tax policies. So the unequivocal political support of G20 leaders is vital if these are to progress.

Australia appears ready to take on these challenges, which are crucial elements of
 a better global order. And it can play an important role as an honest broker to push these issues forward. Success will help cement the G20’s role as the key forum for managing the global economy. But failure would reinforce its declining influence and ability to strike global agreements.

Stephen Pickford is a Senior Research Fellow of International Economics, Chatham House Royal Institute of International Affairs.

This is an extract from G20: Words into Action Brisbane 2014, to be published by Faircount Media in association with the Australian Institute of International Affairs in October 2014.