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The G20's Growth Focus is WorkingTristram Sainsbury Lowy Institute 09/04/2015 In the world of international economic policy-making, it can often feel as if 1995 Nobel economics laureate Robert Lucas was on to something when he famously said 'once you start thinking about growth, it's hard to think about anything else'. The collective search for policies that promote growth and deliver better living standards and employment outcomes remains the core focus of the G20. In 2015, Turkey indicated that the G20's central growth narrative will focus on inclusive and robust growth But the G20 needs to demonstrate that it is 'doing' as well as 'talking', so the delivery of the growth strategies that leaders endorsed in Brisbane 2014 is crucial to G20 credibility. Turkish Prime Minister Ahmet Davutoğlu has stated All well and good, except for the evidence base. According to IMF and OECD modelling, by the end of 2015 we should see 0.5% of additional GDP across the G20 as a result of these growth strategies (see graph): But this is inconsistent with recent forecasts by the IMF Glass-half-empty types such as Leon Berkelmans suggest I have a different take. As Mike Callaghan has outlined So the growth plan unveiled by G20 leaders in Brisbane was exceptional in establishing substantial reform goals in a non-crisis setting. It shifted focus toward structural reforms that raise the collective productive potential of G20 economies, and represents a significant accomplishment in collective macroeconomic policy thinking. The real measure of success for the Brisbane G20 plan is not in the headline growth figure, but in the 1000–plus structural policies that countries have pledged, which are a large step up from similar G20 exercises. The IMF and OECD say But I place a strong caveat: now that the commitments have been made, it is up to domestic constituencies to hold leaders to account. G20 countries have submitted to a peer review and an IMF assessment, to be delivered to leaders in November 2015. This is an improvement on previous G20 accountability processes. Turkey's emphasis on implementation should be commended. Yet, as John Kirton and Julia Kulik highlight Photo courtesy of Turkey G20 2015 Tristram Sainsbury is a Research Fellow in the G20 Studies Centre at the Lowy Institute. |