G20

By Bill Banks of EY

This year I was honored to take part in the Business 20 (B20) summit in Sydney, an event which enabled common views from the international business community to be put forward to G20 leaders this weekend in Brisbane. As a member of the Infrastructure & Investment taskforce, my colleagues and I found that one of the primary barriers to increasing private infrastructure investment has been the small number of properly assessed investment-ready projects. This isn’t due to one single factor, but rather, a range of different issues.

Although robust economic scrutiny is critical to the success of any infrastructure project, there is too often inadequate project selection and prioritization, which is frequently driven by political considerations rather than a sound cost-benefit assessment that would reassure policymakers their investments will deliver maximum impact. We also found there to be weak project preparation and execution capabilities, including inadequate funding arrangements, inappropriate risk allocation, and inefficient procurement policy and procedures, especially in emerging markets. Read more

By David McNair, the ONE Campaign

As the G20 leaders meet in Australia to discuss economic growth, the elephant in the room is corruption. The uncomfortable truth is that at least a trillion dollars are syphoned from developing countries every year as a result of tax evasion, money laundering, bribery and other forms of financial crime. Much of this money flows through anonymous companies registered G20 countries.

But while campaigners and governments have fought hard to forge consensus among G20 leaders on ensuring that these secret firms that facilitate corruption are addressed, last minute politics between China and other G20 members threatens progress. Read more

By Arturo Porzecanski of American University

The chances that this weekend’s G20 Summit in Brisbane will be viewed as successful hinge largely on its leaders’ ability to keep their discussions and declarations relevant and on point. This will require a break with trends to date, as these high-level gatherings have been undermining their own effectiveness by increasingly drifting away from a short-list of achievable priorities. Read more

By Andrei Bougrov and Brook Horowitz of the B20 Task Force on Transparency and Anti-Corruption

When the Russian government took over the G20 presidency at the beginning of 2013, the B20 – a group of business leaders from the major companies of G20 countries – was invited to set up a Task Force to engage in a dialogue with the G20 on corruption. After six months of intensive work, the companies in the B20 Task Force came up with a number of recommendations which have been presented to the G20 leaders in advance of the St Petersburg summit. Read more

By Gerardo Rodriguez of BlackRock

Investing in emerging markets has never been boring. Recent market volatility has spawned various comments on the future of the asset class as a whole. Stronger fundamentals have made emerging markets more resilient and safer places to invest. But the challenging external environment and imminent tapering by the Fed is exposing some of the weak spots of EMs. The adjustment of relative prices is a necessary condition for the rebalancing that is required. However, there are risks that the correction goes too far and the asset class falls into a vicious cycle. Read more

As the G20 kicks off in St Petersburg, one of its dominant themes is a rising swell of complaints over the effects of US monetary policy.

Simply put: the US tapers quantitative easing, and the days of easy money for emerging markets are over – and currencies get hit. So who’s complaining, and how bad has it been? Read more

By Sargon Nissan of The Bretton Woods Project

On the sidelines of this week’s G20 summit, the Brics nations are expected to reveal details of how their proposed $100bn alternative to the IMF will operate. Unveiled at the 5th Brics summit in Durban in March, the Contingent Reserve Arrangement (CRA) should in reality be seen as a clever tactic to extract more influence at the G20 rather than a functional addition to the multilateral system, let alone a genuine alternative to the IMF. Read more

By Simon Evenett of the University of St Gallen

With concerns brewing about emerging market currency crises, the blame game is in full swing. This week the focal point of commentary will be the G20 summit in St Petersburg. Already senior officials from South Africa and Indonesia have taken the US Federal Reserve Board to task for announcing future plans to pump less money into the US economy as it recovers. Meanwhile, numerous investors and analysts pin the blame on gaping trade deficits, lack of government spending discipline and faltering reforms. Read more

By Emma Seery of Oxfam

While disagreements over Syria are likely to dominate the annual G20 summit in St Petersburg this week, leaders are at least in agreement about one key issue on the table: the need to rewrite global corporate tax rules. Read more

Global squabbles over exchange rates have emerged as a key concern for South Korea, as policy makers struggle to battle strong headwinds from Japan’s expansionary monetary policy.

A Bank of Korea report on Monday showed conflicts over currencies listed for the first time among the top five risks facing the country’s financial system, while concerns about China’s economic hard-landing and a delayed recovery in the US economy have subsided. Read more

By Bernd Braasch of the Bundesbank

The financial crisis has clearly revealed a growing emphasis on short-termism in international finance, just when the global economy needs a new financial architecture in which long-term finance and sustainability play a central role. Read more

Hands up if you want more votes

It’s been on the cards for a long time now, but with China and others stumping up this week for the International Monetary Fund’s warchest, are the major emerging markets finally about to get a bigger say in the Fund’s management?

For as long as beyondbrics has been around, the issue of votes and quotas – not to mention the cosy deal between the US and Europe allocating the top jobs at the IMF and World Bank – has been a sore point. Is this the moment of change? Read more

By Barbara Stocking of Oxfam

World leaders will have much more on their plates than the traditional G20 banquet when they meet in Los Cabos this week.

For many, the G20’s job will have been done if economic meltdown in Europe is averted and the rest of the world spared the consequences. Oxfam – which was formed in 1942 in response to the hardship faced by Greeks during the wartime blockade – is anxious to see leaders take concerted action to reduce the suffering of people across the continent who bear no responsibility for the current crisis. Read more

Mexico, led by president Felipe Calderon (pictured),  should use its G20 presidency to push for a streamlined membership and a radical overhaul of the G7 at its core, an influential voice in global economics has said.

In an interview with the FT, Jim O’Neill, chairman of Goldman Sachs Asset Management, said that a new-look G7 could consist of the US, Japan, a single seat to represent eurozone countries, and the four so-called Bric nations of Brazil, Russia, India and China. Read more

The surge in emerging markets that began in the summer could not go on for ever. And it has been broken by fears of a Chinese interest rate rise that sent Shanghai stocks plunging over 5 per cent and triggered a wider sell-off in emerging markets and commodities.

Investors ignored the fact that the G20 leaders managed to set aside their bickering over economic imbalances and put together a vague final communique. Instead they focused, quite rightly, on China’s biggest immediate challenges – the risks of rapid credit growth, asset bubbles and inflation. Read more