Quietly, maybe a touch too quietly, Australia assumed the hosting duties of the G20 on December 1, 2014.  As one of the first initiatives under Australia’s presidency, the program director of the G20 Studies Centre at Australia’s Lowy Institute, Mike Callaghan convened a Think20 session in Sydney.  So as in Russia, and before that in Mexico, representatives from G20 think tanks and  G20-focused academic centers gathered in the mercifully warm and sunny city of Sydney.

Mike Callaghan, the program director, and former finance official chose to press participants to think ‘practically’ an oft repeated idea in the Australian priorities and in our discussions.  To encourage this, each participant was asked to prepare a short policy piece identifying policy options in one of 4 areas:

• economic/finance process;
• trade liberalisation;
•  infrastructure; and
• development

Additionally the Lowy Institute then edited the policy options and gathered these options together in a volume, “Think20 Papers 2014” that was in turn delivered to all the Sherpas that met the day after the Think20 meeting in Sydney.

There is an obvious catch-up by the new Abbott government just recently elected.  The government has issued its first statement and what appears to be Australia’s priorities set out in “G20 2014: Overview of Australia’s Presidency” at Australia’s official G20 website.  At the moment what is described is, unfortunately, a rather overly broad general and vague statement the kind of general statement that has plagued too many G20 summits.

As the Prime Minister Tony Abbott suggested in an opening message:

The main problem we must now solve is how to strengthen economic growth  and employment, to create opportunities for our people. That is our common challenge. The best way to do this is by empowering the private sector. To have strong economies, we need business to invest, build the infrastructure of the future and trade with the rest of the world. We must also implement the G20’s financial reforms to ensure our economies are more resilient to future economic shocks.

Really.  And what is the collective role of the G20 governments.  Where will Australia press forward to achieve collaboration in what will be the Brisbane Action Plan? What are the possible specific policy initiatives that will grow the global economy and advance strong, sustainable and balanced growth – the mantra of the G20 since the Pittsburgh Summit.

Australia’s G20 Presidency, according to the Overview will structure leaders’ discussion around the key themes of:

• Promoting stronger economic growth and employment outcomes
• Making the global economy more resilient to deal with future shocks

We want to maintain a tight focus on practical outcomes that will lift growth, boost participation, create jobs  and build the resilience of the global economy.

Amen.  A simple but vague and all too politically correct position for the new Prime Minister and his government.

The concern expressed quietly by many of us in the G20 expert community is that the new PM appears to be disinclined to give much thought to Australia’s G20 hosting or to have had the time to liberate himself from the political combat that has led to the vanquishing of the former PM Kevin Rudd.  As a consequence, there is not much specific strategic direction.  As one of my colleagues suggested, the G20 survived the Russians and it will survive the Australians if in the end Australia exhibits little enthusiasm for creative G20 leadership.  Likely true, but it would be sadly a missed opportunity.

Many of us looked forward to Australia taking the helm of the G20.  Australia as one of the ‘New’ Middle Powers – identified as one of the MIKTA – has acted enthusiastically since the G20 was raised from the level of finance ministers and central bankers to that of a leaders’ forum.  Now that could be in part as a result of Australia’s former PM Kevin Rudd who displayed real interest in global governance, and in particular in China relations.  But Australia has exhibited a real interest in bridging differences and encouraging collaboration among the G20. The Australians have a dedicated finance officialdom.  Indeed our Think20 convenor Mike Callaghan has spent decades in the economic and international policy area and appears deeply committed to making progress while Australia is at the helm.  And Australia’s Sherpa, Dr. Heather Smith seems committed, if constrained,  to prove Australia’s leadership.  So who knows if officials will be granted the necessary modicum of freedom to act. If allowed the results may prove to be more positive.  It is Australia’s chance to lead.   And as PM Abbott identified:

I look forward to hosting world leaders in the beautiful riverside city of Brisbane in November 2014.  The G20 will be the most important meeting of world leaders Australia has ever hosted. I want it to make a lasting difference.

But to be successful Australia will have to be not just more practical but ‘policy granular’ and in only a limited number of policy areas.  As was discussed at the Think20 there are a number of evident candidates:

• Advance and make far more effective and publicly transparent the peer review mechanism of the Mutual Assistance Program – the MAP and then  tying the macro-economic real economy to the financial economy and the reforms underway;
• beyond risks and vulnerabilities the G20 needs to zero in on the spillovers and tackle the consequences of the end of the US federal reserve quantitative easing policy.  The US is not likely enthusiastic but is a key to avoiding unnecessary turbulence in the global economy;
• Advance the policy efforts in the  BEPS – “base erosion and profit shifting” area.  Improving tax revenues, especially in developing countries but globally could have an impact on economic policy initiatives in infrastructure and elsewhere;
•  Keep your collective G20 eye-on-the-ball on infrastructure.  All these fancy efforts at public-private partnership financing may sound inviting but the public provision of infrastructure is still likely the most effective policy delivery means.  And think of infrastructure broadly – not just bridges and roads but clean water provision, education and health care; and
• Call for a report on the efforts Multilateral Development Banks – MDB’s – with a focus on their program initiatives and assess their capacity to successfully provide infrastructure. If they don’t, then request they be fixed or use other delivery mechanisms, your own if necessary.  And while your at it, a report on the “white elephant” syndrome of national provision of infrastructure could inform the policy on infrastructure as well.

There is much that can be proposed – and achieved.  Don’t fritter the opportunity away.  Are you listening Australia?    

Image Credit:  The Author