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Group commits to higher GDP growth by 2018
THE world's most powerful economies - including the United States, China, Japan and the United Kingdom - have promised to boost their collective GDP growth by an extra 2.1 per cent by 2018 by promoting infrastructure investment and trade.
This is higher than the initial target of 2 per cent and, once met, this so-called Brisbane Action Plan will add "more than US$2 trillion to the global economy and create millions of jobs".
In a joint declaration released at the end of their two-day meeting in Brisbane on Sunday, the G-20 leaders said that the global economy was being held back by a shortfall in demand.
"The global recovery is slow, uneven and not delivering the jobs needed," they said in the three-page statement. "We commit to work in partnership to lift growth, boost economic resilience and strengthen global institutions."
The G-20 is the group of 20 major economies in the world. Collectively, they represent about two-thirds of the world's population, 85 per cent of global gross domestic product and over 75 per cent of global trade.
The G-20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US, and the European Union.
Commenting on the 2.1 per cent target, Australian Prime Minister Tony Abbott, the G-20 host, said that the benefits of this growth will be felt around the world, not just in G-20 member nations.
"The Brisbane Action Plan and individual country growth strategies and employment plans have been made public so people around the world can see our commitments, hold us to account and witness our progress," he added.
International Monetary Fund (IMF) managing director Christine Lagarde, who also attended the Brisbane talks, described the growth target as "commendable" and one that would bring significant benefits for the global economy.
"Implementation is now critical, with a strong accountability framework to monitor progress, supported by the IMF," she said.
Earlier on Sunday, Australian Treasurer Joe Hockey made the point that going further beyond the extra 2 per cent target would be possible only if EU leaders start pumping billions of dollars into the stalling eurozone economy, given that Germany and France have only narrowly avoided falling into recession.
Last week, the IMF said in a report that the global economy is in for a rough ride due to sluggish growth in Europe and Japan, as well as a slowdown in emerging economies.
It trimmed its global growth forecast for the year to 3.3 per cent, down slightly from 3.4 per cent, citing geopolitical tensions and volatility in financial markets.
Another major deliverable of this year's G-20 meeting was the fact that the countries agreed to a global initiative to help address a US$70 trillion gap in infrastructure needed by 2030 to improve productivity, by cutting red tape and matching private investment with capital projects.
On its part, Australia will set up a hub in Sydney to coordinate the G-20's work on infrastructure by bringing together governments, the private sector, multinational development banks and other international organisations.
The G-20 also agreed to work together to crack down on tax avoidance and corruption, and to come up with ways to strengthen financial institutions to avoid a repeat of the 2008 global financial crisis.
Turkey will host next year's G-20 Summit, while it was confirmed on Sunday that China will be the host in 2016.