The voice of emerging markets stronger at G-20 meeting
I have been in Australia for a week for the meeting of G-20 finance ministers and central bankers.
I was able to understand better this time the G-20’s place in the global economy, as it represents two-thirds of the world’s population, 85 percent of the world economy and 80 percent of world trade.
As stated by Australian Finance Minister Joe Hockey to a group of journalists, “Australia has the luck of being in the right region at the right time.”
For some years, we have been debating the concept of “The rising East.”
We are in a period where the world’s economic gravity and richness is shifting from West to East. In a book titled “The Irresistible Shift of Global Power to the East,” which was published in 2008, Professor Mishore Mahbubani, an academic and former diplomat from Singapore, explains that the East rises with the values from the West.
Australia is not only located right in a region that rises with the West’s values, but it is also a country with ties to the West’s history and culture.
You might think that quick visits to cities like Brisbane, Canberra and Gladstone in the course of 10 days might not be enough to know Australia. Still, the huge facilities in Gladstone that will turn the country into one of the world’s biggest LNG exporters in the coming years or the Commonwealth Scientific and Industrial Research Organization (CSIRO), the inventor of Wi-Fi in Canberra, gives enough of an idea.
In the final declaration of the meeting of the G-20 finance ministers and central bankers, a relatively concrete target was set thanks to the efforts of Hockey: The G-20’s GDP will increase 2 percent in the next five years.
What does that target mean? It means 2 trillion dollars of contribution to the global economy and employment to millions of people.
In the meeting where Deputy Prime Minister Ali Babacan and Central Bank Gov. Erdem Başçı participated from Turkey, the voice of emerging markets came out strongly, probably for the very first time.
The representatives of countries like Turkey, Russia, China and Brazil criticized the U.S. Fed and the other central banks of rich countries for the strong winds blowing in the financial markets. They are not that unfair in their criticisms, for if you look to the past five years, the contribution of emerging markets’ dynamism in the growth of the global economy is big.
As stated by Babacan in the meeting at the end of the day, developed countries need “healthy” emerging economies. Otherwise they will also be affected.
In the final declarations, a call was also made to implement the reform package endorsed by the IMF in 2010. We will see the progress on these issues in the leaders’ summit that will take place next November in Brisbane.
I hope that Australia, which has been showing a good performance in the G-20 presidency that it took over from Russia last December, takes seriously IMF President Christine Lagarde’s call to continue the leadership role in the fight against global warming. The current government in Australia is set to annul the “carbon tax,” which was introduced with great courage by the previous government.