A TALE OF TWO SUMMITS
It’s funny what a difference a year makes. It was only in September 2016, when ironically China was holding the G20, the world seemed a little more open towards trade, more inclusive and optimistic. With this year’s G20 summit in Germany fast approaching, clearly mass migration, terrorism, and centralisation of political power, is influencing G20 leaders’ perspective, and they are faced with a challenging, and potentially toxic environment of anti-globalisation, nationalism and protectionism, especially from Australia’s closest allies — Britain and the US.
One of the elements that has remained constant between the tale of these two summits, is the importance of inclusive business — the idea that business can contribute to the development of the world’s poorest economies by doing what it does best, business, albeit inclusively. This first unfolded at G20 Turkey (2015) and continued at G20 China (2016). Germany has further advanced the importance of inclusion with the theme being “Shaping an interconnected world.” But what does this mean? Reading further, the summit seeks “to reduce economic, social, ecological and political risks and to safeguard strong, sustainable, balanced and inclusive growth through collective action.”
Germany is advocating the long-held view that opening trade and growth benefits all. Australia has demonstrated credentials in this approach. The Government’s policies are opening trade opportunities with a view that it not only benefits Australian interests, but as a mechanism to also assist in creating resilient, responsible, and responsive global economies through enhancing growth, employment, purchasing power and productivity. Thanks to this kind of trade, and the combined world effort to reach the global Millennium Development Goals, and now the Sustainable Development Goals, millions of people have been lifted out of poverty in the last two decades.
Building on this idea, G20 Germany is proposing a Compact with Africa, which is to bring more private investment to the African continent.
Here too the Australian Government can hold its head up high and demonstrate credentials, with it being one of the only G20 Governments to have a policy position on creating inclusive growth, through an aid policy which identifies the private sector as an essential partner to achieving sustainable development outcomes in our region. This is an opportunity for Australia to show that engaging business and trade have a positive impact globally.
The G20 similarly presents the Australian Government with an opportunity to reflect and understand how other Governments are looking to influence the business sector in working in developing countries. The Compact with Africa model, AKA the African Marshall Plan, has its critics, however in essence it has the right intention at heart to stimulate economic development via investment. The Compact recognises that aid alone is not going to create the impetus needed to develop the African content, and that government supported business investment is needed to catalyse and drive inclusive growth.
A central pillar of the Compact’s effort is to provide a framework for supporting private investment. It is looking to work with African governments, international organisations, and bilateral partners such as the African Development Bank, the World Bank, and the International Monetary Fund to create a comprehensive, country-specific investment compacts to encourage private-sector investment. Each country is to implement a bespoke package of measures to decrease its investment risks.
This aligns nicely with Australia’s own policy position. However, a lot of our current and future trade and interest lie in the Asia Pacific region. The Compact provides us with a unique opportunity to learn and understand how this model could potentially be applied locally, and how we can use our ability to influence and engage other governments in the region who are G20 members — Indonesia, Japan, China, Republic of Korea — to consider this as a model to stimulate regional economic activity and investment.
The Government is presented with a rare opportunity to not only listen to what the progressive, open-minded and trade-orientated governments are looking to achieve through sustainable and inclusive approaches but to lead them in this process. Through deepening and broadening international economic co-operation and stimulating inclusive trade there is a chance to create policies within G20 that seek to benefit all.
International collaboration, co-operation and trade in these unsettling times, is key to success. This notion of inclusivity and inclusive business is being echoed within the realms of APEC, ASEAN and being called for by the World Economic Forum. So, as Australia sits at the negotiating table this week, it must endeavour to shape the future by demonstrating the benefits of open, fair, sustainable, and inclusive trade that G20 leadership can bring to global security and prosperity.