G20 must mitigate some of the consequences of globalisation, said Kevin Rudd at the Bloomberg New Economy Forum. Bloomberg
The Group of Twenty largest economies needs to take on a greater leadership role in protecting and sustaining global growth, according to Kevin Rudd, a former prime minister of Australia and a leading expert on China-US relations.
“The G20 needs to step up from its current role of being the guarantor of global financial stability to being a greater guarantor of the positive benefits of the globalisation project while guarding against managing negative consequences,” he said at the New Economy Forum in Singapore, organised by Michael Bloomberg.
Mr Rudd was Australian prime minister twice, as well as serving as its foreign minister between 2007 and 2013.
Globalisation is driven by a series of forces that are not owned by any single nation, even the United States or China, which are part of the G20, he said.
The G20 is also made up of the European Union, Argentina, Brazil, Canada, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey and the UK.
The group will meet at the end of this month in Buenos Aires to tackle the risks to growth created by an escalating trade war between its two biggest members. There are increasing hopes that their presidents, Xi Jinping and Donald Trump, will agree to wind down the conflict which has resulted on tariffs being put on billions of dollars of their countries’ goods.
The G20 was created almost 20 years ago when the seven largest, developed, exclusively Western, countries saw a need for a more inclusive body, but it was during the financial crisis a decade ago that it came into its own.
“The G20 … saved the world from going into a global depression in 2009 – that is the truth,” said Mr Rudd, who is currently president of the Asia Society Policy Institute. “So, in performing a global economic fire rescue operation it did pretty well. On building balanced sustainable global economic growth, which is the other half of its mandate, it is still a work in progress. The question becomes one of, which leaders within the G20 can make that work?”
During the financial crisis, Australia was the only major developed economy not to go into recession.
Amid growing political upheaval at home, many of the G20’s leaderships are “preoccupied at present”, Mr Rudd said. However, France’s Emmanuel Macron, despite his own domestic political concerns, “understands the challenges and the opportunities represented by globalisation and because he is relatively fresh and new in his mandate, people like him can provide individual leadership”.
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The leadership opportunity is there to be seized, if not by Mr Macron, then by others who have the capability, such as Japan’s Shinzo Abe. Mr Xi should also be recognised, he said.
However, for China to fully realise its leadership role within the G20, it will need to more fully liberalise its own trade and investment regulatory environment and use that as an example for the rest of the world.
“The advantage of that is it will actually deliver a big growth dividend to China domestically as well,” he said. China can also show global leadership through the G20 on combating climate change and “it is essential it should do so as the world’s largest emitter”.
The G20 will still need to crystallise further as an organisation if it is to maintain the positive dynamics of globalisation while minimising the risks, he said.
“It needs to develop further, it needs to fully exercise the … expansive mandate given [to it] by the participating states themselves. The time has now come for the G20 to make the rest of the machinery of the international system work effectively from the UN, to development banks, to the IMF, to the WTO, to the rest,” said Mr Rudd.
Accounting for the majority of global GDP, the group’s members have a deep stake in making sure the system works and to protect it from being derailed, he said.
Aside from increased protectionism, the threats also include structural unemployment, the rise of nationalism and anti-immigration policies.
Mr Rudd is an accomplished China scholar, speaks Mandarin and is currently working on a doctoral thesis at Oxford University on the Chinese president.
He does not have any plans at this stage to return to public life, having left front-line politics in 2013, preferring to remain a “global citizen”.
“There is a role for people … who can quietly encourage consensus where it is possible, on big global challenges like the climate and the economy and global governance. I am just one of a number of people who seek to do that,” he said.
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