G20 finance ministers and central bankers meet in Sydney this weekend amid ongoing concerns over a volatile global economy.
(Transcript from World News Radio)
Sydney is playing a host to a major gathering of finance ministers and central bankers this weekend amid ongoing concerns over a volatile global economy.
The meeting is the first major test for Australia as President of the G20 this year.
Michael Kenny has the details.
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The G20 dates back to 1999 and brings together 19 of the largest economies in the world plus the European Union.
The International Monetary Fund has called on the ministers and bankers to use the Sydney meeting to develop fresh strategies to help the global economy recover from the financial crisis that began in 2008.
In a new report, the IMF says it is worried about extremely low inflation in Europe and ongoing volatility in emerging economic powers such as Indonesia, Brazil and South Africa.
Federal Treasurer Joe Hockey says this weekend's meeting should consider reforms to the international taxation framework to expand private sector growth across the G-20 economies.
"The world must now go for growth. Now is the time to focus on stimulating economic growth and we will focus on policies to improve investment, trade and of course, that means more employment. Analysis by international organisations such as the IMF, the World Bank and the OECD suggest that actions in these areas alongwith policies to improve provate sector competition offer a big gain for the global economy."
The Australian Treasurer says financial markets across the G20 economies want policy certainty from governments as they confront volatile times.
He believes it is critical for G20 economies to work on shared objectives, including better regulation, as they work to consolidate economic growth.
"The global economy cannot afford complacency. We have not got time for reform fatigue. We've seen some signs that the global economy is recovering. Growth in advanced economies, particularly in the United States and Japan looks to be picking up and the Euro area seems to be resuming growth again. But we're not out of the woods (out of danger) yet. The global economic recovery is not yet sufficiently strong or broadly based to create enough jobs and to continue lifting people out of poverty."
National Australia Bank Chief Economist Alan Oster believes the US and European economies will dominate discussions in Sydney.
Mr Oster says previous G20 meetings have proven to be a useful forum for dialogue.
"It sort of is a good chance for very senior people to get a better understanding of what they actually believe in and what they're seeing in their economy and it doesn't hurt to meet these people face to face. Whether that will actually result in anything that is firm is hard to tell. In the past, they have tended to be talk-fests. But it's better to have people talking and understanding common problems and linking up the dots if you like around things that are going on at present than not doing any of that."
Political scientist Professor John Wanna from the Australian National University believes the G20 meetings have proven to be far more than just talkfests over recent years.
He says they provided an important forum for global economic discussions after the Global Financial Crisis in 2008.
"In 2008 and into 2009, it was very important in orchestrating a response from across the various quarters of the globe. Whether or not it can keep doing that in future will depend upon what the nations participating in it get out of it. If they don't get much out of it, it will start to wither."
The Sydney meeting of finance ministers and central bankers comes ahead of the G20 Leaders' Summit in Brisbane in November which Australia will chair.