G20 Summit in Hangzhou Set to Have Significant Impact on World Economy

When in the wake of the global financial crisis, the G20 countries held the first leaders’ summit in 2008, it underlined just how serious the crisis was. It was clear that only coordinated action by a far wider group of countries than usual could prevent a global depression.

The collective emergency action taken under the auspices of the G20 helped bring the world economy back from the edge of the abyss. Growth, employment and incomes suffered on every continent, but the worst fears were avoided.  This success has led to the G20 and the leaders’ summit taking a major role in global economic governance.

But when the G20 leaders meet next month in China, eight years after that first summit, the crisis will still hang over their discussions. Growth has not fully recovered. Unemployment levels remain high in many countries. Debt levels continue to be a serious drag on the financial system.

It is why the Hangzhou summit comes at a critical time for the world economy. Determined, coordinated action is needed to revive confidence and growth. And the more regions involved in these important discussions, and the more experience those taking part in the discussions have, the more likely they are to make the right decisions – decisions that can help the world finally shake off the lingering financial listlessness the crisis created.

This explains the decision by the Chinese hosts to invite President Nursultan Nazarbayev to join his fellow world leaders at the summit. The invitation is a mark of his experience, of Kazakhstan’s place now in the world economy and of our country’s growing relationship with China.

This friendship, of course, includes our joint efforts to transform transport links and build a modern Silk Road connecting Asia and Europe. The new rail and road routes will slash journey times and give a major boost not just to economic cooperation between our countries but also to global trade – a key priority for the summit.

Lifting the barriers to trade is hugely important. As a World Trade Organisation (WTO) report recently identified, the growth in world trade over the last four years has been well below the average of recent decades. For all who believe that trade is an engine of prosperity, this is a very damaging development.

But this will also require, as China has again recognised, increased efforts to reverse the protectionist trends that have followed the financial crisis.  Here, G20 countries themselves have to take the lead. The WTO has identified over 1,500 trade-restrictive measures put in place by G20 economies since 2008.

Whatever the justification for these steps immediately after the crisis first struck, it is disturbing that this trend is still continuing. The WTO found that an average of 21 new protectionist barriers are still being erected by the world’s biggest economies every month. If the summit can win support to reverse this trend, it will have played a major role in putting the global economy back on track.

High on the agenda for the summit, too, is how countries can work together better to promote innovative and inclusive growth. We need bold steps to increase productivity – something Kazakhstan has itself recognised and taken action on. It is easy in times of economic challenges to cut back on modernisation or research and development, but the long-term impact is always damaging.

We also need to find ways to tackle inequality. The gap between rich and poor continues to grow. Incomes in many developed countries have fallen or stagnated, fuelling frustration and political instability. Bold steps are again needed to encourage growth that is sustainable and inclusive, so the benefits are shared more fairly.

The global economic outlook is, thankfully, not as desperate today as it was when the first G20 leaders’ summit was convened in Washington eight years ago. But there is no room for complacency. The decisions taken at Hangzhou will have a major impact on the world economy and all our prosperity.

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