On September 4-5 the eleventh G20 meeting will be held in the city of Hangzhou, where the leaders of 20 countries and representatives of invited countries will meet. It is also the first ever G20 meeting to be hosted by China. Countries such as Chad, Egypt, Kazakhstan, Laos, Senegal, Singapore and Spain have been invited to participate in the summit.
It is worth noting that Kazakhstan participated in the summit in 2013 in St. Petersburg at the invitation of Russian President Vladimir Putin. Kazakhstan was the first country invited to the high-level forum among former the Soviet states.
In this regard, Kazakhstan’s participation in the G20 summit means world recognition of its economic and social achievements. Kazakhstan has proved its ability to play an important role in dealing with global economic issues.
Nowadays, Group of Twenty or G20 is the most important mechanism for solving global economic problems which unites the major developed and developing economies of the world, accounting for around 85 percent of world GDP and 75 percent of world trade.
The theme of the Hangzhou summit, “Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy,” was chosen at the initiative of China. It is obvious that innovation will be the main driver in all sectors of future global economic growth.
Many experts claim that G20 needs a structural upgrade to take the global economy out of the long-term economic crisis and to move from a crisis-response mechanism to one focusing on long-term governance. China has an important responsibility to make Group of Twenty not just a platform for discussions, but a meeting where many issues can be solved. Possibly, the only country that can bring different countries with different methods of regulating the economy to one table to work on a common solution is China.
It should be noted that the summit is taking place in China during big economic challenges. At the Hangzhou summit methods of economic incentives, forms to facilitate foreign trade and the removal of customs barriers, as well as cooperation between countries in the field of creating a joint free trade zone or common development zones will be considered. In addition, countries will try to reach an agreement on the facilitation of the transfer technologies – a new stage of greater freedom of trade.
In its latest forecast, the International Monetary Fund (IMF) cut its forecast for global economic growth this year from 3.1 percent to 2.9 percent. Earlier this year, the IMF lowered the economic growth forecast for the European Union, Japan and the United States.
Analysts say that the main causes of low growth are the aging of the population, unequal distribution of wealth, technological monopoly, trade protectionism, the crisis of Syrian refugees and terrorism. Group of Twenty countries should further contribute to the promotion of sustainable development to solve the problem. This is the main reason why development issues will be at the head of the macro-political agenda for the first time. Also, special emphasis will be put on an action plan on implementation of the 2030 Agenda for Sustainable Development.
In addition, China made an initiative to promote the adoption of a global trade growth strategy to lay out the guiding principles for a global investment policy and to deepen reform of the existing international financial architecture.
The summit’s agenda also includes discussions of issues contributing to long-term economic development, such as dealing with climate change and anti-corruption cooperation.
Undoubtedly, involvement of countries in the implementation of the One Belt-One Road project and the development of infrastructural investments which can facilitate the trade will be discussed during the summit. Also, during the summit representatives of countries will also discuss topics which have already become traditional: financial regulation, as well as new approaches to the regulation of world trade and the global economy.
Many believe that some of the measures in the framework of China’s 13th five-year plan in the field of socio-economic development in 2016-2020 correspond to the economic situation in the world and can give a boost to global economic growth. Furthermore, it is expected that the second largest economy of the world can help develop a road map which can help find ways to overcome world economic problems.
The formation of the Group of Twenty Summit mechanism has opened a new era on the background of the global financial crisis in which developing countries in cooperation with the developed countries have started to manage the world economy. However, this is only a starting point. In addition, besides the efforts to take the world economy out of the low-growth trap and restart the engine for the World Economic Summit, the time for fundamental transformations has come.
The summit will show what kind of approaches and solutions to these problems exist and whether or not countries are ready to work together and follow some political and economic settings. However, one should not expect all the answers. It is more important to understand and show that countries share common concerns and see common problems and trends. If a serious declaration that encourages countries to take different measures for economic and financial recovery of the economy is developed at the summit under the Chinese presidency, it will be considered that China has fulfilled its task.
The author is a research fellow at Kazakhstan Institute for Strategic Studies under the President of Kazakhstan.