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G20 AGENDA FOR THE WORLD ECONOMY:
ASIA-PACIFIC PERSPECTIVES
Sudip Ranjan Basu, Alberto Isgut and
Daniel Jeongdae Lee
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G20 AGENDA FOR THE WORLD
ECONOMY: ASIA-PACIFIC
PERSPECTIVES
Sudip Ranjan Basu, Alberto Isgut and
Daniel Jeongdae Lee
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G20 agenda for the World Economy: Asia-Pacific perspectives
By Sudip Ranjan Basu, Alberto Isgut and Daniel Jeongdae Lee
Macroeconomic Policy and Development Division (MPDD)
Economic and Social Commission for Asia and the Pacific
United Nations Building, Rajadamnern Nok Avenue, Bangkok 10200, Thailand;
Email: [email protected]
Series Editor Dr. Aynul Hasan, Chief, Development Policy Section Macroeconomic Policy and Development Division WP/14/01
MPDD Working Papers
Macroeconomic Policy and Development Division
G20 AGENDA FOR THE WORLD ECONOMY:
ASIA-PACIFIC PERSPECTIVES*
by
Sudip Ranjan Basu, Alberto Isgut and Daniel Jeongdae Lee**
November 2014
Abstract
The views expressed in this Working Paper are those of the author(s) and should not necessarily be considered
as reflecting the views or carrying the endorsement of the United Nations. Working Papers describe research in
progress by the author(s) and are published to elicit comments and to further debate. This publication has been
issued without formal editing.
This paper examines the agenda of this year’s G20 Brisbane summit – namely, to promote
strong economic growth and employment outcomes and to make the global economy more
resilient to future shocks – in the context of key policy debates in the Asia-Pacific region, as well
as discussions on the United Nations post-2015 development agenda. In particular, priority areas
related to investment and infrastructure, trade, employment, financial inclusion and remittances,
financial regulatory reforms, international tax cooperation and anti-corruption measures, and
energy markets are explored. The paper finds that several issues addressed by the G20, including
infrastructure financing and tax cooperation, are highly relevant for developing countries in the
Asia-Pacific region and that there is significant room for synergy between the UN and G20
processes.
JEL Classification Numbers: E20, E60, G00, H54.
Keywords: G20, Financing, Infrastructure, Post-2015 development agenda, Asia-Pacific.
Authors’ E-Mail Address: [email protected], [email protected], [email protected].
* This paper was prepared as an input to the Fifth High-level Consultation on the G20 Summit is organized as a
special event of the 70th ESCAP session, Bangkok, Thailand, 6 Aug 2014. We thank Aynul Hasan, Oliver Paddison,
Zheng Jian, Kiatkanid Pongpanich, Achara Jantarasaengaram, Patchara Arunsuwannakorn, Pannipa
Ongwisedpaiboon, Solada Chaumpruke and Chawarin Klongdee, who provided comments and supported the
preparation of the paper. The views expressed herein are those of the authors and do not necessarily reflect the views
of the United Nations.
** Sudip Ranjan Basu, Alberto Isgut and Daniel Jeongdae Lee are staff members of the Macroeconomic Policy and
Development Division, United Nations Economic and Social Commission for Asia and the Pacific, United Nations
building, Rajadamnern Nok Avenue, Bangkok 10200, Thailand.
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MPDD Working Papers WP/14/01
G20 AGENDA FOR THE WORLD ECONOMY: ASIA-PACIFIC PERSPECTIVES
Sudip Ranjan Basu, Alberto Isgut and Daniel Jeongdae Lee
G20 Agenda for the World Economy: Asia-Pacific Perspectives
I.
INTRODUCTION
This year’s G20 summit will take place on 15-16 November 2014 in Brisbane, Australia. The
priorities for the G20 laid out by the Australian presidency are, first, to promote strong economic
growth and employment outcomes and, second, to make the global economy more resilient to
future shocks. In February 2014, the G20 members committed to develop policies to lift their
collective GDP by more than 2 per cent above the trajectory implied by current policies over the
coming 5 years.1
This policy package will include both country-specific and common actions in the areas of
investment and infrastructure, trade, employment, financial inclusion and remittances. The
closely related resilience agenda addresses financial regulatory reforms, international tax
cooperation and anti-corruption measures, and energy markets. Reform of international
institutions such as the IMF also falls under this category. It is useful to view the G20 process
from a broader perspective, as one among major processes shaping the global and regional
agendas today. This broader view allows for the identification of synergies of G20 process with
the United Nations overall development agenda.
Therefore, in addition to elaborating on the above G20 agenda items, this paper tries to highlight
the relationship to policy debates in the Asia-Pacific region. The paper also makes references to
ongoing discussions on the post-2015 development agenda wherever relevant. The paper
discusses the economic policy issues of all countries including non-G20 members and least
developed countries to share perspectives on the issues addressed by the G20 and to identify
areas of common interest for United Nations ESCAP and the G20. This paper further aims to
provide a broader perspectives and effort to effectively integrate the region’s development
priorities at the global level and to develop a strong and coordinated regional voice in major
global fora – the need for which was stressed by the ESCAP in light of the 2008-2009 global
financial crisis.
II.
CHALLENGES TO GROWTH RECOVERY
The G20 economies of Asia and the Pacific are still facing many macroeconomic challenges.2
Thus, the manner in which the current growth recovery process is managed will have a longterm impact on the region’s inclusive and sustainable development path as envisaged by the
leaders of the region. The G20 economies are still growing at a pace lower than the pre-crisis
(2002-2007) growth, and the outlook will continue to experience a subdued growth performance
in the coming years. Among the Asia-Pacific G20 economies, growth continues to be subpar
and that the outlook is expected to remain far below that their pre-crisis average growth of 6 per
cent (see figure 1).
The economies in the Asia-Pacific region, and in particular, the G20 economies of the region are
still facing multiple challenges from the developed economies outside of the region as well as
the macroeconomic factors with the region. For example, despite the current growth optimism in
the United States, the recovery remains weak as compared to pre-crisis level. The prospects of
1
This is measured as 2 per cent above the IMF’s October 2013 World Economic Outlook baseline projection for
2018.
2
G20 economies are the following: Argentina, Australia, Brazil, Canada, China, France, Germany, India,
Indonesia, Italy, Japan, Republic of Korea, Mexico, Russian Federation, Saudi Arabia, South Africa,
Turkey, United Kingdom, United States and European Union. The highlighted countries are part of the AsiaPacific region.
1
MPDD Working Papers WP/14/01
the European Union continue to experience several growth challenges, as the unemployment
rate is at historically high among several countries within the group.
Figure 1. Real GDP growth of G20 economies
Sources: ESCAP, based on data from the International Monetary Fund and the World Bank.
Note: GDP growth rates are based on annualized data, constant US$ dollars 2005.
With the Asia-Pacific region, G20 developing countries witness several long-term structural
impediments which are impacting their overall growth recovery. Key structural issues are related
to rising inequality, energy and infrastructure shortages and jobless low-wage growth. These
development challenges have led to significant gaps in productive capacity across the region. In
particular, these gaps have contributed to inflationary pressures and rising balance-of-payments
deficits in the region, especially for some G20 economies in the region. Rising inequality has
contributed sharply to growing household debt as well as has increased the vulnerability of their
populations to economic shocks, as well as contributed to current account imbalances.
III.
G20 AGENDA FOR PROMOTING GROWTH
The key issues for discussion for the G20 are expected to boost economic growth and create
opportunities for jobs not only in the G20 economies but have the potential to spread the
spillover effects in other economies in the region, especially for least developed economies. This
section provides discussion of the priorities areas of the G20 agenda, and to link these issues to
the broader perspectives of the Asia-Pacific region.
A. Infrastructure and investment
There is a need to support global demand and increase productivity through investment,
particularly in infrastructure. The G20 has been highlighting this for several years. This year
Australia has placed infrastructure and investment at the forefront of the G20 growth agenda.
The emphasis is on increasing the availability of private savings for long-term investment by
improving the investment climate and strengthening institutions and regulatory frameworks for
financial intermediation.
2
G20 Agenda for the World Economy: Asia-Pacific Perspectives
In February, the G20 members agreed on the need to:
 Remove constraints to private investment by establishing sound and predictable policy
and regulatory frameworks and by emphasizing the role of market incentives and
disciplines;
 Maximize the impact of public sector capital expenditure; and
 Enhance the catalytic role of multilateral development banks (MDBs).3
In April, they further agreed on the need to:
 Improve the quality and accessibility of investment information; and
 Strengthen the capacity of financial markets to channel more long-term finance.4
At the Brisbane Summit, the G20 members are expected to adopt a set of “Leading Practices” to
help identify, prioritize, plan and deliver quality investment and PPPs. There is also a discussion
to set up a global database of investment-ready projects, to help reduce the costs of searching for
investment opportunities.
Infrastructure and investment is identified as one of the areas in which G20 efforts will also
benefit non-G20 developing countries, through actions such as improving the coordination of
infrastructure project preparation requirements across donors and MDBs and supporting capital
market development in those countries.
Infrastructure and investment are of critical importance for the Asia-Pacific region, home to twothirds of the world’s population and where economic development and urbanization are
progressing at a rapid pace. From a regional perspective, enhancing connectivity in transport,
ICT and energy also has the potential to unlock growth and spread the benefits of growth more
widely, as analysed in detail in recent ESCAP reports.5
Infrastructure financing was one of the main issues discussed in the Asia-Pacific Outreach
Meeting on Sustainable Development Financing in June 2014. 6 The region’s financing
requirements are huge. The ADB estimated in 2009 that the region would need $750 billion per
year to close its infrastructure gaps in the areas of energy, transport, telecommunications and
water & sanitation by 2020.7 This estimate, however, does not include necessary investments in
maintenance of roads and railways. A recent ESCAP publication estimated that the region needs
$160 billion per year for land transport maintenance.8
3
Para 7, Communique of G20 Finance Ministers and Central Bank Governors, Sydney, 22-23 February 2014.
Para 4, Communique of G20 Finance Ministers and Central Bank Governors, Washington D.C., 10-11 April
2014.
5
ESCAP, Growing Together: Economic Integration for an Inclusive and Sustainable Asia-Pacific Century
(Bangkok, 2012) and Economic and Social Survey of Asia and the Pacific 2014: Regional Connectivity for
Shared Prosperity (Bangkok, 2014).
6
The meeting was jointly organized by ESCAP and the Ministry of Finance of Indonesia in Jakarta. The
meeting, which was attended by was attended by more than 150 participants from 30 countries, including
finance ministers, central bank governors, and business leaders and representatives of civil society, contributed
views from the region to global discussions coordinated by the UN Intergovernmental Committee of Experts on
Sustainable Development Financing. What follows is partly based on deliberations during that meeting. See
background paper and additional materials from this meeting at www.unescap.org/events/asia-pacific-outreachmeeting-sustainable-development-financing.
7
ADB and Asian Development Bank Institute, Infrastructure for a Seamless Asia (Tokyo, 2009). Available
from www.adbi.org/files/2009.08.31.book.infrastructure.seamless.asia.pdf. The total investment needs are
expressed in US dollars of 2008 and include investment in water and sanitation. See Table 5.1 in p. 167.
8
ESCAP, Review of developments in transport in Asia and the Pacific, 2013: Transport as a key to sustainable
development and regional integration, Chapter 3.
4
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MPDD Working Papers WP/14/01
The above estimates do not consider the need for investments to contribute to sustainable
development. In this respect, enhancing energy efficiency and reducing the carbon intensity of
the energy mix are critical. A new ADB study which includes such additional expenses
estimates that total energy investment needs for the region between 2010 and 2035 at about
$19.9 trillion, or $765 billion per year.9 Although the different estimates mentioned in this and
the previous paragraph are based on somewhat different country groupings and base years,
adding them gives a preliminary estimate of the region’s total infrastructure investment
requirements of $1.3 trillion per year.
While the region’s financial requirements are huge, its financial resources are also very large. Its
gross national saving amounted to $8.4 trillion in 2012, representing more than half of the
world’s total savings. The region also holds the largest share of the world’s foreign exchange
reserves, $7.3 trillion in 2012. And according to some estimates, the region’s high net worth
individuals had $12.7 trillion in assets in 2012, while the region’s mass affluent had $20.5
trillion in assets.10
The key challenge, however, is to mobilize resources by improving the efficiency of financial
intermediation. In this regard, a three-pronged strategy consisting of public finance, private
flows, and regional financial cooperation could be considered. Public finance has been the
primary source for infrastructure financing in the region. It also provides vital guarantees and
seed investments in PPPs. Thus, strengthening domestic resources mobilization and unlocking
fiscal space could contribute directly to public infrastructure investment and also leverage
private resources. Countries like India have also actively used private equity infrastructure
funds. Private investment in infrastructure in the region’s developing countries grew rapidly,
from merely $2 billion in 1990 to $120 billion in 2010, and the latest estimate is $150 billion.
Yet there is still much room to expand. A major challenge is the absence of mature capital
markets and financing vehicles, which has resulted in a heavy reliance on bank loans.
Given the Asia-Pacific region’s income and demographic diversity, regional financial
cooperation has great potential to mobilize surplus savings for productive investments. With a
growing number of institutional investors such as pension funds in the region, the time is ripe to
deepen and broaden regional capital markets. Notably, ESCAP was an early proponent of
creating a large-scale regional infrastructure investment facility.11
In line with this, China has initiated to set up of a new regional development institution to help
infrastructure development and promote sustainable growth. As founding members, the 21
countries from the Asia-Pacific region signed the Memorandum of Understanding (MOU) on
establishing the Asian Infrastructure Investment Bank (AIIB) on 24 October 2014 in Beijing.
The MOU specifies that the authorized capital of AIIB is $100 billion and the initial subscribed
capital is expected to be around $50 billion.12
9
ADB, Energy outlook for Asia and the Pacific (Manila, October 2013).
High net worth individuals own $1 million or more in assets; mass affluent individuals own between
$100,000 and $1 million in assets. PwC, Asset management 2020: a brave new world (PricewaterhouseCoopers
International, 2014). Available from www.pwc.com/gx/en/asset-management/publications/pdfs/pwc-assetmanagement-2020-a-brave-new-world-final.pdf. According to Wealth-X and UBS, the region’s ultra-high net
worth individuals (UHNWIs), those with a net worth of $30 million or more, held $7.5 trillion of net wealth in
2012-2013
11
See ESCAP, Theme Study of the Sixty-second Commission Session: Enhancing Regional Cooperation in
Infrastructure Development Including that Related to Disaster Managemen (Bangkok, 2006). Available from
www.unescap.org/resources/theme-study-sixty-second-commission-session-enhancing-regional-cooperationinfrastructure.
12
The countries are Brunei Darussalam, Bangladesh, Cambodia, Lao People's Democratic Republic, Myanmar,
10
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
Apart from financing, project capacity is a key constraint. Most developing countries in the
region have difficulties in generating a pipeline of investment-ready projects and in designing
and effectively negotiating complex contractual terms. Thus their capability to engage a wider
range of potential investors and private partners is limited. Weak project governance skills also
lead to implementation delays and quality concerns. Technical assistance from development
partners is important. But as highlighted in a 2012 ESCAP ministerial conference on
infrastructure PPP, different organizations should improve their coordination and standardize
their processes so as to reduce the overhead costs countries need to burden in developing and
implementing PPP projects with them.
Financing and capacity challenges vary significantly across countries in the region. Therefore, a
greater technical assistance is needed in least developed countries, landlocked developing
countries, and small island developing States – of which there are 31 in the Asia-Pacific region.
For the proposed G20 initiatives to have a wider development impact, it is critical that the
special needs of these countries are adequately considered. Otherwise, there is a danger that
well-intended initiatives could further widen the gap by leaving behind smaller and poorer
countries in the competition for financing.
Furthermore, the cross-border infrastructure projects, such as the Asian Highway and Railway
networks, are critical in boosting trade and investment and people-to-people connectivity.
However, these projects are challenging to coordinate and the G20 initiatives could consider
these aspects. In 2013, member States of ESCAP, as contained in the resolution 70/1
‘Implementation of the Bangkok Declaration on Regional Economic Cooperation and
Integration in Asia and the Pacific’, agreed to set up expert working groups to prepare concrete
action proposals to deepen regional cooperation and integration in connectivity and finance. 13
Greater synergy of cooperation in these two areas may further unleash the potential of the
complementary nature of countries in the region. It was further recognised that “there is a need
to implement specific policies that focus on productive capacity-building related to
infrastructure development, broadening the economic base, access to finance and providing
assistance in overcoming the risks and shocks of entering into a regional trade block”.
B. Trade
Trade has been on the G20 agenda for several years, although it has made relatively little
progress. At their July 2014 meeting, the trade ministers of the G20 reaffirmed their
commitment to standstill and roll back protectionist measures introduced since the global
financial crisis. However, a WTO report showed that the G20 members had put in place 112
new trade-restrictive measures since their last summit in November 2013, and it noted that the
vast majority of trade-restrictive measures taken since the onset of the crisis remained in place.14
The G20 members recognized the contribution of bilateral, regional and plurilateral trade
agreements to economic growth by encouraging domestic structural change and that they can
complement multilateral liberalization. They noted the growing importance of global supply
chains and the need to address barriers to trade in services through domestic reform and
international cooperation.
Nepal, China, India, Kazakhstan, Kuwait, Malaysia, Mongolia, Oman, Pakistan, the Philippines, Qatar, Singapore,
Sri Lanka, Thailand, Uzbekistan and Viet Nam. More information is available from:
http://news.xinhuanet.com/english/business/2014-10/24/c_133740149_2.htm
13
www.unescap.org/sites/default/files/E70_RES1E.pdf.
14
See WTO, Report on G-20 Trade Measures (mid-November 2013 to mid-May 2014), 2014. Available from
www.wto.org/english/news_e/news14_e/g20_wto_report_jun14_e.pdf.
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MPDD Working Papers WP/14/01
The G20 members expressed support for a timely implementation of the WTO Trade
Facilitation Agreement concluded in Bali in December 2013 and the successful conclusion of
the Doha round of multilateral trade negotiations. They reaffirmed the importance of aid-fortrade as a means of poverty reduction in developing countries.
All countries in the Asia-Pacific region and the members of the G20 recognize the importance of
trade as an engine of economic growth. As is clear from this region’s experience, trade can play
a key developmental role, a fact that is also emphasized in the post-2015 development agenda
(see figure 2).
Figure 2. Trends in Asia-Pacific merchandise trade
Source: ESCAP statistics. Available from www.unescap.org/stat/data/statdb/DataExplorer.aspx.
Trade restrictive measures globally and regionally since the global financial crisis have had
severe impacts on the region’s exports. For instance, ESCAP estimates a loss of merchandise
export opportunity worth $255 billion (1.6 percent of the region’s output) during the period
2009-2013, associated with measures introduced by major developed economies outside the
region.
Economic and Social Survey of Asia and the Pacific 2014 report further estimated that at the
subregional level, the trade-reducing measures were found to reduce export opportunity by $138
billion in East and North-East Asia, followed by $52 billion in South-East Asia, $39 billion in
North and Central Asia, and $26 billion in South and South-West Asia during the period 20092013. Over the same period, the Pacific island developing States experienced a reduction in
export opportunity of some $500 million. The impacts were also significant in countries with
special needs, negatively affecting merchandise export prospects worth $2 billion in the least
developed countries, about $9 billion in landlocked developing countries and more than $500
million in small island developing States in the region (see figure 3).
6
G20 Agenda for the World Economy: Asia-Pacific Perspectives
Figure 3. Costs of trade-reducing measures in subregions and countries with special
needs, 2009-2013
Source: ESCAP, Economic and Social Survey of Asia and the Pacific 2014. Available from
www.unescap.org/resources/economic-and-social-survey-asia-and-pacific-2014.
Notes: ENEA: East and North East Asia. SEA: South East Asia, NCA: North and Central Asia, SSWS: South and
South West Asia, and PICs: Pacific island developing countries. LLDCs: Landlocked developing countries, LDCs:
least developed countries and SIDS: Small island developing states.
FTA negotiations have accelerated since the stalling of the WTO Doha Round, and the global
financial crisis. ESCAP database shows that countries in the region are currently involved in 150
FTAs, and they have another 70 under negotiation. Several countries are also engaged in megaFTA initiatives, including the Regional Comprehensive Economic Partnership (RCEP) and the
Trans-Pacific Partnership (TPP).
However, the “noodle bowl syndrome” of FTAs in the region is resulting in a complicated and
opaque regional trading system. A more efficient approach would be either a comprehensive
free trade agreement encompassing the entire Asia-Pacific region with a single set of rules of
origin and one schedule of items on which concessions are granted, or a consolidation of the
trading rules embodied in current agreements. These issues deserve further work among ESCAP
member States.
ESCAP member States should undertake deep trade reforms and engage in reciprocal
cooperation to offer effective market access for their goods and services and to reduce non-tariff
measures. Despite significant trade integration in the region, specific trade facilitation measures
are generally lacking. The ESCAP-World Bank Trade Cost database shows that it still costs
more for Asia-Pacific subregions to trade with each other (e.g. South-East Asia with South Asia)
than to trade with developed economies outside the region.15
The low share of least developed countries in Asia-Pacific trade continues to be a concern.
LDCs account for only 0.7% of regional exports, valued at $50 billion in 2012. A priority is to
integrate LDCs more fully into regional and global supply chains by providing them with
preferential market access, improving their productive capacities and enhancing regional
connectivity.
15
Available from http://artnet.unescap.org/trade-costs.asp.
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MPDD Working Papers WP/14/01
Continued support and expansion of the global Aid for Trade initiative (AfT) will be important.
In 2011, AfT commitments to LDCs accounted for only 32% of the total, raising concerns that
they are at risk of being left behind. G20 members could initiate more concrete measures to
support these countries.
C. Employment
During the 2013 summit, the G20 members reaffirmed that policy reforms to support higher
employment and facilitate job creation and better matching of skills with job opportunities are
central in their growth strategies. The G20 labour ministers agreed on the importance of
implementing labour market and social investment policies that support aggregate demand and
reduce inequality. Such policies could include, among others, targeted social protection,
appropriately set minimum wages, and national collective bargaining arrangements.16
This year Australia added greater emphasis on increasing workforce participation, particularly of
women, older workers, youth and low-skilled workers. The G20 members are considering a
collective commitment to reduce the gap between male and female participation by 25 per cent
by 2025. Other proposed actions include reducing non-wage costs and reforming labour market
regulations, increasing investment in skills and education, and addressing informality.
At the regional level, a principal concern in many economies of the region is low job creation
amid rapid growth. Over the past decade, both before and after the financial crisis, GDP growth
in the region was not accompanied by a commensurate expansion in formal sector employment.
During the period 2009-2013, average GDP grew by 6.4% while employment grew by only
1.3% in the developing Asia-Pacific region. Over the period 2000-2007, annual GDP growth
was 8.5% while the formal employment growth was only 1.6% in the Asia-Pacific region (see
figure 4).
Figure 4. Annual growth in GDP and in formal employment, 2000-2013
Sources: ESCAP, based on ILO database. Available from www.ilo.org/empelm/what/WCMS_114240/lang-en/index.htm.
Notes: Calculations for annual GDP growth rates (%) and employment growth rates (%) are based on the average of
two periods, 2000-2007 and 2009-2013.
16
Paragraph 8, “Joint Communique of G20 Labour and Employment and Finance Ministers”, Moscow, 19 July
2013.
8
G20 Agenda for the World Economy: Asia-Pacific Perspectives
The majority of workers in the region are informally employed, own-account or contributing
family workers. Such informal jobs are more likely to be done by women and youth. The
number of “working poor”, those who earn less than $2 a day, also remains high.
While the overall open unemployment rate is estimated to be 4.8% in the Asia-Pacific region,
the unemployment rate is almost three times higher for the youth than for the adult population.
In addition to a lack of decent and productive jobs, this is also an outcome of the mismatch
between education and employers’ requirements, low secondary schooling completion rates and
gender discrimination. Several countries, especially in South Asia, face a potential demographic
dividend. Yet to realize it, they will need to secure productive employment for the growing pool
of young people.
Figure 5. Total and youth unemployment rates in selected Asia-Pacific economies, 2013
or latest available data
Source: ESCAP, Economic and Social Survey of Asia and the Pacific 2014. Available from
www.unescap.org/resources/economic-and-social-survey-asia-and-pacific-2014.
Some countries have undertaken active labour market programmes. China initiated policies to
improve access to and the quality of training systems, especially to benefit migrants from rural
areas to urban areas in search of industrial jobs. For several low- and middle-income countries,
one of the key areas of focus should be to generate more productive and remunerative rural (offfarm) employment.
Wage growth has generally remained weak over the past five years despite relatively robust
economic performance. Economic growth has not translated into higher wages, especially in
relatively richer countries in South-East Asia and South Asia. This has been one of the factors
contributing to rising income inequality in the region. Since the 1990s, regional inequality as
measured by the Gini coefficient has risen from 29.9 to 36.8. In particular, Gini coefficient
increased between the early 1990s and the late 2000s in many major economies of the region:
from 32.4 to 42.1 in China, from 30.8 to 33.9 in India, and from 29.2 to 38.1 in Indonesia. 17
17
ESCAP, Economic and Social Survey of Asia and the Pacific 2014: Regional Connectivity for Shared
Prosperity, Chapter 1. Sales No. E.14.II.F.4.
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MPDD Working Papers WP/14/01
Figure 6. Income inequality in selected developing Asia-Pacific economies, 1990s and
2000s (or latest available data)
Source: ESCAP, Economic and Social Survey of Asia and the Pacific 2014. Available from
www.unescap.org/resources/economic-and-social-survey-asia-and-pacific-2014.
The gap between rich and poor was widespread in the region and continuing to grow in many
countries as shown in Economic and Social Survey of Asia and the Pacific 2014. The report
shows that from available data for about 40 countries in the region, it can be seen that the
poorest 20% of the population accounts for less than 10% of national income in the latest
available year. Among 25 countries with comparable data in two periods (1990s and 2000s),
some major developing countries, such as Bangladesh, China, India, Indonesia, Malaysia and
Turkey, recorded a falling share of national income for the poorest 20% of the population over
the period. However, the share of national income of the poorest 20% increased for some other
countries, such as Armenia, the Islamic Republic of Iran, Kazakhstan, Nepal, Pakistan, the
Philippines, the Russian Federation and Thailand. According to the latest analysis, the share of
national income of the richest 20% of the population in the 2000s ranged from a high of 51.5%
in Malaysia to a low of 38.4% in Kazakhstan, with average share being 44.2% for the latest
available years.
ESCAP analysis indicates that a minimum wage policy, if designed carefully with supportive
adjustment measures (e.g. active labour market programmes and SME support measures), boosts
workers’ income and improves long-term job prospects without adversely affecting businesses.
Moreover, it forces firms to improve production efficiency and contributes to economy-wide
productivity growth.18
D. Financial inclusion and remittances
In 2010, the G20 members adopted a Financial Inclusion Action Plan and created a new body,
the Global Partnership for Financial Inclusion (GPFI), to implement it. The GPFI is an inclusive
platform for all G20 countries, interested non-G20 countries and relevant stakeholders for peer
18
See ESCAP, Economic and Social Survey of Asia and the Pacific 2013: Forward-looking macroeconomic
policies for inclusive and sustainable development. Sales No. E.13.II.F.2. Available from
www.unescap.org/resources/ economic-and-social-survey-asia-and-pacific-2013.
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
learning, knowledge sharing, policy advocacy and coordination. It has four subgroups focusing
on principles and standard setting bodies, SME finance, data and measurement, and consumer
protection and financial literacy.
In 2010, the G20 members also committed to reducing the global average costs of transferring
remittances from 10 to 5 percent in 5 years – by 2014. The World Bank estimates that this
would generate a net increase in income of $16 billion per year for migrants and their families in
the developing world. But this goal is not expected to be achieved this year.
At the regional level, despite rapid economic growth, the region is home to billions of adults that
lack access to reliable financial services and suffer from low financial literacy and capabilities.
Recent data show that the percentage of adults that have an account at a formal financial
institution such as a bank, a credit union, a cooperative, a post office, or a microfinance
institution is 50% worldwide, but for most developing Asia-Pacific countries it falls below this
average (see figure 7).19
Figure 7. Adults (age 15+) with account at a formal institution, and had loans in the past year
(%)
Source: ESCAP, "Sustainable development financing: perspectives from Asia and the Pacific", paper presented at
the Asia-Pacific Outreach Meeting on Sustainable Development Financing. Jakarta, Indonesia, 10-11 June.
Available from www.unescap.org/events/asia-pacific-outreach-meeting-sustainable-development-financing.
The cross-country variation in access to financial services can be partly explained by factors
such as per capita incomes, urbanization and financial depth, but this is not the whole story.
Countries such as Thailand and India, for instance, have higher-than-predicted penetration rates.
Financial inclusion differs by individual characteristics such as gender, education level, age, and
rural or urban residence. In India, for instance, women are 41% less likely than men to have a
formal account, compared with 22% in the rest of the developing world.20
One way to increase access to financial services has been through the use of mobile phone
19
See http://datatopics.worldbank.org/g20fidata/ (accessed 22 July 2014).
See Asli Demirguc-Kunt and Leora Klappe, “Measuring financial inclusion: the global findex database”,
Policy Research Working Paper, No.6025 (Washington, D.C., World Bank, 2012). Available from
http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-6025.
20
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MPDD Working Papers WP/14/01
banking. This could be especially useful in the Pacific island economies, where mobile phone
penetration had risen to nearly 60 percent by 2012.21 However, as noted during the Asia-Pacific
Outreach Meeting on Sustainable Development Financing jointly organized by ESCAP and the
Ministry of Finance of Indonesia in Jakarta in June 2014 in some countries, the lack of access to
electricity limits the applicability of mobile and internet banking. Other concern is that the move
to mobile and internet banking has in some countries led to closure of branches in
geographically isolated areas, harming people who required more customized services.
A remaining challenge is the expansion of financial sectors in rural areas, where banks have
often been resistant to adopt new technologies or to provide access to brick-and-mortar services.
In such cases, regulators have coupled banking licenses to requirements to deepen financial
inclusion in rural areas. For instance, since 2013, banks in Bhutan are required to allocate 20%
of their capital to rural areas.
Officially recorded migrant remittances to the region’s developing economies increased steadily
to $260 billion in 2013, which represents over 55 percent of the world’s total remittance inflows.
For some countries such as Kyrgyzstan, Nepal, Samoa, Tajikistan and Tonga, remittances
represent more than 20 percent of GDP. Large amounts of remittances are still transferred
through unofficial channels. Thus, the amount of actual remittances is believed to be
significantly higher (see figure 8).
Figure 8. Migrant remittances inflows in Asia-Pacific economies, 1990-2013
Source: ESCAP, "Sustainable development financing: perspectives from Asia and the Pacific", paper presented at
the Asia-Pacific Outreach Meeting on Sustainable Development Financing. Jakarta, Indonesia, 10-11 June.
Available from www.unescap.org/events/asia-pacific-outreach-meeting-sustainable-development-financing.
Note: It measures workers' remittances, compensation of employees and migrant transfers and credit.
Remittances provide a financial cushion to many households and economies in the region.
Governments could facilitate these transactions by reducing the costs of sending money and
providing mechanisms that would enable them to tap these resources through, for instance,
diaspora bonds or other remittance-backed bonds.
21
See ESCAP Online Statistical Database. Available from www.unescap.org/stat/data/statdb/DataExplorer.aspx
(accessed 22 July 2014).
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
E. Financial regulatory reforms
Over the past five years, G20 members have agreed and begun to implement a broad range of
policy reforms to promote financial stability. G20’s work in this area is coordinated by the
Financial Stability Board (FSB), earlier a more exclusive forum which since 2008 has included
all G20 members. The FSB works closely with international financial institutions such as the
IMF and with standard setting bodies such as the Basel Committee on Banking Supervision and
the International Organization of Securities Commissions (IOSCO).
According to a letter by the FSB chair to the G20 members dated April 2014, more work is
needed on preventing and managing the failure of globally important financial institutions, to
avoid the problem of privatizing gains and socializing losses as during the global financial crisis.
Proposals on their loss-absorbing capacity and cross-border resolution are thus being developed.
More progress is also needed on improving the oversight of the shadow banking sector, which
includes money market funds, taking into account issues of regulatory arbitrage and the need to
preserve the benefits of credit intermediation through non-bank channels. There is also ongoing
work to make derivatives markets safer. The FSB conducted a study in 2012, followed by a brief
in 2013, on the effects of regulatory reforms on developing economies, including potential
unintended consequences. It found that developing economies tend to lack adequate resources
and expertise to respond to the numerous post-crisis global regulatory initiatives, and
highlighted the need for increased technical assistance, training and knowledge-sharing
activities.
The study also revealed certain concerns over the Basel III capital and liquidity framework.
Reliance on a given credit-to-GDP ratio to activate the countercyclical capital buffer was viewed
as inappropriate for some developing economies because of their higher exposure to swings in
credit and growth cycles. However, given that most banks in developing countries are well
capitalized, of greater concern are the new liquidity requirements. A key issue is the limited
availability of high-quality liquid assets (HQLA) in developing economies, which may lead to
hoarding, with adverse effects on domestic capital market development. Banks may also be
discouraged from undertaking long-term lending.
Finally, the study identified as an overarching concern the need for adequate coordination
between home and host jurisdictions to address potentially adverse cross-border effects, given
that most parent banks are located in advanced economies and their subsidiaries in developing
economies.
At the regional level, following the Asian financial crisis of 1997-98, countries in the region
undertook ambitious reforms which made them largely resilient to the recent global financial
crisis. A more proactive approach to bank supervision was adopted, and macro-prudential
measures such as restrictions on loan-to-value and debt-to-income ratios were implemented to
mitigate emerging systemic risks. The development of local currency bond markets also gained
attention, because of their potential to reduce the double mismatch of currency and maturities in
banks and corporate balance sheets and to diversify funding sources.22
However, there is another side to the story: When it comes to financial sector development, the
Asia-Pacific region punches well below its growing economic weight. In particular, regional
22
The double mismatches, which were a common problem in the run-up to the Asian financial crisis of 1997,
consisted on the financing of long-term, local currency-denominated domestic investments with short-term,
foreign currency-denominated instruments.
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MPDD Working Papers WP/14/01
bond markets remain significantly underdeveloped. Addressing this will be crucial to efficiently
intermediate between the region’s savings and investment needs. Also, most countries have very
small domestic institutional investor base, making them vulnerable to large and volatile capital
flows.
These are important concerns to which the G20, the FSB, and the IMF should pay greater
attention to. The implementation of Basel III capital and liquidity framework and the ongoing
reform discussions related to too-big-to-fail, shadow banking and derivatives are certainly
important. In fact, more countries from the region should be allowed to take part in global
standard setting, not least so that the concerns revealed in the FSB study (e.g. potentially adverse
cross-border effects) are adequately addressed.
At the same time, it is important that the implementation of new regulatory standards do not
stand in the way of the deepening of Asian financial markets. Countries in the region are at
various stages of financial sector development, and financing is crucially important for the
healthy expansion of the region’s trade and investment. Global regulatory efforts should be
accompanied by scaled up technical assistance for least developed countries, which face severe
capacity constraints. Countries in the region should also strengthen financial cooperation with
each other. Existing initiatives such as the Asian Bond Market Initiative and the Chiang Mai
Initiative for liquidity support and surveillance could be further strengthened and perhaps, even
broadened to include more countries in the region.
ESCAP member States plan to spearhead efforts on regional financial cooperation and consider
concrete policy options at a ministerial meeting scheduled for the end of 2015. There is ample
room to increase and expand regional dialogues and consultations on financial market issues,
especially in the context of national and regional economic development. As the UN’s regional
development arm, ESCAP’s work is also focused on sustainable financing for the
implementation of the post-2015 development agenda.
F. Tax cooperation and anti-corruption measures
Tax cooperation is relatively new on the G20 agenda, but has quickly come to the forefront of
G20 discussions, in line with recent public and political reactions to evidence suggesting that
some multinationals pay little or no tax anywhere in the world. There is a wide range of crossborder tax planning techniques that are used to produce such results which are collectively
referred to as “base erosion and profit shifting (BEPS)”.
In 2013, the OECD and G20 jointly established the BEPS project, and a BEPS action plan was
released, with a view to ensure that profits are taxed in the location where the economic activity
takes place. The G20 members have identified this issue as relevant to development and for nonG20 developing economies, as wasteful tax incentives can be a significant source of base
erosion.
A related focus area is international tax transparency and the exchange of information, so as to
make taxpayers with offshore investments comply with their domestic tax obligations. In
February 2014, G20 members endorsed a new standard on automatic exchange of information
(AEOI) between their tax authorities.23 With a view to encourage wider participation in this
initiative, a draft roadmap for developing countries was prepared by the Global Forum on
Transparency and Exchange of Information for Tax Purposes.
23
Para 9, Communique of G20 Finance Ministers and Central Bank Governors, Sydney, 22-23 February 2014.
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
On anti-corruption, G20 members are developing high-level principles on transparency of
company ownership and control, aimed at supporting a stronger investment climate and
protecting developing countries from losing further revenue.24
At the regional level, tax collection tends to be below its potential in many Asia-Pacific
countries, and efforts to improve it are needed for the region to mobilize domestic resources for
investment in sustainable development. The G20 initiatives are thus highly relevant for the
region.
Economic and Social Survey of Asia and the Pacific 2014 report highlights that average tax
revenue for the region’s developing economies is lower not only compared with developed
OECD economies but also with Latin America and sub-Saharan Africa. Some countries have
tax-to-GDP ratios in the single digits. The report estimates that closing the tax gap (between
actual and potential) could add another $300 billion per year to domestic revenues in the region,
and recommends a set of tax policy and administration reform measures which governments can
consider (see figure 9). 25
Low tax revenue is partly due to the low share of the population that pays income taxes. In
Bangladesh, for instance, it is only 1 percent, while in India it is 3 percent. The region accounts
for more than 60% of the estimated $5.9 trillion which flowed out of developing countries
illicitly or illegally between 2001 and 2010 to evade or avoid taxes. Of the 10 countries with the
largest illicit capital flows, 6 are in the region.
In addition, a large part of tax revenue is eroded by exemptions and concessions aimed at
promoting investment and attracting FDI. These exemptions include policies such as tax
holidays, reduced corporate income tax rates, investment tax allowances and partial profit
exemptions to reduce the cost of capital. Mispricing trade, i.e. overstating the value of imports or
understating the value of exports, is also prevalent. Estimates of such mispricing into the EU and
the US between 2005 and 2007 include $577 million for Pakistan, $350 million for Bangladesh
and $477 million for Viet Nam.
Similarly, multinationals often price transactions between subsidiaries in different countries so
that they can divert profits to low-tax countries. In response, some 20 countries in the region
have adopted transfer-pricing rules in their tax laws, mostly based on OECD lines, which
favours the retention of a greater share of taxing rights by the residence country, i.e. the country
of the investor or trader. This is in contrast with the UN model which tends to preserve a greater
share of taxing rights for the source country, i.e., the country where investment or other activity
takes place. Because most multinational companies have headquarters in developed countries,
the OECD model is less favourable to developing countries.
With regards to the BEPS problem, it should be mentioned that during the Asia-Pacific Outreach
Meeting on Sustainable Development Financing jointly organized by ESCAP and the Ministry
of Finance of Indonesia in Jakarta in June 2014 an interesting proposal of creating a ‘passport’
for capital was made to tackle tax evasion through profit shifting, transfer pricing and money
laundering. Such passport is akin to a telephone number that includes an international country
code. Further discussions on the feasibility and possible implementation of this proposal will
24
See https://www.g20.org/g20_priorities/g20_2014_agenda/fighting_corruption.
ESCAP, Economic and Social Survey of Asia and the Pacific 2014: Regional Connectivity for Shared
Prosperity, Chapter 3. Sales No. E.14.II.F.4.
25
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MPDD Working Papers WP/14/01
require concerted efforts at the regional and global levels, for which the G20 could play an
important role.26
Finally, the Economic and Social Survey of Asia and the Pacific 2014 suggested the
establishment of a regional tax forum, under the auspices of ESCAP, which could monitor tax
legislation and regulations across Asia and the Pacific, help to develop regional best-practice,
and create mechanisms to address issues ranging from avoiding tax competition for foreign
investment, to double taxation, and preventing the illicit transfer of funds.27
G. Energy
Energy has been on the G20 agenda for several years, with a focus on supporting international
efforts to improve operation of global energy markets and increasing cooperation between major
producers and consumers. Specific actions included the strengthening of Joint Organizations
Data Initiative (JODI)-Oil, in collaboration with the International Energy Agency, the
International Energy Forum, and OPEC. JODI-Gas is also expected to be launched. A related
area of work has been to improve the regulation and supervision on commodity derivatives
markets, through IOSCO. The G20 members are also discussing practical domestic actions to
improve energy efficiency and curb fossil fuel subsidies, on a voluntary basis.
Importantly, energy access services are positively correlated with human development (as
measured by the Human Development Index). The countries with better access to energy
services tend to exhibit a higher level of human development. Better access to modern energy
services provides households with opportunities to engage in productive activities and
subsequently creates conditions for better jobs higher-level incomes as shown in Economic and
Social Survey of Asia and the Pacific 2013 report (see figure 9). Evidence from the Asia-Pacific
region indicates that access to energy services contributes to greater human welfare and
increasingly higher levels of sustainable development.
However, countries in the region have varied degrees of access to energy services. For example,
the Asia-Pacific region, 1.7 billion people rely on traditional biomass and more than 600 million
people live without electricity. In addition, more than 70% of the people in the Pacific subregion
still do not have access to electricity. Extending access to electricity to the population at large in
the region is fundamental if the region is to move towards a more inclusive pattern of
development that provides equal opportunities to all. In this regard, ESCAP estimated that for
extending universal access to modern sources of energy, countries in the region would need up
to 3% of GDP. 28
Going forward, emerging market economies, many of them in the Asia-Pacific region, will
account for over 90% of net energy demand growth to 2035. However, rapid energy expansion
will not only lead to increased CO2 concentrations in the atmosphere but also, due to a global
situation of excess demand, to high energy prices with serious economic and social implications.
Therefore, it is necessary to not only improve access to reliable, affordable and economically
26
The Outcome Document of the Asia-Pacific Outreach Meeting on Sustainable Development Financing.
Available from www.unescap.org/resources/outcome-document-asia-pacific-outreach-meeting-sustainabledevelopment-financing.
27
See ESCAP, Economic and Social Survey of Asia and the Pacific 2014: Regional Connectivity for Shared
Prosperity, Chapter 3. Sales No. E.14.II.F.4.
28
See ESCAP, Economic and Social Survey of Asia and the Pacific 2013: Forward-looking Macroeconomic
Policies for Inclusive and Sustainable Development. Sales No. E.13.II.F.2. Available from
www.unescap.org/resources/economic-and-social-survey-asia-and-pacific-2013.
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
viable energy services but also to improve energy efficiency and avoid waste and shift the
energy mix towards sources that are less carbon intensive and more environmentally
sustainable.29
Figure 9. Development and universal access to energy services
Source: ESCAP, Economic and Social Survey of Asia and the Pacific 2013. Available from
www.unescap.org/resources/economic-and-social-survey-asia-and-pacific-2013-year-end-update.
Given that the Asia-Pacific region is home to major producers and consumers, and also to
countries with green technologies and expertise, the potential for regional cooperation in energy
is significant. Taking note of this, ESCAP member States in 2013 adopted an action plan on
regional cooperation for enhanced energy security and the sustainable use of energy. To support
its implementation, ESCAP is developing a portal with statistics, indicators and policies to
capture developments in 15 actionable areas, as well as in areas of actions for the Asia-Pacific
subregions.
IV.
Post-2015 development agenda
At the 2012 UN Conference on Sustainable Development (Rio+20), world leaders agreed that
the next phase of global development must ensure a better balance between the three pillars of
sustainability: economic growth, social equity, and environmental stewardship. 30
The result of this agreement is a growing global consensus that the post-2015 development
agenda must extend beyond poverty reduction and the MDGs alone to incorporate issues such as
infrastructure development and climate response. For instance, the UN high-level panel, cochaired by the leaders of Indonesia, Liberia and UK, in its 2012 report, called for universal
29
Section II of this note shows estimates of the cost of enhancing energy efficiency and reducing carbon
intensity.
30
See General Assembly resolution 66/288. Available from www.uncsd2012.org.
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MPDD Working Papers WP/14/01
access to modern infrastructure, including for women, and highlighted the need to catalyse longterm finance for this purpose. 31
With reference to the G20 agenda on infrastructure and investment, it is important to note that
the latest draft of the proposed sustainable development goals for post-2015 also calls for the
development of “quality, reliable, safe, sustainable and resilient infrastructure for energy, water,
waste management, transport, ports and ICT, with a focus on affordable access for all”.32 The
draft lays emphasis on the adoption of green technologies and on investment in rural
infrastructure.
In the case of G20 trade agenda, the open working group for sustainable development goals
supports the promotion of a universal, rules-based, open, non-discriminatory and equitable
multilateral trading system under the WTO, including through the conclusion of negotiations
within its Doha Development Agenda. 33
It suggests increasing significantly the exports of developing countries and doubling the LDC
share of global exports by 2020. It supports the timely implementation of duty-free, quota-free
market access on a lasting basis for all LDCs consistently with WTO decisions, ensuring that
preferential rules of origin applicable to their imports are transparent and simple, and facilitate
their access to markets.34
Another important area of G20 focus has been on employment. One of the proposed sustainable
development goals in the Open Working Group (OWG) is to achieve by 2030 full and
productive employment and decent work, including for young people and persons with
disabilities. An intermediate goal by 2020 is to substantially reduce the proportion of youth not
in employment, education or training. The OWG also calls for fair wages, i.e. equal pay for
work of equal value, for the protection of labour rights, and for the promotion of safe and secure
working environments of all workers, including migrant workers and those in precarious
employment.35
Similarly, financial inclusion is a critical enabler and accelerator of equitable economic growth,
job creation, social and human development. The UN Secretary-General’s special advocate for
inclusive finance has argued that universal access to financial services by 2030 is within reach.
The goal would be for all households and businesses to have access at a reasonable to a widerange of financial services provided by responsible and sustainable institutions operating in wellregulated environments.
Migrants’ families in countries of origin stand to benefit from remittances, which increase
household incomes and enable recipients to invest in housing, health, education and
entrepreneurship development, as well as to increasing household resilience in case of natural
disasters or other shocks. However, due to high cost of sending remittances, migrants often turn
31
See “A New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable
Development”. Available from www.post2015hlp.org/wp-content/uploads/2013/05/UN-Report.pdf.
32
See United Nations Department of Economic and Social Affairs, Division for Sustainable Development,
“Outcome document - Open Working Group on Sustainable Development Goals”. Available from
http://sustainabledevelopment.un.org/focussdgs.html.
33
www.wto.org/english/tratop_e/dda_e/dda_e.htm.
34
Ibid.
35
See United Nations Department of Economic and Social Affairs, Division for Sustainable Development,
“Outcome document - Open Working Group on Sustainable Development Goals”. Available from
http://sustainabledevelopment.un.org/focussdgs.html.
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G20 Agenda for the World Economy: Asia-Pacific Perspectives
to unofficial channels. In this regard, reducing the cost of remittances is included as a mean of
implementing the post-2015 development agenda.36
Furthermore, the global debate on financial regulatory reforms is highly relevant for the post2015 development agenda, as finance is a critical means of its implementation.37 As the global
financial crisis made clear, loose financial regulations can lead to speculative bubbles posing
deleterious risks to the real economy if they burst. Thus Sustainable Development Goal 10 on
reducing inequality within and among countries calls for improving the regulation and
monitoring of global financial markets and institutions and for strengthening the implementation
of such regulations.38
In the context of tax cooperation and anti-corruption measures, there is much evidence that
corruption, by diverting rents from productive uses, has an adverse impact on sustainable
development. Therefore, the implementation of the Rio+20 agenda will depend, to a large
extent, on improving the quality of governance and institutional arrangements in developing
countries. The report of the high-level panel of eminent persons suggested good governance as
one of five “transformative” shifts needed to drive the post-2015 development agenda. 39 In
particular, profit shifting through transfer prices, tax fraud, and illicit financial flows, which are
the result of weak governance arrangement at the international level, result in reduced
government revenues. This is an area where cooperation between the G20 and the UN system
could be highly fruitful.
For energy related G20 agenda, in 2012, the UN Secretary-General launched the global initiative
Sustainable Energy for All, which resolves to achieve three key objectives of providing
universal access to modern energy services, doubling the global rate of improvement in energy
efficiency and doubling the share of renewable energy in the global energy mix, by 2030. The
UN General Assembly also declared 2014-2014 as the decade of sustainable energy for all.40
Achieving these goals will require an immense global investment commitment. Resourceful
solutions that promote the use of public finance to mobilize and leverage private capital are
needed.41 In particular, there is a need to develop the market system to incentivize the private
sector to provide sustainable energy solutions and to mobilize financial resources towards
energy investments. This is an area where cooperation between the G20 and the UN system
could be highly fruitful.
36
See, e.g., “Compendium of existing goals and targets under the 19 Focus Areas being considered by the Open
Working Group”. Available from http://sustainabledevelopment.un.org/owg10.html.
37
Report is available from
http://sustainabledevelopment.un.org/content/documents/4588FINAL%20REPORT%20ICESDF.pdf
38
See United Nations Department of Economic and Social Affairs, Division for Sustainable Development,
“Outcome document - Open Working Group on Sustainable Development Goals”. Available from
http://sustainabledevelopment.un.org/focussdgs.html.
39
United Nations, A New Global Partnership to Eradicate Poverty and Transform Economies Through
Sustainable Development (Washington D.C., 2013). Available from www.post2015hlp.org/wpcontent/uploads/2013/05/UN-Report.pdf.
40
www.se4all.org/.
41
www.se4all.org/hio/innovative-finance.
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MPDD Working Papers WP/14/01
V.
THE WAY FORWARD
As highlighted in this note, many of the issues addressed by the G20 are highly relevant for
countries in the Asia-Pacific region. So it is a positive development that 11 countries from the
region will be participating at this year’s G20 summit: Myanmar, New Zealand and Singapore,
in addition to the 8 members.
In the context of the post-2015 development agenda, this note also identified areas where
cooperation between the G20 and the UN system could be highly fruitful. The UN, with 193
members, is the most representative global platform. The international community is already
addressing issues such as trade and employment through the relevant UN system organizations
such as the WTO and the ILO. It is important that G20 initiatives empower these broader
processes rather than marginalizing them.
The G20 members are taking concrete initiatives on some fronts; in other areas the G20 is
undertaking preliminary discussions. Since the first summit in 2008, the G20 agenda has
broadened significantly beyond immediate crisis-response to incorporate a host of issues ranging
from infrastructure investment to tax cooperation which concerns the entire international
community. So it is crucial that the process becomes more inclusive. As highlighted in previous
ESCAP-G20 consultations, broader cooperation and dialogue not only enhances legitimacy but
also help deliver better solutions. 42 Furthermore, a strengthened partnership between the G20
and the UN should be mutually beneficial to support the implementation of the sustainable
development agenda in the Asia-Pacific region and beyond. 43
42
www.unescap.org/speeches/asia-pacific-perspectives-g20-mexico-summit , www.unescap.org/events/highlevel-consultation-g20-cannes-summit-perspectives-asia-pacific, www.unescap.org/news/asia-pacific-countriesgather-escap-give-perspective-upcoming-g20.
43
Shamshad Akhtar, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP,
“Exploiting Synergies Between the G20 and UN Processes”, statement to Fifth High-level Consultation on the
G20 Summit is organized as a special event of the 70th ESCAP session, Bangkok, Thailand, 6 Aug 2014.
Available from www.unescap.org/speeches/exploiting-synergies-between-g20-and-un-processes.
20