Interconnected global economy to become more robust
At the end of their meeting the finance ministers and central bank governors of the G20 nations agreed on a communiqué. Issued by the 19 leading industrialised nations and emerging economies, and the EU, it looks at crisis prevention in the financial sector, the challenges posed by digitalisation and international fiscal policy. One special focus is on stepping up investment and improving infrastructure in Africa (Compact with Africa).
Although the agreements reached "do not per se take us a great deal further", there was agreement "that we will refrain from competitive devaluations, and that we do not want any unfair competition" stressed Wolfgang Schäuble. "We are all convinced that global trade helps foster growth of the global economy and of individual national economies."
Like the entire German G20 Presidency, the motto of the meeting of G20 finance ministers and central bank governors in Baden-Baden was "Shaping a interconnected world". "Globalisation and digitalisation mean that we are more closely linked with one another and more dependent on one another," said Federal Finance Minister Wolfgang Schäuble before the meeting.
Shaping an interconnected world
The global economy, which has become more interconnected as a result of globalisation and digitalisation, is to be made more robust and more resilient to sudden crises. In order to achieve this, the members of leading industrialised countries and emerging economies (G20) want to put in place a stable financial architecture, as well as reducing debts and forging ahead with structural reforms. Globalisation is to be given a regulatory framework, which takes into account the lessons learned from the major financial and economic crises in 2008 and 2009. "The G20 is the right forum for regulatory policy of this sort," said Wolfgang Schäuble.
In their communiqué, the G20 reiterate that they will refrain from competitive devaluations and that they will not target their exchange rates for competitive purposes. They also stress that global recovery is progressing, but admit that "the pace of growth is still weaker than desirable and downside risks for the global economy remain". This makes it important for national economies to be put on a more robust footing, said Wolfgang Schäuble.
Investing in Africa’s future
At the symposium, representatives of the G20 also discussed ways of creating genuine prospects of a better future and jobs in Africa. The core element is the Compact for Africa – an offer of an investment partnership. It aims to put in place a more enabling environment for private investment in African countries. With development banks and the International Monetary Fund (IMF), the G20 finance ministers want to get international organisations to enter into partnerships with African countries in order to attract private investors.
The G20 will support this process. Several countries have signalled their interest in the project. The finance ministers of Côte d’Ivoire, Morocco, Rwanda, Senegal and Tunisia attended the meeting in Baden-Baden and outlined their ideas and expectations. The G20 Africa conference in June in Berlin will re-examine the issue.
Enhancing cyber security in the financial sector
The digitalisation of the finance branch is an inextricable part of globalisation with all the pros and cons this brings. On the one hand it provides for swift and affordable access to cash and financial services. But cyber attacks can seriously damage the global interconnected financial sector. Cyber security was thus also an important issue discussed by the G20 finance ministers.