Discussions at this meeting of G20 Finance Ministers and Central Bank Governors were dominated by the continuing but “weaker than desirable” global economic recovery. Uncertainty following Brexit, and the persistence of significant downside risks to the economic outlook, featured prominently.
Ministers and Governors reiterated the need to harness “all policy tools”, i.e. to combine accommodative monetary policy with the use of available fiscal space and the implementation of ambitious structural reforms, “individually and collectively” to boost growth.
During his lead remarks on global economy and on the G20 framework for strong, sustainable and balanced growth, the OECD Secretary-General renewed his call for the bold implementation of the three-pronged approach – monetary, fiscal and structural – to escape the existing “low-growth trap”. After reporting limited progress towards the achievement of the 2% target and uneven implementation of the G20 national growth strategies, he insisted on the importance of resisting trade protectionism at a time where international trade volumes are decreasing and trade is not sustaining growth as in the past. He also underscored the need to bolster new sources of growth and drivers of productivity gains, including innovation and the digital economy, as well as skills development.
The Secretary-General also delivered lead remarks on investment and infrastructure, connecting this theme with the growth discussion and, more specifically, with the low-growth trap and the case for public investment in infrastructure. Using the example of innovative financing schemes, aimed at crowding in private financing of infrastructure, as set out in the Guidance Note on Diversification of Financial Instruments for Infrastructure and SMEs endorsed by Ministers, he underscored these points.
The OECD was again recognised by Finance Ministers for its work to progress the implementation of the G20 tax agenda. The Secretary-General reported on the OECD’s most recent developments in this area, including:
There was a general willingness within the G20 membership to broaden the tax agenda to tax policy issues. The OECD has been asked, jointly with the IMF, to continue working on pro-growth tax policies and tax certainty.
The final communiqué recognises OECD work on structural reforms, investment, SMEs and corporate governance. Ministers conveyed their continued support to the effective implementation of the G20/OECD Principles of Corporate Governance and G20/OECD High-level Principles on SME Financing. The review of the Code of Liberalisation of Capital Movements was noted by Ministers and Governors, and Brazil publicly announced that it will participate actively in the review of the Code and is considering joining the Code.
Going forward, the OECD is being asked to continue deliver progress reports on structural reforms (including using the new common set of indicators, which the OECD helped develop, and that was endorsed by Ministers and Governors in Chengdu). The OECD was also called on to continue work on the composition of budget expenditure and revenue, and on the implementation of G20/OECD instruments on Corporate Governance and SME Financing. The Communiqué recognises explicitly the role of the OECD Steel Committee, and suggests a possible new Global Forum as a platform for collective action in this area.
The G20 High-Level Tax Symposium, convened by Germany and the Chinese G20 Presidency in Chengdu, ahead of the official G20 meeting, was actively supported by the OECD. The symposium was devoted to tax policy and the role of tax certainty for growth, trade and investment. The Secretary-General opened the symposium with China’s Minister of Finance Lou Jiwei. He also moderated the second session of the meeting devoted to tax certainty. This symposium outlined key issues as well as priorities in the area of tax for Germany’s presidency next year.
Related OECD reports presented to the G20
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