Productivity is a key global issue that the G20 Summit leaders need to address when they converge on Brisbane in November, according to a prominent Australian economist.
If the Summit does tackle the slowing global economy, then the ‘Brisbane G20′ may well be known for making a significant contribution to the world, Saul Eslake said when he addressed a G20 Business Leaders’ Forum in Brisbane.
The Chief Economist (Australia) of Bank of America – Merrill Lynch put forward a compelling analysis of the challenges facing economic growth at the first of three forums to be hosted by Griffith Business School and law firm Minter Ellison.
Opening proceedings, Managing Partner of Minter Ellison’s Brisbane office Bill Thompson highlighted the firm’s 44-year collaboration with Griffith University and paid tribute to Griffith’s reputation for excellence and innovation.
Griffith University’s Pro Vice Chancellor (Business) Professor Michael Powell said the forum series was intended to foster greater knowledge in the build up to the G20 Leaders Summit. “It is about raising awareness and deepening understanding around the G20,” he said.
The 2% global target for economic growth secured by Federal Treasurer Joe Hockey at the meeting of G20 finance ministers and central bankers in February provided the starting point for an invigorating and insightful presentation by Saul Eslake.
His analysis of the global economic climate since what he called the trough of 2009 referred to initial growth instigated by the G20 but growth that has since slowed. He said official forecasts are now less optimistic about long-term expectations for growth in both advanced and emerging economies. The proposed 2% growth figure now only goes halfway to what is required.
With recovery rates in the US at their weakest since World War 2, Mr Eslake described some “sobering prospects for economic growth”.
“The growth rates of the world’s major economies during the next 20 years will be slower that what we’ve become accustomed to.”
He said Australia had paid a high price, in terms of productivity, for the emphasis placed on security of water, energy and food. To boost productivity he pointed to the need for a structural change which could be brought about by “avoiding the temptation” to rescue failing firms and support declining industries. He also indicated that Australia faced major challenges in increasing productivity and driving economic growth going forward.
“If these kinds of thoughts are in the minds of G20 participants then I’d like to think people will look back on the Brisbane summit favourably.”
The second Business Leaders’ Forum addresses the critical area of infrastructure development as a vehicle for economic growth which is also designated as a major theme for the G20 Summit. It will take place on October 16 at the offices of Minter Ellison in Brisbane CBD.