G20-Germany-Hamburg-2017

SPOTLIGHT ON GERMANY
Spotlight on Germany
The opportunities
and risks of globalisation
If we are to increase global prosperity, we have to balance the opportunities
and risks of globalisation and digitalisation, writes Wolfgang Schäuble
www.bundesfinanzministerium.de
Globalisation and digitalisation mean
that we are more connected and more
dependent upon each other today than at
any other time in our history. They offer
great opportunity, but – if not managed
correctly – can also pose great risk. If we are to
increase global prosperity, we have to balance these
opportunities and risks. This is the overriding focus
of Germany’s G20 presidency in 2017. In the finance
track, we are focusing on three key areas: enhancing
the resilience of our economies; improving
investment conditions, especially in Africa; and
shaping digitalisation.
The world is still feeling the effects of the last
financial crisis, and we cannot exclude the possibility
of future turbulence. Global debt has risen to historical
highs, which hampers the ability of many countries
to respond to any future crisis. It is crucial that we
increase the resilience of our economies, and that we
build buffers to absorb any future shocks. This is why,
at our meeting in Baden-Baden in March this year, we
agreed on principles as a basis for national measures to
make our economies more resilient.
Compact with Africa
Shaping globalisation also means improving
investment opportunities, especially in Africa. Together
with our African partners we want to help make private
investment in Africa more attractive by creating a more
secure and predictable environment and by reducing
the barriers to investment. The aim of our Compact
with Africa in the finance track is to boost growth and
jobs, promote inclusion and give people economic
perspectives in their home countries. Our initiative has
received a very positive response, with seven African
countries joining so far. It builds on the individual
responsibility of the participating African countries to
determine the areas in which they intend to reform in
order to improve the framework conditions for private
investment. Within the framework of the compact,
and together with international financial institutions
and bilateral partner countries, the compact countries
determine how best to implement the priority actions.
The third focus is on the opportunities and
challenges to the financial sector from digitalisation.
Digital innovation improves efficiency, supports
growth and enhances global financial inclusion.
We can reap huge benefits if we embrace the full
potential of digital finance. But there are also risks
that need to be addressed. This is why, among other
things, we have initiated work on cybersecurity in
the financial sector.
Financial market regulation
We hope to build on the progress so far at the coming
summit in Hamburg. Despite some occasional
differences in opinion, the G20 process is effective and
works well. The G20 has proven successful as a forum
for global governance precisely because it allows for
differing views, while still keeping the channels of
dialogue open. This spirit of cooperation and trust has
been clearly underlined in our meetings thus far. We
have agreed that what we have decided on financial
market regulation must now be implemented. We will
proceed with our G20 tax agenda, which to date has
been very successful. And we have advanced a number
of issues in other areas on the G20 agenda, such as
improving the international financial architecture,
combating the financing of terrorism, improving the
environment for remittances and work on green finance.
Global governance
Effective global governance is essential if we want to
master the challenges facing us in the years to come.
It is only by acting together – to build a stable order in
an open world with fair and reliable rules – that we can
shape globalisation for the better. Germany is strongly
committed – during its presidency and beyond – to
working together to make the world a fairer, more
stable, more prosperous place for all. G20
G7G20.com July 2017 • G20 Germany: The Hamburg Summit 35