Improving sustainability KEY TAKEAWAYS Trade fosters a resilient, responsive and responsible global economy The <strong>G20</strong> is an important agenda-setter for global economic governance Responding to the challenges of globalisation The B20 supports the <strong>G20</strong> in its drive to reach a futureoriented world economy, writes Dr Jürgen Heraeus Our world is not only becoming more and more interconnected, but also more and more people are feeling left behind or overwhelmed by an ever faster changing world. Recent elections and referenda in both emerging and developed countries have shown that a growing proportion of our citizenry seem to be discontent with the political establishment. Globalisation and technological change are tremendously beneficial. Between 1990 and 2014, world trade increased about fivefold and global per capita income grew by a factor of 2.5. This had a very real and positive effect on people’s lives: Hundreds of millions of people have been lifted out of poverty and have seen their living standards and incomes improve. Trade fosters a resilient, responsible, and responsive global economy by boosting growth, employment, welfare, purchasing power, and productivity. Both exports and imports enhance economies of scale, specialisation, and competition, while lowering input prices. Imports significantly contribute to consumer welfare, as trade provides access to a more diverse range of goods and services at lower prices. This is especially beneficial for lower-income households. At the same time, not everybody has benefited sufficiently from globalisation. Globalisation creates more competition – and not all companies will be able to succeed. Focusing on anti-globalisation The current anti-globalisation sentiments, which we are witnessing in many industrialised countries in particular, are 85% <strong>G20</strong> share of global GDP not just the result of bad communication. Without a doubt, both governments as well as the business community have not sufficiently explained the benefits of globalisation. They are, however, also the result of increasing income inequalities in many countries and a persistent high unemployment rate, in particular among young people. Therefore, the themes of this year’s <strong>G20</strong> presidency are well chosen: Building Resilience, Improving Sustainability, and Assuming Responsibility. They are essential to ensure that growth is not only dynamic but also inclusive and sustainable. National go-it-alone strategies are destined to fail in tackling today’s challenges but also in realising the many benefits that globalisation and technological change offer. That is why the <strong>G20</strong> is so important. While the communiqués of the <strong>G20</strong> are not legally binding, the <strong>G20</strong> is an important agenda-setter for global economic governance. It holds the necessary weight and legitimacy: its members are not only responsible for 85 per cent of global gross domestic product and threequarters of global exports, but also represent about two-thirds of the world’s population. Most issues require intensive global cooperation – may it be climate change, trade disputes and rules, migration, digitalisation, resource efficiency, the investment gap (particularly in infrastructure), or the fight against corruption, to name just a few. The <strong>G20</strong> may not be an international organisation like the IMF or the WTO in which member states agree on conventions that are binding 90 <strong>G20</strong> <strong>Germany</strong>: The <strong>Hamburg</strong> Summit • July <strong>2017</strong> G7<strong>G20</strong>.com
Improving sustainability The B20 aks the <strong>G20</strong> to reaffirm its commitment to the protectionist standstill A woman paints a banner protesting against the <strong>G20</strong> Summit in <strong>Hamburg</strong> DANIEL BOCKWOLDT/DPA/ALAMY LIVE NEWS G7<strong>G20</strong>.com July <strong>2017</strong> • <strong>G20</strong> <strong>Germany</strong>: The <strong>Hamburg</strong> Summit 91
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