G20 (Group of Twenty)

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  • Women and Economic Growth
    How to Foster Inclusive Growth
    Podcast
    Leading international institutions and private sector corporations have concluded that women’s economic participation is critical to global growth and prosperity. However, nearly 90 percent of nations still have laws on the books that impede women’s work, thereby undermining economic development. During her tenure at the White House, Caroline Atkinson helped to drive global agreements on inclusive growth at major international economic summits, including the commitment by G7 and G20 countries to reduce the gender gap in labor force participation by 25 percent by 2025. She will reflect on countries’ progress in meeting these targets, and the legal, structural, and cultural barriers that must be overcome to build inclusive economies.  This meeting is part of a high-level series, in collaboration with the Bill and Melinda Gates Foundation, to explore the economic effects of inequality under the law. Transcript BIGIO: Good morning, everybody. Good morning. Thank you all so much for joining us today. We’re so thrilled to have you and so thrilled to have our guest. My name is Jamille Bigio. I’m a senior fellow here in the Council’s Women and Foreign Policy program. Our program has worked with leading scholars for 15 years to analyze how elevating the status of women and girls advances U.S. foreign-policy objectives, including prosperity and stability. I want to take a moment before we begin to thank our Advisory Council members who are here with us today, as well as the Bill and Melinda Gates Foundation for its generous support for today’s session. I also just want to remind everyone that the presentation and question-and-answer period will be on the record. Today we are focused on inclusive growth. Economic analysis by leading international institutions like the International Monetary Fund and private-sector corporations have concluded that women’s economic participation is critical to global growth and prosperity. In fact, the McKinsey Global Institute estimated that increasing women’s share in the economy would add as much as $28 trillion or 26 percent to global GDP by 2025 if women played fully equal roles to men in labor markets. But while women are half the world’s population, they generate just 37 percent of global GDP. Why? We know that there are significant legal, structural, cultural barriers that limit women’s participation and undermine what they can contribute to economic growth. International institutions and governments around the world are starting to recognize that women’s economic participation actually does drive economic growth and is worth the investment in the kinds of policies and programs that will increase it. That recognition is due in part to efforts of leaders like our guest today. Caroline Atkinson is now the chief policy adviser for Google. Prior to that she was President Barack Obama’s deputy national security adviser for international economics, and she’s held senior roles at the International Monetary Fund, the U.S. Treasury Department, and the Bank of England. I want to start by noting that while serving at the White House, Caroline led the policy process to prepare for such major international economic summits as the G-7 and the G-20. And it was under her leadership that these summits, for the first time, included a goal related to female labor force participation; specifically, that countries would reduce the gender gap in their labor forces by 25 percent by 2025. Caroline, let’s start with a foundational question. What does female labor force participation have to do with economic growth? ATKINSON: Thanks, Jamille. Before I go to that, I just want to give credit where credit is due, because when we were working in the White House on this goal, we worked very closely with Jamille and her colleagues to figure out what would be a meaningful way to put pressure and put a shining spotlight on this issue. And so it was definitely a joint effort. As the McKinsey study showed, and the IMF has also done, if women were able to participate and did participate in the labor force to the same extent men did, that would be a major push in GDP and living standards around the world. And the gender gap, as we’ve called it, between male and female labor force participation varies a lot across countries. The G-20 includes a broad range of different countries, from advanced industrialized to emerging-market economies. But the gender gap, although it may vary from 10 or 15 percent in some countries—France, Canada, and others—to 40 percent in India, Indonesia, is a significant weight on the economy, just like any unemployment or failure of people to be included in the labor forces, such as in some countries, where there is a very important problem with youth unemployment. Any failure to include productive people in the labor force is a hit on economic growth and living standards. And one other thing. As we saw during the past few decades in the United States, women joining the labor force has been an important support to family incomes. We’ve seen this across countries and it helps children and future generations. BIGIO: So why do you think it was important for G-7 and G-20 countries to tackle this issue? Why did they select the target of reducing the gender gap in their labor forces by 25 percent by 2025 – and what did it take to reach a consensus on this goal? ATKINSON: As a woman, and as a woman working in professions that have generally been dominated by men, I’ve always been interested in trying to promote better working conditions, equality, and so on. At the White House, with President Obama and with the establishment of a priority on women and girls, that was obviously an important part of U.S. policy. And there was an interesting moment—a little bit of a concern was growing in some countries, Japan is a good example, France another, that aging populations would have an impact on growth, that there would be fewer workers to support nonworkers. And there was this huge pool of nonworkers, women, who could be brought into the labor force. So Prime Minister Abe began this program or policy of encouraging women. And there was a funny moment—I agreed to speak to Japanese industry about the importance of encouraging women’s participation and how to make that easier, while on a trip to Japan that I was doing with the President. And Caroline Kennedy and I—she was the ambassador to Japan—were hosting at this roundtable, which the President dropped by, but we were the chairs, if you like, and we were the only two women. The Japanese were telling us how important it was to have female participation and all the rest of it. And I was sitting there thinking, should I say something? Should I not say something? And eventually I decided to say something, and there was all sort of shuffling of their papers about why they were all men. You would have thought they would have realized to send a woman, maybe. Maybe they simply didn’t have any senior women in their companies. We then thought, this would be a nice thing to get into the G-20. There’s a sort of formula about these summits that the G-20 is supposed to be about economic growth and so on. And it is importantly about that. And every year people say we must have a much shorter communiqué; we must streamline it; we must just focus on the big issues. And we always used to say, yes, absolutely right. But secretly we would think it’s a great place to get stuff done, because through the process of the Sherpas, you can jump over some of the experts that have been wrangling with each other across countries, whether trade issues or climate, and have a line to leaders. And then leaders find it much harder to say no in a peer-group setting than to have their negotiators say no. We used to try to get things in there that the U.S. wanted. For example, we got a G-20 summit to address Ebola, which many countries didn’t want to pay attention to. And so this was like that. There was an opportunity there. It took a lot of work because everybody was able to say, oh, it’s really important to have women in the labor force; yeah, we’re all going to work hard on it. And we were saying let’s have something concrete. We need a number. We need a goal that will both force action and attract attention. We played around with different kinds of goals—we came up with this idea that wage equality, obviously that’s incredibly important. We also, by the way, have to think of something the U.S. can manage to do. Sometimes meeting ILO standards could be problematic, because the U.S. doesn’t sign up to all of them and so on. A lot of the analysis suggested this looked like low-hanging fruit. Who can argue that you shouldn’t have more opportunity for women to join the labor force? And then we made it sort of conditional, sensitive to different cultural conditions. The goal was both ambitious but not too ambitious. Every country didn’t have to all get to the same level of female labor participation. They just had to improve their current situation. So the Chinese came to me and said, well, that’s impossible, because we don’t even want to do that, because part of our development is to be richer and allow women not to have to work. We don’t even like this goal, and it would be very hard for us to convince people. The other end of the extreme, I think, was that Mexico said it’s impossible. We’re never going to manage to do this. So it was a lot of hard work to get this goal agreed to. In the end, people get tired of disagreeing. We would love to do it, my counterparts would say, but, our ministry of employment will not agree to it. So then you have to work through the department of labor, to get in touch with their counterparts. And in the end, even in China or Mexico or anywhere else, it’s like the White House is badgering us about this issue. Really, can we not manage to make this commitment? So we got it done in 2014. In one way, looking at all of the data of what’s happened since that is disappointing, because there’s been some progress, but not that much. And again, as I said, it’s just about participation. There are all these other barriers to women working that are only just being addressed. But, on the other hand, I like to be a glass-half-full person, especially at shining a spotlight on this issue and then involving the ILO, the IMF, the OECD, and others, and forcing leaders to know that there was a paragraph somewhere that committed them to actions is important and gets the wheels of governments moving. BIGIO: You’ve highlighted so well what it takes to move countries from the rhetoric, where many are stuck right now, into actual action. It often takes the kind of leadership and commitment that you identified. ATKINSON: Yeah. BIGIO: You noted some of the barriers that are keeping women out of the workforce—from laws to culture. Can you talk more about what some of these issues are? ATKINSON: Certainly social and cultural barriers. One of the countries in the G-20 is Saudi Arabia. We know that there are many barriers there. They now allow women to drive. There are very sort of practical things, like it’s hard in some countries, including Japan, to get adequate child care. In the United States, the Obama administration pushed for paid leave and parental leave. And the lack of that is still astounding. I grew up in Europe, the U.K., and the disparity is striking—the fact that in the United States there is no requirement for government or private companies to do that is a big barrier. We know that female labor-force participation tends to drop off as women get older and have children. We also know that women do 70 percent of the unpaid work, according to surveys. And I suspect there’s some flexibility in that. So when a woman is doing a full-time job and then coming home and doing the bulk of the unpaid work to keep the home going—there’s only so many hours in a day. Another barrier is the straightforward one of pay, that women, even today, even in the United States, even women like ourselves, many of us here, who are informed and lucky enough to be well educated, tend to get paid less. It’s a fact. That even happened to me at the White House. I was employed by a combination of the National Security Council and the White House. And when I got a certain promotion, they gave me the minimum. I mean, I wasn’t paying attention, because you don’t go to the White House in order to make money. But when Susan Rice, to give her credit, became national security adviser and brought in a female chief of staff, they came and said to me, you know, you’re getting paid $20,000 less than the men who had the same title. It can happen all over the place. And, of course, people are less inclined to join the labor force if they’re not going to have equal pay. The World Bank had a study that identified the barriers in different economies and legal systems, and they identified over a hundred different legal barriers for women to participate. So legal barriers also can be a problem. And obviously, countries could start off with fixing that. In fact, there’s research that making the laws equal for men and women will boost the number of women in the workforce. And there’s education. We know that women tend not to go into some of the growth areas, although there’s a big effort now to push STEM education for girls. And again, that’s cultural. Years ago, I was on the board of a great organization called the International Center for Research on Women. It looks at the lives of women and girls in emerging markets. And they did important research that showed that when women become more independent financially, they also become more powerful in the home, and domestic violence goes down. So there is a definite relationship between financial independence, ability to work, go into the labor force, and the power to be free from violence in societies. And I suppose that before you’ve got that independence, there are going to be barriers—societal barriers, and also maybe physical barriers. Men don’t necessarily want their wives to go out and get independence. The ILO looked at work earnings, job security. So women tend to be more in the informal sector with less job security than men, so they’re more likely to lose their jobs in bad economies. And then working conditions. And then there’s the question of whether women are subject to sexual abuse. And we all know that it’s not just in other societies, but very present in our own, that when you’re in a position of power, usually power over women, that that can lead sexual abuse, and that’s a big disincentive to joining the workforce. BIGIO: What can we do to address these barriers? And obviously with the commitment that the G-7 and G-20 countries have made, there are policies that we’d hope to see these countries pursuing. What’s their progress been? ATKINSON: One area where we’re not seeing progress—I’ll just start with that, because it’s incredibly important—is on wage equality and equal pay for equal work. That is something that is very difficult to get political support for, it seems, in different countries. Obviously, that would be a gold standard. Some things are just straightforward encouragement for women, whether through subsidies, whether through encouragement of teleworking, which Saudi Arabia and Italy, for example, are doing. There is the whole basket of child-care policies. In Japan, there’s very little provision of kindergarten and preschool care. In other places, encouraging private-sector and public-sector provision is important. Then there’s also the education piece. There’s a lot of places where governments are trying to find ways to encourage young women to go into different fields. Another thing—especially in my current position at Google, we talk a lot—and I believe in it—is the possibility of digital literacy, helping to close barriers around the world. And there’s a lot of evidence that, for example, small businesses that are online have access to much bigger markets. They tend to pay their workers better. They tend to grow more. That’s also true for women. And there is, unfortunately, evidence that fewer women have internet access globally. Fewer women have digital literacy. I’m not talking about coding, necessarily; I’m talking about being able to connect. And I’m sure you’ve seen stories about how a lot of craft-based industries can enormously increase their markets if they use it. So I think there is an important element there, which I haven’t seen much in the G-7, partly because some of the people who work on it don’t know that much about technology themselves maybe. Another thing that some countries have been doing—and I think it could be a powerful tool over time—is increasing transparency. So there is more reporting of where women are employed, what levels that they’re employed at. And I think that that will help to change things over time, to have a little bit of competition at the top, although—as an economist, you’re usually educated to not really believe in quotas, and so on. But over my career, I’ve become convinced of the value of numerical goals. And actually, when I was at the International Monetary Fund, there were very few senior women. And I had joined the IMF, worked there for a number of years, and all of the time I’d been there, there was tremendous lip service and pride early on in how the graduate intake had become much more balanced. But basically there was a flat line of women in leadership—very low, 12 percent. At the same time, the World Bank, which is much bigger, had, under one of its presidents, committed to raising leadership levels with a specific target. There were various sort of triggers—you had to have a short list, and every woman knows about that: you know, am I the token woman that’s being put on the short list for this unlikely job so that they check that off. But over time it was really enforced, and these charts that I was looking at in my second time at the IMF showed this flat lining, were very different. I can remember being in a meeting with a bunch of people because there then a backlash: there were all these very depressed men who now think they’re not going to get promoted, so what can we do. And I said—what goal do we have? Women in senior jobs. And I said, well, it has to be 50 percent. The whole world will end, no. And I said, I don’t mind if you even have it out a long way, but I just had this feeling that had there been such a goal 20 years earlier when I actually knew the IMF, it would not be flatlined. And some countries are looking for goals. Obviously, you’re aware of politicians who say I’m going to have half the Cabinet be female, and I think all of those things are important. Boards too, because I do think that it just makes a difference if you don’t have to think about it. BIGIO: There are studies, in fact, that have shown that until you have 30 percent representation at the table, there is not a critical mass to influence and improve the organization with a diverse workforce and diverse decision-makers. With that we’d like now to open the floor to questions from you all. If you could raise your placard and, when I call on you, state your name and your affiliation. Q: (Off mic.) ATKINSON: I was talking to some other people about Google recently, and they commented that one thing I’d said, which did not seem exceptional to me, had a set of discussions that clarified something at the beginning. Google is a technology company full of engineers. At its core, it’s an engineering and technology company. They have—and especially pushed by the current CEO, Sundar Pichai—a strong commitment to values which include inclusiveness. Because Google is so large, it does have responsibilities to engage on public policy in a way that, when it was a smaller start-up, it didn’t. There are many people who work at Google who feel very strongly about net neutrality, as you mentioned, but other things: immigration, individual rights, and so on. We are actually a company that’s trying to make innovative products which we think will be good. Now, that said, I think there has been growing awareness—but always some awareness—about the importance of fighting against discrimination in and fighting to provide an equal platform. It’s not obviously just around gender. It’s around other ways that people can be different. One area of policy, for instance, looking at artificial intelligence—I mean, machine learning is important in all tech companies, and there’s quite serious work going on in Google. Actually, it began in a lot of different places, that are now working together about looking at the issue of algorithmic bias, and doing research on that and trying to think through, with researchers, engineers, public policy people, how to avoid the problem that if you train machines on data that it self-incorporates a lot of biases, that they will then reflect those biases back. So that is an area of research that is very active, and I think that’s an area where the technology companies do have to take the lead because they are the ones that know how the algorithms work. Google has joined with some other companies to have researchers working on this. There has also, in its history, been a big tension between freedom of expression and appropriateness of content. And people that started first working at Google obviously support the First Amendment, openness, et cetera, and gradually learned, well, go outside the U.S. and the same laws do not hold. Germany has laws against hate speech, so how do you deal with that? There’s always an incredible amount of agonizing about taking a policy decision to have some content removed. Child porn was easy, in a way, because it is illegal. Also, machines are actually pretty good at any form of identifying child porn. Machines are quite good at detecting that, and then it gets removed immediately. But there are other areas that—a few years ago, before I was there, Google, for example, took a policy decision not to allow revenge porn on YouTube. You could have a debate about that. It’s not illegal, but it’s pretty unpleasant. In India, there’s rape and gang rape, which is a serious problem, and Google takes those videos down as well. I was involved in debate about that. You mentioned data. There is a lot of data. There are a lot of rules, and I think there will probably be more, and there’s certainly a lot of issues around privacy. Actually, cloud services allow companies to do their technology work in—offsite. So I think that uses of that data need to be very carefully monitored and will be carefully monitored because of privacy issues. There is lots of data that, you know, the World Bank is producing, countries are producing. One thing that I have to say is that it’s so wonderful to have everybody talking because, even at the IMF, I would notice—you know, you have to say to women, no, sit at the table. Don’t sit at the back. I know you’re thinking that you need to hurry off and finish your memo and everything, but you don’t need to do that any more than guys do around the table. Q: Ariel Meyerstein. I’m at Citi in the Sustainability Team, so we are tracking and paying attention to a lot of these issues. Another thing that is spoken about a lot right now is the future of work, and I just wonder if you’ve been thinking about how—you know, not five years from now, but 10 and 20 years from now, and how that’s going to intersect with this agenda, and what, you know, kind of will be new challenges presented by all the technological changes but also maybe opportunities. You mentioned telecommuting—but, you know, how you see that cutting both ways. When you mentioned Japan and, we—or in China, we don’t want that many workers, that’s exactly the problem we’re going to have in the gig economies. We’re going to have all these workers and what we’re going to do with them, and how’s that going to exacerbate this agenda. ATKINSON: Thank you. Just to put my cards on the table—as an economist and macroeconomist, I don’t believe that automation and technological advance will lead to a load of people who are out of work. We’ve seen so many technological advances and changes since the industrial revolution, and what matters more for the overall level of employment is the government’s sort of fiscal and monetary policy. We can’t think now what jobs there will be, although we are trying to do that to be more reassuring, but if you go back—think of your grandparents. They wouldn’t have imagined the kinds of jobs people do now. Also, if you think of sustainability around the world, there are so many poor people who need more things to have a decent life that I think imaging that there won’t be a value in producing things and in them working to produce things—I don’t think right. Now, on the other side, a lot of the concerns about future of work I think are going to spur, I hope, interventions that will help on this agenda as well. They will spur more education, more life-long education; more flexibility in the workforce, which will also help—and to help women who are moving out of the workforce at some point to come back. You mentioned teleworking, for example. So I think that an agenda that is—that is focused on making individuals better able to shift between different jobs will also help women. One other area that I don’t know that much about but I think is going to be very interesting and is—will be important, make sure that these issues are part of it, is how workers get represented. And there’s obviously a lot of questioning now about has the drop-off in unionization really been a part of why there’s increased inequality in the United States and other advanced economies. Especially in the United States, a lot of policies are tied to jobs. I mean, health insurance is the most obvious, but there are other ones—pensions and so on—in a way that presumes a certain type of employment. If we’re thinking about changing policies to reflect that, it would be very important to ensure that the gender dimension is included in that. Q: Thank you. Barbara Samuels, Global Clearinghouse of Development Finance. Inspirational to hear you and to be gathered with everyone. Would very much like to push on the belly of the beast. Right now we’re working with the political commitment of the African Union, heads of state, NEPAD, the business community with developing a precise tool to estimate job creation from infrastructure projects in Africa—direct, indirect, induced, and secondary. And when we look at—you were going through the policies, and when we really think about how can we affect this space—and of course we’re working with the support of the German government because the refugee problem, and they say it, like, we can’t—we’ve got to create jobs here, and of course from a U.S. perspective we have terrorism. And part of the agenda is women. So some of the things we’re looking at and would just love to brainstorm with you and everyone else is terms of reference. If, for example, you’re competing for a big-time contract at USAID, they will give preference if you are Deloitte, for example, and you have women-led firms as part of your consortium. So even though against a backdrop, as you know, of WTO regulations and AID architecture which says you can’t do any of those things in other countries, there is support even from the EU, it would seem, to say when you’re putting together the procurement requirements for an infrastructure project, you could actually say, listen, you’ve got to have local content, and in fact, South Africa has done that successfully with their renewable energy project. So let’s think. What are our levers? You could say procurement for local employment, you could include an allocation, like you said, for cabinet and for boards for women. You could also say for cement—supply of cement, equipment and the like. Another phenomenon that we should really push on, we would argue, is blended learning. We talk about blended finance. What about blended learning where we take free, online courses, education. How do you get infrastructure done? Project finance techniques. Why can’t we combine free, online courses with African university courses that teach you how to put together a contract that is going to meet the requirements of institutional investors in Africa and the like—second thing. Third thing is the supply of platform. Let’s have digital marketplaces where, if you are putting together a project in Africa, you can know who are the local financial advisors, engineers and the like, and you can have data fields which include gender. Fourth, performance metrics. As you said, let’s measure these things and get them out there, and so, you know, it’s a really exciting opportunity because the African institutions—the AU, NEPAD—everybody’s like, do all these things. And we’re building a platform that aspires at least to do the first. So would love to brainstorm on those things and also think through—even though Google may not be interested in power, they are the engineers that can help deliver a lot of this, so how can we build in the key private sector players to make this actually work? Thank you. ATKINSON: Thanks. Well, there’s a lot there, and I think that what you say about information—which Google is very—that’s our business—is extremely important, especially probably in those economies, and I love the idea of blended learning and, as I mentioned, the metrics. I’m a little less wedded to the idea of local content just because I think that a lot of these economies are not very competitive. They’re not very competitive because they’re not opened up. Rents are captured by the powerful people. And when you have local content, that can be a recipe for having corruption, that is not as efficient as it would be if it were brought in from overseas. Rather than saying everybody should have a cement industry, which makes no sense, it’s better to think, yes, you should build the maintenance and so on, which tends to have a labor content. So I think that having labor from working on these projects is obviously good. I’m a little concerned that the companies and the private sector—in many of these African countries is not the most efficient, and tends to have government capture. And giving them a sort of piece of every project may not be the best way to go. But the other ideas, I thought, sounded great. Q: (Off mic.) ATKINSON: Yeah. Well, it’s not just tech. I mentioned about the IMF. And one of the things that I felt there, which I still feel, is that I completely agree with you that you have to think of a way to force the goals down into the place where the hiring decisions are taken. That’s one reason why I quite like numerical stuff, because even if you just have to explain why it is that all of your recent hires have been white men, that can be a forcing function and it can be something. And, you know, the tech companies are pretty good at collecting data and so on. They can just have checklists about, you know, what’s your record in hires and why has that been. So I think that having overall goals—which, as you say, the companies tend to have very lofty and increasing focus. And at Google, I would say that it’s—over the time that I’ve been there, which is not very long—there’s been more concern about it. Not just women, there’s also obviously a massive problem about lack of representation of African Americans and Latinos in tech companies. The other thing that I found interesting—you know more about this than I—but it struck me when I was at the IMF that if you’re making decisions one by one, then it’s much harder—it’s much easier to shield the biases or to not understand it because there may be close differences between people and it’s just one person and so on. If you’re hiring in a pool or promoting in a pool, which is what we used to do at certain levels with the IMF, you can’t sort of look at each other around the table and think, oh, well, our pool for the next set of people that are going to be managers is 10 people and nine of them are white. Then you get kind of forced to change. So I feel that forcing people to look at promotions and hiring in a pooled way really helps. Now, that goes against the fact at Google of, for example, and I don’t know about other companies, of pushing down responsibilities for management to hiring managers. I have pushed quite a bit and people don’t particularly like it to say, by the way, we’re going to look at this from the office point of view and it’s not just you, X, who are hiring one person, but I want to see how that fits in the group of the eight people that are going to get hired in this round. So I think that a more conscious training-down of who’s responsible and pushing for this pooled hiring and pooled promotion is important. I also think—it’s interesting what you say about a cultural fit, because, you know, Google people talk about being “googley.” And I have said, what does that mean? Well, it means all sorts of different things. Which can mean, you know, you’re kind of comfortable, you’re friendly with them. I mean, we’ve all seen and I remember at the IMF we were all shown this great woman who was at Yale and at Harvard who’s done a lot of the unconscious bias stuff that makes you go through and see how quickly can sort things, that you have to put under men and under women—all of these men who believed that they didn’t have bias—they were super rational, well, then had to explain why their brains were wired to put the man with the briefcase and the woman in the kitchen. I think it’s good to make people do those just to confront, including me. I mean, I know I have biases, we all do. It’s a little hard to do the thing that they’ve done in orchestras where, you know, they have the person playing so that you can’t see them because I guess you could take names off. Q: (Off mic.) ATKINSON: The thing is, you need a bulk of women. It goes back to what Jamille said. You need to have enough people of any minority to feel that they’re, you know, at home in that space. And, I mean, it’s like on board membership. There is research 20 years ago now showing that companies work better when there’s more diverse decision-making, yet it’s really hard to push it. The basic thing is you just need more people in there. And then you need to make sure that they are in positions of authority. And I think that your point on a cultural fit is a very good one because it ought not to be allowed. Q: Hi. Rachel Robbins, formerly with the World Bank Group. So it was well understood in 2012 the economic implications of having women in the economic labor force globally with the WDR, the World Development Report. So your point about having targets, I completely get. But can you talk a little bit more about what is actually being done. You know, is there—is there annual reporting that companies have stepped up to? Is there a platform to share information? Is there some group of expertise within one of the international organizations that helps countries figure out solutions? I mean, they’ve all signed up to this commitment, but can you talk a little bit more about what is happening? ATKINSON: Yeah. So in one sense, progress is slow. But in another sense, a lot is happening in terms of encouraging research. The G-20 work means that in every government, in every preparation of the leaders, there are people that are accountable for thinking about these issues, thinking about how they can affect women’s labor force participation in their countries. That will step up as you get closer to 2025. And I think that’s long enough to make an investment—to not get to 2024 and then think, oh. There has been the analysis about which of the three different areas that affect participation, both on earnings, working conditions, and job security. That is all work that’s been done by the ILO. But the ILO working with the OECD and with the IMF that are all places that don’t really usually like to work together much, but have been pushed to do it by the political pressure. And Jamille can probably say more, but there is a W-20 and a W-7, which is a Woman-20 and a woman G-7, these groups that have been pushed to develop more recommendations and have those become part of the debate. So it’s a kind of long, slow process, but there is more and more analysis and more and more pressure and more and more analysis both of the facts, but also of the policies that inhibit, the barriers that are all over the place. The first thing would be to remove those, as well as affirmative policies that can help to promote women in the labor force and women getting equal pay. There is definitely more work that has been pushed as a result of this political commitment. That’s not to say there isn’t more to do. And on the private sector, there is a little bit of public shaming, which no doubt—which civil society is doing, and we all are. And then I think the sort of next steps about, OK, you may have some leadership commitment, but how does that filter down and help people to figure out the mechanisms that will lead to different outcomes is a really important piece. BIGIO: I think we have time for just one more question. ATKINSON: Or maybe take both, the two questions, and I’ll answer them together. Q: It can be short. I’m Rosemary Werrett, I’m with Observatory Group, but I also work with a microcredit group in Latin America called Pro Mujer which works for the betterment of women. My question is a little bit different. It’s a two-part question, but it’s short. Does the lack of leadership now from the White House on women and gender issues, does that affect the G-20 momentum because it takes some oxygen out of it? Secondarily, is the whole issue about harassment, sexual harassment, sexual misconduct, does that feed into the diversity argument, and does it help it now that it’s become a major media issue, a Hollywood issue, I think probably an issue around the world? So does that help your diversity effort, or does it not mean anything, or is it negative? Q: (Off mic.) ATKINSON: Yeah. So on the lack of leadership, yes, absolutely, I’m sure it sucks oxygen out. There are already a lot of processes in place that, though we wouldn’t be where we were today if there hadn’t been leadership, whether the lack of leadership now will—there’s a certain inertia forward. The other thing that’s a bit depressing. There used to be a lot of female leaders or a few female leaders in the G-20. Merkel is still there and Theresa May is there as well. But you no longer have Dilma Rousseff and—unfortunately, they all left in rather bad circumstances—President Park from Korea, and the prime minister of Thailand. I mean, there was a high point when there were all of them. But I think that in the coming year, Canada and Argentina are chairing the G-7 and the G-20 and in both cases I think that there’s interest in this issue. I think #MeToo has to help just because of consciousness-raising. I’m only worried about whether there’s going to be a backlash. And on the quotas, I think that having goals, even if you don’t call it quotas—and there are different sort of legal barriers to that, I think there are legal reasons not to. Private sector companies are not allowed to be biased against or in favor of certain demographics. So, you know, you have to be careful. But I think that goals are important, building goals into performance reviews, and that sort of thing. BIGIO: Well, please join me in thanking Caroline so much for a wonderful discussion. (Applause.) And thank you all. Have a wonderful rest of the day. Thank you. (END)
  • North Korea
    Taking On North Korea at the G20
    North Korea’s test of an intercontinental ballistic missile during the week of the Hamburg summit injects an air of crisis into an already tricky set of meetings.
  • Donald Trump
    Meeting Putin
    Podcast
    CFR's Stephen Sestanovich, James M. Lindsay, and Robert McMahon preview U.S. President Donald J. Trump's meeting with Russian President Vladimir Putin on the sidelines of the G20 summit in Hamburg, Germany.
  • Global Governance
    What's at Stake at the G20 Summit
    Will the leaders' gathering in Hamburg find consensus on pressing global economic issues? Experts from many of the group's member states assess prospects.
  • G20 (Group of Twenty)
    What to Know About the Hamburg G20 Summit
    The G20 summit comes amid tensions over trade, climate, and refugee policy and increased uncertainty over the U.S. commitment to multilateral institutions.
  • Global
    The World Next Week: June 29, 2017
    Podcast
    President Donald J. Trump goes to Poland, the Group of 20 meets in Hamburg, and three notable independence days are celebrated.
  • G20 (Group of Twenty)
    Global Economics Monthly: September 2016
    Bottom Line: At the Group of Twenty (G20) Summit in Hangzhou, China, leaders called for governments to do more to support growth, but offered little in the way of new measures. Quietly, and away from the G20 spotlight, fiscal policy is becoming more expansionary, but current policies are unlikely to provide a meaningful boost to growth or soothe rising populist pressures. Fiscal Stances in G20 Countries Last week’s Hangzhou communique disappointed observers hoping for a growth-boosting package of fiscal and structural reforms. Aside from cementing previous agreements on climate and tax compliance, there were no real economic achievements. A coordinated fiscal stimulus package from G20 countries, like in 2009, will not occur this year. Nonetheless, a careful look at the data shows a shift across the G20 countries toward larger fiscal deficits and, in a few cases, toward a more expansionary spending policy. Japan, China, the periphery of Europe, and some emerging markets all display this shift. Even in the United States, the fiscal squeeze of recent years has begun to ease. However, additional fiscal stimulus seems unlikely. Many countries remain hamstrung by high debt levels and gridlocked politics, and other countries, such as Germany, continue to resist using available fiscal space to boost European activity above its trend rate. As a result, global growth is likely to remain anemic. The G20 Call to Action  Beginning in February, G20 finance ministers and central bank governors have called repeatedly for more aggressive growth-oriented policies in their communique: "Over the last several years, the G20 has made important achievements to strengthen growth, investment and financial stability. We are taking actions to foster confidence and preserve and strengthen the recovery. We will use all policy tools—monetary, fiscal and structural—individually and collectively to achieve these goals. Monetary policies will continue to support economic activity and ensure price stability, consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth. Our fiscal strategies aim to support the economy and we will use fiscal policy flexibly to strengthen growth, job creation and confidence, while enhancing resilience and ensuring debt as a share of GDP is on a sustainable path." This message has been reinforced by the International Monetary Fund (IMF) and other international organizations with increasing urgency and anxiety as the year has gone on, most recently in the IMF’s report for the G20 summit. Observers have scrutinized each G20 statement for evidence of policies that would match the G20’s words. Time and again, those wishing for growth-oriented policies have been disappointed. Still, looking across the G20, in most cases fiscal policy has been easing in practice (both compared to last year and to forecasts for 2016 made at the start of the year), in some cases substantially. This easing occurred through allowing larger deficits (Canada and the United States), reducing surpluses (Germany), or delaying planned deficit reduction (France, Italy, and Japan). The exceptions include Latin America and Russia, where domestic pressures are forcing consolidation. Although the weakening in fiscal policy has been the autonomous result of a weaker global outlook (what economists call automatic stabilizers) in some cases, part of the loosening is the result of specific policies that will have a sustained impact. Notably, stimulus packages were announced this year in several countries. In March, Canada promised 3 percent of gross domestic product (GDP). In June, South Korea promised 1.2 percent of GDP. (My colleague Brad Setser has pointed out the limitations of the Korean effort.) In August, Japan announced a package of 6.7 percent of GDP, including loans. Japan’s package is coupled with the long-expected decision to defer the planned hike in the consumption tax, both of which are expected to boost growth by 0.6 percent in 2017. This cumulatively represents a swing of more than 1 percent in Japan’s fiscal position. Most important, China has introduced a substantial fiscal stimulus over the course of the year, which has provided tangible support to demand, though not enough to meaningfully reduce the external imbalances the country faces. These efforts include a loan-bond swap program for local governments to reduce debt costs, new infrastructure investment, and tax cuts. Although the Chinese government released new details of its plan after the summit, the plan does not appear to move fiscal policy beyond what was previously expected. The IMF argues that China’s fiscal deficit, measured comprehensively, stands in excess of 10 percent, and urges caution going forward to contain financial risks, including the weak health of local governments. Others disagree with the IMF’s assessment. As a result, the overall fiscal thrust (that is, the net boost to demand adjusting for changes in the economic cycle) of the eurozone, Japan, United Kingdom, and United States (the so-called G4) has turned positive in 2016 for the first time since 2010.  Figure 1. G4 Fiscal Stance Source: JP Morgan Fiscal Expansion, Not Policy Coordination Fiscal expansion’s many supporters believe that monetary policy has become less effective in recent years with interest rates already at low or negative levels. Further, research by the IMF and others on the experience in Europe after the crisis in 2010 has argued that the impact of fiscal spending (“fiscal multipliers”) is greater when interest rates are zero. In this regard, potentially high payoffs to greater infrastructure and public goods spending would appear to make a great deal of sense with rates low, a point reinforced by the IMF’s recent call for a substantial new infrastructure spending effort. Some economists have explicitly linked these arguments to efforts to address the anxiety now seen across the industrial world, calling for a “responsible nationalism.” However, it is worth emphasizing that a reorientation of spending, with the same overall deficit or surplus, could also address the need for more inclusive growth and assuage concerns of those who feel left behind by globalization. Others have gone further and called for fiscal expansion directly financed by central bank money creation (“helicopter money”). Although these arguments have broad or, in the case of helicopter money, growing appeal among economists, they have not seemed to affect the politics in major countries. On the surface, the fiscal policies of the major countries have hardened in recent years, making compromise more difficult. From this perspective, recent fiscal moves do not appear to be a coordinated act or a stealth policy initiative representing a successful G20 process. In each of the cases above, domestic politics have driven policy decisions, and global debates have played a limited role. Regarding the weak global growth environment as a common factor, I have argued elsewhere that the growth environment should be differentiated from true policy coordination. A more important question, from a growth perspective, is whether it is enough. Again, it is hard to argue that the scope for fiscal policy is exhausted, and indeed the IMF and others maintain that the major surplus countries have the fiscal space to provide additional demand support. The problem: the most significant unused space in the G20 is in Germany, and aside from a proposed 3.7 percent increase in spending (some of which is associated with the migration crisis) and some tax cuts, there appears to be little political room for a change in fiscal policy ahead of fall 2017 elections. These dynamics were on display in last week’s G20 meeting. Germany was quick to put down talk of coordinated action, and China, though supportive of additional growth, was clear that it had done all it can. The United States made the case, as it has in the past, for the fuller use of available fiscal space, but its ability to contribute is stymied by domestic politics. Earlier today, U.S. Treasury Secretary Jack Lew claimed the debate between austerity and growth is over and signaled new fiscal measures would be coming, but it is reasonable to be skeptical about this claim. Encouraging other people to spend their money seems to be the only thing that G20 leaders are able to agree on. What Happens Next Year In the United States, Donald Trump and Hillary Clinton have both put forward expansionary spending proposals, though Trump’s is far more so. But if the United States retains a divided government (as markets appear to expect), it is unlikely that either candidate would see his or her policies approved as president. Still, it is reasonable to expect at least some easing of spending caps, which would allow U.S. policy to become expansionary. In sum, fiscal policy has been responsive to events over the past year, and has provided support for growth in the face of substantial political and economic headwinds, including Brexit. But this easing was more the result of countries acting in their own interest than the result of coordinated action or a breakthrough at the G20. Further, there does not appear to be much more fiscal easing in the pipeline, nor even a reorientation that would address the populist concerns of the electorate. Those who want more aggressive fiscal support for inclusive growth will be disappointed by last week’s meeting. Looking Ahead: Kahn's take on the news on the horizon Ukraine One year after Ukraine’s debt restructuring deal, investor confidence, rattled by continuing conflicts in the country’s east, remains cautious and fragile. What is equally worrying is Ukraine’s slow progress in implementing needed reforms, which has caused a delay in completing the second review of its IMF program and receiving the next tranche of aid. An IMF board meeting is scheduled for September 14.  Emerging Market Debt Corporate debt in emerging markets will likely experience a negative net issuance of $21 billion in 2016, with $118 billion maturing after nearly a decade of rapid expansion. Although this deleveraging process soothes the anxiety about high debt, the repayment ability of some corporations is still in question. The process also reflects debt-issuing companies’ rising concerns about investment profitability and the broader sluggish macroeconomic environment. Venezuela The crisis continues to deepen in Venezuela, underscored by a sharp recent deterioration in oil production, but the government is moving forward with a bond swap to make fall payments on state and energy-company debt. Still, default is a question of when, not if. 
  • India
    India, the Nuclear Suppliers Group, and the Paris Climate Accord
    The Group of Twenty (G20) summit in Hangzhou brought big news: U.S.-China ratification of the Paris climate agreement, heralded as an important sign of “climate change cooperation.” The world’s two largest carbon emitters called upon other Paris signatories to join them in bringing the global agreement into effect. India remains the third largest carbon emitter globally, although its per capita emissions are much lower than those of the United States or China, so many eyes have been watching to see what New Delhi does next. But New Delhi’s next steps now look a little less clear. When Prime Minister Narendra Modi met President Barack Obama in Washington this past June, one line in the joint statement referred to the U.S. commitment to bring the Paris accord into effect this year, and that India “similarly has begun its processes to work toward this shared objective.” Yet the G20 summit produced instead talk of a “linkage” that India has made between membership in the Nuclear Suppliers Group (NSG) and accession to the Paris accord. What does the NSG have to do with Paris? Back in June, the NSG plenary meeting in Seoul, which considered membership for India, did not result in a decision. It was the group’s first formal plenary discussion of the matter, and China held back its approval, stating that Nuclear Nonproliferation Treaty accession should be a requirement. Many in India were disappointed with the non-decision outcome, criticizing the government for acting too hastily, or having failed to do sufficient diplomatic spadework before making a public bid for NSG membership. I wrote at the time that contrary to some public critique, Seoul had not been a “fiasco,” and that a membership process for a forty-eight nation organization that works by consensus could hardly be expected to happen instantly. If anything, India’s overt push for membership had demonstrated decisive leadership, and the United States and India should continue their efforts toward formal inclusion for India in the group. For its part, the United States continues to affirm its strong support for Indian membership. In the wake of the June NSG disappointment, India’s Ministry of External Affairs issued a statement that contained this sentence: “Our application has acquired an immediacy in view of India’s INDC [intended nationally determined contributions] envisaging 40% non-fossil power generation capacity by 2030. An early positive decision by the NSG would have allowed us to move forward on the Paris Agreement.” Since the NSG had issued an exemption to India back in 2008, a major step in the U.S.-India Civil Nuclear Agreement and one that opened up the possibility of civil nuclear commerce with India for any NSG participating government, it was not clear why the lack of NSG membership would hurt India’s ability to ramp up its civil nuclear power sector. But even if it did, according to one calculation by Business Standard reporter Nitin Sethi, it is not clear that the percentage of civil nuclear energy in India’s non-fossil power capacity commitments (16 GW, or 3.91 percent of its clean energy capacity commitments) would make or break its Paris commitments. Most of India’s new clean energy capacity will come from solar and wind. With this muddle as the backdrop, the news from Hangzhou that India would not be ready to ratify the Paris agreement by the end of 2016 spurred a series of fresh news reports. India’s G20 sherpa, Dr. Arvind Panagariya, went on the record stating that India was “not quite ready yet in terms of domestic actions” to ratify by the end of 2016. Some press accounts  took as fact that India had created a new diplomatic linkage between receiving NSG membership and moving ahead with Paris commitment ratification. If this is a bargaining tactic, it’s hard to see how it would be persuasive, for ratification of the Paris accord is not a “give” in exchange for something else but rather a step toward collective action to solve a global problem. If this linkage proves to be real, India loses some of the goodwill gained by its leadership last year in Paris. Count me confused on this one. Follow me on Twitter: @AyresAlyssa   Or like me on Facebook (fb.me/ayresalyssa) or Instagram (instagr.am/ayresalyssa
  • G20 (Group of Twenty)
    The G20 Hangzhou Summit: Making Globalization Work
    On September 4-5 President Barack Obama attends his final annual summit of the Group of 20 (G20) in Hangzhou, China. The event is a fitting bookend for his presidency. The very first G20 summit took place in Washington just days after Obama’s election, meaning that his administration and the G20 have grown up together. The location is also appropriate, symbolizing how rapidly the global economic landscape has shifted—and how the Sino-American relationship, however fraught, has emerged as the fulcrum for progress on the world’s most difficult problems. Expectations for Hangzhou are modest—and so they should be. The meeting occurs as the international economy is still absorbing the aftershocks of the Brexit vote and the International Monetary Fund (IMF) has downgraded projected global economic growth in 2016 to 3.1 percent. The G20, which rescued a global financial system in freefall during 2009-2010, has more recently disappointed, failing to emerge as a steering group capable of providing strategic direction for the world economy. At the working level, G20 governments have launched a dizzying array of worthwhile initiatives on matters from fuel subsidies to anticorruption, with bureaucratic structures to implement them. But G20 leaders have not complemented these technocratic efforts with vigorous efforts to persuade skeptical publics that their governments have a common strategy to advance shared global prosperity. Paul Martin, the former Canadian prime minister who presciently advocated for a leaders-level global forum in 2005, laments, “if [the G20’s] objective is to make globalization work… it has fallen short of the mark.” For the Hangzhou summit to succeed, the assembled world leaders must demonstrate their commitment to make the global economy work for all of humanity, not simply the connected few. Stuck in the Doldrums The G20 emerged out of the financial crisis, which convinced the United States and other Western nations that the “old-boy” network of the G7/G8 could no longer manage the global economy. The world needed a new leaders’ forum where major established and emerging powers could meet to hammer out common positions. By including rising powers and leveraging their resources, the world might better provide global goods like financial liquidity, while sidestepping blockages within (and eventually updating) tired international organizations. Unfortunately, the G20 has failed to become a formidable steering group or to catalyze sweeping global institutional reform. After an admirable, even heroic performance during the financial crisis, its momentum stalled, as the interests and preferences of its heterogeneous membership diverged. The G20 has not given teeth to its own mutual assessment process—a system of peer review intended to discourage members from adopting economic policies with negative consequences for other nations. Nor have G20 leaders advanced a credible, positive agenda involving robust national commitments to get global growth moving again, resorting instead to broad, banal statements of general intent in successive summit communiques. Equally disappointing has been the G20’s failure to improve cooperation on vexing political questions. When the forum was created, some naïve observers (mea culpa) anticipated that habits of cooperation would gradually help to reduce strategic rivalries, as major powers transferred their experiences of economic collaboration to more politically sensitive issues. These vain hopes exaggerated the socializing power of international institutions. What we have seen instead are deepening regional rivalries, clashing territorial ambitions, and (particularly in China and Russia) the fanning of nationalist sentiments.  From Crimea to Syria to the Scarborough Shoal, the return of geopolitics has exposed the limits of great power like-mindedness. The result is a split screen global order, in which Washington cooperates with Beijing and Moscow on certain issues even as it “pivots” to reassure its Asian allies and joins its European partners in sanctioning Russia. What is increasingly clear is that the G20’s future depends on the future of the U.S.-China relationship. This should come as no surprise. Even as the G20 was created, the U.S. policy community was abuzz with talk of a “G2”, conceived as an informal Sino-American directorate that would run the global economy. Although the Chinese quickly squashed such talk, the succeeding eight years have captured two inescapable truths: First, China is in a class by itself among rising powers. The fading economic fortunes of the other ballyhooed BRICS (with the partial exception of still lagging India), have reinforced China’s centrality. Second, whether the issue is financial stability or climate change, prior agreement between the United States and China is increasingly a precondition for major breakthroughs in international cooperation. As often as not, the most relevant high table is a table for two. What China Wants This brings us to China’s goals for the Hangzhou summit. For Beijing, the meeting offers a high-profile opportunity to showcase its arrival as a bona fide economic superpower, as well as an indispensable bridge between what the Chinese still depict as the advanced “north” and developing “south.” As part of their outreach effort, the Chinese have invited more developing countries to attend than any prior G20 summit. They include Chad (chair of the African Union), Egypt, Kazakhstan, Laos (chair of the Association of Southeast Asian Nations), and Senegal (chair of the New Partnership for Africa’s Development). The summit also signals China’s aspirations to transform itself from an export-led manufacturing nation into an innovative, technologically advanced, service-focused, and consumer-driven economy. The choice of Hangzhou as host city is no accident. Chinese president Xi Jinping himself oversaw the city’s dramatic transformation into a promising technology hub when he served as the Communist party chief of Zhenjiang province. Today the city is home to e-commerce giant Alibaba, as well as a burgeoning class of private sector entrepreneurs. For Xi, Hangzhou provides a model for national and global development in the information age. The summit agenda is sprawling. China has identified four top-level priorities: fostering innovative approaches to growth, improving global economic and financial governance, building an open world economy, and promoting inclusive and interconnected development.  But the aspirations don’t stop there. According to foreign minister Wang Yi, China seeks no fewer than ten major results. These range from setting out guiding principles for global investment to creating a new global framework for anti-corruption, supporting industrialization in Africa, and promoting the early entry into force of the Paris Agreement on climate change. Other Chinese officials list additional objectives, from mobilizing support for sustainable infrastructure to securing commitments against exchange rate manipulation. Each of these agenda items will require years (in some cases decades) of follow-up, adding to the already extensive transnational latticework of working level cooperation among relevant ministries in G20 countries. To the degree that these envisioned commitments can spur action and even innovation, as well as increase harmonization of national approaches, China’s ambitions are laudable. What is less clear is whether G20 leaders are prepared to coordinate national policies sufficiently on what should be their bread and butter: advancing the “strong, sustainable, and balanced growth” that has been the G20’s top priority since 2009. The G20 has struggled repeatedly to reach consensus about what mixture of macroeconomic tools—including monetary policy, fiscal policy, and structural reforms—are needed to create and support global demand. This lack of consensus is especially troubling today. At their recent July meeting, G20 finance ministers identified no less than “seven dangers” facing the global economy, including fluctuating commodity prices, low inflation, financial market volatility, political conflicts, terrorism, refugee flows, and Brexit. Observers will be looking at the final G20 communique for a persuasive explanation of how G20 members intend to coordinate their efforts to sustain global demand—much less address these seven looming risks. Summit-watchers will also look closely at how G20 members respond to China’s desire for a joint commitment to structural reforms. At their April meeting, G20 finance ministers endorsed a suite of measures that Beijing believes can boost global productivity and growth, including reforms to labor markets, trade and investment, and competition policy. But the credibility of any G20 commitments will depend on whether China itself is prepared to set a positive example, by further opening its own protected markets. In the end, the most important thing G20 leaders assembled in Hangzhou can do is to reaffirm their determination to pursue an international economic order capable not only of delivering growth but also of providing basic living standards and livelihoods to all citizens. Around the world, anti-globalization sentiments are ascendant, empowering populist politicians promising to put their nation first. Preserving a broadly open world economy requires convincing disillusioned publics that global capitalism can benefit more than just the owners of capital, but ordinary citizens as well.
  • G20 (Group of Twenty)
    G20, Global Health, and China
    New Yorkers who have been used to the annual UNGA sessions (which typically last two weeks and attract over one hundred heads of state and government) in September will probably have difficulty understanding why the two-day G20 summit—to be held in Hangzhou early next month—is such a big deal in China, as tight security measures appear to be causing a great deal of inconvenience to local residents. These measures can be rationalized when we take into account the fact that this will be the first ever G20 summit hosted in China and the second international summit since President Xi Jinping took the reins of the Chinese Communist Party and the military in 2012. An equally important, but less well-known factor to reckon with is the changing landscape of global governance—since the 1990s, summit-centered plurilateral institutions have become a significant forum to address major global challenges. These institutions are part of the rise of worldwide governmental and social networks characterized by less formal links among public, private, and nonprofit entities cum formal relationship among states. Unlike formal, inclusive international organizations such as the United Nations, summit-level clubs such as the G7 and G20 feature limited membership, more flexibility, and less cheap talk. The smaller number of key stakeholders in an informal, more authoritative setting not only allows for more substantive discussions over global challenges that member states have to confront, but also makes it easier for them to overcome collective action in reaching consensus and implementing decisions. As a club of the twenty largest economies in the world, the G20 accounts for 85 percent of global GDP, 75 percent of world trade, and two-thirds of the world’s population. The sheer size of its member countries’ populations and economies give the G20 more legitimacy than the G7 in global governance issues. Legitimacy of the G20 is further beefed up with the shift of its agenda toward sustainable development over the past years. Because of its role as a contributor to and a beneficiary of development, global health is integrally linked to the G20’s mandate of economic growth. The vulnerability of G20 economies to major disease outbreaks notwithstanding, an argument can be made that in the context of globalization, even development-related health issues that are noncommunicable are increasingly cross-border in nature, requiring international cooperation and collective action. In that sense, global health could be a topic that galvanizes the interest of G20 leaders. As early as 2004, when Canadian Prime Minister Paul Martin trumpeted the need for a “Leaders’ 20” or “L20” as an alternative to the G8, global health was one of the common themes under discussion. In July 2016, civil society leaders of the twenty major economies (C20) issued a communique calling for G20 leaders to achieve quality and affordable healthcare and closer international cooperation over major disease prevention and control. Yet for almost a decade, the summit has focused overwhelmingly on traditional financial and economic issues, and global health issues have been only indirectly addressed on the G20 agenda. Until 2013, the G20 had not tackled global health challenges in a substantial way other than promises to meet the Millennium Development Goals (which expired in December 2015) and to strengthen healthcare and social safety nets. Global health issues became prominent for the first time in the 2014 Brisbane summit, when G20 leaders issued a separate statement on the Ebola outbreak in West Africa. It is also encouraging that the 2015 Antalya summit began to target global health risks, including antimicrobial resistance and weak health systems as key concerns. This year, however, Beijing has made it clear that the focus of the summit will be on global economic growth. Indeed, “health” is not even mentioned once in the eighteen-page document on themes and key agenda items of the summit issued by the Chinese government. Why is that the case? The G20 was elevated to the leaders’ level as an international response toward the 2008 global financial crisis. From the very beginning, it has been viewed as a forum to discuss pressing global economic and financial issues. If we believe history matters, it makes sense to consider G20 agenda setting to be a path dependent process in which global health becomes a victim of the “lock-in” effect. Also, including global health in the G20 agenda entails member states committing extra financial resources to improving global health. As my colleague Laurie Garrett notes, since G20 is not a club of rich nations only, attending the summit is no longer viewed as “the Great Global Guilt Trip” (which gives the G7/8 nations moral incentive to contribute financially to global health), and rich nations driven by their own interests would be happy to delink global health from the summit agenda. Although global health will not feature prominently on the Hangzhou summit agenda, it is in China’s interest to play a constructive role in pushing global health as one of the key deliverables at the 2017 Hamburg summit. An area of particular interest to China and other G20 leaders is the financing of the implementation of the Paris Agreement on Climate Change and the health targets of the Sustainable Development Goals (SDGs).  China could work closely with other G20 countries to find innovative solutions to conjure the money necessary to fulfill the targets while maintaining commitments to existing programs such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and the WHO Contingency Fund for Emergencies. Against the backdrop of dwindling financial resources for global health, China’s push to expand the G20 agenda to include global health would boost its image as a global leader in tackling issues of common concern, thereby beefing up its soft power abroad. Indeed, compared to the lavish spending on the Confucius Institutes and other existing soft power projects, a global health initiative led by China would be a more cost-effective and powerful testimony to China’s benevolent intentions internationally.  
  • China
    At China’s G20, G Stands For Green
    Gabriel Walker is a research associate for Asia Studies at the Council on Foreign Relations. This is the second part of a series on China’s role in international development. Read the first part here. One month from today, leaders and policymakers from the world’s largest economies will be rubbing shoulders in Hangzhou for the eleventh annual Group of Twenty (G20) summit. For China, which presides over the group in 2016, the event is the culmination of nine months of diplomatic hard work to realize broad goals like “breaking a new path for growth” and fostering “inclusive and interconnected development.” One important development innovation that China has brought to this year’s proceedings is promoting the concept of “green finance.” Throughout the past year, China has spearheaded the meetings of the newly created “G20 Green Finance Study Group,” whose final report the G20 finance ministers and central bank governors officially welcomed into their agenda last month. One aspect of green financing in particular—fostering the nascent “green bond” market—offers China an important opportunity to display international leadership while contributing to global sustainable development. Green bonds are debt securities whose proceeds fund projects with environmental benefits. Eligible initiatives include anything from energy-efficient buildings and pollution remediation to consumer loans for clean vehicles and renewable energy infrastructure. Multilateral development banks first issued green bonds in 2007 to satisfy investors’ growing appetite for globally conscious financial products. Since then, the issuance of green bonds has grown from just $807 million to $36.6 billion. By 2020, the value of global green bonds could be as high as $1 trillion, nearly a third of which could come from China. Chinese institutions have shown a sustained interest in becoming world leaders in the green bond market. Just over a year ago, wind energy firm Xinjiang Goldwind issued China’s first green bond of $300 million—attracting sixty-seven investors who oversubscribed the bond by nearly five times. In late 2015, the People’s Bank of China (PBOC) and National Development and Reform Commission each issued their own guidelines on green bonds, establishing a relatively unified concept of how the bonds should be used to maintain environmental standards. In March 2016, China’s 13th Five-Year Plan specifically mentioned “developing green credit and bonds” as a top priority within its overall agenda for environmentally conscious industrial development. Soon after, the Shanghai Stock Exchange launched a green bond pilot initiative that requires issuers to follow specific certification, reporting, and accounting guidelines. In total, Chinese green bonds issued in the first half of 2016 amounted to 75 billion RMB ($11 billion), making China the largest market for green bonds anywhere in the world. China’s ambition for green bonds stems largely out of necessity. Ma Jun, chief economist of the PBOC’s research bureau (not to be confused with Ma Jun the environmentalist), has estimated that China needs at least $320 billion of additional capital every year to clean up domestic pollution and fund green development projects. Currently, the Chinese government is only able to meet 15 percent of that demand. Furthermore, Ma has stated that using green financing for Belt and Road projects is in the long-term interests of Chinese investment institutions. However, China is not only embracing green finance for its own purposes—it is leveraging its G20 leadership to encourage other countries to follow suit. Chinese policymakers are in a good position to further clarify and cohere the green bond market, and doing so would show leadership and bring about tangible development benefits within and outside of China. Chinese institutions can effectively formalize the international green bond market by:                   Clarifying what kinds of projects will be funded. Currently, Chinese standards allow green bond proceeds to fund clean coal projects. But should a coal-fired power plant, for example, especially one that uses relatively dirty, subcritical technology, really qualify as “green”? Chinese policymakers must either convince other stakeholders that fossil fuel–based projects are necessary for developing countries, and can be carried out with minimal environmental impact, or abandon the allowance altogether. China’s two sets of standards also differ over whether green bond revenues should fund nuclear energy projects. Determining how proceeds will be allocated. Chinese and international guidelines agree that green bond proceeds must be either earmarked or “ring-fenced” (deposited in their own account) to ensure they are used properly. However, guidelines differ in their transparency requirements for how unallocated funds are invested. Transparency is not a hallmark of Chinese financial institutions and corporations, so Chinese issuers must go above and beyond to maintain high standards for disclosure set forth by any international consensus on fund allocation. Standardizing the environmental reporting process. External reviews are crucial in maintaining the trustworthiness and reliability of green bonds for investors. Chinese and international standards encourage these reviews, but do not necessarily require them. Wholly independent and rigorous third-party “greenness” verification is essential for developing the green bond market, and Chinese policymakers should require it as the international gold standard.   September’s G20 summit is a meaningful moment for Chinese leadership on the world stage, and could also mark an important occasion for clarifying international norms of green finance. Over the past year, the Chinese government, financial institutions, and corporations have already shown their enthusiasm for green bonds. At the summit, Chinese leaders have a new opportunity to further define rules of the road for green bond project selection, proceeds allocation, and environmental reporting. Doing so would not only illustrate that China can deliver real results when leading a prominent multilateral forum, but also set the stage to mobilize vast resources for sustainable investments around the world.