This paper outlines a strategic agenda proposed by Russia for the G20 in 2013 and highlights the specific priorities of the Russian G20 Presidency. Its purpose is to serve as a guide for the preparation of meetings and documents throughout the year, as well as objectives for the G20 Leaders' Summit in Saint Petersburg, September 5-6 2013. Russia will do its best to reach tangible results on the most pressing issues on the global agenda by setting a stage for thoughtful discussions.
Section 1 describes the overall state of global economy and formulates the role of the G20 in solving the global problems.
Section 2 presents the priority topics of the Russian Presidency. Russia sees ensuring continuity and providing additional impetus to the ongoing activities of the G20 as one of its main tasks. At the same time, the section provides an opportunity to understand Russia's viewpoint and become aware of the specific focus areas proposed by Russia among the traditional areas of concern. In addition, Russia puts forward several new discussion topics. Section 2 also depicts general approaches of the Russian Federation to its G20 Presidency. It contains a discussion of the core principles that Russia would like to promote in the G20, as well as Russia's vision of how the G20 working process should be organized in 2013.
Finally, Section 3 and Annex contain the description of the major G20 official events, and a preliminary calendar of the key seminars and events scheduled to be held throughout the year of the Russian Presidency.
Global economy continues to grow at a subdued pace. In the advanced economies, risks seem largely self-inflicted and can only be resolved through political compromise. The "fiscal cliff " in the U.S. has turned into a "cliff-hanger". If an appropriate solution is not reached to avert it, the economy's improving fundamentals could be stymied in 2013. At the same time, a balanced resolution of the budget impasse could accelerate next year's growth momentum.
Economic equilibrium and growth in the Eurozone can only be achieved through sustainable resolution of the debt crisis. The region is in a tightening vise, caught between fiscal austerity and opposing parties' limited commitment to alternatives (whether monetary or political). So far, the worst effects have been avoided, but there is a need to continue implementing a long-term strategy.
Emerging economies' growth expectations are being adjusted to these new global realities and to the shifts in their own domestic trends. Nevertheless, they remain vulnerable to a growing list of economic and geopolitical uncertainties. As a result, conditions and prospects in certain regions continue to diverge.
The global recovery remains extremely fragile with weak, unbalanced growth and large downside risks. To provide an adequate response, concerted international efforts must be directed at addressing these vulnerabilities and ensuring that governments implement the required policies to restore inclusive and sustainable growth. The G20 has played an important role during the crisis and is looked upon for guidance in turbulent times. Russia is convinced that we should embrace this responsibility. Complacency must give way to redoubled efforts to affirm the G20's status as one the most important global fora, and to ensure that the G20 is capable of leading by example.
The G20 has repeatedly shown its solidarity and efficiency in sending positive signals in times of unfolding economic turmoil. Now it is high time for us to recognize the significance of multilateral coordination at a time when a new wave of the crisis is imminent, but has yet to emerge. Moreover, positioning the G20 as the world's premier forum for economic cooperation requires joint efforts in the interests of our people as a steering group for the global economy with a broader vision, rather than in the mode of a short-term crisis manager. In our view, the most valuable contribution from the G20 in this sense would be to demonstrate the political will, intellectual wisdom and practical readiness to find efficient solutions. The concrete form such a demonstration could be is in the G20's commitments on policy coordination, and strict compliance with them.
The core objective of the Russian Presidency is to concentrate the efforts of the G20 - the forum of the world's largest economies - on developing a set of measures aimed at boosting sustainable, inclusive and balanced growth and jobs creation around the world.
Prospects of weak global growth lie at the root of several of the world's economic problems, including a deterioration of fiscal outlooks and bank balance sheets. Low confidence levels are affecting private consumption and investment, having a negative effect on employment. The structure of the G20 work program for 2013 will address these challenges.
Russia is convinced, that common goals of shared global growth can be attained, and restored confidence can be established among different elements of the global economy. We believe that reinvigorating economic growth basing on a solid foundation of intensified financing for investment is the key goal for our combined future efforts, as well as for measures adopted unilaterally.
Addressing major challenges to global economy is a traditional focus of the G20 agenda. Putting the growth as the main goal of the Russian G20 Presidency, we will ensure continuity of the dialogue, and attach extra impetus to the G20 discussion, facilitating further implementation of the G20 commitments and building on the achieved results. The overall agenda for the G20 in 2013 comprises both the legacy from previous Presidencies and several new ideas proposed by Russia. Russian points of emphasis in the "traditional" areas of the G20 activities will be clearly viewed.
The discussion of the whole range of the closely intertwined items of the G20 agenda has been planned around the three overarching priorities, all focused on igniting a new cycle of economic growth. We also look upon them as the three watchwords for the Russian G20 Presidency:
- Growth through quality jobs and investment;
- Growth through trust and transparency;
- Growth through effective regulation.
These 3 priorities of the Russian Presidency will serve as a lens through which we propose to consider and discuss the G20 agenda in 2013, comprising eight areas of the primary focus of public attention:
1) Framework for strong, sustainable and balanced growth;
2) Jobs and employment;
3) International financial architecture reform;
4) Strengthening financial regulation;
5) Energy sustainability;
6) Development for all;
7) Enhancing multilateral trade;
8) Fighting corruption.
To support the Russian Presidency's focus on boosting economic growth and job creation, two new topics will be proposed for discussion, including Financing for investment and Government borrowing and public debt sustainability.
Figure 1. The three-dimensional growth agenda for the G20 proposed by the Russian Presidency, top three priorities are at the roof of the temple, with subtopics of each area given in the columns.
We believe the proposed approach could yield tangible results, establishing a solid base for addressing all the issues on the agenda. We as well recognize the importance of establishing well-structured dialogue to enhance the working process and come to tangible results.
In terms of the working process, Russia counsels "prudent orientation" and pragmatism for the G20 process, and advocates streamlining the working formats and activities to ensure result-oriented performance.
Accordingly, during its Presidency year Russia intends to limit the scope of ministerial involvement in the G20 processes to the traditional meetings of Finance Ministers and Central Bank Governors. However, on a single occasion the Presidency's innovation in the form of a joint meeting of Finance and Labour Ministers will be put on trial. For the first time the G20 Ministers of Labour and Finance will meet to increase the feasibility of the measures developed to facilitate job creation.
In 2013, Russia is planning to lead the G20 in close cooperation with Mexico and Australia, its partnering economies in the Troika. We view the legacy of Mexico, our predecessor, as highly relevant to Russia's objectives in 2013, and we will proactively share our experience with our Australian successors.
Finally, the result-oriented approach promoted by Russia for the G20 requires extensive consultations with a very broad range of external stakeholders. By enhancing our Outreach dialogue with non-G20 states, international organizations (with a special focus on engaging the United Nations), business circles, labour unions, civil society, future leaders, academia and think-tanks, we will not only ensure legitimacy, transparency and efficiency of the G20, but also expand our vision, come up with better solutions, and generate cross-sectoral synergy to enhance the public benefit of the G20.
A durable solution to the challenges presently faced by the global economy requires effective policy measures. The narration that follows contains brief introduction into the priority topics outlaid by Russia for the G20 in 2013.
Decisive actions have been undertaken by G20 to restore and strengthen global growth and to put it on the sustainable path. Nevertheless, global economic recovery is still fragile and large downside risks to the outlook remain, thus spurring the need for in-depth analysis of economic policies and well-coordinated actions of the G20's member economies.
One of the priorities of the Russian Presidency is to address this problem through further development of the Framework for Strong, Sustainable and Balanced Growth. The Framework Working Group (FWG) will address the following topics:
- Revision of country-specific medium- and long-term public debt targets and develop strategies to achieve them;
- Enhancement of the Accountability Assessment Process by extending the number of indicators to enable more comprehensive and precise macroeconomic analysis;
- Analysis of the persistent imbalances among the G20 members in fiscal, monetary, exchange rate and structural policy domains.
At least two group meetings are planned for January and July of 2013, complemented by conference calls. By the end of the year the FWG aims at delivering the G20 Saint Petersburg Action Plan, which will assess key global risks for sustainable growth and set out policy actions that should be taken by member countries to mitigate these risks. An updated report on the persistent imbalances in the G20 economies, as well as an enhanced Accountability Assessment framework, and a review of the progress on the previous G20 commitments will also be presented.
Financing for investment is a key precondition for economic growth and a principal factor for job creation. However, following the global economic and financial crisis of recent years, the levels of various types of investment have declined significantly, especially in the developed countries. The main task of the G20 is to foster such an environment that would be more conducive to financing for investment and identifying new sources for long-term investment in the current global economic landscape, in order to contribute to strong, sustainable and balanced growth. The Russian Presidency is planning to provide room for fruitful discussion on possible ways and practical steps to increase the amounts and effectiveness of financing for investment. We suggest analyzing public policy in this sphere, the role of private-public partnerships (PPPs) and non-traditional sources of long-term financing, debt and equity markets, as well as FDIs. The G20 efforts will be focused on the impact of the financial regulatory reforms on financing for investment, banking sector capabilities and barriers, multilateral and national development banks, international reserves, among others. Jointly with a large group of major international organizations (World Bank, IMF, OECD, FSB, UN, etc.) the G20 will exert much effort, which might lead to the following results to be presented at the G20 summit in September:
- Strengthened public policy and improving PPP in terms of promoting financing for investment;
- Elaborated measures to support investments in small-and-medium enterprises and start-up businesses;
- Measures to meet capitalization needs of global banks;
- Recommendations on regulatory changes that would bring about change in banking business models towards funding the real economy;
- Analysis of the role of possible sources of financing for investment (institutional investors, equity markets, government guarantees);
- Analysis of FDI trends, patterns and impact to maximize their growth enhancing capacity;
- Recommendations on how to increase MDBs' lending capacity.
Active steps undertaken by the G20 countries to overcome the negative consequences of the global financial and economic crisis have led to improving labour market conditions in most countries. However unemployment and under-employment are still on the rise in some countries, creating severe strain on workers and their families. One of the priorities of the Russian Presidency is to overcome this problem by facilitating job creation. The Task Force on Employment (ETF) will lead the effort to address the following topics:
- Job creation through sound monetary and fiscal policies, structural policies to foster innovation and promotion of smaller enterprises;
- Labour activation for the vulnerable groups;
- Monitoring of labour market development and progress on the previous G20 commitments.
Three Task Force meetings are planned: in February, June and October 2013. A special meeting of Ministers of Labour jointly with Ministers of Finance is organized in July. By the end of the year, the ETF aspires to deliver:
- A declaration of the G20's Labour Ministers;
- A database of best practice policies to facilitate job creation and labour activation;
- A set of recommendations on policies to stimulate job creation and labour activation;
- A progress report on implementation of the G20 commitments related to youth employment.
The recent global financial crisis has revealed gaps and deficiencies in the International Financial Architecture (IFA). Addressing these gaps is one of the main priorities of the G20. IFA Reform is a topic that includes a wide range of issues:
- Governance and legitimacy of the international financial institutions;
- Presence and efficiency of multilateral standards, guidelines and recommendations;
- Issues of global liquidity, capital flows, reserve currencies, exchange rates, etc.
IFA Reform should lay the foundation for a stronger global economy and achieve a well-balanced and efficient IFA to prevent the next crisis. To do that the Russian Presidency proposes to work towards further increasing the efficiency and legitimacy of the IMF governance structure. The implementation of the IMF's 2010 Quota and Governance Reform will be particularly challenging. It will secure doubling the IMF quota resources and reviewing the IMF quota formula in order to adequately reflect the current weights of its members. We will also work on strengthening the IMF surveillance framework and multilateral analysis, including the assessment of spillover effects and developing global liquidity indicators. The G20 will also be encouraged to continue working on further development of the Regional Financial Arrangements and strengthening of their cooperation with the IMF. Continuing the implementation of the G20 Action plan to support development of local currency bond markets will also be an important topic. In this context the Russian Presidency will deepen work on government borrowing and public sustainability issues. The IFA Working Group aspires to achieve the following results by the end of 2013:
- Completed IMF' 2010 Quota and Governance reform;
- The review of the IMF quota formula and implementation of the 15-th general review of quotas by January 2014;
- Progress in developing global liquidity indicators;
- Completed implementation of the Action Plan to support the development of local currency markets;
- Further development of RFA and establishment of close cooperation between them and the IMF;
- Reviewed "Guidelines for Public Debt Management", which were introduced by the IMF and World Bank for the first time in 2001.
To prevent the resumption of the world crisis it is important to strengthen financial regulation. One of the G20's main tasks is to solve this problem by providing the Financial Stability Board (FSB) with favorable conditions to carry out its reforms. The FSB will lead a group of international standard setting bodies in an effort to address the following topics:
- Monitoring of Basel III implementation among its members;
- Adoption of the methodology for the selection of, and apply a supervisory regime to, domestic systemically important financial institutions (D-SIFIs);
- Promotion of shadow banking regulation;
- Development of the global legal entity identifier (LEI) system;
- Reduction of mechanistic reliance on Credit Rating Agency (CRA) ratings;
- Completion of the over-the-counter derivatives reform;
- Completion of the FSB transformation into a full-fledged international organization and specification of its internal governance rules and procedures.
The working plan will be closely linked to the key G20 events and the current FSB activities. By the G20 Saint Petersburg Summit we expect to have in place:
- The institutionalization process for FSB;
- Further development and monitoring of the "too-big-to-fail" regulatory framework, including a peer review of the FSB's recovery plans and cooperation agreements for all global SIFIs and the implementation of identification principles and prudential measures relating to domestic systemically important banks (D-SIBs);
- Adoption of policy recommendations to strengthen regulation of the shadow banking sector;
- Preliminary results of the launch of the global legal entity identifier (LEI) system.
Energy sector is a crucial growth engine for G20 members and the world economy as a whole and a key to unlocking world sustainable development. The Energy Sustainability Working Group (ESWG) will lead the effort to address the following topics:
- Making energy and commodity markets transparent and more predictable;
- Promoting energy efficiency and green growth;
- Sound regulation for energy infrastructure;
- Ensuring global protection of the marine environment.
Two ESWG meetings are planned at least for February and June of 2013. They will be complemented by extensive consultations throughout the year. By the end of 2013 the ESWG aspires to deliver:
- Finance Ministers' progress report on the G20's contribution to enhancing transparency and functioning of international commodity and energy markets;
- Recommendations for setting up a framework for forecasting commodity market volatility;
- Draft principles for efficient energy markets regulation to stimulate infrastructure investments and integrate green growth and sustainable development priorities into structural policies;
- Recommendations on the voluntary peer review process for fossil-fuel subsidies;
- A progress report on JODI-oil, and an initial overview of the launch of JODI-gas;
- A draft plan for a best practice database of green energy and energy efficiency policies and management approaches used by members of the G20;
- A fully operational GMEP website as a tool to implement the Global marine environment protection initiative.
Building infrastructure and providing inclusive access to basic amenities are required to spur economic growth. Therefore, the Russian Presidency has positioned development as one of its priorities. The Development Working Group (DWG) is planning to structure its work around the following topics:
- Food security with a focus on agricultural production increase and undernutrition;
- Human resource development with a focus on a global skills database;
- Financial inclusion with a focus on financial literacy and access to financial services by women, migrants and the youth;
- Infrastructure with a focus on long-term financing;
- Active participation in creating a post-2015 development agenda;
- Development of an accountability mechanism to assess progress on the previous G20 commitments.
The group is planning to meet four times: in February, May, July and October of 2013. By the G20 Summit the DWG aspires to prepare draft Saint Petersburg Development Action Plan and G20 Development Working Group Accountability Report to be endorsed by the Leaders.
Hardly could anyone argue that mutually beneficial trade policies are crucial for fast global recovery. One of the Russian Presidency priorities is to strengthen multilateral cooperation in order to find global solutions to the current economic difficulties and risks, and to avoid situations that create trade tensions among the G20 countries. Progress in the Doha negotiations is also vital to meet these goals. With these considerations in mind, the G20 needs to push forward the strong demand for developing trade and investment as a growth driver, and the strong multilateral trading system as a necessary condition for it. Today we are expected to contribute to finding ways to solve the issues on the Doha round agenda and lead the effort to address the following issues:
- Curbing protectionism;
- Strengthening and development of the multilateral trade system;
- Global value chains.
A wide range of joint activities of the G20 and other relevant international fora are scheduled for 2013 with major checkpoints in July (release of the 9th WTO OECD UNCTAD Report on the G20 Trade and Investment Measures) and December (WTO Ministerial conference). Before the Leaders' Summit in Saint Petersburg will be presented:
- A reflection on the 9th WTO OECD UNCTAD Report on the G20 Trade and Investment Measures;
- Briefs on addressing protectionism and strengthening the multilateral trade system.
Corruption is a great obstacle for effective growth of the global economy. One of the main priorities of the Russian Presidency is to fight corruption in an efficient and intransigent manner. The Anti- Corruption Working Group (ACWG) will continue its work on the issue, structured around the following topics:
- Start implementation of the G20 Anti-Corruption Action Plan 2013-2014. Guidance will be sought and a number of focus areas will be pursued, including in promoting UNCAC, further independence of anti-corruption agencies, interdicting foreign bribery, combating money laundering and proceeds of corruption, denial of entry for corrupted officials, and other areas of the Action plan;
- Anti-corruption training to build a corruption-free society;
- Deepening the engagement of business community;
- Financial transparency and disclosure for public officials;
- Eradicating corruption in major international events.
Three ACWG meetings are planned: in February, April, and October of 2013. By the end of the year the ACWG aspires to develop:
- The Third Monitoring Report on the implementation of the G20 Anti-Corruption Action Plan;
- G20 Anti-Corruption Training Course;
- Recommendations on proper conduct related to major international events.
G20 Leaders' Summit is scheduled for September 5-6th, and will take place at a famous historical site - Konstantinovsky Palace at Strelnya.
Throughout the year of its Presidency Russia is planning to hold five Sherpas' meetings, five meetings of Ministers of Finance, a joint meeting of Ministers of Finance and Labour, meetings of working groups, and several side-events aimed at supporting the G20 agenda.
Russia also sees much reliance on Outreach as the key to the success of the year of its Presidency, and will promote extensive Outreach dialogue with various categories of stakeholders. Outreach consultations will start as early as in December, 2012. Final Outreach events are scheduled to be held in June, 2013.
Russia has launched a special website, where all the latest news and information concerning the calendar and venues of the events, as well as official papers and other relevant information is published.
ACWG: Anti-Corruption Working Group
CRA: Credit Rating Agency
DWG: Development Working Group
EME: Emerging Market Economy
ESWG: Energy Sustainability Working Group
ETF: Task Force on Employment
EU: European Union
FDI: Foreign Direct Investment
FSB: Financial Stability Board
FTA: Free-Trade Agreement
FWG: Framework Working Group
G8: Group of Eight
G20: Group of Twenty
GMEP: Global Marine Environment Protection
IFA: International Financial Architecture
ILO: International Labour Organization
IMF: International Monetary Fund
JODI: Joint Organizations Data Initiative
LEI: Legal Entity Identifier
MDB: Multilateral Development Bank
NGO: Non-Governmental Organization
OECD: Organization for Economic Cooperation and Development
PPP: Private-Public Partnership
RFA: Regional Financial Arrangements
RTA: Regional Trade Agreement
SIFI: Systemically Important Financial Institution (D-SIFI: domestic SIFI)
WTO: World Trade Organization
UN: United Nations
UNCAC: United Nations Convention Against Corruption
UNCTAD: United Nations Conference on Trade And Development