Economic implications dire unless G20 solves growth problem

Tuesday, 11 November 2014  Media Alerts

​"The world has an economic growth problem," said Professor Richard Holden​ from the UNSW Business School ahead of the meeting of 20 largest countries in the world in Brisbane.

"If the world economy does grow as robustly as it did in the pre-2008 era then the economic and social implications are dire. It means significantly less worldwide poverty reduction, lower incomes and higher unemployment than previously anticipated."

In response to the global financial crisis from 2008 onwards, the G20 meeting promised coordinated economic stimulus to stave off the worst of the recession.

"Countries that undertook serious stimulus weathered the financial crisis much better than those that did not," said Richard Holden, a Professor of Economics at the UNSW Business School and an Australian Research Council Future Fellow from 2013 to 2017.

The G20 includes members in both camps. However a vital lesson that the world has learnt is that austerity failed everywhere it was tried."

The G20 meeting itself will discuss important topics such as tax-dodging by large companies and promises for better infrastructure. Coordinating action on profit shifting by companies to avoid tax is also likely to be a hot-button topic.

There is also a logjam in global trade talks, with the governance of the World Trade Organisation called into question.

He said, "one of the biggest drivers of global growth in the last 50 years has been international trade. Continued reduction of tariff and non-tariff barriers is crucial for continued growth and prosperity."

Professor Richard Holden from the UNSW Business School can comment on the overall balance or deficit, education, social programs, taxation and political economy.