Clare Walsh, a senior official in the Australian Department of Foreign Affairs and Trade and the chair of the Development Working Group of the G-20, recently visited CGD for a round-table discussion with CGD senior staff. Afterwards I hosted her and CGD senior associate, Scott Morris, a former senior US Treasury official, on the Wonkcast.
Having closely followed the creation of the G-20 Development Working Group during Korea’s G-20 presidency in 2010, I was eager for an update what the group’s current agenda. I also wanted to delve more deeply into something that has puzzled me: just how do the deliberations of the Working Group—which is comprised of smart, well-informed and well-intentioned folks like Clare and Scott—translate into changes in the policies of the G-20 member nations?
Among the outcomes of the 2010 Seoul Summit was the Seoul Consensus (named deliberately to contrast with the older Washington Consensus), which included nine pillars, ranging from such issues as infrastructure, trade and financial inclusion to food security and knowledge sharing.
The agenda has since become more sharply focused and under Australia’s presidency, which will culminate in Leaders’ Summit in Brisbane, Queensland, in mid-November, the focus will be on three key areas:
Increasing financing for infrastructure investment in developing countries by encouraging the right conditions to attract private sector investment in developing economies.
Ensuring that developing countries can reap the benefits of the G20’s efforts to improve the international tax system, including in combatting base erosion and profit shifting and increasing the information shared between tax authorities.
Assisting developing economies to expand the use of formal financial services and take action to reduce the cost of transferring remittances into developing economies.
All well and good, I say, but just how do ideas such as these get translated into real-world change?
“You shape the initiative over a series of meetings and you can actually deliver something at the end,” Clare explains. “There’s no one size fits all. The first thing put on the table will be one country’s perspective, but then it gets molded” by ideas and comments from the representatives of other countries, she explains.
Scott, who participated in G-20 Development Working Group meetings when he was working at Treasury, adds that although representatives go into meetings with clear marching orders from their respective governments, “there is a balancing act of having sufficient flexibility to have a meaningful negotiation.”
The working group’s emphasis on domestic resource mobilization will focus on how to eliminate base erosion, or the loss of domestic tax funds as a result of illicit financial flows, an area where CGD research fellow Alex Cobham and others at CGD have been actively involved in both research and policy dialogues, including especially recent work on the automatic exchange of tax information.
Topping the G-20 development agenda, however, is infrastructure—an issue on which everybody seems to agree that much more is needed.
“Infrastructure is a top priority for the G-20, full-stop.” Clare says. “The Development Working Group is taking its cue from the G-20 as a whole and focusing on barriers to private investment in infrastructure.”
Clare explains: “There is obviously an issue around foreign direct investment and why private sector isn’t investing to the level that many of these countries would like. There’s also some issues around project preparation. What’s the pipeline of support? How is support being provided at the national, and even at the regional levels, so that you have good quality projects being developed in a timely way that can attract investment?”
Scott, who in February published a list of Five Ways to Breathe New Life into the G-20 Infrastructure Agenda, says he is heartened to see infrastructure given such prominence in the Development Working Group and the wider G-20 agenda.
“I think that speaks well of the G-20’s approach to development because it is the right priority, but it’s also a good example of where the G-20 can bring value to a complex issue,” he says.
For more on the G-20 Development Working Group and what to expect from the Brisbane Summit, tune into the full Wonkcast.
My thanks to Kristina Wilson for recording and editing the Wonkcast, and for a first draft of this blog post.