Читать книгу Economics of G20 - Группа авторов - Страница 39

As the chapter discusses, the growth of per capita income had declined after the financial crash of 2008. Subsequently, there has been recovery. However, the average growth rate during the period 2011–2016 is lower for all income groups and regions except for the low-income group. The growth in 2016 is lower than in 2014 when the commitment to raise growth rates was made (Table 1). The decline in growth rates is the most for the LICs and the least developed group. Disparities are also increasing.

Furthermore, the latest projections from the World Bank (Global Economic Prospects, January 2018) show that there is very little likelihood of meeting the Brisbane target of raising growth by 2% (Table 1). In fact, the growth rates are only marginally higher than those achieved before the promise, and for many countries, the growth rates are actually lower.

Table 1. Growth in Per Capita Income

Note: The historical data are from the World Bank World Development Indicators. The projections for 2018 and 2020 are from the World Bank, Washington, DC. Global Economic Prospects, January 2018.

The current account balances for most developing regions have deteriorated, mainly because of poorer export performance. As this is true for the members of the G20, they have either not lived up to their commitments or their commitments were inadequate to meet their stated objectives. The monitoring process seems to concentrate only on the inputs, namely whether the promised actions were actually undertaken. The monitoring process does not sufficiently concentrate on the actual outcomes. The situation is worse because usually a worsening of the current account presages a lowering of the growth rate. Furthermore, the poorer export performance raises the question of where the impetus for growth would come from. This could be of major importance for Latin American countries as growth in the region is highly correlated with growth in other regions and this correlation is getting stronger.

For all the income groups and regions, gross fixed capita formation (GFCF) as a percentage of GDP was lower in 2016 than in 2014, except for SSA where it was the same (Table 2). For high- and low-income countries and for the least developed countries, share of GFCF in 2014 was higher than the average of 2012–2014. This is also the case for the regions of MNA and SSA. This suggests that before 2014, GFCF had been on a rising trend that has since been disrupted. For other regions and income groups, GFCF in 2014 was lower than that in 2012; so GFCF was already on a declining trend and this has continued since 2014. There seems to be some basic structural features that are leading to declining GFCF and these basic features have not yet been dealt with, perhaps not even identified. Similarly, only for three countries, Mexico, Saudi Arabia and Turkey, investment as a share of GDP is higher in 2016 than in 2014.

Table 2. Gross Fixed Capital Formation (% of GDP)

Source: World Bank World Development Indicators.

The communiqués from the different summits stress the need for mobilising resources from the private sector for both infrastructure investment and for small and medium-sized enterprises (SMSEs). There have been few instances in recent decades of large private sector investment in infrastructure. These are usually long-gestation projects on which it is difficult to levy high enough user charges to justify the investment. Also, these are often projects where the social return is much larger than the private return. It might be difficult to mobilise sufficient private capital. There is also an additional problem in that given the low returns, large-scale infrastructure investments may lead to a debt crisis. Furthermore, large figures are thrown as to the infrastructure needs. But are such numbers really needed right now? Or they are more hopes based on the very high quality infrastructure needed when economies have grown for a period. In addition, it must be remembered that the infrastructure can be used for consumption purposes or to support production. But if investment gets too skewed towards infrastructure, there might not be enough investment in production facilities. Investment in infrastructure may be at the expense of investment in machinery and equipment, lowering growth rates and the need for the infrastructure.¹