G20 sum­mit this year to con­trib­ute to global eco­nomic gover­nance

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As the world econ­omy con­tin­ues to face new and tough chal­lenges in 2016, ex­perts en­vi­sion this year’s G20 sum­mit, sched­uled for Septem­ber in Hangzhou, China, will play a key role in boost­ing world eco­nomic growth and im­prov­ing global eco­nomic gover­nance.

WORLD ECON­OMY FACES CHAL­LENGES

The su­per easy mone­tary poli­cies im­ple­mented in some Western coun­tries in re­cent years have stag­nated their re­forms and stalled their eco­nomic growth. Italy, one of the G20 mem­bers, is plagued this year by new and old prob­lems, such as a slug­gish growth, heavy debt, high un­em­ploy­ment, and a se­vere cri­sis in the bank­ing sec­tor.

Cur­rently, Italy’s debt to­tals US2.63tril­lion (F$5.45tr), and its un­em­ploy­ment rate rose to 12 per cent last year from 8.4 per cent in 2010. Mean­while, Bri­tain’s and Ger­many’s eco­nomic growth are ham­pered by their do­mes­tic po­lit­i­cal or so­cial prob­lems. Bri­tain will hold a ref­er­en­dum to de­cide whether it will re­main within the Euro­pean Union (EU) or not; the un­cer­tain out­come of the ref­er­en­dum un­der­mines con­fi­dence in Bri­tain’s, and even Europe’s, eco­nomic growth. And the refugee cri­sis has be­come the tough­est prob­lem fac­ing Ger­many’s eco­nomic growth, and an­a­lysts say that Ger­many’s eco­nomic growth would suf­fer a fur­ther set­back if the prob­lem is not tack­led prop­erly. The econ­omy of the United States, a key mem­ber of the G20, is re­cov­er­ing, but this does not ben­e­fit all Amer­i­cans. Or­di­nary Amer­i­cans’ in­comes have been drop­ping and the wealth gap in the coun­try is widen­ing fur­ther.

Ac­cord­ing to statis­tics, real in­comes of US house­holds have slid over the past 15 years, and the la­bor force par­tic­i­pa­tion rate has reached record lows over the past decades. A sus­tain­able growth of the U.S. econ­omy, ex­perts say, is not guar­an­teed. Mean­while, some de­vel­op­ing mem­bers in the G20 are see­ing a re­duc­tion in im­ports and a shrink­ing man­u­fac­tur­ing sec­tor, be­cause of his­tor­i­cal fac­tors or eco­nomic slow­downs in de­vel­oped coun­tries. And the de­pre­ci­a­tion pres­sure on their cur­ren­cies is mount­ing amid an an­tic­i­pated in­ter­est rate hike by the US Fed­eral Re­serve. For ex­am­ple, Ar­gentina is fac­ing a de­pre­ci­a­tion pres­sure as its for­eign re­serves slump due to slid­ing com­mod­ity prices on the mar­ket. Ar­gentina is also ex­pe­ri­enc­ing an in­creas­ing fis­cal deficit and swelling in­fla­tion be­cause of its ex­pan­sive fis­cal poli­cies and money sup­ply. Xin­hua

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