G-20 and the Real Economy: Bridging the Divide

Forward

The financial crisis that first rocked advanced economies in 2007, and whose aftershocks continue to reverberate around the world, mobilized G-20 policy makers to devise new rules aimed at mitigating risk in the global economy.  It also led many businesses to seek new business models and recalibrate investment decisions in light of the expected shifts in the policy environment in all major markets.  Concerned entrepreneurs around the world welcomed G-20’s resolve to create a more resilient global financial architecture.  However, while each new policy tries to address specific risks and perceived market vulnerabilities, the convergence of the new regulations on the non-banking sector is akin to experiencing a very long and drawn out earthquake, where the familiar ground of running a business is constantly shifting.  Indeed, the two responses to the crisis – one by wealth creators and the other by wealth regulators – have not been in sync.

In recognition of this growing divergence, business federations across the G-20 countries redoubled their efforts to integrate business perspectives in G-20 policy-making processes.  Our efforts are beginning to meet with some success.  Although companies realize that final regulations and policies  will be imperfect, the worst case scenarios feared by many companies are now less likely – at least by government mandate.  However, conflicts continue to arise between and among various G-20 inspired reforms which may leave companies effectively choosing between two or more evils.

This booklet attempts to bridge the gap between the world as envisioned by shell-shocked regulators and that experienced by companies in major markets.   By tapping into the membership and insights of the most representative business federations across the G-20 countries, our goal is to draw policy-makers’ attention to how their decisions affect the ways in which businesses compete, invest, grow or fail. 

Any further divergence between political expectations, regulatory responses, and the reality of creating jobs, executing on business vision, and delivering value in goods and services will crimp growth prospects in G-20 economies.  The business community recognizes its responsibility to let policy makers peer into their world; a world characterized by the pressure of the markets, an unwavering ambition to compete globally, and the daily struggle to generate economic growth.