Document Actions
What's New
London summit pledges to boost global economy
G20 leaders in London have pledged an additional trillion-dollar stimulus package to boost global economy. They have also reiterated their commitment to assist less developed countries to achieve their MDGs and assured of pursuing sustainable development to tackle climate change.
N. Ravi
London: Leaders of the world’s largest economies at the G20 summit in London pledged additional $1.1 trillion in resources for the International Monetary Fund and other multilateral institutions to boost global growth.Addressing the media at the end of the summit, British Prime Minister Gordon Brown said this would be in addition to the fiscal stimulus packages that the individual countries had unveiled that would total $5 trillion by the end of next year.
There was agreement on the biggest stimulus package in history, the biggest interest rate cut, the biggest infusion of resources into multilateral institutions and the biggest boost to trade finance in history, he said.
The leaders agreed to treble the resources available to the IMF to $750 billion and support the allocation of new Special Drawing Rights of $250 billion, support at least $100 billion in lending by multilateral development banks that will be available to all members and ensure $250 billion in trade finance while allowing the IMF to sell gold and provide concessional finance to the poorest countries.
Brown said there was “substantial agreement” on the need to do whatever it took to restore growth. The outcome represented the “collective action of people working together at their best.”
The summit for the first time agreed on a set of principles to reform the global banking system. The shadow banking system including hedge funds would be brought under the regulatory regime and new accounting stands would be formulated.
In a strong move against tax havens and banking secrecy, the leaders warned “we stand ready to deploy sanctions to protect our public finances and financial system” and declared, “The era of banking secrecy is over.” They noted that the Organisation of Economic Cooperation and Development had on the day of the summit published a list of countries assessed against the international standard for the exchange of information.
They would in addition put in place new rules on pay and bonuses in the financial institution that do not reward failure.
Addressing the issue of rising protectionism in different countries, they reaffirmed the commitment made at the Washington summit last November to refrain from raising new barriers to investment or trade in goods and services, importing new export restrictions or implementing measures to stimulate exports that are inconsistent with World Trade Organisation rules.
They would also minimise any negative impact on trade and investment that may arise from their domestic fiscal policy actions and said they would not retreat into financial protectionism.
The leaders called upon the WTO and other international bodies to report publicly on the adherence of all countries to these commitments. They also called for “an ambitious and balanced conclusion” to the Doha round of trade talks that could boost the global economy by at least $150 billion a year.
In addition, they pledged to assist the less developed countries to meet the Millennium Development Goals and “lay the foundation for a fair and sustainable world economy.” The fiscal stimulus packages would also be directed to ensuring a green, low carbon recovery.
Source: The Hindu
