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WASHINGTON, D.C.: World leaders agreed on an action plan to restore
global growth and prevent future financial upheaval at a crisis
summit here, promising spending plans, a trade deal and reforms.
“One of the key achievements was to establish
certain principles and take certain actions for adapting our
financial systems to the realities of the 21st century,” US
President George W. Bush told a post-summit press conference.
He noted that one of the important agreements
reached during the summit was to “reject protectionism and refrain
from erecting new trade barriers.”
A final statement from the leaders on Saturday
(Sunday in Manila) after one of the biggest international economic
gatherings in years pledged responses on a number of fronts, with
another meeting scheduled for April to flesh out policies.
Government spending plans are to be used to
reverse immediate economic decline, a global trade deal is to be
promoted to guard against protectionism, and financial regulation
and world financial institutions are to be reformed.
“We are determined to enhance our cooperation
and work together to restore global growth and achieve needed
reforms in the world’s financial systems,” the G20 said after
the crisis summit here.
The meeting of the Group of 20 nations, which
represent 85 percent of the world economy, was convened by outgoing
President Bush to tackle the financial crisis that is seen as the
worst since the 1930s.
Commitment to reforms
While weeks ago some had talked expansively of
redrawing the financial system in a “Bretton Woods II” overhaul
in Washington, D.C. the final communiqué amounted to a commitment
to keep working on reforms.
The G20 leaders tasked their finance ministers
with drawing up a series of recommendations by March 31 to be
brought before a new summit in April, at a location to be announced
shortly.
Six areas will be specifically targeted:
Regulating those parts of the financial markets that have
exacerbated the crisis, boosting transparency and reforming “fat
cat” compensation practices.
The ministers, from the industrialized and
emerging world, must also evaluate global accounting norms and the
financing needs of international financial institutions.
Finally, they must draw up a list of financial
institutions whose collapse would imperil the global financial
system.
IMF and World Bank
Bush said the leaders had agreed that both the
International Monetary Fund (IMF) and World Bank, the two main
international financial institutions created in 1944 in Bretton
Woods, should be modernized.
“We should reform the international financial
institutions. Again, these institutions have been very
important—the World Bank, IMF—but they were based on an economic
order of 1944,” he told a press conference.
Britain, which will chair G20 starting January,
deemed the summit a start of the road to the new Bretton Woods,
referring to the 1944 meeting in New Hampshire, where the
international monetary protocols were created to govern trade,
banking and other financial relations among nations.
British Prime Minister Gordon Brown told
reporters “it is absolutely clear that we are trying to build new
institutions for the future.”
Meanwhile, Japanese Prime Minister Taro Aso
voiced support for a dollar-centered currency system, despite
growing concern about the troubled global financial mechanism.
“Our prime minister stressed that no currency
but the dollar can be used as a key currency,” a Japanese
government official told reporters.
World Bank chief Robert Zoellick complimented
leaders for working to “lay a productive foundation” for
recovery.
“But the poorest developing countries must not
be left out in the cold. We will not solve this crisis, or put in
place sustainable long-term solutions by accepting a two-tier
world,” he said in a statement.
“If we are going to avert a human crisis, we
will have to do more,” he added.
“The [United Nations] Secretary-general
welcomes the Declaration of the Summit on Financial Markets and the
World Economy, held in Washington, D.C. today, which committed
leaders to joint action,” said a statement from UN chief Ban
Ki-moon’s office.
He hailed the stimulus programs as an
opportunity to promote “green economic development,” and
expressed support for renewable energy, conversion to more
carbon-friendly systems, and investing in climate change adaptation
measures in the most vulnerable developing economies.
Finance policeman
The final communiqué was also significant in
what it did not include. There was no mention of the creation of a
global financial market enforcer as demanded by some European and
emerging countries but opposed by the US.
“Regulation is first and foremost the
responsibility of national regulators who constitute the first line
of defense against market instability,” the G20 statement stated.
There was no reference to coordinated stimulus
packages from governments either, an idea promoted by Britain.
The final agreement said leaders would use
“fiscal measures to stimulate domestic demand to rapid effect.”
“I believe that you will see in the next few
weeks significant further announcements [of tax and spending plans]
by a number of countries,” Brown said at a press conference.
The meeting of G20 countries, rather than the G7
group of rich countries favored in the past, reflects the rise of
emerging economies and their increasingly important role in the
world economy.
The summit, which convened leaders from
Argentina, Australia, Brazil, Britain, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi
Arabia, South Africa, South Korea, Turkey and the United States, the
European Union and the Bretton Woods Institutions, namely the
International Monetary Fund and the World Bank, ended with a
declaration, vowing to enhance cooperation to restore global growth
and achieve needed reforms in the world’s financial system.
Seamless transition
Despite the consensus for the broad ideas of the
communiqué, the summit was severely hamstrung by the absence of the
man of the moment: US President-elect Barack Obama.
The Democrat sent former secretary of state
Madeleine Albright and ex-Republican lawmaker Jim Leach to meet with
members of visiting delegations on his behalf.
Bush, who bid an emphatic “goodbye” at the
end of his press conference, said he had told fellow leaders that
the United States would enjoy a “seamless” transition to
Obama’s new team.
WTO talks
The summit also concluded with a pledge to
revive World Trade Organization talks begun in 2001 on a new global
deal.
The last attempt to clinch a deal in the Doha
Round of talks, intended to boost global commerce by lowering trade
barriers, fell apart in July in Geneva.
-- AFP And Xinhua
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