G20 puts up a joint front, seeks bigger role for emerging economies
10 Nov 2008
Finance ministers and central bank governors from the Group of 20 (G20) major industrial and emerging economies ended their annual meeting in Sao Paulo pledging ''all necessary steps'' to tackle the global financial crisis and an increased role for developing countries in global economic affairs.
A joint communique issued at the end of the summit, however, made no specific proposals to tackle the current financial crisis nor did it detail proposals on the devolution of economic power.
''We agreed that we must draw policy lessons from the current crisis and take all necessary steps to restore market confidence and stability and to minimise the risk of a future crisis," a joint statement issued at the end of the two-day summit said.
''Global crisis requires global solutions and common set of principles," the statement said, adding, ''we stand ready to urgently take forward work and actions agreed by our leaders."
Brazilian finance minister Guido Mantega, current chair of the G20, said there was agreement on joint and coordinated action, greater regulation of financial markets and on measures needed to regain financial stability.
G20 officials also agreed on infusing liquidity through tax cuts and increased government spending to avoid a recession and pledged better coordination among governments and financial institutions.
Participants at the G20 summit called for a rapid response mechanism to signs of national and international crisis and also discussed the need for fiscal incentives to enterprises.
The summit agreed on the need to overhaul the Bretton Woods system set up in 1944 as it was no longer relevant to the current international financial scenario.
This would mean restructuring at the the World Bank and the International Monetary Fund.
The IMF, World Bank and other multilateral lending agencies ''have an important role to play, consistent with their mandates, in helping to stabilise and strengthen the international financial system, advancing international cooperation for development and assisting countries affected by the crisis," the statement noted.
''We underscored that the Bretton Woods Institutions must be comprehensively reformed so that they can more adequately reflect changing economic weights in the world economy and be more responsive to future challenges," the statement said.
"Emerging and developing economies should have greater voice and representation in these institutions," it added.
The agreements arrived at the Sao Paulo meeting will be discussed further at the summit of the G20 heads of state in Washingtom on Friday and Saturday.
The members of the G-20 are the finance ministers and central bank governors of 19 countries - Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. The European Union is also a member, represented by the rotating Council presidency and the European Central Bank.
To ensure global economic fora and institutions work together, the managing director of the International Monetary Fund (IMF) and the president of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.
The G-20 brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world's population.
