Committing to fight economic slowdown and combat corruption,the G-20 leaders have expressed confidence that USD 450 billion firepower of the International Monetary Fund (IMF) would help in safeguarding financial stability and preventing global crisis.
Pointing out that global economy continues to vulnerable,the declaration issued at the end of the two-day G-20 summit here said,”this effort (to provide USD 450 billion to the IMF) shows the G-20 and the international community’s commitment to take the steps needed to safeguard global financial stability and enhance the IMFs role in crisis prevention and resolution.”
It called for collective action to deal with financial market tensions and promote trade,growth and jobs.
“Clearly,the global economy remains vulnerable,with a negative impact on the everyday lives of people all over the world,affecting jobs,trade,development,and the environment… We will act together to strengthen recovery and address financial market tensions,” said the declaration.
Among other G-20 leaders,the Summit was attended by Prime Minister Manmohan Singh who said that “my overall assessment of the meeting is that there was general agreement that policy in all countries must shift to strengthening growth… there was also general agreement that the most urgent problem we must tackle is to reduce uncertainty about the Eurozone.”
India has committed USD 10 billion as part of the USD 75 billion pledged by the five-nation BRICS bloc to the strengthen IMF’s firepower to deal with the global crisis. On the issue of corruption,which is being raised by India at different global fora,the declaration called upon the members nations and other stakeholders to play an active
role in combating the menace and deny safe havens to proceeds of such activities.
“We renew our commitment to deny safe haven to the proceeds of corruption and to the recovery and restitution of stolen assets,” the declaration said.
Corruption,it added,”impedes economic growth,threatens the integrity of markets,undermines fair competition,distorts resource allocation,destroys public trust and undermines the rule of law. We call on all relevant stakeholders to play an active role in fighting corruption.”
Referring to trade issues,the G-20 leaders expressed “deep concern” about rising instances of protectionism and expressed their commitment for “open trade and investment,expanding markets and resisting protectionism in all its forms,which are necessary conditions for sustained global economic recovery,jobs and development.
“We underline the importance of an open,predictable,rules-based,transparent multilateral trading system and are committed to ensure the centrality of the World Trade Organization (WTO). Recognizing the importance of investment for boosting economic growth,we commit to maintaining a supportive business environment for investors,” the declaration said.
The declaration also expressed the commitment of the G-20 nations to reduce imbalances and strengthen public finances of deficit nations with sound and sustainable policies and moving toward greater exchange rate flexibility.
“Despite the challenges we all face domestically,we have agreed that multilateralism is of even greater importance in the current climate,and remains our best asset to resolve the global economy’s difficulties,” it added.
Recognizing the need to pursue growth-oriented policies that support demand and recovery,the declaration said that the United States will calibrate the pace of its fiscal consolidation by ensuring that its public finances are placed on a sustainable long-run path so that a sharp fiscal contraction in 2013 is avoided.
G-20 members,it added,will remain vigilant of the evolution of oil prices and will stand ready to carry out additional actions as needed,including the commitment by producing countries to continue to ensure an appropriate level of supply consistent with demand.
“We welcome Saudi Arabia’s readiness to mobilize,as necessary,existing spare capacity to ensure adequate supply. We will also remain vigilant of other commodity prices,” the declaration added.
Against the background of renewed market tensions,it said,the Euro Area members of the G-20 will take all necessary measures to safeguard the integrity and stability of the area,improve the functioning of financial markets and address financial sector problems.
“We look forward to the Euro Area working in partnership with the next Greek government to ensure they remain on the path to reform and sustainability within the Euro Area,” it added.
The G-20 also welcomed the commitment by China to allow market forces to play a larger role in determining movements in the Remnimbi (RMB),continue to reform its exchange rate regime,and to increase the transparency of its exchange rate policy.
The member nations,it added,will endeavour to move more rapidly toward market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals,avoid persistent exchange rate misalignments,and refrain from competitive devaluation of currencies.
On reforms of the IMF,the G-20 leaders agreed to complete the comprehensive review of the quota formula,to address deficiencies and weaknesses in the current quota formula,by January 2013 and to complete the next general review of quotas by January 2014.
“We reaffirm that the distribution of quotas based on the formula should better reflect the relative weights of IMF members in the world economy,which have changed substantially in view of strong GDP growth in dynamic emerging markets and developing countries,” the declaration said.