The Group of 20 leaders could not set aside their differences on crucial aspects of coordinating a global fiscal stimulus plan and keeping a tight leash on the worlds banking system but agreed today to add an extra $1.1 trillion as loans and guarantees into the international economy by 2010-end. The goal,as British Prime Minister and Chairman of the London Summit Gordon Brown said,was to prevent a global recession. This is the day that the world came together,to fight back against the global recession. Not with words but a plan for global recovery with a clear timetable, said summit host British Prime Minister Gordon Brown. US President Barack Obama called the agreements a turning point in our pursuit of global economic recovery. However,Brown added that there was no quick fix and that the $1.1-trillion top-up to a $5-trillion fiscal stimulus already underway demonstrated the G20 leaders willingness to do whatever it is necessary to create more jobs,expand trade and grow the economy. These measures,a final communique,said would raise world output by four percent by the end of next year. For emerging markets such as India,hard hit by a sharp deceleration of capital inflows,the G20 agreed to make available an additional $850 billion through institutions such as the World Bank,Asian Development Bank and International Finance Corporation. This will help finance counter-cyclical spending,bank recapitalisation,infrastructure,trade finance,balance of payments support,debt rollover,and social support, Brown said. Indias tough position on protectionism,however,did not cut much ice with the global leaders. When pointed out that 17 of the 20 members of the G20 had taken protectionist measures since the November 15 Washington summit,Brown almost dismissed it. He said the World Trade Organisation Director-General Pascal Lamy informed the leaders that these infringements are not serious. But the G20 did say it wanted an early conclusion of the Doha round of trade talks that is estimated to boost the economy by $150 billion a year. China,on the contrary,stood out among developing countries having agreed to contribute $40 billion to increase the International Monetary Funds resources. Japan and the European Union chipped in with $100 billion each. With $1 trillion invested in United States treasury bills and with another $2 trillion in reserves,Chinas economic clout was apparent. It strongly demanded an increase in the IMFs quota,which has been agreed to,recognizing the changing global order. Significantly,to prevent a walkout by France President Nicholas Sarkozy,the G20s most significant decision perhaps was to clamp down on tax havens,something that India has never been able to impress upon the developed world. This is the beginning of the end of tax havens, said Brown. The leaders statement also committed to taking actions against non-cooperative jurisdictions,including tax havens. The era of banking secrecy is over. The OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of information, it said. The leaders also signed off on plans to tighten financial rules to bring hedge funds and credit rating agencies under closer supervision. Leaving regulation of the world banking system to be thrashed out between Brown and the Finance Ministers,the G20 leaders said they would meet again later this year to take stock of the movement further. From london,the big push • IMF resources trebled from $250 billion to $750 billion • New special drawing rights allocation of $250 billion • $100 billion of extra lending by multilateral development banks • Support of $250 billion for trade finance • Tax havens to be blacklisted,financial rules tightened • More oversight of hedge funds,credit rating agencies
