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Leaders welcome G20 action plan Leaders welcome G20 action plan
(about 2 hours later)
World leaders have welcomed the outcome of the G20 summit that calls for further steps to shore up a global economy on the brink of recession.World leaders have welcomed the outcome of the G20 summit that calls for further steps to shore up a global economy on the brink of recession.
The meeting called for a "broad policy response", emphasising the role fiscal policy, such as tax cuts, must play in reviving economic growth.The meeting called for a "broad policy response", emphasising the role fiscal policy, such as tax cuts, must play in reviving economic growth.
Leaders said they would make progress before a second summit in April.Leaders said they would make progress before a second summit in April.
However, for all the talk of action and change, some analysts and campaigners said the outcome was disappointing.However, for all the talk of action and change, some analysts and campaigners said the outcome was disappointing.
The meeting brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others - representing 85% of the world economy.The meeting brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others - representing 85% of the world economy.
This is plain-vanilla stuff they could have agreed on without holding a meeting Simon Johnson, economist, MIT Summit pledge to 'restore growth'G20 summit: In quotesG20 declaration: Full textThis is plain-vanilla stuff they could have agreed on without holding a meeting Simon Johnson, economist, MIT Summit pledge to 'restore growth'G20 summit: In quotesG20 declaration: Full text
China said on Sunday that the meeting, which was attended by President Hu Jintao, was "conducive to the growth of the world economy" and would help reform international financial institutions.China said on Sunday that the meeting, which was attended by President Hu Jintao, was "conducive to the growth of the world economy" and would help reform international financial institutions.
"China hopes that all countries could continue to enhance co-ordination, seek consensus, substantially strengthen the financial regulation and take actions to prevent global economic recession," said foreign ministry spokesman Qin Gang."China hopes that all countries could continue to enhance co-ordination, seek consensus, substantially strengthen the financial regulation and take actions to prevent global economic recession," said foreign ministry spokesman Qin Gang.
Beijing's view had earlier been echoed by the other leaders attending the event.Beijing's view had earlier been echoed by the other leaders attending the event.
US President George W Bush said that leaders had agreed to reform global economic structures, but rejected protectionism.US President George W Bush said that leaders had agreed to reform global economic structures, but rejected protectionism.
British Prime Minister Gordon Brown said the meeting reached important conclusions about trade, financial stability and economic expansion and Germany's chancellor, Angela Merkel, said she was extraordinarily satisfied with the outcome.British Prime Minister Gordon Brown said the meeting reached important conclusions about trade, financial stability and economic expansion and Germany's chancellor, Angela Merkel, said she was extraordinarily satisfied with the outcome.
'Plain vanilla''Plain vanilla'
However, analysts said the meeting was long on promises and short on action.However, analysts said the meeting was long on promises and short on action.
"This is plain-vanilla stuff they could have agreed on without holding a meeting," Simon Johnson, an economist at the Massachusetts Institute of Technology and a former chief economist of the International Monetary Fund told the New York Times."This is plain-vanilla stuff they could have agreed on without holding a meeting," Simon Johnson, an economist at the Massachusetts Institute of Technology and a former chief economist of the International Monetary Fund told the New York Times.
"What's new, except that this is the G20 instead of the G7?""What's new, except that this is the G20 instead of the G7?"
Carl Weinberg, chief economist at High Frequency Economics, said that markets could be vulnerable after the weekend meeting because there was no clear pledge for co-ordinated tax and interest rate cuts.Carl Weinberg, chief economist at High Frequency Economics, said that markets could be vulnerable after the weekend meeting because there was no clear pledge for co-ordinated tax and interest rate cuts.
"This isn't a strong action statement on addressing the matters at hand," he told Bloomberg News."This isn't a strong action statement on addressing the matters at hand," he told Bloomberg News.
Key issues agreed by world leaders at this summit included:
  • reform of international financial institutions such as the World Bank and the International Monetary Fund
  • an agreement by the end of 2008, leading to a successful global free-trade deal
  • improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions
  • making sure banks and financial institutions' incentives "prevent excessive risk taking"
  • asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system
  • strengthening countries' financial regulatory regimes
  • taking a "fresh look" at rules that govern market manipulation and fraud.
Key issues agreed by world leaders at this summit included:
  • reform of international financial institutions such as the World Bank and the International Monetary Fund
  • an agreement by the end of 2008, leading to a successful global free-trade deal
  • improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions
  • making sure banks and financial institutions' incentives "prevent excessive risk taking"
  • asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system
  • strengthening countries' financial regulatory regimes
  • taking a "fresh look" at rules that govern market manipulation and fraud.
Poor not representedPoor not represented
Oxfam International said that many of the world's poorest and most vulnerable countries were not included in this summit, yet they were the ones likely to suffer most in a global economic downturn.Oxfam International said that many of the world's poorest and most vulnerable countries were not included in this summit, yet they were the ones likely to suffer most in a global economic downturn.
"More than two billion people were not represented at this summit, and it's critical that their voices and contributions be part of the solution to the current crisis," said Gawain Kripke, spokesperson for Oxfam International."More than two billion people were not represented at this summit, and it's critical that their voices and contributions be part of the solution to the current crisis," said Gawain Kripke, spokesperson for Oxfam International.
The group said that the action plan agreed by the G20, while reaffirming commitments to the Millennium Development Goals, did not include specific measures to ensure this.The group said that the action plan agreed by the G20, while reaffirming commitments to the Millennium Development Goals, did not include specific measures to ensure this.
However, Oxfam welcomed the pledge to reform the International Monetary Fund and said reform to its power structure was long overdue. Meanwhile, the African Union said that Africa must be consulted over any reform of the world's financial system.
"There is one problem for us, and that is that people tend to take decisions for us, without listening to us, and then impose them on us," said Jean Ping, chairman of the AU commission.
"Africa demands to be heard," he said. "We want to be listened to and we wish to take part in the decisions involving our future destiny," he added.
DifficultDifficult
Mr Bush acknowledged that it would be difficult to agree to concrete steps to revive the world economy given the number of countries that attended the summit.Mr Bush acknowledged that it would be difficult to agree to concrete steps to revive the world economy given the number of countries that attended the summit.
"Once you make the decision to have the G20, then the fundamental question is, with that many nations from six different continents, who all represent different stages of economic development; would it be possible to reach agreements?""Once you make the decision to have the G20, then the fundamental question is, with that many nations from six different continents, who all represent different stages of economic development; would it be possible to reach agreements?"
Mr Bush's successor in the White House, Barack Obama, said in a statement that he was ready to work "together on these challenges" with the G20 when he takes office in January.Mr Bush's successor in the White House, Barack Obama, said in a statement that he was ready to work "together on these challenges" with the G20 when he takes office in January.
"The president-elect believes that the G20 summit... is an important opportunity to seek a coordinated response to the global financial crisis," said a statement issued in his name."The president-elect believes that the G20 summit... is an important opportunity to seek a coordinated response to the global financial crisis," said a statement issued in his name.