New Delhi: The Group of Twenty (G-20), which accounts for about 80% of the world’s gross domestic product (GDP), has emerged as one of the most potent global forums working towards restoring stability in financial markets and boosting economic growth. Following the G-20 meetings in Brazil and the US recently, member-countries are set to meet once again in London next year.
Stephen Timms, financial secretary to the UK treasury, is currently visiting member countries to understand their views and make sure they are reflected in the agenda for the London meeting. In an interview, Timms talks about possible developments in the run-up to the London summit. Edited excerpts:
Give us an overview of the situation in the run-up to the next G-20 meeting.
The decisions by the G-20 leaders in Washington, an unprecedented meeting, agreed we should work together to restore growth and achieve performance in the world’s financial system, and we see the G-20 meeting in London on 2 April (2009) as a really key opportunity to help find a way out of the economic crisis. We are very keen to work closely with India to maximize the chances of success coming out of the summit.
Looking foward:Timms says the G-20 finance ministers’ meeting in London could be a key opportunity to help find a way out of the economic crisis and to maximize the prospects for success. Ramesh Pathania / Mint
We have emphasized the importance of international coordination and collaboration and that is where the G-20 is the forum that gives us a chance to achieve the cooperation and collaboration that we need.
There will be a G-20 finance ministers’ meeting ahead of that (summit), sometime in March, also in London. What I am here to do is to make sure we are preparing thoroughly with our G-20 partners, understanding fully their perspectives in order to maximize prospects for success in what are going to be really crucial historic decisions.
You have stressed on avoiding protectionism at this point in time. South Korea and Brazil are the other countries, in addition to the UK, in charge of preparing agenda papers for the forthcoming summit. What is the sense you get from the other two on the subject?
I think there is pretty broad consensus on the need to avoid protectionism. We all understand there are forces that would request for some protectionism. Our view is that this is a critically important moment to achieve a trade deal to achieve a successful outcome to the Doha Round (of World Trade Organization talks). And in the next few days there is a window here we really want to take advantage of. My sense is that there is a broad view that that is the right thing to do.
What are the prospects of a successful conclusion to the Doha Round?
There is a fair chance now. There are some genuinely difficult and sometimes complex issues that need to be resolved. This is a really big prize for the world economy if we can seize it.
What is the timeline you have set yourself? By the end of this calendar year?
Even after the Washington G-20 meeting we still haven’t got a clear picture of the kind of new financial architecture emerging.
We have four working groups (from the November Washington round), one of them on IMF (International Monetary Fund) and one on the World Bank. It reflects the degree of importance we attach to this. I am particularly interested in talking to people here about IMF because I know that is an area where there are some strong views. More importantly, we have made good progress in reaching a common understanding about the financial stability forum. It is accepted now it is the right thing to do. India will be a member of the financial stability forum.
That is quite an important step forward along this reform road.
Can you give us a broad sense of the architecture of the financial stability forum?
The financial stability forum already exists, it has a narrow membership at the moment. I think it is now clear that Brazil, India and China will have memberships. That is an important step forward. It is something that came very clearly at G-20 finance ministers’ meeting in Sao Paulo in Brazil in October.
How were the talks with the Indian government this time?
My sense is that India is very positive about the G-20 forum. We are going to want to carry on working very closely with Indian government between now and 2 April.