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‘G-20 to warn against complacency on economy’

‘G-20 to warn against complacency on economy’
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First Published: Wed, Jun 23 2010. 05 07 PM IST
Updated: Wed, Jun 23 2010. 05 07 PM IST
Washington: The Group of 20 major economies will warn against complacency in tackling the global economic crisis and say that sickly public accounts could hit long-term growth, a draft G-20 document shows.
The draft version of the summit communique, obtained by Reuters and drawn up ahead of a G-20 leaders meeting this weekend in Toronto, reflected the different views within the G-20 on how to proceed with economic policy.
The draft, dated June 11, said the recovery was “uneven and fragile” with unemployment at unacceptable levels. “There is no room for complacency,” it said.
At the same time, it said “fiscal challenges in many states are creating market volatility, and could seriously threaten the recovery and weaken prospects for long-term growth.”
The United States has argued for continued stimulus spending by governments to ensure the global economic recovery does not fizzle out.
Other countries, such as Germany, intend to cut spending quickly in order to bring down public debts and deficits.
“Further actions are still required to address the underlying causes of the global financial crisis and promote more responsible and transparent banking sectors,” it said, without spelling out further details.
Reforms of banking around the world, along with ways to ensure the recovery of the global economy, are high on the agenda of this weekend’s summit.
The draft said the G-20 would push for conclusion of a long-delayed world trade deal and would pledge to extend a commitment not to raise barriers to investment or trade for three more years, through 2013.
G-20 nations converge on Canada on 26 June-27 June as Europe fights a debt crisis and the United States battles persistently high joblessness.
The summit also comes days after China dropped the controversial peg of its currency to the dollar, a step long called for by the United States and other countries as an important part of the push to rebalance the global economy.
The draft communique is likely to be negotiated and amended by leaders at the summit.
The G-20 groups the world’s biggest economies and covers two-thirds of the world’s population. In includes Australia, Argentina, Brazil, Indonesia, Japan, Mexico, Russia, Korea, Saudi Arabia, South Africa, and Turkey in addition to the big European economies, the United States and Canada.
Trade, Economic Progress
One concrete agreement among the leaders involved trade. The group praised itself for avoiding the temptation to put up trade barriers during the economic meltdown and said it would continue to work to bring them down.
“We renew for a further three years, until the end of 2013, our commitment to refrain from raising new barriers to investment or trade in goods and services, implementing World Trade Organization (WTO)-inconsistent measures to stimulate exports, or imposing new export restrictions or other barriers,” it said.
“Where any protectionist measures have been enacted in the context of the economic crisis, we agree that these should be lifted.”
It also pledged again for a renewed push to complete world trade talks known as the Doha Round.
“Bringing the WTO Doha Development Round to a successful conclusion as soon as possible is more important than ever,” it said. “Each of us is ready to make contributions, and we pledge to empower fully our negotiators to undertake the give-and-take necessary to move into endgame negotiations.”
The leaders would their direct trade ministers to present a plan outlining the “way forward” in the talks at the next G-20 summit in November in Seoul, it said.
The draft touched on moves to fight corruption and climate change, but it focused mostly on the economy, including the bright spots since the last G-20 met last in Pittsburgh.
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First Published: Wed, Jun 23 2010. 05 07 PM IST
More Topics: G-20 | Economy | Summit | Public debt | Banking |