The second Group of 20 (G20) Summit concluded in London on Thursday with consensus on how to get the world out of the financial crisis, including pledge of 1.1 trillion U.S. dollars to revive the world economy, a joint call to fight protectionism, and concrete actions to tighten banking regulations.
In a post-summit Leaders' Statement, the G20 leaders emphasized that "the only sure foundation for sustainable globalization and rising prosperity for all is an open world economy based on market principles, effective regulation, and strong global institutions."
The G20 leaders pledged to do "whatever necessary" to restore confidence, growth, and jobs; repair the financial system to restore lending; strengthen financial regulation to rebuild trust; fund and reform international financial institutions; promote global trade and investment and reject protectionism, and build an inclusive, green and sustainable recovery.
Chinese President Hu Jintao (4th L, 1st row), and other leaders attending the Group of 20 summit, and top officials from relevant organizations pose for group photos in London, Britain, April 2, 2009
"By acting together to fulfill these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future," said the statement.
British Prime Minister Gordon Brown addresses a news conference at the end of the Summit of the Group of 20 Countries (G20) on world economy at ExCel exhibition center in London, April 2.
For people around the globe, the new commitments by the world leaders are an important boost to restore confidence in their fight against the financial and economic crisis.
HUGE FUNDS TO FINANCIAL INSTITUTIONS TO STIMULATE JOBS, GROWTH
Among the additional funds to be injected into international financial institutions, 500 billion dollars will go to the International Monetary Fund (IMF) for it to lend to countries hit hard by the financial crisis, 250 billion dollars will be used to support a new Special Drawing Rights (SDR), 100 billion dollars will support additional lending by the multilateral development banks, and 250 billion dollars will be devoted to guarantee trade finance.
Chinese President Hu Jintao (2nd R) talks with British Prime Minister Gorden Brown (R) as they prepare to pose for a family photo during the Group of 20 summit in London, Britain, April 2, 2009
Of the additional funding for the IMF, 40 billion dollars will come from China, 100 billion from the EU, and 100 billion from Japan, according to Brown.
Chinese President Hu Jintao attends the Group of 20 summit in London, Britain, April 2, 2009.
"Together with the measures we have taken nationally, this constitutes a global plan for recovery on an unprecedented scale," said the statement, adding that the G20 leaders are confident that the agreements reached Thursday will accelerate the return to trend growth.
United States President Barack Obama addresses a news conference at the end of the Summit of the Group of 20 Countries (G20) on world economy at ExCel exhibition center in London, April 2.
With the newly pledged funds, the G20 leaders agreed to make the possible best use of investment to achieve a goal of building a resilient, sustainable and green recovery.
French President Nicolas Sarkozy addresses a news conference after the Summit of the Group of 20 Countries (G20) on Financial Markets and World Economy at ExCel exhibition center in London, April 2.
As Brown pointed out that trade is the "engine of growth," 250 billion dollars will be injected to stimulate trade to boost the economic recovery of countries hit by the crisis.
However, the meeting failed to agree on any new stimulus measures, which the United States had been hoping for.
Meanwhile, the G20 leaders spoke out their opposition to trade protectionism and determination to promote and facilitate global trade and investment, and remained committed to a quick conclusion of the Doha Round of world trade talks as soon as possible.
"We reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports," said the Leaders' Statement.
To ensure a "fair and sustainable recovery for all," the summit reaffirmed the commitment to meeting the UN Millennium Development Goals and to achieving ODA (official development assistance) pledges, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa.
STRENGTHENED FINANCIAL SUPERVISION, REGULATION
The G20 leaders agreed to take action to build a stronger, more globally consistent, supervisory and regulatory network for the future financial sector to rebuild trust in the financial system.
They agreed to establish a new Financial Stability Board (FSB) with a strengthened mandate as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain and the European Commission. The FSB will collaborate with the IMF to provide an early warning of macroeconomic and financial risks and the actions needed to address them.
The leaders agreed on extending regulation and oversight to all systematically important financial institutions, instruments and markets, including systematically important hedge funds for the first time.
They reached consensus on taking action against non-cooperative jurisdictions including tax havens, and agreed to publish a list of tax havens. "The era of banking secrecy is over," said Brown.
They also agreed on extending regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice, particularly to prevent unacceptable conflicts of interest.
POSITIVE REATION FROM MAJOR COUNTRIES
U.S. President Barack Obama called the London summit as "historical" and "a turning point" as "unprecedented and comprehensive" actions will be taken to revive the world economy.
Speaking at a press conference after the summit, Obama highly praised results of the meeting. The G20 have made enormous strides to improving financial regulation, but needs to reform failed regulatory systems and must put an end to bubble and bust economy.
French President Nicolas Sarkozy also expressed his satisfaction with the final results, while German Chancellor Angela Merkel called the results "a very good, almost historic compromise" that will give the world a clear financial markets architecture.
Dutch Prime Minister Jan Peter Balkenende told BBC that said it has been "a remarkable meeting" and the results "are extremely important."
South African President Kgalema Motlanthe, who country is the only representative in the G20, told reporters he was "quite pleased" with the meeting results, citing that the leaders had agreed to protect financing for developing countries and pledged to conclude talks on a new global trade deal.
For people around the world, what is important next is to see how words turn into action.
"These commitments made by G20 leaders must be translated into concrete action. With this unprecedented stimulus package I am quite confident that we will be able to overcome this economic crisis," said UN Secretary-General Ban Ki-moon after the meeting.
According to Brown, the G20 leaders are scheduled to meet again before the end of this year to review progress on their commitments.Source:Xinhua