G20’s New Lead Role In Global Economic

PITTSBURGH: The Group of 20 rich and developing nations promised to give rising powers such as China more say in rebuilding and guiding the global economy, and declared their crisis-fighting efforts a success on Friday.

Leaders pledged to keep emergency economic supports in place until sustainable recovery is assured, launch a framework for acting together to rebalance economic growth, and implement tougher rules governing banks by 2012.

“Here in Pittsburgh, leaders representing two thirds of the planet’s population have agreed to a global plan for jobs, growth and a sustained economic recovery,” British Prime Minister Gordon Brown said after a two-day summit.

U.S. President Barack Obama’s first turn hosting a major summit ended on an upbeat note, with leaders claiming victory in stopping the recession from turning into a depression.

“It worked,” they said in the final communique. “Our forceful response helped stop the dangerous, sharp decline in global activity and stabilize financial markets.”

Obama said, “We cannot tolerate the same old boom-and-bust economy of the past. We can’t wait for a crisis to cooperate. That’s why our new framework will allow each of us to assess the other’s policies, to build consensus on reform, and to ensure that global demand supports growth for all.”

The Pittsburgh gathering was the third summit in a year for the G20, which said it would now be the “premier forum” for economic cooperation, supplanting the Western-dominated G7 and G8 that were the primary international forums for decades.

“This is a symbolic act of inclusion of immense importance to international politics,” said Colin Bradford, senior fellow at the Brookings Institution in Washington. “There is tremendous significance to the history being made today that this decision does not enlarge the G7 but replaces it.”

Others were more skeptical. “I think the G7 is something of a zombie — very hard to kill,” said Simon Johnson, a former IMF chief economist. “They have a lot of inter-connections … but obviously at the summit level, they are gone.”

The move was a clear acknowledgment that fast-growing countries such as China and India now play a much more important part in world growth.

“This movement to the G20 and away from the G7 is recognizing economic realities. You can’t talk about the global economy without having the major dynamic emerging economies at the table,” John Lipsky, the deputy managing director of the International Monetary Fund, told Reuters Television.

Disclosure of a second Iranian uranium enrichment plant gave Obama, with the leaders of Britain and France at his side, an opportunity to press for united action against Tehran over its disputed nuclear program.

Obama said Iran was “on notice” that it must choose when it meets with world powers in Geneva on Oct. 1 whether it would “continue down a path that is going to lead to confrontation”.

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G20’s New Lead Role In Global Economic was first posted on September 26, 2009 at 1:25 pm.
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