WISDOM POOL: G20 leaders discussed global issues including the economy, food security and environment protection at their fourth summit in Toronto, Canada (LI XUERE)
At their recent summit in Toronto, leaders of the Group of 20 (G20) major economies reached consensus on a series of crucial issues ranging from reducing fiscal deficits to opposing protectionism.
The summit, held from June 26-27, focused on the theme of "recovery and new beginnings." It was the first G20 summit in its new capacity as the premier forum for international economic cooperation, as set out at the Pittsburgh summit in the United States in September 2009.
Advanced economies promised to halve their deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016, said a declaration at the conclusion of the Toronto summit.
While countries with fiscal deficits take action to boost savings, countries in surplus would carry out reforms to lessen reliance on external demand by exploring domestic sources of growth.
The G20 also agreed to take measures to improve transparency and regulation of hedge funds, credit rating agencies and over-the-counter derivatives.
The declaration did not include any agreement on a global banking levy or financial transaction tax proposed by some Western countries.
Regarding the reform of international financial institutions, the declaration said the G20 would try to strengthen the "legitimacy, credibility and effectiveness" of these institutions.
For instance, the G20 endorsed World Bank reforms to increase the voting power of developing and transition economies by 4.59 percent since 2008.
The group urged the International Monetary Fund (IMF) to complete its quota reform by the next G20 summit in November in Seoul. At the Pittsburgh summit, it was agreed to shift at least 5 percent of IMF quota to developing countries.
The G20 also pledged to improve the international financial institutions' senior leadership selection processes.
Commitment to fighting protectionism and promoting trade and investment was reaffirmed.
To this end, the G20 committed, until the end of 2013, to refraining from raising barriers to investment or trade, imposing new export restrictions or implementing export-stimulating measures that would not be consistent with World Trade Organization rules.
G20 leaders decided on schedules for two future meetings, to be held in November 2011 in France and in 2012 in Mexico.
In a speech at the Toronto summit, Chinese President Hu Jintao called for shifting the focus of the G20 from coordinating stimulus measures to balancing growth and from addressing short-term contingencies to promoting long-term governance.
G20 members should give support to countries suffering from sovereign debt crises, he said. They should promote the reform of international financial regulation to establish an international financial system conducive to the growth of real economy.
While upholding the consistency of regulatory principles, Hu said, differences in various countries' financial markets should be taken into account. G20 members should also help enhance the IMF's capacity so that it can strengthen supervision over macroeconomic policies of all parties, particularly economies issuing major world reserve currencies, such as the U.S. dollar.
More importantly, they should work to build an open and free global trade regime and trade disputes should be resolved through consultations.
Speaking of China's role in helping address the financial crisis, Hu said China has made contributions to regional and global economic recovery by implementing its economic stimulus package plan and providing assistance to developing countries.
For instance, China contributed $50 billion to the IMF funding increase in the wake of the financial crisis, asking the money primarily be used to help the least developed countries.
China set up a $10-billion China-ASEAN (Association of Southeast Asian Nations) Investment Fund, in addition to providing $15 billion in loans to ASEAN countries.
It extended a $10-billion loan to member states of the Shanghai Cooperation Organization. It also offered $10 billion in concessional loans to African countries, while canceling debts owed by poorer ones.
To make long-term sustainable development of the world economy possible, it was imperative the world help developing countries to realize their full potential for development, Hu said.
G20 members are obligated to take concrete steps to ensure the UN's Millennium Development Goals—including an end to poverty and hunger, universal education and gender equality—are achieved on schedule by 2015, he said.
Established in 1999, the G20 consists of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the UK, the United States and the EU.
Members of the G20 account for 90 percent of global economic output, 80 percent of world trade and two thirds of the world's population.
In November 2008, as the financial crisis was raging across the world, the G20 gathered for its first meeting in Washington, D.C. The leaders achieved common understanding of the root causes of the global crisis, while promising to strengthen cooperation in fighting protectionism and promoting economic growth. They also worked out an action plan to tackle global financial and economic problems.
At their second summit in London in April 2009, the G20 promised to provide $1.1 trillion in funding to the International Monetary Fund (IMF), the World Bank and other multilateral financial institutions. The group also agreed to strengthen financial supervision and regulation.
On the reform of financial institutions, G20 leaders decided to establish a Financial Stability Board with a strengthened mandate to succeed the Financial Stability Forum. The new board is tasked with monitoring macroeconomic and financial risks in collaboration with the IMF.
In September 2009, G20 leaders gathered in the U.S. city of Pittsburgh. They agreed to increase the quota share to emerging markets and developing countries at the IMF by at least 5 percent and the voting power for developing and transition countries at the World Bank by at least 3 percent. They also designated the G20 as "the premier forum" for international economic cooperation.
(Source: Xinhua News Agency)