G-20 meet: Consensus still eludes on outcome
  • This Section
  • Latest
  • Web Wrap
Last Updated: Friday, September 25, 2009, 00:40
Pittsburgh: As the US stepped up efforts to clinch an agreement at the G-20 Summit here tomorrow for a sustainable economic growth, countries like India are still not ready for withdrawing the global economic stimulus package as they feel it is necessary to quicken the recovery process.

Despite differences, US officials are confident that a broad consensus has been evolved at the preparatory meetings on the need for higher capital reserve requirements in banks and other financial institutions, the lack of which led to collapse of institutions last year.

A US draft of the G-20 Summit says Washington wants the other countries to agree to "mutual assessment" to be monitored by International Monetary Fund to ensure that "policies pursued by individual countries are collectively consistent with more sustainable and balanced trajectories for the global economy".

But there are countries like Germany and Brazil who have expressed reservations against the draft while China and Britain are not averse to such an agreement.

Prime Minister Manmohan Singh, who is leading the Indian delegation, is expected to put up a strong demand for continuance of the economic stimulus package to quicken the global recovery from the worst economic crisis seen since the Great Depression Of 1930s.

G20 asked to tackle banking secrecy

The Global Financial Integrity (GFI) today asked leaders of the G20 countries to pursue measures to increase transparency in global finance and curtail illicit financial flows.

"Despite the fact that wealthy nations are experiencing a recovery from the global financial crisis experts are warning that the worst may still be ahead for developing nations," said GFI director Raymond Baker in a statement.

The World Bank, he said, is predicting that 89 million additional people may be pushed into extreme poverty by the end of 2010 while the combined GDP of developed economies is projected by the United Nations to shrink by 4.1 per cent.

"In the face of these dire forecasts having an effective plan for bolstering economic development in emerging economies is crucial," Baker said.

Hours before the G-20 summit was to start in Pittsburgh, the GFI said discussions on development aid should include examination of the link between the hundreds of billions in illicit financial flows coming out of developing countries each year, lack of progress achieving poverty alleviation and development goals, and the role played by facilitating secrecy jurisdictions.

"Every year the developing world loses as much as $1 trillion to government corruption, criminal activity, and tax evasion," Baker said.

"Each country is different; depending upon the geopolitical landscape, but the result is the same, money flows abroad and disappears into secrecy jurisdictions and other points of absorption in Western economies," Baker said.

The US, he said, has indicated it considers tackling these outflows a part of "strengthening recovery in the world's poorest countries."

In a letter to colleagues by the US "Sherpa" to the G-20 Michael Froman said: "as we take steps to increase the flow of capital to developing countries, we also need to prevent its illicit outflow. "

"The loss of these funds undermines economic development efforts and forestalls good governance," Baker said. "Staunching the outflow of hundreds of billions of dollars is necessary and long overdue," he added.

Bureau Report

First Published: Friday, September 25, 2009, 00:40

comments powered by Disqus