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G20 vows to work together on global economic crisis

Nov 16, 2008 08:26 AM IST India India

Washington DC: The two-day Summit of global leaders has ended on Saturday with a call for concerted action to tackle the financial crisis. World leaders had gathered in Washington DC to back a series of measures to kick-start the global economy with better financial market regulation and more say for emerging countries.

World leaders have mooted plans for a strong regulatory mechanism to bring transparency in financial system and stimulate growth.

Prime Minister Manmohan Singh asked world leaders to refrain from protectionism. He says the economic crisis has seriously affected developing countries like India.

He has sought international guarantees to protect growth of developing economies. He asked the developed economies to adopt a multi-faceted approach to tide over the current economic crisis.

Singh mooted a coordinated global fiscal stimulus to help mitigate the severity and duration of the recession to give a strong signal to investors worldwide.

Singh told the world leaders at the G-20 summit, convened by President George W Bush, that there was a need for a credible system of multilateral surveillance that can signal the emergence of imbalances as the crisis was "far from over".

The economist-turned politician made a prescriptive address covering various areas needing urgent attention like reforms of the multilateral financial institutions to enhance concessional flows, a caution against protectionist policies and changes in the global financial architecture to avoid recurrence of the crisis.

In his five page address at the plenary session of the day-long summit, Singh also sought a mechanism of consultation that can yield results in terms of policy coordination.

Cautioning that a slowing down of growth in developing countries would push millions of people into poverty, Singh said, "These are not transient impacts but will impact a full generation."

"It would be a great pity if this growing support for open policies in the developing world is weakened because of a failure to protect developing countries from a recession which is not of their making. We need to take urgent steps to strengthen the global trading system and forestall any protectionist tendencies which always surface in times of recession," PM Manmohan Singh said.

"Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims," he added.

"India is experiencing this negative impact. After growing at close to 9 per cent per year for four years, our growth rate is expected to slow down to between 7 per cent to 7.5 per cent in the current financial year," Manmohan Singh informed the Summit.

He was heard with rapt attention by leaders including Bush, British Prime Minister Gordon Brown, French President Nicolas Sarkozy, Japanese Prime Minister Taro Aso and Russian President Dimitry Medvedev.

US president George W Bush hosted the powers of the 20th Century joined the heads of new economic heavyweights like China and oil-rich Saudi Arabia for the summit.

"I thought this was a very successful summit," said Bush. "We recognize on the one hand there's been a severe credit crisis and on the other hand our economies are being hit hard and so there was a
common understanding that we promote a pro growth economic policy," he added.

"Our nations agreed that we must make the markets more transparent," Bush concluded.

Meanwhile, leaders said they would continue to work toward stimulating economic demand.

The final 3,600-word announcement endorsed several stimulative measures, including interest rate cuts by central banks around the globe or potential economic stimulus packages.

The meeting is expected to pave the way for more work in coming months and another summit in early 2009 when a newly installed US president Barack Obama could consider potentially far-reaching changes to the financial system.

G-20 leaders said they would meet again by the end of April next year to review the progress on the initiatives announced.