WASHINTON, D.C—World leaders reached an agreement to stimulate the world’s economies at the G20 Summit on the Financial Market and World Economy at the National Museum Building in Washington, D.C., Nov. 15. The agreement supports free capitalism with a five page declaration statement and a 47 point action plan.
The leaders of twenty of the developed and emerging economies, as well as the heads of the World Bank and IMF, and UN Security General and Chairman of the financial form, reached a consensus on global action plan and made commitments to stimulate their respective economies. They agreed to support free capitalism with a new balanced system of financial stimulus, regulation, and global economic monitoring.
“We will focus on key agendas: understanding the causes of the global financial crisis, review the effectiveness of our response at this point, identifying principals to reforming our financial regulatory systems, launching a specific action plan, reaffirming our conviction that free market principals offer the surest path to lasting prosperity,” said President Bush in a dinner toast to welcome the world leaders at the evening prior to the summit.
According to the press briefing by Senior Administration Officials shortly after the summit, the meeting was successful in accomplishing its objectives and surpassed the expectations of the leaders present.
Senior Administration Officials outlined the key points discussed in the summit, including the importance to implement pro-growth investment and pro-growth policies to stimulate their economies. They said that a stimulus would need to have a near-term impact on a country’s economy.
“Not one single country challenged the need to stimulate our economies,” said French President Sarkozy in a press conference shortly after the summit.
“I have always argued in favor of a stimulus according to the circumstances appropriate for each country, and support the use of fiscal measures in order to stimulate internal demand with immediate results while maintaining a framework to assure that the fiscal measures are sustainable,” said Sarkozy.
Many countries have already taken actions to stimulate their economies in the past weeks, with China having announced a $586 billion stimulus package. Some financial analysts argued that it is not a clear indication of funds to distribute, as more than one third of the funds were previously allocated. China was seated two seats from the United States.
“China played a large role in the summit and was expected to play a large role… as a country with such a large GDP. I’m very happy to see the recent Chinese authorities’ shift from an export lead growth model to a consumption lead growth model, which has been recommended by the IMF,” said IMF Managing Director Dominique Strauss-Kahn. “This shift will be useful to the influence of China in the world economy.”
The summit called for an increase in the IMF’s role in the global surveillance of financial systems, including providing early warning to prevent another economic crisis. And in recognizing the IMF’s increased need of resources, some leaders have already committed to provide the IMF the financial support with Prime Minister Aso of Japan having offered $100 billion to assist in IMF lending to countries hit by the crisis.
“Not only has Europe agreed but the entire world has agreed to be in sync with one another and respond in a coordinated fashion to the economic and financial crisis,” said President Sarkozy.
However the question has been raised as to whether the next U.S. administration would be supportive of the declaration and action plan agreed on. And if they would take part in the next G-20 submit which is scheduled to take place shortly after President-elect Obama is due to take office.
“President Bush said in reference to President-elect Obama that he was being kept abreast of the details of our conversation and that he would receive a report on the final results. President Bush spoke of a strong Obama administration,” said President Sarkosy.
The leaders of twenty of the developed and emerging economies, as well as the heads of the World Bank and IMF, and UN Security General and Chairman of the financial form, reached a consensus on global action plan and made commitments to stimulate their respective economies. They agreed to support free capitalism with a new balanced system of financial stimulus, regulation, and global economic monitoring.
“We will focus on key agendas: understanding the causes of the global financial crisis, review the effectiveness of our response at this point, identifying principals to reforming our financial regulatory systems, launching a specific action plan, reaffirming our conviction that free market principals offer the surest path to lasting prosperity,” said President Bush in a dinner toast to welcome the world leaders at the evening prior to the summit.
According to the press briefing by Senior Administration Officials shortly after the summit, the meeting was successful in accomplishing its objectives and surpassed the expectations of the leaders present.
Senior Administration Officials outlined the key points discussed in the summit, including the importance to implement pro-growth investment and pro-growth policies to stimulate their economies. They said that a stimulus would need to have a near-term impact on a country’s economy.
“Not one single country challenged the need to stimulate our economies,” said French President Sarkozy in a press conference shortly after the summit.
“I have always argued in favor of a stimulus according to the circumstances appropriate for each country, and support the use of fiscal measures in order to stimulate internal demand with immediate results while maintaining a framework to assure that the fiscal measures are sustainable,” said Sarkozy.
Many countries have already taken actions to stimulate their economies in the past weeks, with China having announced a $586 billion stimulus package. Some financial analysts argued that it is not a clear indication of funds to distribute, as more than one third of the funds were previously allocated. China was seated two seats from the United States.
“China played a large role in the summit and was expected to play a large role… as a country with such a large GDP. I’m very happy to see the recent Chinese authorities’ shift from an export lead growth model to a consumption lead growth model, which has been recommended by the IMF,” said IMF Managing Director Dominique Strauss-Kahn. “This shift will be useful to the influence of China in the world economy.”
The summit called for an increase in the IMF’s role in the global surveillance of financial systems, including providing early warning to prevent another economic crisis. And in recognizing the IMF’s increased need of resources, some leaders have already committed to provide the IMF the financial support with Prime Minister Aso of Japan having offered $100 billion to assist in IMF lending to countries hit by the crisis.
“Not only has Europe agreed but the entire world has agreed to be in sync with one another and respond in a coordinated fashion to the economic and financial crisis,” said President Sarkozy.
However the question has been raised as to whether the next U.S. administration would be supportive of the declaration and action plan agreed on. And if they would take part in the next G-20 submit which is scheduled to take place shortly after President-elect Obama is due to take office.
“President Bush said in reference to President-elect Obama that he was being kept abreast of the details of our conversation and that he would receive a report on the final results. President Bush spoke of a strong Obama administration,” said President Sarkosy.
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