On the eve of the G20 summit slated for Thursday in London, major developed and developing countries have come up with a host of proposals for tackling the current financial crisis and economic downturn.
At the summit, participating leaders are expected to seek agreement on what fiscal and monetary measures should be adopted to restore growth, what regulatory changes are needed to make to the financial system, and how to reform such international organizations as the International Monetary Fund (IMF) and the World Bank.
While the two major economies in the G20 bloc, the U.S. and the European Union (EU) share consensus over the above issues, they differ over which goes first and how to implement the measures.
The U.S. is eager to put economic stimulus measures on the top agenda of the summit, fearing being slow in action would risk further economic slumps. U.S. Secretary of Treasurer Timothy Geithner recently called on other countries to commit two percent of their GDP to extra spending to stimulate growth.
The EU, on the other hand, holds a much cooler stance, saying there is no need for new fiscal stimulus measures. Instead, it proposes strengthening fiscal surveillance, reforming the international financial system, and establishing a more efficient surveillance system.
The two economic powers also differ over the amount of funding needed to replenish IMF resources. The U.S. favors a trebling of the existing 250-billion-U.S.-dollar fund the IMF has now at its disposal to support struggling economies, indicating the U.S. could contribute up to 100 billion dollars.
The IMF and European leaders want to see IMF resources doubled and the EU is prepared to offer 75 billion euros (about 99 billion dollars). Japan has offered 100 billion dollars and China has also given a positive response to the proposal.
Japanese Finance Minister Yosano Kaoru has recently said Tokyo was considering introducing a large-scale economic stimulus package worth over two percent of its GDP.
Japanese Prime Minister Aso Taro said a few days ago that he would require the international financial organizations to enhance supervision over financial derivatives at the London summit, and to increase the fund resources for the international organizations such as the IMF.
The BRIC nations -- Brazil, Russia, India and China, have reached broad consensus over a series of issues including stabilizing the international financial system, adopting fiscal stimulus measures to promote domestic demand, reforming international financial organizations and combating protectionism.
The BRIC finance ministers urged on March 14 that the financial reform be adapted to the current global economic changes, and the emerging and developing nations be given a bigger say and status.
Chinese Vice Foreign Minister He Yafei said on March 23 that China hopes participating parties at the summit would enhance solidarity, gather consensus and seek a win-win situation, so as to stimulate the confidence of the market and people. The upcoming summit is also expected to push concerned parties to continue drawing up economic stimulus packages based on their own conditions.
Meanwhile, China hopes substantive progress could be made in international financial institution reform, in particular, giving greater say to emerging markets and developing countries, said He. Specific roadmaps and timetables should be made accordingly, he added.
He reiterated China's opposition to trade protectionism, urging the summit to promote all-round and balanced progress of the Doha talks and especially, give more trade support to developing countries.
China is concerned with the issue of development, the Chinese official said, hoping that assistance to the developing countries would not be reduced due to efforts to tackle the financial crisis.
Earlier this month, Brazilian President Luiz Inacio Lula da Silva said he will speak for the international financial system reform, the completion of the World Trade Organization's Doha round talks and against protectionism at the G20 summit in London.
At the London summit, Brazil would propose a rebalance of the international flow of capital to protect the emerging economies from global financial crisis, said the country's Finance Minister Guido Mantega on March 13 when he was attending the latest G20 meeting in Horsham, a county in southern England.
Among Russia's proposals to the London Summit, Kremlin said on its website on March 16 that a normal functioning of global economy requires a stable and predictable international monetary and financial system functioning in accordance with pre-determined rules and based on macroeconomic and financial discipline maintained by major global economies.
Russia also called for "enlargement of the list of currencies used as reserve ones" and "introduction of a supra-national reserve currency to be issued by international financial institutions."
Talking about Russia's priorities at the London summit, Russian President Dmitry Medvedev said in a TV interview earlier this month that an important issue is monitoring the macroeconomic indicators of countries that have an impact on the global financial situation so that problems that occur in one state do not create a severe domino effect.
India said Monday it will oppose protectionism during the G20 summit this week, urging developed countries to shoulder more responsibilities.
Foreign Secretary Shiv Shankar Menon told reporters in New Delhi that India will resist protectionist measures put in place by countries seeking to shield their domestic industries from the global financial crisis.
Prime Minister Manmohan Singh, who will attend the London summit, said emerging economies did not cause the crisis, but were victims to the economic downturn. He called on developed countries to attach importance to problems the financial crisis brought to developing ones.
As the only Middle East nation to attend the London summit, Saudi Arabia would contribute to an international stimulus package of 2 trillion U. S. dollars, according to London-based Al-Hayat newspaper on March 6.
Indonesia, Argentina, Mexico and South Africa, which will also attend the meeting, also pressed for a reform of international financial institutions like the IMF and the World Bank, appealing for more help for developing countries.
(Xinhua News Agency March 31, 2009)
