The recently concluded London G20 financial summit released a communiqu vowing to wield all policies to ensure the world economy gets back on track by the end of 2010.
The summit also promised to raise aid through the International Monetary Fund (IMF), beef up financial regulation, curb protectionism, and together assume responsibilities to deal with the crisis.
Amid waning global economy, heavyweight international organizations, including the IMF, the World Bank, and the Organization for Economic Cooperation and Development (OECD), all forecast that the world economy will shrink this year, the first contraction since World War II.
The developed world is still mired in recession, while once-robust emerging economies are also being battered by the slowdown, threatening the world with the grimmest economic plight since the Great Depression.
Facing severe challenges, the G20 member states, which possess 90 percent of global output, left aside disagreements, coordinated policies, raised positive plans to overcome the crisis and addressed the post-crisis world order. It should be dubbed as a milestone in history.
The day-and-a-half London summit efficiently discussed three topics, pointing out the direction of global economic development after the crisis. The paramount mission of the summit is to coordinate measures to surmount the crisis and jump-start the global economy.
In the run-up to it, the US proposed that G20 members apply proactive fiscal policies and guarantee stimulus packages amounting to two percent of GDP. Though the core economies of the Euro Zone, especially Germany and France, expressed reserved attitudes to the spending sprees, the communiqu of the summit still emphasized the positive effect of fiscal stimulus plans.
The G20 promised stimulus packages worth $5 trillion by the end of 2010, amounting to four percent of global GDP.
It indicates that the member states have reassured the interdependence of the world economy despite the current turmoil.
The second topic was to enhance international aid.
One of the greatest achievements in London was the collective promise to reinforce international aid institutions, including the IMF and the World Bank. China, Japan and Europe, among others, promised to contribute more capital to the IMF.
Meanwhile, the World Bank also agreed to expand the scale of trade credit and inject $250 million to revive world trade.
Supplementary aid to the IMF and the World Bank amounted to $1.1 billion, which will definitely help stabilize the global financial, trade and investment systems, and make recovery quicker.
The third issue is protectionism.
