G-20 Heads To Discuss Expediting Global Recovery

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Heads of governments of the G-20, representing 90 per cent of the global GDP, 80 per cent of world trade and 66 per cent of humanity will meet at Pittsburg in the United States to discuss ways to expedite global economic recovery.

The two-day summit beginning Thursday, the third of its kind since the financial crisis hit the world last September, is coming six months after the G-20 Summit in London, while the global economy is slowly emerging from the slump, led by Asia's resurgent economies.

The groundwork for the Pittsburgh summit was made at the meeting of the G-20 Finance Ministers and Central Bank Governors earlier this month in London where they decided to work to achieve a high, stable and sustainable growth, which called for an orderly re-balancing of global trade, removal of domestic barriers and promotion of efficient functioning of global markets.

The Pittsburg summit will take a long-term view of the economy and review implementation of the measures decided at the previous summits--Washington (2008) and London (April, 2009)--including the decision to inject USD 1.1 trillion for the revival of the emerging market economies before proceeding cautiously about the future.

The gathering is also expected to deliberate on issues like steps to enhance mutual trading, as also the role of the World Bank in developing countries. It will send a strong political message on the crucial issue of climate-change negotiations at the Copenhagen summit under the U.N. Framework Convention on Climate-Change (UNFCCC) in December.

Meanwhile, leaders from some leading western economies rallied behind an American plan to build a more balanced global economy, and warned against returning to business-as-usual once recovery took hold.

U.S. Treasury Secretary Timothy Geithner said Tuesday the key was to ensure that the recovery was self-sustaining and to make sure that "as we recover from this crisis, we are laying the seeds for a more balanced, (and a) more sustainable recovery".

President Barack Obama has already made his intentions clear when he said he would work with G-20 leaders to strengthen the rules governing financial markets and ensure that the global economic crisis that engulfed the world just a year ago would not recur. He said the world's leading economies had made progress in stabilizing the global financial system but much work remained to create jobs and growth.

British Prime Minister Gordon Brown said there was substantial backing from the G-20 nations for creating a new framework to shrink surpluses in export-rich countries, such as China, and boosting savings in debt-laden nations, including the United States.

Canadian Prime Minister Stephen Harper supported the idea of a re-balanced global economy, saying world growth could no longer hinge solely on "over-extended" U.S. consumers.

However, French Economy Minister Christine Lagarde added a note of caution, saying she feared growing signs of economic recovery could undermine commitments to re-work and regulate the world financial order.

Meanwhile, developing nations will seek to address the sensitive issue of reforming international institutions including the International Monetary Fund and the World Bank.

The three summits are historical as it is for the first time in the modern era that countries with diverse political ideologies and at different stages of economic and social development have made common cause to tackle the world's first truly global economic crisis and prevent a repeat of the Great Depression of the 1930s.

Meanwhile, China is recovering from its most severe slowdown in decades to report a 7.9% growth in the second quarter from a year earlier, up from 6.1% the previous quarter. India has reported a 6.1% growth in the same quarter. All the major Asian economies, including Japan, have returned to growth.

Germany and France, the Eurozone's two biggest economies, also are back on the growth path. However, the U.S. economy, the world's largest and the global engine for world trade, remains in recession--its deepest and longest since the 1930s.

Companies are still pruning jobs, mainly in the U.S. and Europe, and millions of people in the developing world have been forced back into poverty.

Though the summit is not a negotiating forum, the issue of climate-change is expected to figure in a big way ahead of the crucial Copenhagen Summit.

Heads of governments of the G-20, representing 90 per cent of the global GDP, 80 per cent of world trade and 66 per cent of humanity will meet at Pittsburg in the United States to discuss ways to expedite global economic recovery. The two-day summit beginning Thursday, the third of its kind since the financial crisis hit the world last September, is coming six months after the G-20 Summit in London, while the global economy is slowly emerging from the slump, led by Asia's resurgent economies. (Market News Provided by RTTNews)