[DEBATE] : (Fwd) G20
pbond at mail.ngo.za
Sun Dec 28 09:42:05 GMT 2008
Finance chiefs eye first steps in revamping global system
SãO PAULO, BRAZIL Nov 08 2008 10:05
Looking to take the first steps toward revamping a global financial
system ravaged by crisis, leaders from the main industrialised and
emerging economies gather on Saturday seeking common ground.
Yet the talks involving the Group of 20 leading nations faced a host of
challenges to find unity from diverse perspectives of the United States,
European Union and the main emerging nations.
European leaders have said they hope the São Paulomeeting will lay the
groundwork for the start of key reforms to be put in motion starting
with a November 15 summit in Washington of G20 leaders.
The United States, in transition ahead of the inauguration of
president-elect Barack Obama, has played down expectations for any major
new initiatives in a crisis that began with a meltdown in the US real
estate market and quickly spread to the banking system, becoming a
credit crisis crippling the global economy.
The emerging nations meanwhile are arguing the crisis shows a need for
wider participation in the management of the global economy beyond the
Group of Seven wealthy nations.
The top emerging economies -- Brazil, Russia, India and China -- want "a
reorganisation of the world financial system," Brazilian Economy
Minister Guido Mantega told reporters on Friday.
The G7 is no longer sufficient to address global crises such as the one
rippling around the world and the G20 should be strengthened, Mantega
said after a meeting with his counterparts from the other so-called BRIC
Mantega, summarizing his discussions with the finance ministers from
Russia, India and China, said "we have come to the conclusion that there
must be a reformulation, a reorganisation of the world financial system".
Specifically, he said, the system put in place by the 1944 Bretton Woods
agreement was outdated and needed to be changed to take into account the
greater economic importance of emerging nations.
The G7 -- Britain, Canada, France, Germany, Italy, Japan, the United
States -- "is not sufficient", he said.
The emerging nations want to see the G20 -- which includes the G7 and
the BRIC countries plus other significant economies such as Australia,
Indonesia and Turkey -- reinforced and elevated to a heads-of-state and
heads-of-government level, above the finance ministerial status it
A joint statement by the BRIC finance ministers said they would
"continue to take all necessary steps to lessen the impact of the recent
turmoil on economic activity, aiming to preserve medium and long-term
They stressed "there is an urgent need to find mechanisms ... to restore
the real economy's access to credit, stimulate demand and to resume
The BRIC ministers also put the blame for the current crisis with the
world's most advanced economies, noting that it began in the United
States and quickly spread to Europe.
Sergio Jellinek, a World Bank spokesperson for Latin America, said that
the weekend talks in São Paulo one week ahead of a summit of world
leaders "can contribute a sort of roadmap to orient actions to confront
the global crisis".
Jellinek added that the World Bank considers it important to have
"better participation by emerging economies in any decisions".
The official added: "Emerging nations are that that are producing growth
during the current crisis. It is necessary that any global mechanisms
reflect the world as it is today, not at the end of World War II."
The São Paulo meeting, which will include the finance ministers and
central bank governors from the United States, China, Japan and Europe,
among others, is seen as a preparatory session for a hastily called G20
summit in Washington on November 15.
The EU meanwhile put together its "wish list" for the summit, including
tougher regulation of markets and a stronger role for the World Bank and
International Monetary Fund.
The United States, backed by Canada, is playing down expectations for
Yet one US official speaking on condition of anonymity said the
Washington summit may go beyond a statement of principles.
"We think we may be able to agree ... on some actions that we can take
in the near term," the official told reporters.
Those might include steps to increase transparency, improve risk
management, coordinate among regulating authorities, and even the
adoption of more consistent and convergent rules, in the areas like
accounting or capitalization, he said.
The G20 includes the seven major industrialized nations -- Britain,
Canada, France, Italy, Japan, Germany and the United States -- plus
Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
Saudi Arabia, South Africa, South Korea and Turkey.
It also takes in the 27-nation European Union. - AFP
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