Creating a better future for all Rich Nations pledge $1tr To save World Economy
Leaders of the group of 20 nations with the most powerful economies have agreed to make a sum of $1.1 trillion to the International Monetary Fund to enable it develop a bail out plan for developing economies reeling from currency woes and the effects of the global downturn.
The G20 group of nations is made up of the world's most powerful economies, accounting for 90% of the world"s economic output, 80% of world trade and two-thirds of the world's population.
At their summit at the Excel Centre in London's Docklands yesterday, France and Germany were reported to have successfully persuaded the Group of 20 leaders to back stronger financial regulations to avoid a repeat of the current global financial crisis.
As the world leaders make efforts to finalise an agreement that would tackle the headache of financial crisis gripping the globe, with pledges of extra efforts to boost economic growth, specific targets on spending by their respective governments, however, appeared unlikely.
Back here in this country, however, the belief of some people is that the package will not have any significant impact on the economy, just as others think the financial crunch affecting the globe cannot produce much effect on our local economy.
For what the experts think, look out for our Monday edition.
Statement issued at the end of the summit pledged to restore confidence, growth, and jobs; repair the financial system to restore lending; strengthen financial regulation to rebuild trust; fund and reform the international financial institutions to overcome this crisis and prevent future ones; promote global trade and investment and reject protectionism, to underpin prosperity; and build an inclusive, green, and sustainable recovery.
"By acting together to fulfil these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future,” the statement expressed the optimism.
"The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy.
Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale,” the statement added.
The G20 also agreed to increase the resources available to the IMF through immediate financing from members of $250 billion, subsequently incorporated into an expanded and more flexible New Arrangements to Borrow, increased by up to $500 billion, and to consider market borrowing if necessary.
“We support a substantial increase in lending of at least $100 billion by the Multilateral Development Banks, including to low income countries, and ensure that all MDBs, including have the appropriate capital,” they pledged.
“In order for our financial institutions to help manage the crisis and prevent future crises we must strengthen their longer term relevance, effectiveness and legitimacy.
So alongside the significant increase in resources agreed today we are determined to reform and modernise the international financial institutions to ensure they can assist members and shareholders effectively in the new challenges they face,” added the statement.
As President Barack Obama and British Prime Minister Gordon Brown joined other leaders at a working breakfast in the city's east Docklands district, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul's Cathedral.
Obama and Brown expressed confidence Wednesday that world leaders would come up with a strong agreement to address financial regulation, growth, and troubled banks.
But that optimism was marred by a split with French President Nicolas Sarkozy and German Chancellor Angela Merkel, who refused calls for more government spending and insisted the meeting must instead take concrete steps on tougher financial regulation.