News / Asia

Global Financial Policy Makers Agree to IMF Reform, Currency Pledge

US Treasury Secretary Timothy Geithner arrives at a press conference following the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju, 23 Oct 2010
US Treasury Secretary Timothy Geithner arrives at a press conference following the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju, 23 Oct 2010

A historic deal among the world's top 20 economies has been reached reforming the International Monetary Fund. Financial policy makers also agreed to avoid a currency war.

The agreement by the advanced and leading emerging economies will shake up the International Monetary Fund. Europe is to give up two of its nine chairs on the 24-seat executive board.

"It is a milestone in reforming global governance," said Olli Rehn, the chief for economic and monetary affairs of the European Commission.

IMF managing director Dominique Strauss-Kahn calls it "very historic" and the biggest-ever reform for the fund since its inception at the end of the Second World War.

Dynamic emerging economies and other under-represented countries, such as Brazil, China, India and Russia, are to control more than six percent of IMF voting rights by 2012.

In an effort to avert a possible trade war that could damage the global economic recovery, the Group of 20 members also pledged not to engage in tit-for-tat currency devaluations.

The meeting in Gyeongju took place just three weeks before the G20 summit of heads of governments in the South Korean capital, Seoul. U.S. Treasury Secretary Timothy Geithner says the Seoul summit needs to give force to what was agreed here.

"The challenges the leaders face are the ones that we discussed today," he said. "And what we want to see is the leaders review these proposals, review this framework and give it their full support."

Officials of the host nation say they want the Seoul meeting to implement a new economic order that will prevent any future fiscal crises from endangering the world's economy

Officials say the currency agreement emerged after an all-night negotiating session. It commits the G20 nations to "refrain from competitive devaluation of currencies" and allow markets, to primarily drive exchange rates.

The state of the U.S. dollar, weakened by a loose monetary policy, prompted some G20 countries, notably Brazil, Indonesia and South Korea, to intervene in the foreign exchange market recently to stem a surge of their currencies.

Strong currencies hurt a country's export competitiveness. China has rejected calls to increase the value of the yuan, which is effectively pegged to the dollar.

Host South Korea and the United States put forward a proposal to narrow the gap between what any G20 nation produces and invests and how much it consumes.

But a push for a binding numerical target of four percent of gross domestic product by 2015 was called unrealistic by Japan's finance minister, Yoshihiko Noda. Australia's treasurer, Wayne Swan, rejected what he called a "one size fits all" policy. Other members, such as China and Germany, also expressed reservations. They are among those who point the finger of blame at U.S. policies for the recent international financial crisis.

The current account proposal, however, would also force the United States to spend less while boosting its exports and savings.

The G20 ministers and bank governors also agreed on tougher rules for financial institutions blamed for triggering the global economic crisis.

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs