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

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy 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.
US Carriers Suspend Travel to Israeli
X
Carolyn Presutti
July 23, 2014 1:21 AM
The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video US Carriers Suspend Travel to Israel

The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video NASA Focuses on Earth-Like Planets

For decades, looking for life elsewhere in the universe meant listening for signals that could be from distant civilizations. But recent breakthroughs in space technology refocused some of that effort toward finding planets that may harbor life, even in its primitive form. VOA’s George Putic reports on a recent panel discussion at NASA’s headquarters, in Washington.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.

AppleAndroid