News / Economy

G20: Economy Recovering, but Crisis Not Over

G20 summit participants pose for a group picture in St.Petersburg, Sept. 6, 2013.G20 summit participants pose for a group picture in St.Petersburg, Sept. 6, 2013.
G20 summit participants pose for a group picture in St.Petersburg, Sept. 6, 2013.
G20 summit participants pose for a group picture in St.Petersburg, Sept. 6, 2013.
The Group of 20 powers said on Friday the world economy was improving, but it was too early to declare an end to crisis with emerging markets facing increasing volatility.
The prospect that the Federal Reserve may rein in its expansive monetary policies as soon as this month has plunged into turmoil some emerging economies that had enjoyed rapid growth helped by a flood of cheap dollars.
In talks on the economy which were overshadowed by the Syrian crisis and which were described as "difficult" by participants, emerging and developed powers in St. Petersburg managed to find a common form of words.
Leaders of the G20 — which accounts for 90 percent of the world economy and two-thirds of its population — agreed to adjust policy carefully but said countries at the sharp end also had to put their houses in order.
A communique issued at the end of the two-day summit stuck closely to the statement issued by finance ministers in July, demanding changes to monetary policy must be "carefully calibrated and clearly communicated."
International Monetary Fund Christine Lagarde welcomed that commitment, adding: "Both advanced economies and emerging markets will have to address their domestic challenges in order for spillovers to be effectively managed."
The G20, which united in response to global crisis in 2009, now faces a multi-speed recovery with the U.S. economy pushing ahead, Europe maybe finding a floor and developing economies facing blowback from the looming 'taper' by the Fed.
The nod in the communique to managing "spillovers" of policy shifts was the closest countries like India got to an acknowledgement of their plight.
"The situation in the global economy looks better now than it did five years ago. Economic growth is recovering, but risks of course are still very, very great," Russian President Vladimir Putin told a news conference.
As the statement was released, markets were fixated on the monthly U.S. jobs report which came in weaker than expected, complicating the Fed's decision on whether to scale back its massive monetary stimulus later this month.
Demands led by Germany for binding targets to extend the Toronto debt reduction goals agreed at a summit hosted by Canada in 2010, fell on deaf ears as the focus has shifted firmly towards promoting growth.
"Medium-term fiscal strategies... will be implemented flexibly to take into account near-term economic conditions, so as to support economic growth and job creation, while putting debt as a share of GDP on a sustainable path," the communique said.
New elements referred to a growth initiative proposed by Australia, which assumes the G20 chair next year, a proposal to tighten regulation of so-called 'shadow banking' and extending a deadline on reining in trade protectionism.

  • Russia's President Vladimir Putin, center foreground, gestures as he walks by U.S. President Barack Obama, front row second right, as he takes his place at a group photo outside of the Konstantin Palace in St. Petersburg, Russia, Sept. 6, 2013.
  • U.S. President Barack Obama, right, walks with Germany's Chancellor Angela Merkel prior to a group photo of G-20 leaders outside of the Konstantin Palace in St. Petersburg, Russia, Sept. 6, 2013. 
  • An image of U.S. President Barack Obama drinking out of a paper cup is shown on a large screen in the media center of a G-20 summit in St. Petersburg, Russia, Sept. 6, 2013. 
  • British Prime Minister David Cameron speaks during a media conference after a G-20 summit in St. Petersburg, Russia on Friday, Sept. 6, 2013.
  • Russian President Vladimir Putin (C) arrives for the family picture event during the G20 summit in St. Petersburg, Sept. 6, 2013.
  • U.S. President Barack Obama walks away after shaking hands with Russia's President Vladimir Putin during arrivals for the G20 Summit at the Konstantin Palace in St. Petersburg, Sept. 5, 2013.
  • U.S. President Barack Obama meets with Japanese Prime Minister Shinzo Abe at the G20 Summit in St. Petersburg, Sept. 5, 2013.
  • A man protests possible military action in Syria as the first day of the G20 Summit gets underway in St. Petersburg, Sept. 5, 2013.
  • BRICS leaders' at the G20 Summit in Strelna near St. Petersburg, Sept. 5, 2013.
  • Participants sit at a table during a BRICS leaders' meeting at the G20 Summit in Strelna near St. Petersburg, Sept. 5, 2013.
  • Apples are seen on the ground next to statues across the street from the Constantine Palace, the venue for a G20 meeting in St. Petersburg, Sept. 4, 2013.

Difficult talks

The summit debate on the health of the world economy, chaired by Putin on Thursday evening, was difficult and reflected concerns about a growth slowdown in the developing world.
"The most difficult and time-consuming discussions related to the evaluation of the situation of global economy," Andrei Bokarev, head of the Finance Ministry's international department who was involved in drafting the communique, told Reuters.
The BRICS group of large emerging economies — Brazil, Russia, India, China and South Africa — agreed to chip $100 billion into a currency reserve pool that could help counter a possible balance-of-payments crisis.
But the facility is a drop in the ocean compared to the trillions traded in foreign exchange daily and it is likely to be next year at the earliest before it is finalized.
Even within the BRICS there was an acknowledgement that countries had to help themselves.
China and Russia — which both run external surpluses — chided India for failing to tackle a yawning current account deficit that has exposed the rupee to a brutal selloff amid a broader flight to the U.S. dollar.
"Facing increased financial volatility, emerging markets agree to take the necessary actions to support growth and maintain stability, including efforts to improve fundamentals, increase resilience to external shocks and strengthen financial systems," the G20 communique said.
Indian Prime Minister Manmohan Singh won some support from Japan, as the two countries said they would expand a bilateral currency swap facility to $50 billion from $15 billion, strengthening the rupee's defenses.
Nascent signs of a turnaround in Europe after a sovereign debt crisis and slump in parts of the euro zone kept the region's leaders out of the firing line for the first time in three years.
"I want to tell you, at this G20 we were no longer the focus of attention," said European Commission President Jose Manuel Barroso.

You May Like

Photogallery Brussels Schools, Metro Reopen Under Heavy Guard

City remains under the highest threat alert level due to what authorities have described as a 'serious and imminent' threat of attack

Video Debt-ridden Refugees Await Onslaught of Lebanese Winter

Aid agencies are attempting to reduce potentially devastating consequences of freezing conditions and snowstorms that killed eight last year, including three Syrian refugees

UN Warns Air Pollution in Asia Pacific Has Rising Cost

Globally some seven million people a year die prematurely due to indoor and outdoor pollution with about 70 per cent of those deaths in region

This forum has been closed.
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.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs

World Currencies


Rates may not be current.