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.
x
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.
Reuters
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

Elusive Deal With Iran Could Yield Foreign Policy Legacy for Obama

A new Iranian leader -- and a strategic shift by the United States -- opens narrow window for nuclear agreement with Tehran More

Column: Saudi-Iran Meeting Could Boost Fight Against Islamic State

The fact that Iranians and Saudis are talking again does not guarantee a breakthrough, but it could make it easier to build a broad coalition against IS More

Thai Ruler Gives Top Cabinet Posts to Junta Inner Circle

Thailand's army chief has kept an iron grip on power as he extends the government, hand-picking an interim parliament that subsequently nominated him prime minister 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.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.