News / Economy

G20 Focus: Policy Clarity, Global Rebalancing

Russia's President Vladimir Putin, center, meets with representatives of G20 Youth Summit, St.Petersburg International Economic Forum, June 20, 2013.
Russia's President Vladimir Putin, center, meets with representatives of G20 Youth Summit, St.Petersburg International Economic Forum, June 20, 2013.
Reuters
The world's economic crisis response team grappled on Friday with the prospect of more market volatility resulting from powerhouses the United States, China and Japan charting a course towards recovery.
 
Finance ministers and central bankers from the Group of 20  nations, gathered in Moscow, were expected to call for greater clarity in policy 'messaging' after signals of a withdrawal of U.S. monetary stimulus caused a global sell-off in stocks and bonds, and a flight to the dollar.
 
G20 sources said a draft communique in the works would also urge China to encourage demand-driven growth and allow greater exchange-rate flexibility as part of wider efforts to rebalance the global economy.
 
"There has been a kind of over-reaction of the markets," French Finance Minister Pierre Moscovici said. "So we are looking for the balance."
 
The G20 also backed a fundamental tax rethink that takes aim at the loopholes used by multinational firms and responds to widespread anger among voters hit with higher tax bills to cover soaring national debts.
 
The forum took the lead in the 2008-09 financial crisis and now faces a multi-speed global economy in which only the United States appears to be nearing a self-sustaining recovery.
 
China, for years the engine of global growth, is suffering a slowdown amid doubts over the stability of its financial system; Japan has only recently embarked on a radical fiscal and monetary stimulus experiment, and Europe's economy is more stop than go.

Chairman Ben Bernanke's announcement that the Fed may start to wind down its $85 billion in monthly bond purchases sparked a panicky sell-off, particularly in emerging markets.
 
Investors were calmed by testimony to Congress this week by Bernanke, who is not coming to Moscow, though he said the exit plan from money-printing remained on the cards.
 
Clearer policy communication is "crucial for preventing serious volatility on financial markets," said Russian Finance Minister Anton Siluanov.
 
Negotiators working on a joint communique reconvened after a drafting session on Thursday night that sources said was less fraught than at the February G20 meeting in Moscow, when there was talk of a currency devaluation war.
 
Ministers will review the text over dinner.
 
The BRICS emerging markets caucus — Brazil, Russia, India, China and South Africa — also met on Friday. They were unlikely to progress on joint steps, such as a shared pool of forex (foreign exchange) reserves, to guard against capital flight.
 
Jobs commitment

The United States is beating its fiscal targets thanks to improving growth and Washington has urged the G20 to priorities growth over fiscal consolidation sought by Europe's largest economy, Germany.
 
G20 labor ministers, who met on Thursday, held a joint session on Friday with finance ministers, putting the jobs crisis in Europe — where youth unemployment is nearly 60 percent in debt-strapped Greece and Spain — at the center of the debate.
 
"Getting people back to work must be top of the agenda," U.S. Treasury Secretary Jack Lew wrote in an article for the Financial Times. "In many parts of the world, such as Europe, growth is too weak to drive job creation."
 
The European Union's employment commissioner, Laszlo Andor, shared Lew's prescription for recovery, telling Reuters that investment in jobs was vital for maintaining social peace and emerging from years of austerity.
 
"If in the name of competitiveness and internal devaluation you just compress wages constantly, you also kill demand and you can kill the recovery," Andor said.
 
The G20 released a tax action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
 
The tax plan is one of the major 'deliverables' that will go before the summit of G20 leaders being hosted by President Vladimir Putin in St Petersburg in early September.
 
Protest in Moscow

Russia, the first big emerging nation to host the annual presidency of the G20, finds itself in an awkward political spot following the flight of former U.S. spy agency contractor Edward Snowden to Moscow.
 
G20 delegates arriving at Sheremetyevo airport may not have bumped into Snowden, who has requested asylum in Russia, but they ran into a protest in Moscow over the jailing on Thursday of a prominent Russian opposition politician.
 
Alexei Navalny, who organized protests against Putin's election for a third Kremlin term last year, was sentenced to five years in prison for theft in a case that drew international condemnation as politically motivated.
 
Navalny was released on bail on Friday pending an appeal.
 
Officials checking in to the five-star Ritz Carlton hotel on Moscow's central Tverskaya Street paid little attention to thousands of Navalny supporters protesting outside, in keeping with a G20 tradition of keeping politics and policy separate.
 
"The rally and the traffic jams are causing meetings to be postponed," said one European diplomat. "But we fully understand the democratic right to protest."

You May Like

For Lebanon-based Refugees, Desperation Fuels Perilous Passage

In a war that has caused an estimated three million people to flee Syria, efforts to make perilous sea journey in search of asylum expected to increase More

South African Brewer Tackles Climate Change

Mega-brewer SAB Miller sent delegates to climate summit in Peru, says it is one of many private companies taking their own steps to fight climate change More

Indonesia Reports Increase in Citizens Joining Islamic State

Officials say more than 350 of its citizens are now in Syria or Iraq to fight with Islamic State - 50 more than last month More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8033
JPY
USD
117.19
GBP
USD
0.6372
CAD
USD
1.1634
INR
USD
63.622

Rates may not be current.