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

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.