Acknowledges developing countries' concerns over early coordinated withdrawal.
Leaders of the Group of 20 countries, who met here today, have reached a broad agreement on the need to let individual countries decide on the schedule for phasing out the fiscal stimulus measures their governments had introduced in the wake of the economic downturn that engulfed the global economy last year.
In the process, the G-20 Summit has acknowledged the concerns expressed by developing countries, including India, over an early and co-ordinated phase-out of stimulus measures. A few developed countries have been suggesting an “exit strategy” for the stimulus measures now that “green shoots of recovery” can be seen.
India’s view on this issue has been that even though signs of economy recovery are visible, the global economy still needs these stimulus measures.
At the same time, however, the draft declaration of the summit is understood to have endorsed the US recommendation for the adoption of a new framework for balanced and sustainable growth. This is being seen as a reflection of the G-20 leaders commitment to take significant and concrete steps towards controlling and reducing emission of greenhouse gases at the next meeting of the United Nations Framework Convention on Climate Change, to be held in Copenhagen in December.
Indeed, the draft declaration is believed to have favoured a general political consensus towards successful conclusion of the climate change talks at Copenhagen.
The draft declaration is also understood to have endorsed a plan of action on the reform of the financial system and an increase in the representation of developing countries in the multilateral financial institutions like the International Monetary Fund and the World Bank.
Endorsing this further, a White House statement said : “The G-20 leaders reached a historic agreement to put the G-20 at the centre of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis.”
The statement referred to US President Barack Obama’s reference to G-20 as a premier global economic forum and his call to the world leaders to reform global economic institutions to meet the needs of an interconnected world economy.
“Today, leaders endorsed the G-20 as the premier forum for their international economic cooperation. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest,” the White House said.
The draft declaration is also understood to have called for an end to protectionism in trade, investment, services and capital flows. This is significant in light of the intensifying trade wars among major trading partners like the US and China, and the failure of the World Trade Organisation to resume the Doha round of trade talks.
On Thursday, US President Barack Obama had hosted a dinner for the heads of governments that included Prime Minister Manmohan Singh. Planning Commission Deputy Chairman, Montek Singh Ahluwalia, was India's Sherpa at the negotiations that preceded the plenary session of the Summit today.
