G-20 summit

Amid apprehensions and expectations, fed by various pre-summit discourses among official delegates of developed and developing countries, the five-hour long crucial G-20 summit on Thursday in London finally came out with a broad consensus on at least two major issues — one relating to the global financial boost and the other concerning the proposed reforms of International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), popularly known as the World Bank. The summit ended with an agreement to pump into the resource-starved world economy a whopping $1.1 trillion (i.e. $1100 billion) by the end of 2010 through multilateral global institutions. The G-20 summit, hosted by the British Prime Minister, Gordon Brown and attended by our Prime Minister, Dr Manmohan Singh, the US President Barak Obama, French President, Nicolas Sarkozy, Chinese President and Japanese Prime Minister, among others, unanimously decided to take necessary global action to restore growth, rebuild confidence in fnanical system, beat back recession and save jobs of people. The injection into global economy of the above-noted $1.1 trillion is to consist of an addition of $500 billion to the existing quantum of $250 billion of IMF resources, a new allocation of special drawing rights (SDRs) worth $250 billion, trade finance support to the tune of another $250 billion and yet, again, $100 billion for lending to the poorest countries by multilateral development banks (MDBs).

It is happy that the world leaders agreed to wind up bank secrecy and, instead, pledged to take measures for greater transparency and against tax havens, first by naming those who do not obey transparency norms and by imposing sanctions thereafter against them. The G-20 summit also decided to carry forward the proposed reforms of the IMF and World Bank which with their existing coffer strength are unable to bail out the sinking economies of the current resource-starved world. Apart from boosting their coffers, the anomalous IMF quota system and the criteria of voting rights among member countries, which were set up in 1944, have been decided to be amended to suit the current situation faced by member nations. However, the outcome of the summit is only a mixed bag since no concrete action emerged on protectionism which happens to be the most irritating deterrent to developing world’s market expansion. However if the member nations are sincere enough to abide by whatever monetary stimulus package is agreed upon in the summit, the revival of global economy from current crisis will certainly be possible within a span of 12-15 months time. ASSAM TRIBUNE