World leaders, meeting for a crisis summit in Washington, have agreed on an action plan to restore global growth and prevent future financial upheaval while promising new spending plans, a trade deal and a set of reforms.
A final statement from the leaders after one of the biggest international economic gatherings in years pledged responses on a number of fronts, with another meeting scheduled for April to flesh out policies.
Government spending plans are to be used to reverse immediate economic decline, a global trade deal is to be promoted to guard against protectionism, and financial regulation and world financial institutions are to be reformed.
“We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems,” the G20 said on Saturday, after the crisis summit in Washington.
The meeting of G20 countries, which represent 85 percent of the world economy, was convened by outgoing US President George W. Bush to tackle the financial crisis that is seen as the worst since the 1930s.
While weeks ago some had talked expansively of redrawing the financial system in a “Bretton Woods II” overhaul in Washington, the final communique amounted to a commitment to keep working on reforms.
The G20 leaders tasked their finance ministers with drawing up a series of recommendations by March 31 to be brought before a new summit in April, at a location to be announced shortly.
Six areas will be specifically targeted: regulating those parts of the financial markets that have exacerbated the crisis, boosting transparency and reforming “fat cat” compensation practices.
The ministers, from the industrialized and emerging world, must also evaluate global accounting norms and the financing needs of international financial institutions.
Finally, they must draw up a list of financial institutions whose collapse would imperil the global financial system.
Bush said the leaders had agreed that both the IMF and the World Bank, the two main international financial institutions created in 1944 in Bretton Woods, should be modernized.
“These institutions have been very important — the World Bank, IMF — but they were based on an economic order of 1944,” he told a press conference.
British Prime Minister Gordon Brown said. “It is absolutely clear that we are trying to build new institutions for the future.”
Japanese Prime Minister Taro Aso voiced support for a dollar-centered currency system, despite growing concern about the troubled global financial mechanism.
“Our prime minister stressed that no currency but the dollar can be used as a key currency,” a Japanese government official told reporters.
The final communique was also significant in what it did not include. There was no mention of the creation of a global financial market enforcer as demanded by some European and emerging countries but opposed by the US.
There was no reference to coordinated stimulus packages from governments either, an idea promoted by the UK.
The final agreement said leaders would use “fiscal measures to stimulate domestic demand to rapid effect.”
Struggling Asian economies meanwhile came away from the meeting with a promise of more access to financing from international organizations that analysts said yesterday should help credit-starved exporters and calm markets from South Korea to India.
Beijing welcomed the step but gave no indication whether it might respond by heeding appeals to use its US$2 trillion in reserves to help expand a global bailout fund.
The G20 leaders promised to expand access for developing countries to financing through the IMF and other bodies, though they gave no figures.
“We have seen evidence of trade financing, as well as financing more generally for emerging markets, deteriorate,” said Michael Buchanan, chief Asia economist for Goldman Sachs. “If the G20 and IMF and donor countries can provide financing, that will help to alleviate that. That will be very significant.”
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
SHOT IN THE ARM: The new system can be integrated with Avenger and Stinger missiles to bolster regional air defense capabilities, a defense ministry report said Domestically developed Land Sword II (陸射劍二) missiles were successfully launched and hit target drones during a live-fire exercise at the Jiupeng Military Base in Pingtung County yesterday. The missiles, developed by the Chungshan Institute of Science and Technology (CSIST), were originally scheduled to launch on Tuesday last week, after the Tomb Sweeping Day holiday long weekend, but were postponed to yesterday due to weather conditions. Local residents and military enthusiasts gathered outside the base to watch the missile tests, with the first one launching at 9:10am. The Land Sword II system, which is derived from the Sky Sword II (天劍二) series, was turned