G20 imbalance pledge left vague
Source: Agencies |
November 13, 2010, Saturday
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Print Edition
Print Edition
G20 leaders closed ranks yesterday and agreed to a watered-down commitment to watch out for dangerous imbalances, yet offered investors little proof that the world was any safer from economic catastrophe.
After an acrimonious start, the developing and emerging nations agreed at the summit in Seoul to set vague "indicative guidelines" for measuring imbalances between their multi-speed economies but, calling a timeout to let tempers cool, left the details to be discussed next year.
European leaders broke away for their own mini gathering in the middle of the summit to discuss a deepening credit crisis in Ireland, a stark reminder that the consequences of the worst financial crisis since the Great Depression still posed a serious threat to global stability.
In a communique signed off at the end of the gathering, the group's fifth since the financial crisis exploded in 2008, there was a little something for everyone.
Leaders vowed to move toward market-determined exchange rates and pledged to shun competitive devaluations, a line addressing other countries' concern that the US Federal Reserve's easy-money policy was aimed at weakening the dollar.
In a nod to emerging markets struggling with huge capital inflows, the G20 gave the okay to impose "carefully designed" control measures.
They also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalization talks launched in 2001.
But bland promises to deal with imbalances did not appear enough to bring about any real shift. The International Monetary Fund warned that gaps between cash-rich exporters and debt-laden importers was widening to pre-crisis levels.
"The work that we do here does not always seem dramatic," US President Barack Obama said after the summit. "It's not always going to be immediately world-changing. But step by step we're building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions."
The G20's accord sought to recapture the unity forged in crisis two years ago, but deep divides meant the leaders could not venture much beyond what was agreed by finance ministers last month.
"This hasn't been a love-fest," one official said.
After an acrimonious start, the developing and emerging nations agreed at the summit in Seoul to set vague "indicative guidelines" for measuring imbalances between their multi-speed economies but, calling a timeout to let tempers cool, left the details to be discussed next year.
European leaders broke away for their own mini gathering in the middle of the summit to discuss a deepening credit crisis in Ireland, a stark reminder that the consequences of the worst financial crisis since the Great Depression still posed a serious threat to global stability.
In a communique signed off at the end of the gathering, the group's fifth since the financial crisis exploded in 2008, there was a little something for everyone.
Leaders vowed to move toward market-determined exchange rates and pledged to shun competitive devaluations, a line addressing other countries' concern that the US Federal Reserve's easy-money policy was aimed at weakening the dollar.
In a nod to emerging markets struggling with huge capital inflows, the G20 gave the okay to impose "carefully designed" control measures.
They also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalization talks launched in 2001.
But bland promises to deal with imbalances did not appear enough to bring about any real shift. The International Monetary Fund warned that gaps between cash-rich exporters and debt-laden importers was widening to pre-crisis levels.
"The work that we do here does not always seem dramatic," US President Barack Obama said after the summit. "It's not always going to be immediately world-changing. But step by step we're building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions."
The G20's accord sought to recapture the unity forged in crisis two years ago, but deep divides meant the leaders could not venture much beyond what was agreed by finance ministers last month.
"This hasn't been a love-fest," one official said.
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