G20 Summit plans to inject US$5tn into economy before 2011
Friday, April 3, 2009
The G20 Summit held in London, England concluded Thursday with an injection into the economy of US$5 trillion by the end of 2010.
Global trade would be supported by $250 billion (169.5 billion pounds). “We are going to act decisively to kickstart international trade. We will ensure availability of at least $250 billion over the next two years,” said Gordon Brown Prime Minister of the United Kingdom.
The International Monetary Fund IMF will have access to $750bn in resources of which $250bn will support special drawing rights.
Developing countries received $100bn which will be dispensed via Multilateral development banks. Towards this end, the IMF will sell off gold reserves.
China will support the IMF fund by $40bn, the European Union by $100bn, and Japan by $100bn.
There will be increased regulation on banking and credit ratings agencies. There was a commitment to clamp down on hedge funds, tax havens and toxic assets. To restore consumer confidence in the financial sector, a new Financial Stability Board will be initiated internationally. There would be new policies implemented to control pay and bonuses paid to the heads of banks and corporations.
The G20 leaders were adverse to protectionism and rallied to support international trade and investment.
The Leaders’ statement said, “We reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.”
Eoin O’Malley, senior adviser on international trade at BusinessEurope, said “The measure also needs to be part of wider package to avoid protectionism and conclude the Doha round which will stimulate trade growth. The key point now is to move forward with Doha. The key now is implementation. G20 governments must act quickly to provide this finance to companies that need it urgently.”