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Posts Tagged ‘G20’

Zoellick: G20 must act to stabilize food prices

In Uncategorized on January 8, 2011 at 4:12 am

Free markets rather than protectionist polices are the solution to volatile food prices and the G20 should take steps to prioritize the provision of food for the poor, World Bank President Robert Zoellick said.

“The answer to food price volatility is not to prosecute or block markets, but to use them better,” Zoellick wrote in an opinion piece in Thursday’s Financial Times urging G20 leaders to put access to food at the top of its agenda.

“By empowering the poor the G20 can take practical steps toward ensuring the availability of nutritious food,” he wrote.

French President Nicholas Sarkozy will take the presidency of the G20 in 2011. In his column Zoellick set out nine action points to make sure the poorest have access to food. Such steps were needed to ensure global growth and stability, he said.

Food prices hit a record high last month, outstripping levels that prompted riots in 2008 and key grains could climb even further as weather patterns give cause for concern, the UN’s food agency said on Wednesday.

Zoellick said more work was needed to understand the relationship between international prices and local prices in poor countries. In Cambodia the local price of rice has risen by a quarter since mid-2009, while international prices have shed 15 percent.

“Factors such as transport costs, crop types and exchange rates can mean that local prices are delinked from international prices,” he wrote.

“Work could target first those commodities and countries that are most at risk from volatility.”

He also called for an international code of conduct to exempt humanitarian food aid from export bans.

Export restrictions make food price volatility worse. Ideally, countries would not impose any export bans; in 2011 they should at least agree that food for humanitarian purposes be allowed to move more freely,” he wrote.

Other steps include improving supply transparency and long-weather forecasting, creating small humanitarian reserves in disaster-prone regions and providing alternatives to export bans and price fixing.

Risk management products, such as weather insurance or a hedge on energy prices to keep transport and input costs low, should also be considered, he said.

Source: SGGP

France to push G20 monetary reforms: finance minister

In Uncategorized on November 17, 2010 at 3:26 am

China stands firm as G20 wrangling goes to wire

In Uncategorized on November 12, 2010 at 4:53 am

Prime Minister to attend G20 Summit

In Uncategorized on November 10, 2010 at 2:26 pm

World union leaders urge G20 to keep promise for decent jobs

In Uncategorized on November 10, 2010 at 6:51 am

S.Korea hopes to settle currency row at G20 summit

In Uncategorized on November 1, 2010 at 4:41 am

G20 sows seeds of future forex skirmishes

In Uncategorized on October 24, 2010 at 7:54 am

GYEONGJU, South Korea (AFP) – The Group of 20 may have declared a currency truce, but its ceasefire agreed in weekend talks appears to contain seeds of hostility that could germinate in future.

Analysts welcomed the pact by G20 finance ministers meeting in South Korea to “refrain from competitive devaluation of currencies” and to bring their current account imbalances into line.

AFP/File – The Group of 20 may have declared a currency truce

The International Monetary Fund was empowered to police the agreement, which however lacks teeth in the absence of numerical targets for countries such as China to lower their swollen trade surpluses.

And at the same time, the G20 agreed a historic shift in power at the IMF to give China and other emerging powers a greater say, potentially creating new sources of friction within the world’s financial watchdog.

Domenico Lombardi, a former executive board member of the IMF and World Bank, said US Treasury Secretary Timothy Geithner had scored a victory for his argument that huge imbalances in trade are a new menace to the world economy.

“The G20 consensus is gradually shifting towards the US position but without numerical targets it is unlikely that this broad commitment will bite,” Lombardi, a senior fellow at the Brookings Institution in Washington, told AFP.

He suggested that China had bought itself some breathing space after months of tension over its policy of deliberately cheapening the yuan, which critics argue gives Chinese exporters an unfair edge in global markets.

“The Chinese pledged greater flexibility in their currency ahead of the Toronto summit but they did little afterwards,” Lombardi said, referring to a G20 leaders’ meeting in June.

By targeting China’s hefty current account surplus, Washington is groping for a new way to cajole Beijing into relaxing its tight shackles on the yuan.

However, many emerging markets including China suspect that the United States is deliberately allowing the dollar to flounder on currency markets so that it can export its way back to prosperity.

Caught between the US and Chinese pincers are major economies such as Japan and emerging markets in Asia and Latin America, which are seeing their own currencies rise to alarming levels to the detriment of their exporting firms.

The G20’s credibility in resolving the tension was not helped by the decision of Brazilian Finance Minister Guido Mantega — who gave voice to fears of an “international currency war” last month — to stay away from South Korea.

Other G20 finance ministers admitted that the unwieldy grouping of advanced and developing economies had faced valid criticisms this weekend, in the run-up to a November 11-12 summit in Seoul.

“We arrived in Gyeongju full of apprehension and we leave full of expectation,” France’s Christine Lagarde said.

Britain’s George Osborne said “no one really anticipated on arrival” the breakthroughs on tackling the currency question and IMF reform.

South Korean President Lee Myung-Bak had jokingly threatened on Friday to shut down all transport to the meeting venue, a 90-minute drive from the nearest big airport at Busan, until a deal was struck.

Ahn Soon-Kwon, a research fellow at the Korea Economic Research Institute, said the G20 had made a “good start” towards defusing any currency war and labelled the agreement “quite an achievement for the US”.

“But if you look into it, China will gain more, because striking a deal like this will hardly stop US consumers from buying cheap made-in-China goods,” he said.

“This deal will actually help China earn some respite from Washington’s criticism on currency issues.”

Marco Annunziata, chief economist with Unicredit Group in London, noted the inherent tension in tasking the IMF with a beefed-up surveillance role just as China is set to wield more votes on its board.

“The IMF will need to be extremely candid and outspoken, and the experience so far does not bode well: the IMF was already charged with monitoring global imbalances, but its surveillance has no teeth,” he said.

Geithner himself launched a thinly veiled attack on China’s past reluctance to allow the public release of IMF criticism of its currency policy.

Overall, Annunziata said, the G20 agreement would go “some way towards calming market fears of currency wars”.

“Whether the positive impact is durable, however, will depend on whether national policies are in fact changed to be in line with the agreement,” he said.

“Otherwise this will be seen as an empty statement of principle.”

Source: SGGP

Currency frictions as G20 powers meet

In Uncategorized on October 22, 2010 at 7:56 am

The world’s top finance officials convene in South Korea Friday, stalked by currency disputes that threaten to destabilise a fragile recovery from the global economic crisis.

G20 finance ministers and central bankers were to start a two-day meeting at 0645 GMT in preparation for a Seoul summit next month grouping leaders of nations at the heart of the forex row, including the US and Chinese presidents.

Ministers from the G7 industrialised nations were gathering in the southern city of Gyeongju, facing warnings that failure to rectify skewed patterns of economic growth could ignite trade protectionism.

US Treasury Secretary Timothy Geithner said this week he planned to use the meetings to promote efforts to “rebalance” the world economy so it is less reliant on US consumers, who are still reeling from the 2008 financial crisis.

The United States wants to establish “norms” on exchange-rate policy, and persuade other nations that it does not aim to devalue its way back to prosperity, he told the Wall Street Journal.

Japanese Finance Minister Yoshihiko Noda (C) speaks during a media briefing at a hotel before the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju on October 22, 2010

With a super-loose US monetary policy weakening the dollar, major emerging G20 economies such as South Korea, Brazil and Indonesia have intervened in recent weeks to curb their own currencies and protect exporters.

But for the United States, which is in the full throes of election season, China lies at the root of the problem owing to its policy of keeping a firm lid on the yuan’s value to safeguard its humming export machine.

The verbal sparring has sparked warnings that the world could degenerate into an all-out “currency war” as rich powers and big emerging economies resort to unilateral action — undermining multilateral bodies such as the G20.

Japan’s Finance Minister Yoshihiko Noda said Friday that the G20 must “reaffirm” the need for more flexibility in emerging countries’ currencies during the talks in South Korea.

Apparently signalling they want a temporary truce, the G20 ministers will pledge to “refrain from competitive undervaluation” of their currencies, according to a draft statement obtained by Dow Jones Newswires.

The Group of 20 will “move towards (a) more market-determined exchange rate system”, the draft said, without spelling out how.

But the group would also minimise “adverse effects of excess volatility and disorderly movements in exchange rates” — apparently reflecting concerns of Asian and other export-reliant nations about rapid rises in their currencies.

“The only solution is dialogue: we should search together for coordinated measures to resume a more balanced global growth that encourages internal demand in some countries and brakes it in others,” French central bank chief Christian Noyer said in an interview with business daily Les Echos.

“There is agreement within the G7 for the greatest possible stability on the currency markets,” he was quoted as saying.

One idea pushed by the US administration is for exporting powerhouses such as China to limit their overall current-account surpluses, as a backdoor way of making them appreciate their currencies.

China this week surprised markets by raising interest rates to rein in accelerating inflation, but has shown little appetite for coordinated action to unshackle the yuan for fearing of driving exporting companies out of business.

And the US suggestion to target the current account appears to be getting short shrift from other G20 members, with Japan’s Noda calling it “not realistic”.

G20 ministers will also discuss reforms to give emerging nations more say at the International Monetary Fund, which is working on its own proposals to reform the global currency system.

The South Korean hosts are pushing for a global financial safety net to safeguard countries from the effect of sudden damaging capital flows, which have surged as the dollar has declined.

Also on the agenda are talks about tighter controls over mega-banks and finance firms blamed for triggering the world crisis.

The draft G20 statement said cooperation is essential to maintain a global recovery that is “moving ahead, albeit in a fragile and uneven way”.

Source: SGGP

Currency war threat looms over G20 ministers’ meeting

In Uncategorized on October 20, 2010 at 4:07 am

SEOUL, Oct 20, 2010 (AFP) – G20 finance ministers will meet in South Korea this week to try to chart a new direction for the world’s economy after a devastating downturn, but fears of a “currency war” could blow them off course.

The host nation dislikes the phrase — Finance Minister Yoon Jeung-Hyun has said the exchange rate issue is not “like a duel in a Western film”.

But South Korea admits the disputes will loom large over the October 22-23 meeting of ministers and central bank chiefs in the southeastern city of Gyeongju.

Ministers will set the agenda for the November 11-12 Group of 20 summit in Seoul, South Korea’s biggest international event for two decades.

AFP – This file photo taken on May 26, 2010 shows an Australian 100 dollar note (C) amidst a raft of foreign currencies.

Seoul wants to leave its mark on history with a “Korea Initiative” to set up a global financial safety net aimed at protecting emerging markets from disruptions caused by sudden changes in capital flows.

The nation, which built its economic “Miracle on the Han River” on the ashes of the Korean War, also intends to put development prominently on the G20 summit agenda for the first time.

And it wants to push ahead with reforms to the International Monetary Fund (IMF) to give emerging countries greater voting power, while encouraging the adoption of post-crisis rules to bolster the world’s banks.

“South Korea… will stress that a currency war is tantamount to mutual economic destruction and push for a compromise,” an organiser told Yonhap news agency on condition of anonymity.

The United States and European Union, trying to export their way to economic health amid lacklustre domestic demand, accuse China of significantly undervaluing the yuan to boost its own exports.

China says it is being made a scapegoat for US domestic problems.

And it points out that expectations of US “quantitative easing”, a move to pump more dollars into the market, are swamping emerging markets with destabilising capital inflows as investors chase higher yields.

The United States last Friday signalled a temporary truce, delaying publication until after the Seoul summit of a report that could have labelled China a currency “manipulator”.

There is a chance that “some sort of understanding” may be reached in Gyeongju, the Seoul official said, after weekend talks overseen by the United Nations raised the need for deeper global governance to tackle common problems.

Yoon Deok-Ryong, of the Korea Institute for International Economic Policy, said it would be hard to reach a firm agreement on forex issues at the South Korea meetings.

“However, an understanding may be reached by countries to abstain from measures that can worsen the situation until the next G20 summit planned for 2011 in France,” Yoon said.

The stakes are high, according to IMF chief Dominique Strauss-Kahn.

“The spirit of cooperation must be maintained. Without that, the recovery is in peril,” he told a meeting in Shanghai Monday.

South Korea says the G20 pulled the world back from a 1930s-style Great Depression but must now show it can cooperate in a post-crisis era.

Indian Prime Minister Manmohan Singh, in comments to Wednesday’s Financial Times, expressed fears about the group’s fraying cohesion — a concern echoed by Bank of England governor Mervyn King.

King called Tuesday for a “grand bargain” among the world’s major economies, saying forex tensions could spark trade protectionism.

“That could, as it did in the 1930s, lead to a disastrous collapse in activity around the world,” he said in a speech.

Ministers will discuss the state of the world economy, IMF reform and establishment of a financial safety net, the G20 framework for “strong, sustainable and balanced growth”, and regulatory reform among other issues.

The Basel Committee on Banking Supervision met Tuesday in Seoul to finalise reforms requiring global banks to bolster their reserves.

“The capital requirement, combined with a global liquidity framework, will substantially reduce the possibility of a banking crisis in the future,” said its chairman Nout Willink.

The Financial Stability Board created by the G20 was meeting in Seoul Wednesday. It was expected to agree a broad plan to strengthen regulation and supervision of banks and other financial companies seen as “too big to fail”.

Source: SGGP

Vietnam makes good impression at G20 Summit

In Uncategorized on July 1, 2010 at 10:18 am

Vietnam makes good impression at G20 Summit

QĐND – Wednesday, June 30, 2010, 21:3 (GMT+7)

This was the first time at the G20 Summit that Vietnam had the opportunity to share its opinions, initiatives and experiences and actively contribute to resolving global economic issues. Its viewpoints on regional and international affairs left a good impression on the participants.

Prime Minister Nguyen Tan Dung and the Vietnamese delegation left Toronto, Canada on June 29 after attending the G20 Summit at the invitation of Canadian Prime Minister Stephen Harper.

VOV reporter interviewed the Deputy Minister of Foreign Affairs, Doan Xuan Hung, about the outcomes of the G20 Summit, as well as Vietnam’s contributions.

VOV: Could you tell us about the most important issues discussed at the G20 Summit?

Mr Hung: This was the fourth time the G20 nations held a summit, with the first and the third taking place in Washington and Pittsburgh in the US and the second in London, UK. These three summits took place in the context of the global economic crisis, so leaders of the G20 countries focused their discussions on looking for solutions to help the world economy weather the storm.

This year’s G20 Summit was held at a time when the global economy was experiencing a downturn. But the participants in the summit discussed and agreed on effective measures to promote a sustainable economic recovery in a stronger and more balanced manner. The summit is the world’s prestigious and democratic forum to deal with global economic issues and boost international economic cooperation.

Developing countries have been striving to cushion themselves from the impact of the global economic downturn but their economic recovery is not strong enough to be sustainable, while most newly-emerging economies are bouncing back a steady growth rate to serve a key driving force behind the global economic recovery.

The G20 Summit focus on dealing with many challenges, such as the debt crisis in Europe and the high unemployment rate (8-9 percent) in some developed countries. A number of European nations emphasised the need for fiscal consolidation and the settling of debts to prevent another economic recession, while the US and some other countries suggested boosting economic recovery and generating jobs to clear debt.

The participants at the fourth G20 Summit reached a consensus on fiscal consolidation and stepping up a sustainable economic recovery in accordance with the different conditions in individual countries.

The Summit only concentrated on developed countries like the G8 but also paid attention to developing countries. It stressed the need to strengthen international cooperation with the Association of Southeast Asian Nations (ASEAN) and the Africa Union (AU).

The Summit identified promoting trade liberalisation, completing the Doha negotiations, narrowing the development gap, reforming international financial institutions and increasing the right of developing countries to vote, as the most important issues that need to be dealt with.

The Summit discussed openly and constructively how to address global economic issues and called for a united assessment to ensure a strong, sustainable and balanced growth in the world economy.

VOV: What did the Vietnamese delegation contribute to the G20 summit?

Mr Hung: This was the second time that ASEAN countries had been invited to take part as a guest.

After consulting with other ASEAN member countries, Vietnam presented ASEAN’s viewpoints on the main topics at the G20 summit, such as global economic development. The ASEAN Secretary General said such presentation was highly praised by several member countries as realistic.

During the meetings between the deputy ministers and ministers of finance and foreign affairs, Vietnam consistently put forward ASEAN’s viewpoints and pursued benefits for developing countries.

Prime Minister Nguyen Tan Dung also took part in discussions on global issues. He highlighted the G20’s efforts to deal with issues related to the global economy to promote its sustainable growth and development. He also praised various frameworks that the G20 approved in Pittsburgh last year and measures for this year.

In addition, PM Dung highlighted issues that the G20 should pay more attention to countries that apply for fiscal support on the basis of friendly growth, which does not cause a negative effect on capital inflows from the developed to developing countries, and emerging countries, including ODA.

He emphasized the need for co-operation between blocs, and called for an early end to the Doha round of negotiations.

PM Dung initiated a co-operation mechanism between ASEAN and the G20 to stimulate global economy and discussed ways of ending the Doha negotiations as soon as the G20 has seemingly come to a standstill on the issue.

VOV: What do you think of Vietnam’s first participation in a major forum like the G20 to discuss global economic issues?

Mr Hung: I am very happy to say that Vietnam has been praised by our international friends. Although Vietnam is only a small economy, its track record as well as its role in ASEAN have been highlighted. The leaders of many countries met with PM Dung and expressed their wishes to forge closer ties with Vietnam.

In addition to joining the world’s leading countries to discuss measures to deal with global economic issues, Vietnam represented developing countries to have a say in many issues of common concern.

The G20 provided an excellent chance for Vietnam to raise its image and prestige and strengthen its relationship with other countries. On the sidelines of the summit, PM Dung also met with dozens of world leaders, including the US, China, Russia and the EU.

VOV: Thank you very much.

Source: VOV


Source: QDND