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The G-20 group of nations, which includes the world’s largest developed and emerging economies, has pledged more than $2 trillion to boost the global economy over the next five years. The finance leaders of the countries said they would take positive action to increase investment, promote completion and boost employment. The G-20 group accounts for 85 percent of the recorded global economy.
The statement by the G-20 group that followed their two-day meeting in Sydney, Australia, stated, “We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2 pc above the trajectory implied by current policies over the coming five years … This is over $2tn more in real terms and will lead to significant additional jobs.”
Australia hosted the meeting, and the Australian Treasurer, Joe Hockey, said in a news conference that for the first time, the G-20 was putting a real number to what it was trying to achieve. He said, “We want to add over $2tn more in economic activity and tens of millions of new jobs.”
However, Germany’s Finance Minister Wolfgang Schaeuble said “The results of this process cannot be guaranteed by politicians.”
The report also indicated concerns by emerging nations following the policy tapering of the Federal Reserve, and regretted that the process to give emerging nations more say in the IMF had stalled. China, Brazil and Russia had lobbied for more voting power in the IMF, and changes had been agreed in 2010, but later blocked by the U.S. Congress.
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The G-20 urged the USA to reconsider and ratify the reforms to provide emerging economies greater voting power.
The decision of the U.S. central bank to reduce its monthly bond-buying program to $65 billion from $85 billion had jarred poorer countries prompting investors to sell off currencies, stocks and bonds of emerging economies, which in turn forced many governments to take emergency economic measures.
After the meeting, IMF chief Christine Lagarde said “The tapering that we see is a result of the significant improvement of the global economy, but particularly the U.S. economy, and that in and of itself is positive.”
At the meeting, the U.S. had also actively lobbied to close global tax loopholes through which multinationals manage to avoid paying tax.
