24 September 2009

G20 to plot course for sustainable economy

The following is excerpted from today's edition of "CBC news".

The leaders of the world's largest economies are expected to continue developing a global exit strategy for stimulus spending as they gather for G20 meetings in Pittsburgh.

Other major issues leaders are expected to tackle at the two-day event include capping bankers' bonuses, overhauling financial regulation and plotting a future course for sustainable growth.

The meetings will also include leaders from some of the fast-growing developing countries, such as China, India and Brazil.

The economic turnaround the world has seen is the result of governments spending trillions of dollars, said Glen Hodgson, chief economist of the Conference Board of Canada.

"Governments are really spending our way back to a sustained recovery," Hodgson said.

But analysts have said this G20 meeting is unlikely to end with a treaty-like consensus or trillion-dollar announcements...

The two-day gathering is the third meeting of the Group of 20 top economies in the aftermath of the financial crisis that began a year ago.

A primary goal of the meetings will be to continue to work toward a common approach for global economic recovery and an exit strategy for stimulus programs that will not drive the global economy back into a recession.

Prime Minister Stephen Harper is expected to push G20 leaders to combat protectionist measures and to keep their borders open to trade.

The global economic recovery has been fragile and it's important that G20 countries continue with their stimulus packages and economic reform, Harper has said....

British Prime Minister Gordon Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel will also be urging the G20 to stick to stimulus plans, while avoiding future imbalances in the global economy such as excessive budget deficits.

The U.S. administration will be pushing leaders to agree "on a framework for balanced and sustainable growth, a set of policies, parameters and process" to avoid imbalances that contributed to the global financial meltdown, said Mike Froman, a top economic adviser to U.S. President Barack Obama.

Obama wants the G20 to agree to a new global framework that would require countries to radically change how they manage their economies and restrain dangerous imbalances that range from massive trade surpluses in countries like China, Japan and Germany, to massive trade deficits in countries like the U.S.

Many economists believe that such imbalances helped bring about the world's economic crisis. However, China is resisting the rebalancing plan, fearing that it could be used to attack its trade surplus.

Meanwhile, ... France has moved to curb huge bonuses to its bankers, and is urging the other G20 nations and the European Union to follow suit so the French banking industry is not at a professional disadvantage....