TEXT-G20 appendix on framework for sustainable growth

ST ANDREWS, Scotland, Nov 7 (Reuters) - Following is the
text of an appendix to the communique issued by finance
ministers and central bank governors at their meeting in St.
Andrews, Scotland.

For the text of the communique, click [ID:nFCC000060].

A FRAMEWORK FOR STRONG, SUSTAINABLE AND BALANCED GROWTH:
DEVELOPING THE 'MUTUAL ASSESSMENT PROCESS'

Shared policy objectives

1. In line with the Pittsburgh commitment, G20 Finance
Ministers and Central Bank Governors at their meeting in St
Andrews, reaffirmed their shared objectives of strong,
sustainableand balanced growth and of raising living standards
in the emerging markets and developing countries.

2. The first challenge for the G20 in using the new
Framework will be the transition from crisis response to a
strong, more sustainable and balanced pattern of global growth.

The G20 template for 'national and regional policy
frameworks' for 2010

3. Each G20 country will set out their medium-term policy
frameworks, plans and projections in the agreed template on a
consistent basis with other G20 members. G20 members will
indicate the key forward-looking elements of their policy
frameworks and plans, outline the expected first order impact of
policies on the domestic economy and, more generally, their
national forecasts for key economic variables.

4. They will provide the Fund with policy frameworks and
plans for the next 3-5 years, if possible. Countries can submit
data based on existing products, including for example national
budgetary plans and Article IV inputs. Countries should fill in
as much information as they can, though it is recognised that it
may not be possible for all countries to fill in every piece of
information in the template. G20 members should complete the
template, sharing with all other G20 countries at the same time,
by the end of January 2010, if possible.

5. In addition to national submissions, the process should
include submissions from the relevant European institutions in
line with their areas of competence.

The role of the IMF, World Bank and other international
organizations

6. In line with the Pittsburgh agreement, the IMF will
assist us by providing analysis (and technical support where
appropriate)of how our respective national or regional
frameworks fit together and the World Bank will advise us on
progress in promoting development and poverty reduction as part
of the rebalancing of global growth, taking into account the
relevant institutional policy setups.

7. In carrying out its analysis for the mutual assessment,
theFund should also receive input from and draw on the expertise
of other international organisations, as appropriate, for both
assessing G20 policies and in analysing the impact of policy
options, including: the FSB on financial policies; the ILO on
labour market policies; the WTO on trade policies; and the OECD
and UNCTAD, where appropriate.

The process and timetable for 2010

By end-January, if possible: G20 countries set out their
national policy frameworks and plans - sending their completed
templates to the IMF and sharing with other G20 members.

By mid-February: G20 countries interact with the IMF to
assure quality, elaborate and clarify any information supplied
in the template, where necessary, during the following 2-week
period; and, to identify inconsistencies and incoherence in
national assumptions, particularly between forecasts and
frameworks/plans.

Mid-February to April: IMF analysis to analyse the mutual
compatibility of country frameworks and policies and calculate
the aggregate impact of the frameworks and policies for global
economic prospects. To ensure consistency, the Fund will apply
common underlying assumptions to the country-specific
information/data, which may result in adjustments to forecasts
where necessary.

On the basis of this analysis and inputs from the World Bank
and other international organisations, and consulting countries
where appropriate, the Fund will produce an initial report
containing a 3-5 year forward-looking assessment of global
economic prospects, conditional upon national policy frameworks
and plans ('the base case scenario'), and an initial indication
of any policy issues and possible alternative policy scenarios
that may be useful to explore.

April (Spring meetings): Deputies, Ministers and Governors
consider initial Fund analysis, discuss any policy issues,
including any risks caused by inconsistencies in the collective
G20 policy mix or other risks, and consider and agree the
different alternative policy scenarios that should be modelled
by the Fund. (Other parts of national administrations will be
involved where appropriate).

April-June: Fund produces policy scenarios - based on
Finance Ministers' decisions taken in April, the Fund will
provide more concrete analysis of how medium-term global
prospects might be enhanced through collective policy actions to
reach or get closer to the agreed shared objectives. The IMF
will not focus on country-specific assessments or
recommendations but will come forward with policy
recommendations for groups of countries facing similar
circumstances. The Fund's report will be modelled on the recent
G20 Surveillance Notes, using simulations and discussions of
alternative policy scenarios as ways to illustrate how enhanced
policy coordination could help achieve better outcomes for
everyone.

World Bank prepares analysis of the implications of
collective G20 policies for development and poverty reduction -
on the basis of national frameworks and plans and the Fund's
base case scenario and alternative policy scenarios.

June: G20 mutual assessment and consideration of policy
options - working on the basis of Fund analysis and inputs from
the World Bank and other international organisations, the G20
will develop a basket of policy options designed to ensure that
the G20 achieve their objectives, based on a range of policy
scenarios. These policy options will relate to the full range of
policy commitments made in Pittsburgh. G20 Deputies will prepare
a report for discussion and agreement, firstly by Finance
Ministers and Central Bank Governors at their preparatory
meeting and then by Leaders at their Summit in June 2010. There
are a number of possible publishing options - decisions on
publication of the mutual assessment and policy scenarios will
need to be taken nearer the time.

June to November: Refinement and updating of the mutual
assessment process - with the assistance of the IMF, World Bank
and other international organisations. The Fund will provide
refined and updated analysis to the G20 by the end of August. If
desirable, G20 countries can update their policy frameworks,
plans and projections.

November: Refined mutual assessment and more specific policy
recommendations for consideration and agreement by Finance
Ministers and Central Bank Governors at their preparatory
meeting, and by Leaders at their Summit in November 2010.