(Reuters) - The leaders of the Group of Twenty (G20) leading and emerging nations will agree at a summit on Thursday to refrain from currency moves that would hurt each other’s economies, according to a draft statement.
Following is the statement, dated March 26, 2009, obtained by Reuters.
1. We, the Leaders of the Group of Twenty met, for a second time, in London on 2 April.Over the last half century strong growth and increasing international trade has brought untold jobs and prosperity to our citizens. We now face the greatest challenge to the world economy in modern times, a crisis affecting the lives of ordinary men, women, and children around the world. A global crisis requires a global solution.
2. We believe that an open world economy based on market principles, effective regulation, and strong global institutions will ensure a sustainable globalization with rising prosperity for all. We are determined to restore growth now, resist protectionism, and reform our markets and our institutions for the future. We have agreed actions to meet these challenges as part of an integrated strategy that will restore confidence and ensure a lasting global recovery. We are determined to ensure that this crisis is not repeated.
Restoring global growth now
3. We are taking unprecedented and concerted fiscal actions to support growth and jobs. Acting together we strengthen the impact of this fiscal expansion, which amounts to a stimulus of more than this year and next and is expected to increase output by more than percentage points and employment by over million jobs. We are committed to deliver the scale of sustained effort necessary to restore growth while ensuring long-run fiscal sustainability.
4. Our central banks have also taken exceptional action, cutting interest rates aggressively and to close to zero in many advanced economies. Our central banks have pledged to maintain expansionary policies as long as needed, using the full range of monetary policy instruments, including unconventional policy instruments, consistent with price stability.
5. We are taking comprehensive action to strengthen our financial institutions in order to restore domestic lending and international capital flows. We have made available over of support to our banking systems to provide liquidity, recapitalize financial institutions, and address the problem of impaired assets. We are committed to take all necessary actions to restore the flow of credit through the financial system and ensure the soundness of systemically important institutions, acting within the agreed G20 Framework for Restoring Lending. These measures underpin and strengthen the impact of our fiscal and monetary policy actions.
6. Emerging and developing countries, which have been the engine of recent world growth, are now facing shocks which threaten stability and jeopardize the global economy. It is imperative that capital continues to flow to them. We have therefore agreed to make of resources available through the international financial institutions. This will finance counter-cyclical spending, bank recapitalization, infrastructure, trade finance, debt rollover, and social support. To this end:
* we have agreed to increase the resources available to the IMF to $ through bilateral borrowing from members of $ subsequently replaced by an expanded New Arrangements to Borrow of $ and borrowing in the market of up to $ if necessary; * we support a substantial increase in lending of $ by the Multilateral Development Banks;
* we will make available $ over the next two years to support trade finance through our export credit and investment agencies and through the MDBs. We have asked our regulators to make use of available flexibility in capital requirements for trade finance.
7. We will ensure these resources can be used effectively to meet the needs of emerging and developing countries. The IMF should implement rapidly its new Flexible Credit Line for countries with strong policies and its reformed lending and conditionality framework. It should also double access to its low income country facilities.
8. We have agreed a general SDR allocation of $ to strengthen global liquidity. 9. The world’s poorest are most at risk from the crisis and we are resolved to support them. We remain committed to meeting the Millennium Development Goals and to achieving our ODA pledges including commitments on Aid for Trade. We are making available $ in social protection for the poorest countries, alongside investing in food security, and we support the World Bank’s Vulnerability Financing Framework. We call on the UN to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable. We have also asked the IMF to bring forward, by the Spring Meetings, proposals to use the proceeds of agreed gold sales to support low income countries.
10. These actions together constitute the largest fiscal and monetary stimulus, the most comprehensive support program for the financial sector, and the greatest mobilization of resources to support global financial flows in modern times. Our objective is that they will enable the global economy to expand by by the end of 2010. We have taken and will continue to take the measures necessary to deliver this outcome. We call on the IMF to assess regularly the actions taken and the actions required.
An open global economy
11. World trade is falling for the first time in. We need to sustain the benefits of globalization and open markets, and promote trade as a crucial driver of growth in the world economy. Therefore:
* we reaffirm the commitment made in Washington not to raise new barriers to investment or to trade in goods and services, including within existing WTO limits, not to impose new trade restrictions, and not to create new subsidies to exports.
We will rectify promptly any such measures. We extend this pledge for a further 12 months;
* we will notify promptly governments and other relevant institutions of any measures which have the potential to cause direct or indirect trade distortions;
* we will minimize any negative impact on trade and investment of our domestic policy actions including action in support of the financial sector. We will not retreat into financial protectionism;
* we commit to conduct our economic policies responsibly with regard to the impact on other countries and to refrain from competitive devaluation of our currencies.
12. We call on the WTO, together with the IMF and other international bodies as appropriate, to report on our adherence to these undertakings on a quarterly basis.
13. We are committed to reaching rapid agreement, on the basis of progress already made, on modalities leading to a successful conclusion of the Doha Round which would boost the global economy by at least $150 billion per annum.