Sustained Efforts Toward World Economic Recovery

  • 7 September 2009

The G-20 Finance Ministers’ meeting held in London last Saturday developed important understanding on moving forward to rid the world of the current financial crises. Agreement was reached on setting global standards to govern bankers’ bonuses and incentives and the necessity to maintain economic recovery that was initiated last year to confront the crisis. Also, the Managing Director of the International Monetary Fund, Dominique Strauss-Kahn, announced that the Fund has succeeded in obtaining $500 billion from additional resources, which was decided by the leaders at the G-20 summit in April 2009. At the summit, several countries had expressed their readiness to fulfill their obligations stipulated by the IMF. India said it would purchase $10 billion worth of (SDR)-denominated notes issued by the IMF, and China announced that it would buy $50 billion worth of such notes as well. The Finance Ministers of the “G-20” states said that they expected rapid implementations of reforms for the management of international financial institutions, which was agreed upon in 2008.

There was consensus on the need to continue the implementation of international economic incentives, despite signs of recovery in the global economy. This points to an important fact, that there is keenness to treat the root causes of the global financial crisis. One of the important issues in this context is that reforming international financial institutions like the International Monetary Fund and the World Bank has become an important priority on the agenda for international efforts at present and coming times. This means that there is an awareness of the fact that the financial crisis, which the world is going through, has its special structural reasons that affect international economy.

Despite some differences between developed and developing countries or within the group of developed countries and among emerging nations, it is obvious that there is serious concern on addressing the “economic crisis.” There is also a strong sense of its gravity and any complacency in dealing thereon. This is manifest in common keenness to move forward with stimulus measures and economic reforms in order to completely overcome the negative effects of this crisis. The message addressed by many economic forces during the London’s “G-20” finance ministers meeting recently, was an important one, because although the global economy is witnessing some recovery from the setback, it is still going through a difficult and critical phase, according to British Prime Minister Gordon Brown. The US Treasury Secretary recently has also said that, significant challenges still loom over the horizon although growth is coming. This situation, where signs of growth co-exist with challenges and obstacles, require more efforts, cooperation and participation at the international scene to enhance prospects of growth.