The G-20 summit held in Toronto signals a new era for international economic cooperation. Countries have pledged to a full return to growth with quality jobs, to reform and strengthen financial systems, and to create strong, sustainable and balanced global growth as per the G-20 communiqu?. In the emerging countries? context, the focus was on strengthening social safety nets, enhancing corporate governance reform, financial market development, infrastructure spending and greater exchange-rate flexibility. The deliverables of the G-20 summit largely focused on how to handle the economies in a post-crisis situation. They fall within the purview of financial sector reforms, IFIs and development, trade protectionism and investment and a broad framework for sustainable and balanced growth.
Within the financial sector, the Basel Committee on Banking Supervision and Financial Stability Board (FSB) will work towards a new global regime for bank capital, liquidity and accounting. This will be adopted at the forthcoming Seoul summit with an aim of implementation by end-2012. The proposal to levy a tax on banks was left to the individual countries. The FSB and IMF will work towards identifying risks and strengthening supervision. Within the IFI reforms, a $350-billion capital increase was granted for MDBs. This capital will be utilised to make the IFI?s more transparent, accountable and effective. Although the voting power of developing countries will increase by 4.59% in the World Bank since 2008, the ratification of IMF quota and voice reforms has not yet materialised. WTO, OCED, UNCTAD and ILO have been requested to monitor the situation and publicly report on trade issues.
Although the Toronto meet was the first summit of G-20 in its new capacity as a forum for international economic cooperation, the deliverables as envisaged by the developing countries haven?t fully materialised. The Seoul summit should address these gnawing issues. Even if the priorities are different for both developed and developing countries, key reforms, such as the IMF quota reform, financial sector reform and progress in Doha development round need to be looked into. If the developed countries are willing to make only piecemeal changes, it may suffer from not truly becoming a platform for international economic cooperation.
?The author is a researcher at Icrier