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ECONOMIC IMBALANCES NEED TO BE ADDRESSED

 

The forthcoming G20 Cannes Summit in November 3-4, 2011 is already taking the most public eagerness and significant in the global politics. It is expected that in Cannes all G-20 leaders will take effective mandate forward for paving the way for sustainable development and balanced growth.  G-20 represents over 85% of world economy and has been developing as a leading forum for international economic co-operation and new global economic governance.  G-20 Seoul Summit leaders committed to work to tackle the global economic “tension and vulnerabilities” by the searching the common ground.  Nevertheless, we must agree to work harder to our commitments. Concerning to the need to re balance the world economy this upcoming summit is also very significant to paved the new strategy for the global leaders. Furthermore, the relationship and work group between G-20 and G-8 should be respected and should be made strong framework for its implementation. Besides that, G-20 leaders adopted the Seoul Development Consensus for shared growth with a multi- year action plan and hope this would go further in Cannes Summit. The ongoing Euro zone deficit and debt crisis in many Euro zone strongly expressed a large and long term economic growth plan. French President Nicolas urges G-20 to promote global economic growth plan and gradually reducing the deficit and debt must be more important to make reliable measures rather to go for global implementation of austerity measures. During the speech in Ely see Palace in France he mentioned that “In order to control the global economic imbalances. He pointed out that in China private consumption accounts for only 35% of GDP, while in Europe, the rates were 60 % and 70 % level”.

 2011 Cannes Summit: Priorities of the French Presidency

  • Coordinating economic policies and reducing global macroeconomic imbalances
  • Strengthening financial regulation
  • Reforming the International Monetary System
  • Improving global Governance
  • Working on behalf of development

G-8 Pledge for Arab world and possible outcomes may seen in G-20 Cannes Summit

Group of 8 Countries (G-8) nation have pledged nearly $58 billion to several Arab Countries to help with re-construction and moves towards democracy.  Out of 58 billion, $ 38 billion will be contributed by development banks through 2013 and more than $ 200 billion from the G-8 and the wealthy Arab Countries. The Marseille meeting agreed figure is doubled a sum comparing to the meeting in the northern French Seaside town of Deauville in May. During the meeting in Marseille, the original Arab Spring Partnerships was extended to Jordan and Morocco. The leaders of the Transitional National Council as well as representatives of several Mediterranean countries committed to fully overthrow the Gaddafi regime from Libya and boosting the economic activity in Libya, Predominantly the encouragement of oil and gas exports. Underlining this fact, upcoming November G-20 summit leaders may address the Arab World issues for her re-construction and democratic reforms. During the meeting, International Monetary Fund (IMF) recognized Libya’s post –Gaddafi Leadership as well as National Transitional Council (NTC) as the legal legislature of the Libyan People.  According to the IMF head Christine Legarde, “The IMF can actually extend an approximate total of $35bn for the region and particularly with the focus on those that are oil-importing countries because, as we know, they are the ones that are suffering the most from the high commodity prices, whether it’s fuel or prices of food”.

Financial Transaction Tax at upcoming G-20 Cannes Summit

On 23-24 June, 2011GDA campaigners performed the Global Day of Action on the Financial Transaction Tax (FTT) with the motive to pressurize and make the entire concerned bodies alert and stick on it on upcoming G-20 November. This could go further on the influence of the formation of Euro-zone FTT raising heavy amounts for tacking the global issues. The European Union must push for the adoption of a Financial Transaction Tax at a G20 Summit. “Ahead of the Cannes summit, we will come out with a proposal for a European financial transaction tax and we are committed to explore this further also at the G20 level,” European Commission President Jose Manuel Barrosco said in a televised address. European Banks have poured disrespect the idea of a Financial Transaction Tax.”The G20 must now address the global economic crisis into an opportunity to help the world poorest. A tiny tax on the banks could raise hundreds of billions needed for those around the world feeling the effects of crisis they did the least to create” Jenny Ricks, Head of Campaigns at Action Aid. FTT is new financing required to generate the huge financial resources, to pay for the global financing and economic crisis and as well as reducing the unemployment rate and Climate Change combat.

From Seoul to Cannes; implementation and new expectation

Global Financial Safety Nets (GFSN) and International Monetary system Reforms agenda receive promisingly new approach especially by Korean Government. Talking about Cannes Summit it must go under the depth and structural approach of GFSN issues paved by Seoul Declaration.  International Monetary System reform issues in Cannes Summit may have to focus on the implementation rather for the academic approach.  Secondly, many of them predicted that the success of Seoul Summit “Currency wars” or currency imbalances would rather get effective policy and coordination to address the global imbalances. Seoul summit had drawn up Multi-Year Action Plan in nine key pillars of economic growth including infrastructures, food security and human resource development.  This year summit must draw a linkage between the developing countries and G-20 for the possible outcomes and successful implementation of L.D.C summit and Aid Effectiveness. Moreover, developing and underdeveloped countries must be supported by the Group of 20 countries. According to the Changyong Rhee, Former G-20 Sherpa, and Republic of Korea, he said that “G-20 is not just about crisis management, but also about global economic management beyond crisis”. Cannes summit must underline this quote and must work for long term goal for the Debt crisis prevail in the Euro zone. Price volatility and food security issues have been taken significantly as the major G-20 agenda by France. The coordination among G-20 leaders should be improved gradually. After the meeting in June, all G-20 agricultural ministers sanctioned the components of an action plan to present to the leaders at the Cannes summit. Reviewing this plan it has numerous positive elements, but critically defined both bio-fuel and financial regulatory policy reform. The upcoming Cannes Summit should address these limitations as well as should strength the role of agriculture assistance and it must be developed as catalyst for more efficiency of G-20. So, it becomes essential for the G-20 leaders to go behind the strong approach in solving the imperative global economic problems of today whereby they begin the new road for the sustainable economy.

(Also published in www.sauravrajpant.com.np)

 

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