G-20 Backs Sustained Crisis Response, Shift in IMF Representation

• Author: International Monetary Fund

In a communiqué, the leaders said the forceful policy response to the crisis had helped stop a dangerous, sharp decline in global activity and stabilize financial markets. Industrial output is now rising in nearly all economies and international trade is starting to recover. The leaders quoted IMF analysis showing the global economy expected to grow at nearly 3 percent by the end of next year.

The leaders, meeting on September 25, said they decided to designate the G-20 as the "premier forum for our international economic cooperation." The G-20 leaders also agreed to continue strengthening regulation of the international financial system; protect consumers, depositors, and investors from abusive market practices; and encourage the resumption of lending to households and businesses. They asked the IMF to help the G-20 with its analysis of how national or regional policy frameworks fit together.

At the same time, they stressed their commitment to the world's poorest countries, saying "steps to reduce the development gap can be a potent driver of global growth."

IMF Managing Director Dominique Strauss-Kahn welcomed the G-20's continuing support of the IMF and noted the leaders' reaffirmation of their London Summit initiative to reach agreement on IMF quotas by January 2011. "The April 2008 quota and voice reforms were a first step to enhance the voice and representation of the world's emerging and developing countries. Today's G-20's commitment to a shift in quota share to dynamic emerging market and developing countries of at least five percent from over-represented to under-represented countries, and to protect the voting share of the poorest in the IMF, is a decisive move. This historic decision, and the emergence of the G-20 as a key forum for international economic cooperation, will lay the foundation for a deeper partnership in global economic policy between emerging and developing countries and the advanced economies," Strauss-Kahn said.

Delivering on commitments

The G-20 leaders said they had delivered on their commitment to treble the resources available to the IMF to combat crises. "This commitment and the innovative steps the IMF has taken to create the facilities needed for its resources to be used efficiently and flexibly have reduced global risks. Capital again is flowing to emerging economies," the communiqué said.

The leaders said the...