A group of 20 finance
ministers and central bankers from the world’s biggest economies which make up
the G-20, plan to meet in Sydney this weekend with the top priority of
addressing the issue of market turmoil present within the global economy and
discussing ways to reinvigorate global growth. In December, the U.S. central
bank said it would start reducing its monthly Treasury and mortgage bond
purchases, intended to keep interest rates low and support economic recovery in
the aftermath of global recession. Investors responded by pulling out of
emerging markets and channeling their money to the U.S. in hopes of higher
returns, which only contributed to sharp falls in stock markets and the
currencies of some developing countries.
The
key focus of the meeting will be exploring ways of restoring global growth amid
indications that the world’s largest economies are once again slowing. It is
suggested that boosting private investment in infrastructure would help
stimulate growth, and by committing to a global growth target higher than the
Interenational Monetary Fund’s forecast, which is 3.7 percent this year, the
economy will be well on its way to a more stable and secure state.
U.S.
Treasury Secretary Jacob Lew states that boosting global growth and creating
more jobs will be the G-20’s top priority. “Despite signs of improvement,
global growth remains uneven and well below potention, while unemployment
remains stubbornly high in many places,” Lew told reporters in Sydney on Friday.
“The growth strategies that we will be developing must be ambitious in
substance and address both deficiencies in near-term demand as well as
longer-term economic challenges.”
Another
key item addressed will be the failure of the U.S. to pass the 2010 IMP reform
package. Last month, Congress rejected a funding request from the Obama administration
that would have double the IMF’s lending capacity to about $733 billion and
increased the voting power of emerging economies. The international lending
agency’s governing board gave a green light to the overhaul in 2010, and
approval by congress in the last remaining roadblock for it to take effect.
I
think it is necessary that the United States support the IMF reform now in order
to secure global economic stability in the future. With the funding capacity
increase, the global economy will have more room to grow. This reform is not
only in the interest of the United States but will be beneficial to all other
countries as well. In this meeting, the members must come to a consensus and
fund the best possible solution to the present deficit of global economic
growth. Without the cooperation of all economies working together, nothing will
ever get accomplished and the economy will continue to drop.
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