G-20 summit lays ground work for long-term prosperity: Obama

G-20 summit lays ground work for long-term prosperity: Obama

President Barack Obama answers questions during a news conference at the conclusion of the G-20 summit, in Pittsburgh on Friday. APTerming the third round of G-20 Summit in Pittsburgh as a success, Obama said it has achieved an unprecedented level of tangible global economic cooperation even as acting to address the threat posed by climate change.

"We've brought the global economy back from the brink. We laid the groundwork today for long-term prosperity as well," he said at a post-summit press conference, which was attended by leaders of the top 20 economies of the world.

"Here in Pittsburgh we have taken several significant steps forward to secure our recovery and transition to strong, sustainable and balanced economic growth," he underlined.
"At the G-20, we have achieved a level of tangible global economic cooperation that we have never seen before, while also acting to address the threat posed by climate change," he said.

The President said because the global economy is now "fundamentally interconnected", "we need to act together to make sure our recovery creates new jobs and industries, while preventing the kinds of imbalances and abuse that led us into this crisis."

He warned against the "boom-and-bust economy of the past". "Going forward, we cannot tolerate the same old boom-and-bust economy of the past. We can't grow complacent. We can't wait for a crisis to cooperate", he said.

Briefing reporters on the key highlights of the Pittsburgh summit, Obama said the new frame work will allow each of these countries to assess the other's policies, to build consensus on reform and to ensure that global demand supports growth for all.

The G-20 countries, he said also agreed to take concrete steps to move forward with tough new financial regulations so that crisis like this can never happen again.
"Third, we agreed to phase out subsidies for fossil fuels, so that we can transition to a 21st-century energy economy, a historic effort that would ultimately phase out nearly USD 300 billion in global subsidies," the US leader said as the Summit of leaders of the top 20 economies of the world came to an end.

This reform will increase the energy security, transform economy, and will help combat the threat posed by climate change. "All nations have a responsibility to meet this challenge. And together we have taken a substantial step forward in meeting that responsibility," he underlined.

Finally, Obama said the G-20 countries agreed to reform the system of global economic cooperation and governance. "We can no longer meet the challenges of the 21st century with 20th-century approaches. That's why the G-20 will take the lead in building a new approach to cooperation," the President said.

The US President underlined the importance of making key global institutions "reflect the reality of our times" by shifting  more responsibility to emerging economies.
"To make our institutions reflect the reality of our times, we will shift more responsibility to emerging economies, within the International Monetary Fund, and give them a greater voice," Obama said.

He also highlighted the need to establish a new World Bank trust fund to help the world's most vulnerable move out of poverty.

"To build new markets and help the world's most vulnerable citizens climb out of poverty, we established a new World Bank trust fund, to support investments in food security and financing for clean and affordable energy," he said.

As the Pittsburgh Summit of leaders of the top 20 economies of the world came to an end, the White House said it marks a critical transition from crisis to recovery.
They agreed to continue their stimulus until recovery is secured and to start identifying the best ways for the G-20 to coordinate efforts to wind down the enormous fiscal, monetary, and financial support efforts taken in response to the crisis once recovery is secured.

The G-20 also adopted Obama’s proposed Framework for Strong, Sustainable and Balanced Growth, which outlines a process for economic cooperation and coordination to help ensure that post-crisis policies avoid a return to dangerous imbalances that undermine long-term economic growth.

This is the first time such a large number of countries – the G-20 accounts for 85 percent of world output -- have agreed to work together to adopt policies to ensure strong growth for all.

The G-20 agreed to strong international standards for bank capital – calling on banks to hold more and higher quality capital -- and also agreed to strong international standards for compensation aimed at ending practices that lead to excessive risk-taking, the White House said.

It also committed to phase out fossil fuel subsidies over the medium-term while providing targeted support to help the poorest. The leaders asked their Energy and Finance Ministers to report on their implementation strategies and timelines at the next meeting of the G-20.

This groundbreaking effort will encourage the conservation of energy, improve energy security, and provide a down-payment on their commitment to reduce greenhouse gas emissions, the White House said.

Committing to update the architecture for global economic cooperation, the G-20 leaders reached a historic agreement to put the G-20 at the centre of their efforts to work together to build a durable recovery and reform the international financial system.

As part of this modernisation, they agreed to a shift of at least five percent in IMF quota share from over-represented countries to underrepresented countries, giving dynamic emerging market and developing economies a greater decision making power in the IMF in line with their weight in the global economy.

They also agreed to an increase of at least three percent in the voting power of developing and transition countries at the World Bank and called on a reformed Bank to play a leading role in responding to challenges that require globally coordinated action.

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