G20 to thrash out 'tangible' growth framework

Seek transparency in Fed tapering plan

G20 to thrash out 'tangible' growth framework

G20 ministers on Saturday began their two-day deliberations to work out a "real and tangible framework" to push global growth amid clamour for a more transparent tapering programme by the US Fed Reserve with a view to reducing volatility in the global financial markets.

Australia, which is the chair of the G20, wants the ministers to agree to a tangible plan to achieve the collective global goal of promoting growth and lifting economies which are still reeling under the impact of the economic slowdown.

Talking to reporters ahead of the G20 ministerial meeting, Australian Treasurer Joe Hockey hoped that the ministers would "lay down a real and tangible framework for increasing growth of the global economy in the next five years".

The finance ministers and the central bank governors of G20 nations, which represent 85 per cent of the global economy, should come out with "real outcomes" to enhance cooperation to deal with volatility in global financial markets, he stressed. The contentious issue, however, is the tapering or withdrawal of monetary stimulus by the US Federal Reserve as it is having major implications on the markets in developed and emerging economies.

Indian Finance Minister P Chidambaram who reached here on Saturday will also pitch for greater transparency in the US Fed’s tapering operations, expeditious reforms of IMF and automatic sharing of tax information.

Hockey endorsed India's demand for a "forward guidance" on tapering by the US Federal Reserve when he made a case for a "no surprises policy" as far as monetary activities were concerned. "That is what the central bank governors are waiting for," he added.

The Fed first talked about tapering in May 2013, sending markets the world over into turmoil and the Indian rupee to a record low. Though the situation has improved much since then, the fears remain.

The US Fed has reduced its monthly bond purchases by $20 billion to $65 billion on signs of an improving US economy. The reduction in stimulus, it is feared, may affect capital flows to emerging markets and impact their currencies.

India is represented by Reserve Bank Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram at G20 ministerial which will provide crucial inputs to the leaders' summit in Brisbane on November 15-16.

Concrete assurances

At the meeting of the Finance and Central Bank Deputies on Friday, Mayaram made a strong case for expediting International Monetary Fund (IMF) quota reform to give greater voting powers to emerging economies.

Using strong words, he described the inability of the IMF to move ahead with the quota reforms as "first visible failure of the G20" and asked the member nations to expeditiously ratify the 14th General Review which aimed at providing greater say to the developing world in the multilateral body. "We strongly stated that it is unfortunate that despite agreement in G20, implementation of 2010 reforms, which is vital for credibility, legitimacy and effectiveness of the IMF, have not been completed and we have missed the deadline of January 2014," he had said.

Chidambaram is expected to pursue the matter further to get concrete assurances from G20 members on expeditious reform of the multilateral body.

Besides the IMF reforms, India is also pressing for inclusion of tax avoidance besides tax evasions as part of the the overall global tax agenda. It will also push the case for automatic exchange of financial information that would help the member nations in dealing effectively with tax evasion.

The G20 is scheduled to come out with a communique on Sunday reflecting the broad consensus that would emerge during the two-day deliberations of the Finance Ministers and Central Bank Governors.

Narendra Modi or Rahul Gandhi? Who will win the battle royale of the Lok Sabha Elections 2019

Get real-time news updates, views and analysis on Lok Sabha Elections 2019 on Deccanherald.com/news/lok-sabha-elections-2019 

Like us on Facebook or follow us on Twitter and Instagram with #DHPoliticalTheatre for live updates on the Indian general elections 2019.

Liked the story?

  • 0

  • 0

  • 0

  • 0

  • 0