ID :
162168
Fri, 02/18/2011 - 17:19
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Shortlink :
https://oananews.org//node/162168
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G-20 to discuss global imbalances, surging food prices
PARIS, Feb. 18 Kyodo -
The Group of 20 financial chiefs are set to hold a two-day meeting in Paris from Friday evening to discuss ways to reduce global imbalances and address soaring food and energy prices to steer the world economy toward a sustainable and balanced growth path.
During the talks, the finance ministers and central bank governors of the G-20 developed and emerging economies are likely to have a heated debate on what guidelines should be used to assess economic imbalances.
While several yardsticks, including current account balance, effective currency exchange rates and foreign currency reserves, have been floated as possible measurements, gaps remain between developed and emerging member economies.
A U.S. Treasury Department official told reporters earlier that the United States does not expect agreement on the guidelines to be reached at the Paris meeting, saying technical discussions will likely continue in the first half of the year.
On the other hand, Japanese Finance Minister Yoshihiko Noda said while the G-20 economies are still divided, ''It is possible for the G-20 to agree'' on a set of indicative guidelines at the meeting.
''It would be progress if we agree on indicative guidelines,'' Noda told reporters in Paris on Friday morning, adding that what is important is to work toward correcting global imbalances rather than arguing over the specifics of the guidelines.
He added the issue of tackling global imbalances is expected to dominate the G-20 meeting.
France, which holds the rotating chair of G-20 conferences this year, is also keen on taking up the issue of rising commodity prices at the talks.
But this is another area of disagreement, with some member economies opposed to the imposition of strict regulations on commodity markets, arguing that spikes in food and energy prices basically reflect strong demand in fast-growing economies.
Noda said the G-20 members will merely ''kick off discussions'' on the matter at the ministerial gathering and are unlikely to reach any specific conclusions.
Bank of Japan Governor Masaaki Shirakawa told reporters on Friday morning, ''There are various arguments about international commodity price hikes and I think we need solid discussions on what factors are behind the movements.''
Shirakawa also said he will brief other G-20 participants about the current state of the Japanese economy during the meeting.
The participants will also likely discuss how to address growing capital inflows into emerging economies amid concern they could spark inflation and derail the countries' high economic growth.
With regard to the issue, Noda said he plans to explain Japan's policy of strengthening coordination between the Chiang Mai Initiative, a regional currency swap agreement in Asia, and the International Monetary Fund.
France is also pushing for discussions on reviewing the international monetary system by proposing that the yuan be included in the composition of the IMF's special drawing rights.
The value of the SDR, created by the IMF in 1969, is determined by the weighted average of added values of the U.S. dollar, euro, pound and yen.
While France denies intending to challenge the dollar's position as the world's preeminent reserve currency, U.S. Federal Reserve Chairman Ben Bernanke said earlier this month that the dollar's position in the global economy will not change.
The G-20 financial chiefs will conclude their meeting on Saturday afternoon and release a communique.
The G-20, accounting for 85 percent of world output, groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
The Group of 20 financial chiefs are set to hold a two-day meeting in Paris from Friday evening to discuss ways to reduce global imbalances and address soaring food and energy prices to steer the world economy toward a sustainable and balanced growth path.
During the talks, the finance ministers and central bank governors of the G-20 developed and emerging economies are likely to have a heated debate on what guidelines should be used to assess economic imbalances.
While several yardsticks, including current account balance, effective currency exchange rates and foreign currency reserves, have been floated as possible measurements, gaps remain between developed and emerging member economies.
A U.S. Treasury Department official told reporters earlier that the United States does not expect agreement on the guidelines to be reached at the Paris meeting, saying technical discussions will likely continue in the first half of the year.
On the other hand, Japanese Finance Minister Yoshihiko Noda said while the G-20 economies are still divided, ''It is possible for the G-20 to agree'' on a set of indicative guidelines at the meeting.
''It would be progress if we agree on indicative guidelines,'' Noda told reporters in Paris on Friday morning, adding that what is important is to work toward correcting global imbalances rather than arguing over the specifics of the guidelines.
He added the issue of tackling global imbalances is expected to dominate the G-20 meeting.
France, which holds the rotating chair of G-20 conferences this year, is also keen on taking up the issue of rising commodity prices at the talks.
But this is another area of disagreement, with some member economies opposed to the imposition of strict regulations on commodity markets, arguing that spikes in food and energy prices basically reflect strong demand in fast-growing economies.
Noda said the G-20 members will merely ''kick off discussions'' on the matter at the ministerial gathering and are unlikely to reach any specific conclusions.
Bank of Japan Governor Masaaki Shirakawa told reporters on Friday morning, ''There are various arguments about international commodity price hikes and I think we need solid discussions on what factors are behind the movements.''
Shirakawa also said he will brief other G-20 participants about the current state of the Japanese economy during the meeting.
The participants will also likely discuss how to address growing capital inflows into emerging economies amid concern they could spark inflation and derail the countries' high economic growth.
With regard to the issue, Noda said he plans to explain Japan's policy of strengthening coordination between the Chiang Mai Initiative, a regional currency swap agreement in Asia, and the International Monetary Fund.
France is also pushing for discussions on reviewing the international monetary system by proposing that the yuan be included in the composition of the IMF's special drawing rights.
The value of the SDR, created by the IMF in 1969, is determined by the weighted average of added values of the U.S. dollar, euro, pound and yen.
While France denies intending to challenge the dollar's position as the world's preeminent reserve currency, U.S. Federal Reserve Chairman Ben Bernanke said earlier this month that the dollar's position in the global economy will not change.
The G-20 financial chiefs will conclude their meeting on Saturday afternoon and release a communique.
The G-20, accounting for 85 percent of world output, groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
