ID :
162552
Sun, 02/20/2011 - 20:38
Auther :
Shortlink :
https://oananews.org//node/162552
The shortlink copeid
China prevails, G20 waters down resolution on trade imbalances
Paris (PTI) China prevailed upon the G-20
grouping to water down a resolution to correct global economic
imbalances, even as India raised concerns about rising
commodity and energy prices.
The final G-20 communiqué that was issued after two days
of hard bargaining was a compromise worked out between the
member countries, as it excluded key indicators like foreign
exchange reserves and fiscal deficit at the insistence of
China.
"There were differences, therefore in this communiqué, it
was agreed that we will try to identify and complete the
process (of selecting indicators) by April," Indian Finance
Minister Pranab Mukherjee said after the G-20 meeting of
Finance Ministers and Central Bank Governors.
"It has not been simple. There were obviously divergent
interests, but we were able to reach a compromise on a text,"
French Economy Minister Christine Lagarde said.
Sitting on huge foreign exchange reserves, China does
not want these to be included as one of the parameters for
tracking and correcting structural flaws to reduce global
trade imbalances.
China is sitting on USD 2.8 trillion worth of forex
reserves and is accused by the US of manipulating its
currency, the yuan. "Our aim is to agree, by our next meeting
in April" on a set of indicative guidelines to ensure orderly
economic growth, the communiqué said.
Taking on board India's concerns over rising commodity
prices, the resolution called for stepping up investment in
the agriculture sector of developing countries.
Faced with double-digit food inflation, India also
pressed for a coordinated approach to tackle food, commodity
and oil price volatility, which make emerging economies
"vulnerable".
The issue was raised by Mukherjee, who said that "India
did not contribute to the build-up or persistence of global
imbalances", but "found no room for comfort in tackling food
inflation" in the backdrop of high international prices.
Commodity prices increased by 20 to 30 per cent in 2010,
according to International Monetary Fund (IMF) estimates.
The communiqué issued said: "We discussed concerns about
the consequences of potential excessive commodity price
volatility... We reiterated the need for long-term investment
in the agriculture sector in the developing countries."
The ministers also agreed on a plan to strengthen the
international monetary system (IMS) with regard to disruptive
capital flows and disorderly movement in exchange rates, a
matter of great concern to India.
"Today, we agreed on... strengthening the functioning of
IMS... mindful of possible drawbacks and management of global
liquidity to strengthen our capacity to prevent and deal with
shocks...," the communiqué said.
The document also expressed concern over the impact of
rising oil prices, which have exceeded USD 100 per barrel.
It has been decided to call a meeting of the G-20 Energy
Ministers to deliberate on the problem of rising crude oil
prices in the international market.
As far as tax evasion and unearthing ill-gotten money is
concerned, Mukherjee said that about 500 tax information
exchange agreements have been signed.
The communiqué said, "We urge all jurisdictions to extend
further their networks of TIEA and encourage jurisdictions to
consider signing the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters."
India has been at the forefront in raising issues
concerning the parking of slush money in tax havens.
On the contentious suggestion of removing structural
imbalances, the communiqué accommodated China's objections to
the inclusion of forex reserves and current account deficit in
the list of parameters for determining such flaws.
The communique instead said that indicative guidelines
without targets will be used to assess public debt and fiscal
deficit; private savings and private debt; and external
imbalances composed of trade balance and net investment income
flows and transfers, taking exchange rate, fiscal, monetary
and other policies into due consideration.
In the financial sector, the ministers committed
themselves to "regulating and oversight of the shadow banking
system to efficiently address the risks, notably of arbitrage
associated with the shadow banking..."
The shadow banking system, or the shadow financial
system, consists of non-depository banks and other financial
entities (investment banks, hedge funds and money market
funds).
grouping to water down a resolution to correct global economic
imbalances, even as India raised concerns about rising
commodity and energy prices.
The final G-20 communiqué that was issued after two days
of hard bargaining was a compromise worked out between the
member countries, as it excluded key indicators like foreign
exchange reserves and fiscal deficit at the insistence of
China.
"There were differences, therefore in this communiqué, it
was agreed that we will try to identify and complete the
process (of selecting indicators) by April," Indian Finance
Minister Pranab Mukherjee said after the G-20 meeting of
Finance Ministers and Central Bank Governors.
"It has not been simple. There were obviously divergent
interests, but we were able to reach a compromise on a text,"
French Economy Minister Christine Lagarde said.
Sitting on huge foreign exchange reserves, China does
not want these to be included as one of the parameters for
tracking and correcting structural flaws to reduce global
trade imbalances.
China is sitting on USD 2.8 trillion worth of forex
reserves and is accused by the US of manipulating its
currency, the yuan. "Our aim is to agree, by our next meeting
in April" on a set of indicative guidelines to ensure orderly
economic growth, the communiqué said.
Taking on board India's concerns over rising commodity
prices, the resolution called for stepping up investment in
the agriculture sector of developing countries.
Faced with double-digit food inflation, India also
pressed for a coordinated approach to tackle food, commodity
and oil price volatility, which make emerging economies
"vulnerable".
The issue was raised by Mukherjee, who said that "India
did not contribute to the build-up or persistence of global
imbalances", but "found no room for comfort in tackling food
inflation" in the backdrop of high international prices.
Commodity prices increased by 20 to 30 per cent in 2010,
according to International Monetary Fund (IMF) estimates.
The communiqué issued said: "We discussed concerns about
the consequences of potential excessive commodity price
volatility... We reiterated the need for long-term investment
in the agriculture sector in the developing countries."
The ministers also agreed on a plan to strengthen the
international monetary system (IMS) with regard to disruptive
capital flows and disorderly movement in exchange rates, a
matter of great concern to India.
"Today, we agreed on... strengthening the functioning of
IMS... mindful of possible drawbacks and management of global
liquidity to strengthen our capacity to prevent and deal with
shocks...," the communiqué said.
The document also expressed concern over the impact of
rising oil prices, which have exceeded USD 100 per barrel.
It has been decided to call a meeting of the G-20 Energy
Ministers to deliberate on the problem of rising crude oil
prices in the international market.
As far as tax evasion and unearthing ill-gotten money is
concerned, Mukherjee said that about 500 tax information
exchange agreements have been signed.
The communiqué said, "We urge all jurisdictions to extend
further their networks of TIEA and encourage jurisdictions to
consider signing the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters."
India has been at the forefront in raising issues
concerning the parking of slush money in tax havens.
On the contentious suggestion of removing structural
imbalances, the communiqué accommodated China's objections to
the inclusion of forex reserves and current account deficit in
the list of parameters for determining such flaws.
The communique instead said that indicative guidelines
without targets will be used to assess public debt and fiscal
deficit; private savings and private debt; and external
imbalances composed of trade balance and net investment income
flows and transfers, taking exchange rate, fiscal, monetary
and other policies into due consideration.
In the financial sector, the ministers committed
themselves to "regulating and oversight of the shadow banking
system to efficiently address the risks, notably of arbitrage
associated with the shadow banking..."
The shadow banking system, or the shadow financial
system, consists of non-depository banks and other financial
entities (investment banks, hedge funds and money market
funds).
