Washington, Feb 12 (Inditop.com) President Barack Obama has told the US Congress that the key role given to the Group of 20 (G-20) leading economies in the global financial crisis reflects the growing importance of key emerging economies such as India and China.
“Given the central role the G-20 had played in the response to the crisis, it is not surprising that the leaders agreed in Pittsburgh to make the G-20 the premier forum for their economic coordination,” he said in the annual Economic Report of the President.
“This shift reflects a shift that was reinforced by the agreement in Pittsburgh to realign quota shares and voting weights in the IMF and World Bank to better reflect shifts in the global economy.”
The 458-page document sent to the Congress Thursday details the actions taken by Obama to prevent the economy from falling into a depression, and outlines White House’s outlook and policies on areas as diverse as savings and investment, health care and climate change.
The G-20, which includes India and 18 other nations plus the European Union is composed of most of the world’s largest economies, both advanced and emerging, and makes up nearly 90 percent of world’s gross national product.
Turning to the global financial crisis, Obama noted that even as world GDP was estimated to have fallen roughly 1.1 percent in 2009 from the year before, “Asia continued to grow at a robust pace for the year as a whole (over 6 percent)”.
While “industrial production fell in Brazil and Mexico in a manner similar to that in industrial economies, but in China and India it merely stalled for a brief period and then accelerated again”.
“This overall performance in the emerging world is a turnaround from previous crises, where recessions in the advanced countries were followed by sustained collapses in some emerging countries,” he said.
But “rather than resort to beggar-thy-neighbour policies, this crisis has been characterised by international policy coordination,” Obama said, noting: “National policies did not take place in a vacuum; to the contrary, nations used a number of international institutions to coordinate and communicate their rescue efforts.”
Turning to climate change, Obama said: “Developing countries such as China and India are responsible for a growing proportion of emissions because of their heavy reliance on carbon intensive fuels, such as coal.”
“Given the global nature of the problem and the declining US share of greenhouse gas emissions, US actions alone to reduce those emissions are insufficient to mitigate the most serious risks from climate change.”
Thus “cooperation by both past and future contributors to emissions will be required to stabilise the atmospheric concentrations of greenhouse gases,” he said.
In December, the US worked with major emerging economies, including Brazil, China, India, and South Africa, developed countries, and other regions around the world to secure agreement on the Copenhagen Accord, Obama recalled.
The US, he said, also spearheaded an agreement in September to phase out fossil fuel subsidies among G-20 countries, a goal seconded by countries in the Asia-Pacific Economic Cooperation (APEC) in November.
The G-20 also called on all nations to phase out such subsidies worldwide, he said, noting “fossil fuel subsidies are particularly large in non-OECD countries, such as India and Russia”.
