The New Nation - Internet Edition

BBC Online

World leaders at the G20 financial summit in Washington have pledged to work together to restore global growth.

They said they were determined to work together to achieve "needed reforms" in the world's financial systems.

US President George W Bush said that finance ministers would now work on detailed reform proposals, and then report back.

Leaders of emerging economies said the summit marked a historic shift of power away from the richer countries.

Bush's successor in the White House, Barack Obama, said in a statement that he was ready to work "together on these challenges" with the G20 when he takes office in January.

"The president-elect believes that the G20 summitt is an important opportunity to seek a coordinated response to the global financial crisis," said a statement issued in his name.

The meeting brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others - representing 85% of the world economy.

For the leading emerging economies, the significance of this G20 summit was clear - they now have to be taken into consideration in the management of the global economy.

Brazil's President, Luiz Inacio Lula da Silva, said: "We are talking about the G20 because the G8 doesn't have any more reason to exist."

Key issues agreed by world leaders at this summit included:

Reform of international financial institutions such as the World Bank and the International Monetary Fund, An agreement by the end of 2008, Leading to a successful global free-trade deal, Improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions, making sure banks and financial institutions' Incentives "prevent excessive risk taking", Asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system, strengthening countries' financial regulatory regimes, Taking a "fresh look" at rules that govern market manipulation and fraud. In his address at the end of the summit, Bush said there was no doubt that the financial crisis facing the United States and many other countries was a severe one.

Everyone is affected by this downfall. Budgets of households and big corporations are equally affected.

He said it had even been conceivable that the US "could go into a depression greater than the Great Depression".

"We are adapting our financial systems to the realities of the 21st century," he said.

Speaking after the summit, UK Prime Minister Gordon Brown said the group had reached important conclusions "about trade, about financial stability and about the expansion of our economies".

Russian President Dmitry Medvedev said the global financial structures created at the end of WWII were now inadequate.

"It will be necessary to rebuild the whole international financial architecture, make it open and fair, effective and legitimate".

The stalled Doha round of global trade talks should be pushed forward so that a basic agreement can be reached before President Bush leaves office in January, said German Chancellor Angela Merkel.

"If there is the political will, it would be good if we could reach an agreement in the Doha round with the present US administration."

In their joint closing statement, leaders said the reforms would only be successful, if they were "grounded in a commitment to free market principles".

G20 leaders say they will meet again by 30 April, 2009, to review progress.

The next summit looks set to be held in London, with US President-elect Obama attending.

Although no formal decision has been announced, France's President, Nicholas Sarkozy, made it clear that he expects London to be chosen as the venue.

The G20 group of countries consists of 19 leading industrialised and developing countries, as well as the European Union.

Describing as a "plain-vanilla stuff" the outcome of the G-20 summit on the financial crisis, analysts have said it left substantive issues to future meetings and was unable to bridge the ideological gap and articulate a coordinated global response.

For all the talk of action and history-making change, some experts said the outcome was disappointing. "This is plain-vanilla stuff they could have agreed on without holding a meeting," Simon Johnson, an economist at the Massachusetts Institute of Technology (MIT) and a former chief economist of the IMF said. "What's new, except that this is the G-20 instead of the G-7?"

The influential financial daily, the 'Wall Street Journal' said, the group left most tough decisions to President-elect Barack Obama who will have to confront a tangle of high-stake economic and regulatory issues immediately after taking office.

"Many of the issues discussed this weekend - including credit rating agency reform, accounting standards convergence, and affirmation of open trade and investment - were issues already being studied," Tim Ryan, President of the Securities Industry and Financial Markets Association, told the Journal. "We hope this summit will provide additional political will to move these important issues forward."

The group vowed to help developing countries get access to financing, including ensuring the International Monetary Fund and other multilateral development banks have sufficient funding. And it said the poorest countries should have a greater voice at the World Bank and IMF.

But an economist at California State University Sung Won Sohn told the Journal, "the devil is in details. Despite the good intentions, progress will be arduous and slow. Each nation has its own agenda complicating matters."