The global economy has got a boost finally. The G20 Meeting has decided to pump $1.1 trillion into the world economy before the end of 2010 through the multilateral institutions such as the International Monetary Fund (IMF). The members of G20 have also mutually agreed that the secrecy age had pledged to undertake measures for more transparency, which includes tax havens. Greater transparency will be ensured by highlighting the names of those who do not conform to the transparency norms. They will try to impose sanctions against those who hold out.
The booster dosage, coupled with the measures initiated by respective individual governments would amount to a total of fiscal stimulus package of about $ 5 trillion towards the end of 2010. This will enable the global economy to return to its path of growth much ahead then earlier predicted.
The $1.1 trillion boost up will also be consisting of further addition of $500 billion in the resources of IMF, trade finance support of about $250 billion, a newer allocation of special drawing rights (SDRs), which will be worth $250 and an additional $100 million for lending to the poorest countries by banks involved in multilateral developments.
In the case of protectionism, concrete action was taken as mentioned earlier. Not much progress has been achieved on this issue.
Indian Prime Minister, Dr. Manmohan Singh is very happy about the outcome of the G20 meeting. He said this in a briefing given to the media after the Summit meeting had concluded. He was much pleased about India becoming a member of the Financial Stability Forum and also the Basle Committee on supervision of banks.
Dr. Manmohan said that the $1.1 trillion being injected into the economy would stimulate output as well as growth. This would be beneficial to India as normally the external environment was hitting the growth trajectory of India.
Commenting on the IMF, World Bank as well as global regulatory framework, Dr. Singh said that traditionally there had been excessive surveillance of operations in the developing world by these world bodies. Now, this will change. The present economic crisis did not emerge from developing countries, but from center of capitalism.
Dr. Singh said that the re balancing of the quotas within IMF keeping in view the current economic realities did not materialize. He was, of course, hopeful that the issue will be raised in review meeting supposedly to be held by the British Prime Minister, Gordon Brown, which he will undertake along with the finance ministers of G20.