G20 Gives Birth to “Pittsburgh Pact” for Sustainable Growth
25/09/2009
The G20 summit held on 24 and 25 September has given birth to the “Pittsburgh Pact,” which sets out to create a “joint framework” for “strong, balanced, sustainable” growth. The “pact” envisages, among other things, turning the G20 into a standing forum for status monitoring and debate among the countries constituting the major world economies. The decision to invest the G20 increasingly with the economic issues is in line with the goal of building a stronger, more balanced world economy by reforming the financial system and improving living standards in the poorest countries.
The agreement on the issue of financial managers’ bonuses is also of great importance. Indeed, Pittsburgh has called a halt to super-bonuses for banking executives and a clampdown on financial speculation. The draft agreement provides that executives’ pay is to be pegged to long-term performance, thus ruling out any form of automatic link between salaries and immediate results, particularly when this would entail risks either for the banks or for their customers. Agreement has also been reached on the necessity of not lowering the guard against the world financial crisis and of avoiding a premature halt to the economic pump-priming measures.
The G20 is made up of the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. The latter are joined by the European Union, represented by its duty presidency and by the European Central Bank (ECB). Overall, the members of the G20 represent almost 90% of gross world product and 80% of international trade, and over two-thirds of world population as well. This is why the G20 carries great authority and is in a position to wield a considerable influence over the world economic and financial system. And to foster ever-increasing cooperation among the forums and the economic institutions, the G20’s meetings are also attended by representatives from the International Monetary Fund (IMF) and the World Bank.
“The G20 will be the major economic forum in 2010, with the G8 as a distinct summit,” Canadian Prime Minister Stephen Harper has said at a news conference, going on to announce that Canada, which is to hold the G8 duty Presidency next year, would also be hosting a G20 summit in June.
