G20 draft communique forecasts growth in 2010

LONDON (AFP) - Group of 20 leaders predict that the world economy will start to grow again by the end of 2010 in a draft communique for their London summit this week reported by the Financial Times on Sunday. The 24-point draft reiterates pledges to avoid protectionism but is sketchy about a global approach to a fiscal stimulus package. In a report on its website, the newspaper said the fiscal stimulus measures taken by individual countries will increase global output by more than two percentage points and create more than 20 million jobs. With action to support the financial and banking systems and increased resources for the International Monetary Fund, the world economy could expand by the end of next year, the communique added. The leaders of the 20 major economies meeting in London on Thursday say that a "global crisis requires a global solution", the FT reported. "We are determined to restore growth now, resist protectionism, and reform our markets and institutions for the future... We are determined to ensure that this crisis is not repeated," they pledge. They state their belief in "an open world economy based on market principles, effective regulation, and strong global institutions" to ensure "a sustainable globalisation with rising prosperity for all". "We will not retreat into financial protectionism," they say. Responding to warnings made by Germany and others that massive injections of capital into the economy could cause inflation, the communique also said the G20 are committed to "working together to avoid unintended impacts on others". Elsewhere, the communique said tax havens and "non cooperative jurisdictions" will face sanctions, and will be named and shamed in a separate document to be published at the summit. On executive pay and bonuses, which has sparked major public anger since the crisis hit, the G20 say remuneration should "reward actual performance, support sustainable growth and avoid excessive risk-taking". It told banks that the quality and quantity of their capital must improve but "capital requirements should not be strengthened until a significant and sustained economic recovery is assured and the transition managed to ensure that the extension of credit is not constrained". The draft communique also said emerging and developing economies "must have greater voice and representation" in international financial institutions, opening the way to reforms of the IMF and World Bank, the FT reported.

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