Note: The following text is a quote:
http://www.whitehouse.gov/files/documents/g20/Architecture_Fact_Sheet.pdf
THE PITTSBURGH SUMMIT: CREATING A 21ST CENTURY INTERNATIONAL
ECONOMIC ARCHITECTURE
Dramatic changes in the world economy have not always been reflected in the global architecture
for economic cooperation.
This all started to change today. The G-20 Leaders reached an historic agreement to put the G-
20 at the center of their efforts to work together to build a durable recovery, while avoiding the
financial fragilities that led to the crisis. They committed to a fundamental realignment of voting
weights at the International Monetary Fund (IMF), fully vesting dynamic emerging economies in
this key institution. They agreed to a significant increase in the voice of dynamic emerging
economies in the World Bank and called on a reformed World Bank to play a leading role in
responding to challenges that require globally coordinated action.
Establishing the G-20 as the Premier Global Economic Forum. Leading up to the Pittsburgh
Summit, President Obama called on the world’s leaders to reform global economic institutions to
meet the needs of an interconnected global economy. Making the G-20 the premier forum for
their international economic cooperation brings to the table the countries needed to build a
stronger global economy, reform the financial system, and lift the lives of the poorest.
Greater Representation of Emerging Markets and Developing Countries at the
International Monetary Fund and World Bank. The crisis demonstrated the need for an IMF
equipped to fight the global spread of the crisis and a World Bank able to mobilize vital funds to
help secure much-needed gains in the fight against poverty.
These institutions’ future legitimacy, effectiveness and credibility require tangible reforms to
increase the voice of dynamic emerging economies and developing countries. U.S. leadership
built G-20 consensus to support a shift of at least 5% in quota share from countries currently
over-represented at the IMF to countries that are currently underrepresented. This reform will
give dynamic emerging market and developing economies a say in the IMF more in line with
their weight in today’s global economy. The G-20 also delivered on its promise to contribute
over $500 billion to the IMF’s expanded New Arrangement to Borrow (NAB), dramatically
increasing its financial firepower.
The G-20 also reached agreement to increase the voting power of emerging market and
developing countries at the World Bank by at least 3%. This strengthens the World Bank’s
ability to fulfill its mission to reduce global poverty and its capacity to tackle challenges, such as
climate change and food security, that require globally coordinated actions. These changes
represent a major step forward in our effort to build global institutions that reflect 21st century
economic realities and can effectively address key economic and development challenges.
A stronger and more effective Financial Stability Board and Global Forum. Earlier this
year, all G-20 nations joined an expanded Financial Stability Board, which is coordinating and
monitoring our efforts to make sweeping reforms to transform the system of global regulation.
An expanded Global Forum on Transparency and Exchange of Information is the primary
vehicle in the G-20’s effort to promote greater tax transparency.
Note: The following text is a quote:
http://www.whitehouse.gov/files/documents/g20/Framework_Fact_Sheet_Pittsburgh.pdf
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THE PITTSBURGH SUMMIT: STRONG, SUSTAINABLE, AND BALANCED
GROWTH
President Obama has repeatedly called for the end of this “era of profound irresponsibility” and
for international leaders to take steps, no matter how difficult or unpopular, to ensure when
growth returns, the old imbalances do not.
Today, the G-20 launched a Framework for Strong, Sustainable, and Balanced Growth, a US
proposal. In this Framework, G-20 nations pledged to pursue policies aimed at preventing credit
and asset price cycles from becoming forces of destabilization and to seek a more balanced
pattern of global demand growth. This requires macroeconomic policies that support demand
and decisive progress on structural reforms that foster private demand and strengthen long-run
growth potential. The G-20 nations also agreed to work together to assess how their policies fit
together, to evaluate whether they are collectively consistent with the G-20’s common goals and,
if there are signs of danger, to propose new policies.
Before the crisis, some countries relied too heavily on borrowing for growth, running large
external deficits and building up their international debt. Others relied too heavy on exports for
growth, running large external surpluses and often building up huge reserves. The crisis showed
that this was unsustainable. The U.S. consumer is now likely to save more and spend less, a
necessary change, in the years ahead. That means that U.S. spending alone won’t be able to
propel the global economy forward at the needed speed. A strong, durable recovery requires
shifting from public to private sources of demand to maintain our commitment to fiscal
responsibility – and steps to strengthen domestic sources of growth in countries that previously
drew heavily on exports for growth. Such a strong, durable recovery in turn is essential to
creating jobs here and abroad and to the G-20’s shared commitment to reducing global poverty.
Each G-20 country bears primary responsibility for its own economic management. But each
country’s ability to achieve its goals hinges in part on the actions of others. The Framework
signals a shared recognition among the G-20 that they will need to work together to ensure that
the sum of our national policy choices does not result in a return to old habits by:
• Agreeing that strong global growth requires more responsible borrowing and higher
levels of savings in countries like the United States and policies to increase domestic
sources of growth in today’s external surplus countries.
• Initiating a new process of mutual assessment to evaluate whether the G-20’s policies are
consistent with a more sustainable and balanced pattern and distribution of global growth.
• Committing G-20 nations to put in place macro-prudential regulatory policies to help
prevent credit and asset price cycles from becoming destabilizing forces in the future.
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These efforts will supplement the robust regulatory reforms the G-20 committed to
implement today.
• Asking the IMF to evaluate whether policies pursued by individual G-20 countries are
collectively consistent with a more sustainable and balanced trajectory for the global
economy and, if needed, recommend how policies could be adjusted to improve the
global outlook.