XIANGHE, China, 16 October 2005 — Top finance officials of 20 rich and emerging economies meeting here yesterday will call for action on high oil prices and to free up world trade, according to a draft of their final statement.
“We are concerned that long-lasting high and volatile oil prices could slow down growth and cause instability in the global economy,” they said in a draft statement obtained by AFP.
The Group of 20 meeting also turned to a gathering of the World Trade Organization (WTO) in Hong Kong in two months and urged the 148 member nations to agree to reduce barriers to free trade, such as tariffs and subsidies.
“We agreed that a successful WTO Doha Development Round is critical for ensuring that globalization truly benefits all countries,” the finance ministers and central bankers said in the draft communique.
The grouping brings together the seven leading industrialized nations — Britain, Canada, France, Germany, Italy, Japan and the United States — with population giants and key developing nations such as China, India and Brazil.
In his opening address, Chinese President Hu Jintao warned of “financial turbulences from time to time and new manifestations of trade barriers and protectionism”.
“Facing all this, we must strengthen international cooperation to seize opportunities and meet challenges together so as to promote balanced and orderly development of the world economy.”
A dominant issue at the meeting — which also included major oil producers such as Saudi Arabia and Indonesia — was the price of oil, which rose above $70 a barrel this summer following Hurricane Katrina.
“To stabilize the oil price at a reasonable level, we agreed to work together and call on the international community to strengthen cooperation to improve production and refining capacities,” said the draft.
The G-20 in the statement also called for better conservation and enhanced alternative energies, more dialogue between oil suppliers and consumers, and more “transparency of the oil market to lessen price speculation”.
IMF chief Rodrigo Rato said that to reduce the blow of high commodity prices or natural disasters, the G-20 nations had discussed the creation of a “shock facility” that could lend funds to impacted nations.
“I think we’ll be able to move it forward in the next few months,” he said.
The group voiced support for liberalizing trade, a move many believe could help reduce poverty and ease the suffering of more than a billion people living on less than two dollars per day.
On fighting poverty, the G-20 noted the slow pace toward achieving the UN Millennium Development Goals (MDGs) and said some poor countries were unlikely to meet the targets in improved health, education and other areas.
“We are concerned that a number of developing economies may not be able to attain the MDGs without substantial additional support,” the draft said.
The World Bank has argued that free and fair trade will be more important than development aid in fighting global poverty, by making the global trade in farm products fairer, a point its President Paul Wolfowitz stressed yesterday.
“Unless serious concessions are made by all sides ... the Doha Round of trade talks will fail and the people who will suffer the most are the poor people of the world,” he said in a statement.
The four-year-old round of talks that started in Qatar has been held up by disputes on how far rich nations are willing to drop trade-distorting subsidies and tariffs, especially in the farm sector.
In their draft statement, the G-20 said they were “committed to significantly increasing market access for goods and services, reducing trade-distorting domestic support, eliminating export subsidies in agriculture and providing effective special and differential treatment for developing countries.”
The G-20 also said they have committed “strong support” for reforming the International Monetary Fund and World Bank, in which developing nations feel they are underrepresented.
Rato said participants had generally agreed that the IMF faces a “problem of legitimacy” unless it revamps its distribution of votes, especially to reflect the growing weight of Asian economies.