Although, the G20 Summit wrapped up in relative peace and the leaders reached a landmark deal to slash deficits and secure long-term economic stability, yet the targets were regional and vague. But now, they face the daunting task of going ahead without hurting the fragile global economic recovery. Good news, however, remains that the world's most powerful leaders emerged from the G20 Summit with an agreement for advanced economic powers to cut their deficits in half by 2013 and stabilize their debt loads by 2016.
The communiqué also commits emerging countries to greater exchange rate flexibility without mentioning China by name because China is irritated when other countries try to tell it what to do with its exchange rate. Nevertheless, the United States, Europe and Canada have pleaded with China to allow its exchange rate to fluctuate more freely, and to implement measures that would encourage Chinese people to save less and spend more. "Surplus economies will undertake reforms to reduce their dependence on external demand and focus more on domestic sources of growth," the communiqué says. The agreement was a painful one to negotiate. And many countries fear that the “austerity measures” would hurt domestic economies at a time when they are actually fragile. That’s why the communiqué stressed repeatedly that the austerity measures must be so designed as to enhance long-term growth prospects.
"We have to make sure we're not rushing too quickly to the exits and all at the same time," said U.S. President Barrack Obama, who had been pushing for a slow removal of stimulus measures."Our fiscal health tomorrow will rest in no small measure on our ability to create jobs today."
Moreover, the deficits should be reduced not by raising taxes on incomes or businesses, but rather by cutting government spending, boosting productivity or possibly raising consumption taxes as per advice from the International Monetary Fund. The leaders agreed to greater exchange rate flexibility and measures to strengthen their social safety nets. But the G20 leaders also promised to put forward country-specific plans in time for the next summit in Seoul in November. The G20 also made progress on reforms for financial institutions. They agreed to speed up measures to strengthen bank balance sheets. The participating nations agreed on principles that would make sure taxpayers aren't burdened, if the banks go upside down. The governments of all countries can save a lot of tax payers’ money by cutting the size of the cabinet in their respective countries.
G 20 communiqué also included the following key measures: Setting up a working group on international development issues, the first time the G20 has given itself a formalized a role in helping poor countries. --Reaffirming some of the countries' support for the Copenhagen Accord to control greenhouse gas emissions. --Continuing developing strategies to cut fossil fuel subsidies. --Speeding up reform of the IMF so that emerging markets have more say.--Launching a food security program.-- Reiterating support for the Doha round of global free trade talks.
Furthermore, the co-operation among G20 should boost global output by US$4 trillion, create tens of millions of jobs, lift even more people out of poverty, and stabilize global growth (IMF).
Nevertheless, the world leaders are really worried for an extremely heavy debt load. Quite obviously, it has been caused by the incompetent and lazy leaders who have been sleeping over the issues in the past.
Even the G8 communiqué claims the initiative of maternal health will prevent the deaths of 1.3 million children aged five years and under and 64,000 maternal deaths while enabling 12 million couples to access family planning. Yet, there is no strategic plan on how these goals will be achieved. Though, there is a five-year commitment of the $2.85-billion from Canadian taxpayers’ money without details. Hence, the Muskoka initiative is not so inspiring.
It is a fact that when the leaders sit down and make unanimous decisions on what’s best for the global economy-- is of tremendous value, but in this technological advanced stage, there is no need of having face to face meetings at such a high price when quality video conferencing is the best option available at a very cheap cost. Spending a huge amount of tax payers' money is a blunder, as it would further damage our fragile economy.
Since the present system of capitalistic economy does not offer any satisfactory answer to many questions, G 20 leaders failed to realize a need for a change in the economic system. The present system has dragged the whole world near the edge of disaster. It is almost impossible to eliminate the impact of debt load for a long time to come. An overhaul or repair of the present economic system won’t fetch wanted results. It is strongly recommended that the International community must go for a viable balanced economic system based on ethical values, justice and fairness, as the present one is not working. A few other steps include small Cabinet size, “a global denuclearisation” and a “no war pact” which must be signed by all countries.