As the fourth summit of the Group of 20 (G20) concluded in Toronto in late June, the international community seemed prudently optimistic about its agreement on targets to cut fiscal deficits and a determination to safeguard global economic recovery.
The Toronto summit took place at a time when the world economy is recovering but challenges and risks remain, posing threats to healthy growth. The theme of the summit—Recovery and New Beginnings—tells of the situation in which the world is involved in terms of its economies.
The global economy is stepping out of recession and into recovery. But the process is going on at a different pace in different countries, and is not firmly established. Dangerous factors are still looming large. They include the expanding sovereign debt crisis, drastic exchange rates fluctuations of major currencies and persistent volatility in international financial markets. Meanwhile, the deeper impact of the international financial crisis is yet to be overcome; and structural flaw in the world economy remain very serious.
Therefore, the need to accelerate the establishment of a new international financial order that is fair, equitable and well managed; as well as the establishment of an international financial system suitable for the growth of the real economy, are urgent.
In less than two years, the G20 has overtaken the role of the long-established Group of Eight (G8). Accounting for 90 percent of global output, 80 percent of world trade and two thirds of the world's population, the G20, with superior inclusiveness and representation, is emerging as the key platform for both the industrialized nations and emerging economies to discuss world economic issues and coordinate responses and policies.
At the previous three summits in Washington, London and Pittsburgh, the G20 members coordinated global responses to the economic crisis, implemented stimulus measures to revive world economy, and agreed on action to strengthen financial regulation and the reform of international financial institutions. The interventions by G20 members have effectively mitigated the impact of the crisis and promoted a quicker transition to economic recovery.
The Toronto summit has secured the achievements the G20 has already made. But worry arises from the fear even though G20 leaders have determined the nature of the problems, they may not have the coordinated framework to implement their commitments effectively and efficiently. Still, the world hopes the G20 platform will play a larger role in future economic coordination in the post-crisis era. Hopefully, the G20 will live up to expectations.