Agro Perspectiva

Business G20 summary: world leaders adopt “St. Petersburg plan” of economic development

09.09.2013 09:26 "Agro Perspectiva" (Kyiv) — September 7, the last day of the G20 summit in St. Petersburg, was devoted mainly to discussions of economic issues, Voice of Russia reports. The main topics were unemployment, investments and barriers that hamper trade between countries. The summit’s participants adopted a declaration that sums up the summit’s results. Experts are already saying that the economic part of this declaration is one of the most constructive plans that any summit of the G20 has ever adopted. The summit’s last day started with reports of expert groups - the so-caled «business 20» and «economic 20». The experts presented their reccomendations about how to create favorable conditons for businesses. The «business 20» experts believe that the countries, first of all, should develop trade between themselves. To create better conditions for businesses, the participants included a point in the summit’s declaration in which they promice to reject protectionist practices in business. The head of the summit’s trade group Alxey Mordashov, who is also Director General of Russian steel-producing company «Severstal», coments: «We are convinced that the fewer the restrictions of freedom of trade between countries are, the speedier the world’s economy develops. In fact, an agrement between the G20 countries to reject protectionism already exists, but initially, it was to expire in 2014. We have called on the G20 countries’ leaders to prolong it.» One of the most acute problems of today is unemployment. In the majority of countries, the unemployment level is still higher than it used to be before the economic crisis broke out. Russia’s President Vladimir Putin believes that attracting more foreign investments to Russia may help to create more jobs. This is what he said in his speech at the summit: «One of the reasons why the world’s economy is now developing in slower tempos and why unemployment is not decreasing is that the volume of long-term investments has considerably lowered within the last few years. Here, we have a whole range of problems - the bank system of the European Union has become less centralized, the fiscal space is decreasing, the credit potential of development banks is lowing, financial regulation is becoming tougher. This is why Russia suggests to join efforts to seek more sources of financing investments.» The summit’s participants tried to jointly seek for ways of how to attract long-term investments into economy and for new sources of financing. In their opinion, one of the main tasks should be stimulation of private investments, including investments in infrastructure. But for this goal, a number of problems should be solved - problems that have to do, mainly, with freedom of capital flow, lack of highly profitable projects and deficit of financing. To develop infrastructure projects, the G20 worked out a plan of developing a market of bond issues in local currencies. At his press conference after the summit, President Putin praised its results. «We managed to make quite a few important decisions in a number of spheres,» he said. «We all agree that policy aimed at keeping economy developing at a due tempo should be combined with introduction of middle-term standards and country standards of the strategy of fiscal consolidation.» «We adopted the so-called „St. Petersburg plan» of actions," the Russian President continued. «It envisions middle-term tasks for every country to low the budget deficit and to hold all-embracing structure reforms. I believe that these measures will strengthen the trust of financial markets in our plans and attract more investments in the real sector of economy.» Some other agreements that were achieved at the St. Petersburg summit are a commitment to work out a new formula of calculating quotas of the International Monetary Fund by the beginning of 2014, an agreement for lowing the budget deficit of each of the G20 countries and some principal agreements aimed at unifying the tax policy and fighting against offshore practices and corruption. The summit’s participants confirmed their readiness to reject «a war of currencies». The summit’s final declaration also says about the readiness to reject the practice of quantitative easing and return to the traditional credit and currency policy. It is expected that all these measures will make the world’s economy develop at a speedier tempo.