Global leaders commit to jobs growth

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President Hu Jintao (C) and members of his government are pictured during their bilateral meeting with U.S. President Barack Obama (not pictured) at the G20 Summit in Los Cabos, Mexico, June 19, 2012. [Photo/Agencies]

Leaders from major economies around the world concluded their annual G20 summit in the Mexican resort of Los Cabos with a general statement to promote growth and jobs.

While many countries in the European Union grapple with financial crises, leaders gave little in the way of specifics in their G20 Leaders Declaration after wrapping up the three-day summit. In the statement, leaders recognized the challenges in the global economy and the urgency to take actions to put it back on track.

According to the declaration, "the global economy remains vulnerable, with a negative impact on the everyday lives of people all over the world, affecting jobs, trade, development, and the environment".

Leaders at the summit reportedly coordinated and worked out solutions to create financial stability in the global economy. The declaration said that EU members of the G20 will "take all necessary policy measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks".

In the statement, leaders welcomed Spain's plan to shore up its banking system and the EU's support for Spain's authority to restructure its finances. Leaders said they will work with the next Greek government to ensure Greece remains on the path to reform and sustainability within the eurozone, though no details were laid out.

General commitments that were agreed upon by leaders at the summit were announced in the statement. They include throwing support behind economic stabilization and the global recovery as well as employment and social protection; strengthening the international financial structure; reforming the financial sector; and advancing food security.

German Chancellor Angela Merkel said during the summit that leaders had a very "intensive discussion about the different risks for sustainable growth".

"It is obvious that we have problems in the eurozone, and that it is necessary to act ... but the important thing is ... that (the Europeans) have made clear that we are determined to act," Merkel said.

The statement, however, did specifically support greater government spending in countries that can afford it, if conditions get significantly worse, according to the Associated Press.

Yves Tiberghien, associate professor of political science at the University of British Columbia, said European leaders have "publicly committed serious institutional upgrades for their banking systems and to the fiscal situation of the EU".

The leaders from the G20 economies, which account for 90 percent of gross world product and two-thirds of the global population, also said it recognized commitments to increasing International Monetary Fund (IMF) resources.

"The commitments exceed $430 billion and are in addition to the quota increase under the 2010 Reform," according to the declaration.

Earlier in the week, BRICS, a group of emerging nations comprising Brazil, Russia, India, China and South Africa, said they were "willing to make a contribution" to IMF resources. On Monday, China announced a $43-billion contribution to the IMF.

"China came in a position of strength thanks to its strong actions taken to rebalance the economy and reduce the current account surplus," said Tiberghien, who attended the summit as an observer with the Global Summitry Project, which analyzes the annual summits.

Tiberghien added China has demonstrated "a great sense of solidarity and ownership of the global economic system with its commitment to the IMF".

"At the same time, China has cooperated with the other BRICS countries and succeeding in obtaining strong credible pledges by developed countries to move forward with the restructuring of voting rights at the IMF and other institutions and more action on development," he said. "Japan, China and key emerging economies have committed very significant resources to the IMF, both to mark solidarity with the Europeans and build up the safety net for affected countries."

yuweizhang@chinadailyusa.com

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