WASHINGTON (AP) — An ambitious goal to boost global
growth by $2 trillion in the next five years is within reach, finance
officials of the world’s major economies believe, despite a variety of
threats, including rising political tensions over Russia’s actions in
Ukraine.
In a joint statement Friday, finance ministers and
central bank governors from rich and developing nations skirted over
substantial differences in such areas as central bank interest rate
policies and whether to impose tougher sanctions on Russia because of
its dealings with Ukraine.
Their talks resume Saturday with
meetings of the policymaking committees of the International Monetary
Fund and its sister institution, the World Bank.
The final Group
of 20 communique pledged to keep working on concrete economic reforms
that could boost global growth by 2 percent over the next five years.
But finance officials concede that the economic reforms needed to
achieve that goal will in many cases be politically difficult.
"We
remain vigilant in the face of important global risks and
vulnerabilities," the statement said." We are determined to manage these
risks and take action to further strengthen the recovery, create jobs
and improve medium-term growth prospects."
Australian Treasurer
Joe Hockey said all the finance ministers realized that hard decisions
would have to be made in terms of reforming labor market policies and
dealing with budget deficits.
"It is hard but that is the only way
we are going to grow the economy," Hockey, who is chairman of the G-20
this year, told reporters at news conference after the group’s two days
of discussions.
The finance ministers agreed to develop concrete
proposals for each of their countries and present those plans at a
September meeting in Australia in preparation for a G-20 leaders’ summit
on Nov. 15-16 in Brisbane that will be attended by President Barack
Obama and leaders of the other nations.
The tough language the
U.S. has been using threatening "additional significant sanctions" if
Russia escalates the Ukraine situation was missing from the statement by
the G-20, which includes Russia. Instead, the G-20 finance officials
said they were closely monitoring the economic situation in Ukraine,
"mindful of any risks to economic and financial stability."
But at
a news conference late Friday, U.S. Treasury Secretary Jacob Lew
insisted that there was strong support for tougher sanctions if Russia
continues to escalate the situation in Ukraine. Lew said that the
Western allies "stand together in asking Russia to step back."
The
G-20 group endorsed the $14 billion to $18 billion loan package that
the International Monetary Fund has developed to help Ukraine avoid a
financial collapse. IMF officials have said the lending agency’s support
program will likely be approved by the agency’s board of directors by
the end of this month or early May.
The United States and various
European nations have already imposed an initial round of sanctions
aimed at punishing Russia for its annexation of the Crimean Peninsula.
The
United States is raising the prospect of tougher penalties if Russia
attempts to annex parts of Eastern Ukraine, but European officials have
been hesitant to go further, worried about possible economic retaliation
by Russia.
Also missing in the G-20 statement was a lengthy
section that had been included in the February statement concerning the
need for continued low interest rate policies by major central banks.
Asked
about that change, British Chancellor of the Exchequer George Osborne
said, "I wouldn’t read too much into that" and joked "we’re trying to
keep the communique much shorter."
He noted that the Federal
Reserve and the Bank England were moving cautiously to reduce stimulus
efforts as the U.S. and British economies improve. However, some critics
have expressed concerns that there is a danger that central banks could
move too quickly to reduce support before labor markets improve.
The
United States came in for criticism in the G-20 communique for the
failure of Congress to approve U.S. funding for the IMF that is needed
to implement a reform program that the 188-nation lending agency adopted
in 2010.
That program would give the IMF more resources to help
countries in economic distress and provide greater voting rights to
developing economies such as China.
But the measure has stalled in Congress for years and supporters failed again in March to win
congressional approval.
The
G-20 officials said they were "deeply disappointed" with the continued
U.S. delay and said if approval was not obtained by the end of this
year, the IMF should explore other options. The statement did not say
what options might be available if there is continued U.S. inaction.
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