G20: Policies that Support Domestic Growth should also Support Global Growth

6 September 2013: At the close of their annual summit at St. Petersburg, the leaders of the G20 issued the G20 Leaders’ Declaration. In the Declaration, the leaders acknowledged that “G20 countries have a responsibility to ensure that all people have an opportunity to gain from strong, sustainable and balanced growth.”

According to the Financial Times, the Declaration also referred to the US plan of tapering its quantitative easing stimulus program. The US plan has put pressure on currencies and financial markets in the developing world and caused concerns about the stability of the emerging markets.

The relevant statement carries a general proposition, suggesting that G20 members should think beyond their domestic borders when they act:

“16. We commit to cooperate to ensure that policies implemented to support domestic growth also support global growth and financial stability and to manage their spillovers on other countries.”

The G20 also commit to “refrain from competitive devaluation and [not to] target our exchange rates for competitive purposes.” (para. 17)

According to FT, Christine Lagarde, managing director of the International Monetary Fund, emphasized the procedural commitment to ensure that the exit from easy monetary policy would be “orderly and clearly communicated.”

The G20 also endorsed the St Petersburg Development Outlook “to focus our efforts on concrete steps to improve food security, financial inclusion, infrastructure, human resource development and domestic resource mobilization.”