WASHINGTON -- Faced with the most serious global financial meltdown since the Great Depression in the 1930s, world leaders vowed on Saturday to undertake coordinated actions to revive the global economy and reshape the financial architecture to prevent similar calamities in the future.
The first plenary session begins at the G20 Summit on Financial Markets and the World Economy at the National Building Museum in Washington, November 15, 2008. [Agencies]
BRETTON WOODS II
"We are committed to advancing the reform of the Bretton Woods Institutions so that they can more adequately reflect changing economic weights in the world economy in order to increase their legitimacy and effectiveness," said the leaders in a declaration issued at the G-20 summit on financial markets and world economy.
"In this respect, emerging and developing economies, including the poorest countries, should have greater voice and representation," the declaration said. "The Financial Stability Forum (FSF) must expand urgently to a broader membership of merging economies."
The International Monetary Fund (IMF), in collaboration with the expanded FSF and other bodies, should work to better identify vulnerabilities, anticipate potential stresses, and act swiftly to play a key role in crisis response, said the leaders.
The Washington summit, held amid serious challenges to the world economy and financial markets, was the first one for the G-20 since it was founded 1999 in the wake of the Asian financial storm which hit in 1997.
The current financial crisis, much more serious than that in 1997, has reshaped the economic map. And leaders of emerging economies called for a complete overhaul of the world's financial institutions to give the developing and emerging economies a greater voice and representation in the world financial system.
In a rare show of unity, the so-called BRIC club of fast-growing emerging economies -- Brazil, Russia, India and China-- issued a joint statement last week calling for a heftier role in shaping the new global financial architecture.
"We are talking about the G20 because the G8 doesn't have any more reason to exist, in other words, the emerging economies have to be taken into consideration in today's globalized world," Brazilian President Luiz Inacio Lula da Silva told reporters gathered at the summit.
"The existing multilateral organizations and the international rules in place were rejected by history. Both the IMF and the World Bank should open themselves to bigger participation of developing economies," said the Brazilian president, whose country currently holds the rotating leadership of the G-20. "This means more of a voice, representation and a vote for developing countries."
U.S. President George W. Bush voiced his support, saying he believes it is necessary to reform the current financial system in a "Bretton Woods II" overhaul.
"One of the key achievements was to establish certain principles and take certain actions for adapting our financial systems to the realities of the 21st century," said Bush, noting that part of the regulatory structures that are in place were 20thcentury regulatory structures. "And obviously, you know, the financial industry went way beyond them."
Britain, which will chair the G-20 starting January, deemed the summit a start of the "road to the new Bretton Woods," referring to the 1944 meeting in New Hampshire, the United States, where the international monetary protocols were created to govern trade, banking and other financial relations among nations.
"There is a clear determination on the part of world leaders in every continent to take necessary action to move economies out of this difficult period," British Prime Minister Gordon Brown said.
"I was very happy with the results of the summit," said European Commission President Jose Manuel Barroso at a joint press conference with French President Nicolas Sarkozy on Saturday. "It has laid the foundation for the future."