World leaders from the G20 countries, representing 85% of the world’s output, will meet in London on April 2, 2009 – against the backdrop of what has been described as the worst international banking crisis in generations.
The G20 says countries need to come together to enhance global coordination in order to help restore global economic growth. The Summit aims at obtaining commitment from World leaders on three key issues:
* First, to take whatever action is necessary to stabilise financial markets and enable families and businesses to get through the recession
* Second, to reform and strengthen the global financial and economic system to restore confidence and trust.
* Third, to put the global economy on track for sustainable growth
The World Bank recently completed a report on the impact of the financial crisis in developing countries. The World Bank says financial conditions facing developing countries have deteriorated sharply. It estimates that developing countries face a financing gap of between $270bn and as much as $700bn depending on the severity of the economic and financial crisis and the strength and timing of policy responses. Reportedly, 94 out of 116 developing countries have experienced a slowdown in economic growth. Of these countries, 43 have high levels of poverty. World Bank Group President Robert B. Zoellick said *”This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis.”*
US President Barack Obama has said the US had two goals at the G20 – to ensure joint action to jump-start economies and to move forward on a regulatory reform agenda. US Treasury Secretary Tim Geithner echoes this, saying the US Administration believes it is essential for other major countries to commit to substantial and sustained efforts to bolster their economies. At the same time, he believes the US must strengthen cooperation to fight money laundering and terrorist financing and *”to crack down on those who use offshore tax havens to escape paying their share of taxes.”* And, Head of the US Federal Reserve, Ben Bernanke, also has called for the revamping of the global system of financial regulation.
UK Prime Minister Gordon Brown will host the Summit. He believes that the aim of the London summit is no less than the redesign of the world financial system. Secondly, he has said, there will be efforts to prevent a future crisis by strengthening the international regulation of banks and other financial institutions. In an address to the US Congress last week, the Prime Minister queried, *”.. how much safer would everybody’s savings be if the whole world finally came together to outlaw shadow banking systems and offshore tax havens?”*
G20 Officials reportedly are drawing up a list of uncooperative havens and discussing sanctions. The G20 is believed to be drawing up its list from three overlapping groups of havens: those that have no double taxation conventions, which allow countries to swap information on taxpayers; those that have refused to accept the idea of new tax TIEAs; and those which agreed in principle to TIEAs but have failed to sign them.
Prime Minister, the Rt. Hon. Hubert Ingraham, M.P., commented on the G20 initiatives on the occasion of his Mid-Year Budget Statement last month, while addressing the topic of the Global Economic Crisis and Outlook. He said, *”We have a vested interest in protecting our financial services sector and so we will redouble efforts to ensure that we follow international best practices and cannot be correctly identified as an uncooperative jurisdiction.”*