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G20 Leaders' Conclusions on Development, 2008-11

From G20 summit communiqués
Zaria Shaw and Sarah Jane Vassallo, G20 Research Group, November 14, 2011

Summary of Conclusions on Development in G20 Finance Communiqués

Year
# of Words
% of Total Words
# of Paragraphs
% of Total Paragraphs
# of Documents
% of Total Documents
# of Dedicated Documents
2008 Washington
651
17.8
9
12.6
1
100
0
2009 London
1726
27.6
28
30.4
3
100
1
2009 Pittsburgh
2292
24.5
20
18.3
1
100
0
2010 Toronto
3899
34.5
61
42.3
2
100
1
2010 Seoul
9195
58.1
105
47.9
5
100
2
2011 Cannes
2545
17.9
33
16.9
3
100
0
Average
3384
30.0
42.6
28.0
2.5
100
0.7

Notes:
Data are drawn from all official English-language documents released by the G20 leaders as a group. Charts are excluded.
“# of Words” is the number of development-related subjects for the year specified, excluding document titles and references. Words are calculated by paragraph because the paragraph is the unit of analysis.
“% of Total Words” refers to the total number of words in all documents for the year specified.
“# of Paragraphs” is the number of paragraphs containing references to development for the year specified. Each point is recorded as a separate paragraph.
“% of Total Paragraphs” refers to the total number of paragraphs in all documents for the year specified.
“# of Documents” is the number of documents that contain development subjects and excludes dedicated documents.
“% of Total Documents” refers to the total number of documents for the year specified.
“# of Dedicated Documents” is the number of documents for the year that contain a development-related subject in the title.

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Definition

The G20 recognizes that each country has primary responsibility for its own economic and social development, and for this reason it is important to respect the development of country-owned strategies. With regard to the diversity of growth models and approaches, following the G8, the G20 is committed to strengthening the dialogue on varying development philosophies, strategies and policies from which all countries can benefit. The G20 has called upon developing countries to establish sound economic and social policies to attract more private capital flows, and for developed countries to support these actions through improved and more effective lending (through the IMF, World Bank and other multilateral development banks), an open trading system and increased development assistance. The G20 is committed to a shared vision for global development and continues to develop a global partnership among developed and developing countries.

Criteria

The following keywords were used in relation to develment:

African Development Bank (AfDB), African Union (AU), debt relief, development aid, development assistance, Development Assistance Committee (DAC), developing countries, development financing, development gap, donor, emerging economies, European Bank for Reconstruction and Development (EBRD), global rebalancing, highly/heavily indebted poor countries (HIPC), InterAmerican Development Bank (IADB), International Bank for Reconstruction and Development (IBRD), international development assistance, International Development Association (IDA), International Finance Corporation (IFC), international financial institutions (IFIs), International Monetary Fund (IMF), least developed countries (LDCs), Millennium Development Goals (MDGs), multilateral development banks (MDBs), New Partnership for Africa’s Development (NEPAD), North-South relations, Organisation for Economic Co-operation and Development (OECD), official development assistance (ODA), Paris Club, poorest of the poor, poverty reduction, sustainable development, World Bank, United Nations (UN)

Coding Rules

The unit of analysis is the paragraph/sentence.
A direct reference to development or a cognate term is required.
Cognate or extended terms can be used without a direct reference to development if they have previously been directly associated together in summit communiqué history.

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Conclusions on Development in G20 Leaders' Communiqués

2008 Washington Summit (November 14-15)

Declaration of the Summit on Financial Markets and the World Economy

Commitment to an Open Global Economy

Actions to be Taken

  1. Against this background of deteriorating economic conditions worldwide, we agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will:

Commitment to an Open Global Economy

  1. We recognize that these reforms will only be successful if grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. These principles are essential to economic growth and prosperity and have lifted millions out of poverty, and have significantly raised the global standard of living. Recognizing the necessity to improve financial sector regulation, we must avoid over-regulation that would hamper economic growth and exacerbate the contraction of capital flows, including to developing countries.
  1. We are mindful of the impact of the current crisis on developing countries, particularly the most vulnerable. We reaffirm the importance of the Millennium Development Goals, the development assistance commitments we have made, and urge both developed and emerging economies to undertake commitments consistent with their capacities and roles in the global economy. In this regard, we reaffirm the development principles agreed at the 2002 United Nations Conference on Financing for Development in Monterrey, Mexico, which emphasized country ownership and mobilizing all sources of financing for development.

Reforming International Financial Institutions

Immediate Actions by March 31, 2009

Medium-term actions

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2009 London Summit (April 1-2)

Declaration on the Summit of Financial Markets and the World Economy

Strengthening Our Global Financial Institutions

  1. Emerging markets and developing countries, which have been the engine of recent world growth, are also now facing challenges which are adding to the current downturn in the global economy. It is imperative for global confidence and economic recovery that capital continues to flow to them. This will require a substantial strengthening of the international financial institutions, particularly the IMF. We have therefore agreed today to make available an additional $850 billion of resources through the global financial institutions to support growth in emerging market and developing countries by helping to finance counter-cyclical spending, bank recapitalisation, infrastructure, trade finance, balance of payments support, debt rollover, and social support. To this end:

Resisting protectionism and promoting global trade and investment

  1. World trade growth has underpinned rising prosperity for half a century. But it is now falling for the first time in 25 years. Falling demand is exacerbated by growing protectionist pressures and a withdrawal of trade credit. Reinvigorating world trade and investment is essential for restoring global growth. We will not repeat the historic mistakes of protectionism of previous eras. To this end:

Ensuring a fair and sustainable recovery for all

  1. We are determined not only to restore growth but to lay the foundation for a fair and sustainable world economy. We recognise that the current crisis has a disproportionate impact on the vulnerable in the poorest countries and recognise our collective responsibility to mitigate the social impact of the crisis to minimise long-lasting damage to global potential. To this end:
  1. We agreed to make the best possible use of investment funded by fiscal stimulus programmes towards the goal of building a resilient, sustainable, and green recovery. We will make the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure. We encourage the MDBs to contribute fully to the achievement of this objective. We will identify and work together on further measures to build sustainable economies.

Annex: Declaration on Strengthening the Financial System

Tax Havens and Non- Our Global Financial Institutions

We are committed to developing proposals, by end 2009, to make it easier for developing countries to secure the benefits of a new cooperative tax environment.

Annex: Declaration on Delivering Resources through the International Financial Institutions

We, the leaders of the Group of Twenty, are committed to ensuring that capital continues to flow to emerging market and developing countries to protect their economies and support world growth. To this end, we have agreed to increase very substantially the resources available through the international financial institutions and to ensure that the institutions have the facilities needed to address the crisis in a coordinated and comprehensive manner.

We have agreed to make available an additional $850 billion of resources through the IMF and the multilateral development banks to support growth in emerging market and developing countries by helping to finance counter-cyclical spending, bank recapitalisation, infrastructure, trade finance, balance of payments support, debt rollover, and social support.

For the IMF, we have agreed to support:

In addition to these steps, we have also agreed to support a general allocation of SDRs equivalent to $250 billion to increase global liquidity, $100 billion of which will go directly to emerging market and developing countries. We agreed to ratify urgently the fourth amendment to the IMF’s articles.

We agreed to accelerate the next quota review to be completed by January 2011 to ensure the IMF’s finances are on a sustainable footing commensurate with the needs of the international monetary system.

For the Multilateral Development Banks (MDBs), we have agreed to support:

We have also agreed to ensure that the international financial institutions have the facilities they need to address the current crisis and meet the needs of emerging markets and developing countries. To this end:

We agreed that these resources and facilities should enhance the capacity of the international financial institutions to address the crisis. Cooperation and coordination between the IFIs should be strengthened to increase their effectiveness. Emerging and developing economies, including the poorest, should have greater voice and representation.

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2009 Pittsburgh Summit (September 24-25)

The Leaders Statement: The Pittsburgh Summit

Preamble

20. We are committed to a shift in International Monetary Fund (IMF) quota share to dynamic emerging markets and developing countries of at least 5% from over-represented countries to under-represented countries using the current quota formula as the basis to work from. Today we have delivered on our promise to contribute over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB).

21. We stressed the importance of adopting a dynamic formula at the World Bank which primarily reflects countries’ evolving economic weight and the World Bank’s development mission, and that generates an increase of at least 3% of voting power for developing and transition countries, to the benefit of under-represented countries. While recognizing that over-represented countries will make a contribution, it will be important to protect the voting power of the smallest poor countries. We called on the World Bank to play a leading role in responding to problems whose nature requires globally coordinated action, such as climate change and food security, and agreed that the World Bank and the regional development banks should have sufficient resources to address these challenges and fulfill their mandates.

A Framework for Strong, sustainable and Balanced Growth

4. We will need to work together as we manage the transition to a more balanced pattern of global growth. The crisis and our initial policy responses have already produced significant shifts in the pattern and level of growth across countries. Many countries have already taken important steps to expand domestic demand, bolstering global activity and reducing imbalances. In some countries, the rise in private saving now underway will, in time, need to be augmented by a rise in public saving. Ensuring a strong recovery will necessitate adjustments across different parts of the global economy, while requiring macroeconomic policies that promote adequate and balanced global demand as well as decisive progress on structural reforms that foster private domestic demand, narrow the global development gap, and strengthen long-run growth potential. The IMF estimates that only with such adjustments and realignments, will global growth reach a strong, sustainable, and balanced pattern. While governments have started moving in the right direction, a shared understanding and deepened dialogue will help build a more stable, lasting, and sustainable pattern of growth. Raising living standards in the emerging markets and developing countries is also a critical element in achieving sustainable growth in the global economy.

Reforming the Mandate, Mission and Governance of the IMF

18. Our commitment to increase the funds available to the IMF allowed it to stem the spread of the crisis to emerging markets and developing countries. This commitment and the innovative steps the IMF has taken to create the facilities needed for its resources to be used efficiently and flexibly have reduced global risks. Capital again is flowing to emerging economies.

19. We have delivered on our promise to treble the resources available to the IMF. We are contributing over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB). The IMF has made Special Drawing Rights (SDR) allocations of $283 billion in total, more than $100 billion of which will supplement emerging market and developing countries’ existing reserve assets. Resources from the agreed sale of IMF gold, consistent with the IMF’s new income model, and funds from internal and other sources will more than double the Fund’s medium-term concessional lending capacity.

21. Modernizing the IMF’s governance is a core element of our effort to improve the IMF’s credibility, legitimacy, and effectiveness. We recognize that the IMF should remain a quota-based organization and that the distribution of quotas should reflect the relative weights of its members in the world economy, which have changed substantially in view of the strong growth in dynamic emerging market and developing countries. To this end, we are committed to a shift in quota share to dynamic emerging market and developing countries of at least five percent from over-represented to under-represented countries using the current IMF quota formula as the basis to work from. We are also committed to protecting the voting share of the poorest in the IMF. On this basis and as part of the IMF’s quota review, to be completed by January 2011, we urge an acceleration of work toward bringing the review to a successful conclusion….

Reforming the Mission, Mandate and Governance of Our Development Banks

22. The Multilateral Development Banks (MDBs) responded to our April call to accelerate and expand lending to mitigate the impact of the crisis on the world’s poorest with streamlined facilities, new tools and facilities, and a rapid increase in their lending. They are on track to deliver the promised $100 billion in additional lending. We welcome and encourage the MDBs to continue making full use of their balance sheets. We also welcome additional measures such as the temporary use of callable capital contributions from a select group of donors as was done at the InterAmerican Development Bank (IaDB). Our Finance Ministers should consider how mechanisms such as temporary callable and contingent capital could be used in the future to increase MDB lending at times of crisis. We reaffirm our commitment to ensure that the Multilateral Development Banks and their concessional lending facilities, especially the International Development Agency (IDA) and the African Development Fund, are appropriately funded.

23. Even as we work to mitigate the impact of the crisis, we must strengthen and reform the global development architecture for responding to the world’s long-term challenges.

24. We agree that development and reducing global poverty are central to the development banks’ core mission. The World Bank and other multilateral development banks are also critical to our ability to act together to address challenges, such as climate change and food security, which are global in nature and require globally coordinated action. The World Bank, working with the regional development banks and other international organizations, should strengthen:

25. To enhance their effectiveness, the World Bank and the regional development banks should strengthen their coordination, when appropriate, with other bilateral and multilateral institutions. They should also strengthen recipient country ownership of strategies and programs and allow adequate policy space.

26. We will help ensure the World Bank and the regional development banks have sufficient resources to fulfill these four challenges and their development mandate, including through a review of their general capital increase needs to be completed by the first half of 2010. Additional resources must be joined to key institutional reforms to ensure effectiveness: greater coordination and a clearer division of labor; an increased commitment to transparency, accountability, and good corporate governance; an increased capacity to innovate and achieve demonstrable results; and greater attention to the needs of the poorest populations.

Strengthening Support for the Most Vulnerable

34. Many emerging and developing economies have made great strides in raising living standards as their economies converge toward the productivity levels and living standards of advanced economies. This process was interrupted by the crisis and is still far from complete. The poorest countries have little economic cushion to protect vulnerable populations from calamity, particularly as the financial crisis followed close on the heels of a global spike in food prices. We note with concern the adverse impact of the global crisis on low income countries’ (LICs) capacity to protect critical core spending in areas such as health, education, safety nets, and infrastructure. The UN's new Global Impact Vulnerability Alert System will help our efforts to monitor the impact of the crisis on the most vulnerable. We share a collective responsibility to mitigate the social impact of the crisis and to assure that all parts of the globe participate in the recovery.

35. The MDBs play a key role in the fight against poverty. We recognize the need for accelerated and additional concessional financial support to LICs to cushion the impact of the crisis on the poorest, welcome the increase in MDB lending during the crisis and support the MDBs having the resources needed to avoid a disruption of concessional financing to the most vulnerable countries. The IMF also has increased its concessional lending to LICs during the crisis. Resources from the sale of IMF gold, consistent with the new income model, and funds from internal and other sources will double the Fund’s medium-term concessional lending capacity.

36. Several countries are considering creating, on a voluntary basis, mechanisms that could allow, consistent with their national circumstances, the mobilization of existing SDR resources to support the IMF’s lending to the poorest countries. Even as we work to mitigate the impact of the crisis, we must strengthen and reform the global development architecture for responding to the world’s long-term challenges. We ask our relevant ministers to explore the benefits of a new crisis support facility in IDA to protect LICs from future crises and the enhanced use of financial instruments in protecting the investment plans of middle income countries from interruption in times of crisis, including greater use of guarantees.

37. We reaffirm our historic commitment to meet the Millennium Development Goals and our respective Official Development Assistance (ODA) pledges, including commitments on Aid for Trade, debt relief, and those made at Gleneagles, especially to sub-Saharan Africa, to 2010 and beyond.

38. Even before the crisis, too many still suffered from hunger and poverty and even more people lack access to energy and finance. Recognizing that the crisis has exacerbated this situation, we pledge cooperation to improve access to food, fuel, and finance for the poor.

39. Sustained funding and targeted investments are urgently needed to improve long-term food security. We welcome and support the food security initiative announced in L’Aquila and efforts to further implement the Global Partnership for Agriculture and Food Security and to address excessive price volatility. We call on the World Bank to work with interested donors and organizations to develop a multilateral trust fund to scale-up agricultural assistance to low-income countries. This will help support innovative bilateral and multilateral efforts to improve global nutrition and build sustainable agricultural systems, including programs like those developed through the Comprehensive African Agricultural Development Program (CAADP). It should be designed to ensure country ownership and rapid disbursement of funds, fully respecting the aid effectiveness principles agreed in Accra, and facilitate the participation of private foundations, businesses, and non-governmental organizations (NGOs) in this historic effort. These efforts should complement the UN Comprehensive Framework for Agriculture. We ask the World Bank, the African Development Bank, UN, Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), World Food Programme (WFP) and other stakeholders to coordinate their efforts, including through country-led mechanisms, in order to complement and reinforce other existing multilateral and bilateral efforts to tackle food insecurity.

40. To increase access to energy, we will promote the deployment of clean, affordable energy resources to the developing world. We commit, on a voluntary basis, to funding programs that achieve this objective, such as the Scaling Up Renewable Energy Program and the Energy for the Poor Initiative, and to increasing and more closely harmonizing our bilateral efforts.

41. We commit to improving access to financial services for the poor. We have agreed to support the safe and sound spread of new modes of financial service delivery capable of reaching the poor and, building on the example of micro finance, will scale up the successful models of small and medium-sized enterprise (SME) financing. Working with the Consultative Group to Assist the Poor (CGAP), the International Finance Corporation (IFC) and other international organizations, we will launch a G20 Financial Inclusion Experts Group. This group will identify lessons learned on innovative approaches to providing financial services to these groups, promote successful regulatory and policy approaches and elaborate standards on financial access, financial literacy, and consumer protection. We commit to launch a G20 SME Finance Challenge, a call to the private sector to put forward its best proposals for how public finance can maximize the deployment of private finance on a sustainable and scalable basis.

42. As we increase the flow of capital to developing countries, we also need to prevent its illicit outflow. We will work with the World Bank’s Stolen Assets Recovery (StAR) program to secure the return of stolen assets to developing countries, and support other efforts to stem illicit outflows. We ask the FATF to help detect and deter the proceeds of corruption by prioritizing work to strengthen standards on customer due diligence, beneficial ownership and transparency. We note the principles of the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action and will work to increase the transparency of international aid flows by 2010. We call for the adoption and enforcement of laws against transnational bribery, such as the OECD Anti-Bribery Convention, and the ratification by the G20 of the UN Convention against Corruption (UNCAC) and the adoption during the third Conference of the Parties in Doha of an effective, transparent, and inclusive mechanism for the review of its implementation. We support voluntary participation in the Extractive Industries Transparency Initiative, which calls for regular public disclosure of payments by extractive industries to governments and reconciliation against recorded receipt of those funds by governments.

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2010 Toronto Summit (June 26-27)

The G20 Summit Declaration

Preamble

3. Our efforts to date have borne good results. Unprecedented and globally coordinated fiscal and monetary stimulus is playing a major role in helping to restore private demand and lending. We are taking strong steps toward increasing the stability and strength of our financial systems. Significantly increased resources for international financial institutions are helping stabilise and address the impact of the crisis on the world’s most vulnerable. Ongoing governance and management reforms, which must be completed, will also enhance the effectiveness and relevance of these institutions. We have successfully maintained our strong commitment to resist protectionism.

International Financial Institutions and Development

23. The International Financial Institutions (IFIs) have been a central part of the global response to the financial and economic crisis, mobilizing critical financing, including $750 billion by the IMF and $235 billion by the Multilateral Development Banks (MDBs). This has underscored the value of these institutions as platforms for our global cooperation.

24. We commit to strengthening the legitimacy, credibility and effectiveness of the IFIs to make them even stronger partners for us in the future.

25. Towards this end, we have fulfilled our Pittsburgh Summit commitment on the MDBs. This includes $350 billion in capital increases for the MDBs, allowing them to nearly double their lending. This new capital is joined to ongoing and important reforms to make these institutions more transparent, accountable and effective, and to strengthen their focus on lifting the lives of the poor, underwriting growth, and addressing climate change and food security.

26. We will fulfill our commitment to ensure an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association and the African Development Fund.

27. We have endorsed the important voice reforms agreed by shareholders at the World Bank, which will increase the voting power of developing and transition countries by 4.59% since 2008.

28. We underscore our resolve to ensure ratification of the 2008 IMF Quota and Voice Reforms and expansion of the New Arrangements to Borrow (NAB).

29. We called for an acceleration of the substantial work still needed for the IMF to complete the quota reform by the Seoul Summit and in parallel deliver on other governance reforms, in line with commitments made in Pittsburgh.

30. Today we build on our earlier commitment to open, transparent and merit-based selection processes for the heads and senior leadership of all the IFIs. We will strengthen the selection processes in the lead up to the Seoul Summit in the context of broader reform.

31. We agreed to task our Finance Ministers and Central Bank Governors to prepare policy options to strengthen global financial safety nets for our consideration at the Seoul Summit. Our goal is to build a more stable and resilient international monetary system.

32. We stand united with the people of Haiti and are providing much-needed reconstruction assistance, including the full cancellation of all of Haiti’s IFI debt. We welcome the launching of the Haiti Reconstruction Fund.

33. We have launched the SME Finance Challenge and commit to mobilizing funding for implementation of winning proposals, including through the strong support of the MDBs. We have developed a set of principles for innovative financial inclusion.

34. We welcome the launch of the Global Agriculture and Food Security Program in fulfillment of our Pittsburgh commitment on food security, an important step to further implement the Global Partnership for Agriculture and Food Security, and invite further contributions. Looking ahead, we commit to exploring innovative, results-based mechanisms to harness the private sector for agricultural innovation. We call for the full implementation of the L’Aquila Initiative and the application of its principles.

Fighting Protectionism and Promoting Trade and Investment

38. We therefore reiterate our support for bringing the WTO Doha Development Round to a balanced and ambitious conclusion as soon as possible, consistent with its mandate and based on the progress already made. We direct our representatives, using all negotiating avenues, to pursue this objective, and to report on progress at our next meeting in Seoul, where we will discuss the status of the negotiations and the way forward.

39. We commit to maintain momentum for Aid for Trade. We also ask international agencies, including the World Bank and other Multilateral Development Banks to step up their capacity and support trade facilitation which will boost world trade.

Other Issues and Forward Agenda

44. We recognize that 2010 marks an important year for development issues. The September 2010 Millennium Development Goals (MDG) High Level Plenary will be a crucial opportunity to reaffirm the global development agenda and global partnership, to agree on actions for all to achieve the MDGs by 2015, and to reaffirm our respective commitments to assist the poorest countries.

45. In this regard it is important to work with Least Developed Countries (LDCs) to make them active participants in and beneficiaries of the global economic system. Accordingly we thank Turkey for its decision to host the 4th United Nations Conference on the LDCs in June 2011.

46. We welcome the Global Pulse Initiative interim report and look forward to an update.

47. Narrowing the development gap and reducing poverty are integral to our broader objective of achieving strong, sustainable and balanced growth and ensuring a more robust and resilient global economy for all. In this regard, we agree to establish a Working Group on Development and mandate it to elaborate, consistent with the G20’s focus on measures to promote economic growth and resilience, a development agenda and multi-year action plans to be adopted at the Seoul Summit.

Annex I: The Framework for Strong, Sustainable and Balanced Growth

4. The Framework for Strong, Sustainable and Balanced Growth we launched in Pittsburgh is the means to achieving our shared objectives. G20 members have a responsibility to the community of nations to assure the overall health of the global economy. We committed to assess the collective consistency of our policy actions and to strengthen our policy frameworks in order to meet our common objectives. Through our collective policy action, we will ensure growth is sustained, more balanced, shared across all countries and regions of the world, and consistent with our development goals.

13. Across all G20 members, we recognise that structural reforms can have a substantial impact on economic growth and global welfare. We will implement measures that will enhance the growth potential of our economies in a manner that pays particular attention to the most vulnerable. Reforms could support the broadly-shared expansion of demand if wages grow in line with productivity. It will be important to strike the right balance between policies that support greater market competition and economic growth and policies that preserve social safety nets consistent with national circumstances. Together these measures will also help unlock demand. These include:

15. We are committed to narrowing the development gap and that we must consider the impact of our policy actions on low-income countries. We will continue support development financing, including through new approaches that encourage development financing from both public and private sources. The crisis will have long lasting impact on the development trajectories of poor countries in every region of the world. Among these effects, developing countries are likely to face increased challenges in securing financing from both public and private sources. Many of us have already taken steps to help address this shortfall by implementing innovative approaches to financing, such as advance market commitments, the SME challenge and recent progress with respect to financial inclusion. Low-income countries have the potential to contribute to stronger and more balanced global growth, and should be viewed as markets for investment.

16. These measures need to be implemented at the national level and tailored to individual country circumstances. We welcome additional measures announced by some G20 members aimed at meeting our shared objectives.

17. To facilitate this process, the second stage of our country-led, consultative mutual assessment will be conducted at the country and European level. Each G20 member will identify the measures it is taking to implement the policies we have agreed upon today to ensure stronger, more sustainable and balanced growth. We ask our Finance Ministers and Central Bank Governors to elaborate on these measures and report on them when we next meet. We will continue to draw on the expertise of the IMF, World Bank, OECD, ILO and other international organisations, as necessary. These measures will form the basis of our comprehensive action plan that will be announced in the Seoul Summit. As we pursue strong, sustainable and more balanced growth, we continue to encourage work on measurement methods to take into account social and environmental dimensions of economic development.

Annex III: Enhancing the Legitimacy, Credibility and Effectiveness of the IFIs and Further Supporting the Needs of the Most Vulnerable

1. The global economic and financial crisis has demonstrated the value of the International Financial Institutions (IFIs) as instruments for coordinating multilateral action. These institutions were on the front-line in responding to the crisis, mobilizing $985 billion in critical financing. In addition, the international community and the IFIs mobilized over $250 billion in trade finance.

2. The crisis also demonstrated the importance of delivering further reforms. As key platforms for our cooperation, we are committed to strengthening the legitimacy, credibility and effectiveness of the IFIs, to ensure that they are capable of helping us maintain global financial and economic stability and supporting the growth and development of all their members.

3. To enhance the legitimacy and effectiveness of the IFIs, we committed in London and Pittsburgh to support new open, transparent and merit-based selection processes for the heads and senior leadership of all International Financial Institutions. We will strengthen these processes in the lead up to the Seoul Summit in the context of broader reform.

MDB Financing

4. Since the start of the global financial crisis, the MDBs have been playing an important role in the global response by exceeding our London commitment, in providing $235 billion in lending, more than half of which has come from the World Bank Group. At a time when private sector sources of finance were diminished, this lending was critical to global stabilization. Now more than ever, the MDBs are key development partners for many countries.

5. We have fulfilled our commitment to ensure that the MDBs have appropriate resources through capital increases for the major MDBs, including the Asian Development Bank (AsDB), the African Development Bank (AfDB), the Inter-American Development Bank (IADB), the European Bank for Reconstruction and Development (EBRD), the World Bank Group, notably the International Bank for Reconstruction and Development (IBRD) and the International Finance Corporation (IFC). As major shareholders at these institutions, we have worked together with other members to increase their capital base by 85%, or approximately $350 billion. Overall, their total lending to developing countries will grow from $37 billion per year to $71 billion per year. This will improve their ability to address the increasing demand in the short and medium terms and to have enough resources to support their members. We support efforts to implement these agreements as quickly as possible.

MDB Capital Increase Pre-Crisis Annual Lendinga New Annual Lendingb
AfDB 200% increase $1.8 B $6 B
AsDB 200% increase $5.8 B $10 B
EBRDc 50% increase $5.3 B $11 B
IADBd 70% increase $6.7 B $12 B
IBRD 30% increase $12.1 B $15 B
IFC $200M selective capital increase $5.4 B $17 B
Total 85% increase in MDB capital $37 B $71 B
*All dollar figures USD
a 2000-2008. b 2012-2020. c mostly callable, of a temporary nature, for CRR4; d Includes agreement to relieve Haiti’s debt to the IADB

6. We recognize the acute development needs in Africa, the region the furthest behind on the Millennium Development Goals. For this reason, the African Development Bank will be capitalized for substantial growth, with a 200% increase in its capital and corresponding tripling of its annual lending levels, to strengthen capacity to support the region’s long-term growth and development.

7. To ensure that the IFC has the resources necessary for its continued growth, we will consider a long-term hybrid instrument to shareholders and earnings retention, to complement the recent selective capital increase linked to voice reforms.

8. In order to support low income countries, given their need to borrow at more concessional terms, we will fulfill our commitment to ensure an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association (IDA) and the African Development Fund, which are undergoing financial replenishments this year. We welcome the fact that many G20 members have taken important steps to join as donors to these institutions. We reiterated our support for fairer and wider burden sharing.

MDB Reforms

9. We have also fulfilled our commitment to ensure that these capital increases are joined to ongoing and important institutional reforms to make the MDBs more effective, efficient and accountable. These include:

10. With these reform commitments, we are building not just bigger MDBs, but better MDBs, with more strategic focus on lifting the lives of the poor, underwriting growth, promoting security, and addressing the global challenges of climate change and food security. Implementation of these reforms has already begun, and we will continue to ensure that this work is completed and that further reforms are undertaken where necessary.

World Bank Group Voice Reforms

11. We welcomed the agreement on the World Bank’s voice reform to increase the voting power of developing and transition countries by 3.13% consistent with the agreement at the Pittsburgh Summit. When combined with the 1.46% increase agreed in the previous phase of the reforms, this will provide a total shift of 4.59% to DTCs, bringing their overall voting power to 47.19%. We committed to continue moving over time towards equitable voting power, while protecting the smallest nations, by arriving at a dynamic formula which primarily reflects countries’ evolving economic weight and the World Bank’s development mission. We also endorsed voice reforms at the IFC which will provide a total shift of 6.07%, to bring DTC voting power to 39.48%.

Debt Relief for Haiti

12. We stand united with the people of Haiti as they struggle to recover from the devastation wrought by the earthquake in January, and we join other donors in providing assistance in this difficult time, including through the Haiti Reconstruction Fund set up by the World Bank, the Inter-American Development Bank and the United Nations. To ensure that Haiti’s recovery efforts can focus on its reconstruction action plan, rather than the debt obligations of its past, our Finance Ministers agreed last April to support full cancellation of Haiti’s debts to all IFIs, including through burden sharing of the associated costs, where necessary. We are pleased that an agreement on a framework for cancelling such debt has been reached at the IMF; the World Bank, the International Fund for Agriculture Development, and soon at the Inter-American Development Bank. We will contribute our fair shares of the associated costs as soon as possible. We will report on progress at the Seoul Summit.

IMF Reforms

16. A number of G20 members have already formally accepted the recently agreed reforms to the expanded NAB, which will provide a significant back-stop to IMF quota resources, consolidating over $500 billion for IMF lending to countries in crisis. Other participating G20 members will complete the acceptance process by the next meeting of G20 Finance Ministers and Central Bank Governors. We call on all existing and new NAB participants to do the same.

17. G20 members committed to ensure that the IMF’s concessional financing for the poorest countries be expanded by $6 billion through the proceeds from the agreed sale of IMF gold, consistent with the IMF’s new income model, and the employment of internal and other resources. We are delivering. Some G20 members have supported this commitment with additional loan and subsidy resources for the Poverty Reduction and Growth Trust (PRGT) and some others plan to contribute in the coming months.

Further Supporting the Needs of the Most Vulnerable

19. We have made significant progress in supporting the poorest countries during the crisis and must continue to take measures to assist the most vulnerable and must ensure that the poorest countries benefit from our efforts to restore global growth. We recognize the urgency of this, and are committed to meeting the Millennium Development Goals by 2015 and will reinforce our efforts to this end, including through the use of Official Development Assistance.

20. We have made concrete progress on our commitment to improving access to financial services for the poor and to increasing financing available to small- and medium-sized enterprises (SMEs) in developing countries.

21. Adequately financed small and medium-sized businesses are vital to job creation and a growing economy, particularly in emerging economies. We have launched the SME Finance Challenge aimed at finding the most promising models for public-private partnerships that catalyze finance for SMEs. We are committed to mobilizing the funding needed to implement winning proposals, including through the strong support of the MDBs. We welcome the strong support of the MDBs for scalable and sustainable SME financing proposals, including those from the Challenge in partnership with the private sector. We look forward to announcing the winning proposals of the SME Finance Challenge and to receiving recommendations to scale-up successful SME finance models at the Seoul Summit.

22. We have developed a set of principles for innovative financial inclusion, which will form the basis of a concrete and pragmatic action plan for improving access to financial services amongst the poor. This action plan will be released at the Seoul Summit.

23. At the Pittsburgh Summit, we recognised the importance of sustained funding and targeted investments to improve long-term food security in low income countries. We welcome the launch of the Global Agriculture and Food Security Program (GAFSP), which will provide predictable financing for low income countries to improve agricultural productivity, raise rural incomes, and build sustainable agricultural systems. We are particularly pleased that the fund has approved inaugural grants totalling $224 million for Bangladesh, Rwanda, Haiti, Togo, and Sierra Leone. We also support the development of the private sector window of the GAFSP, which will increase private sector investments to support small and medium sized agri-businesses and farmers in poor countries. We welcome the support already received, and encourage additional donor contributions to both the public and private sector windows of the GAFSP.

24. There is still an urgency to accelerate research and development to close agricultural productivity gaps, including through regional and South-South cooperation, amidst growing demands and mounting environmental stresses, particularly in Africa. The private sector will be critical in the development and deployment of innovative solutions that provide concrete results on the ground. We commit to exploring the potential of innovative, results-based mechanisms such as advance market commitments to harness the creativity and resources of the private sector in achieving breakthrough innovations in food security and agriculture development in poor countries. We will report on progress at the Seoul Summit.

Principles for Innovative Financial Inclusion

Innovative financial inclusion means improving access to financial services for poor people through the safe and sound spread of new approaches. The following principles aim to help create an enabling policy and regulatory environment for innovative financial inclusion. The enabling environment will critically determine the speed at which the financial services access gap will close for the more than two billion people currently excluded. These principles for innovative financial inclusion derive from the experiences and lessons learned from policymakers throughout the world, especially leaders from developing countries.

  1. Leadership: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.
  2. Diversity: Implement policy approaches that promote competition and provide market-based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers.
  3. Innovation: Promote technological and institutional innovation as a means to expand financial system access and usage, including by addressing infrastructure weaknesses.
  4. Protection: Encourage a comprehensive approach to consumer protection that recognises the roles of government, providers and consumers.
  5. Empowerment: Develop financial literacy and financial capability.
  6. Cooperation: Create an institutional environment with clear lines of accountability and co-ordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders.
  7. Knowledge: Utilize improved data to make evidence based policy, measure progress, and consider an incremental “test and learn” approach acceptable to both regulator and service provider.
  8. Proportionality: Build a policy and regulatory framework that is proportionate with the risks and benefits involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation.
  9. Framework: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value; and market-based incentives to achieve the long-term goal of broad interoperability and interconnection.

These principles are a reflection of the conditions conducive to spurring innovation for financial inclusion while protecting financial stability and consumers. They are not a rigid set of requirements but are designed to help guide policymakers in the decision making process. They are flexible enough so they can be adapted to different country contexts.

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2010 Seoul Summit (November 11-12)

The G20 Seoul Summit Leaders’ Declaration

4. The concrete steps we have taken will help ensure we are better prepared to prevent and, if necessary, to withstand future crises. We pledge to continue our coordinated efforts and act together to generate strong, sustainable and balanced growth.

9. Today, the Seoul Summit delivers

• the Seoul Action Plan composed of comprehensive, cooperative and country-specific policy actions to move closer to our shared objective. The Plan includes our commitment to:

- undertake macroeconomic policies, including fiscal consolidation where necessary, to ensure ongoing recovery and sustainable growth and enhance the stability of financial markets, in particular moving toward more market-determined exchange rate systems, enhancing exchange rate flexibility to reflect underlying economic fundamentals, and refraining from competitive devaluation of currencies. Advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates. These actions will help mitigate the risk of excessive volatility in capital flows facing some emerging countries;

- enhance the Mutual Assessment Process (MAP) to promote external sustainability…To support our efforts toward meeting these commitments, we call on our Framework Working Group, with technical support from the IMF and other international organizations, to develop these indicative guidelines, with progress to be discussed by our Finance Ministers and Central Bank Governors in the first half of 2011; and, in Gyeongju, our Finance Ministers and Central Bank Governors called on the IMF to provide an assessment as part of the MAP on the progress toward external sustainability and the consistency of fiscal, monetary, financial sector, structural, exchange rate and other policies…

• a modernized IMF that better reflects the changes in the world economy through greater representation of dynamic emerging markets and developing countries. These comprehensive quota and governance reforms, as outlined in the Seoul Summit Document, will enhance the IMF's legitimacy, credibility and effectiveness, making it an even stronger institution for promoting global financial stability and growth.

• the Seoul Development Consensus for Shared Growth that sets out our commitment to work in partnership with other developing countries, and LICs in particular, to help them build the capacity to achieve and maximize their growth potential, thereby contributing to global rebalancing. The Seoul Consensus complements our commitment to achieve the Millennium Development Goals (MDGs) and focuses on concrete measures as summarized in our Multi-Year Action Plan on Development to make a tangible and significant difference in people's lives, including in particular through the development of infrastructure in developing countries.

• our strong commitment to direct our negotiators to engage in across-the-board negotiations to promptly bring the Doha Development Round to a successful, ambitious, comprehensive, and balanced conclusion consistent with the mandate of the Doha Development Round and built on the progress already achieved. We recognize that 2011 is a critical window of opportunity, albeit narrow, and that engagement among our representatives must intensify and expand. We now need to complete the end game. Once such an outcome is reached, we commit to seek ratification, where necessary, in our respective systems. We are also committed to resisting all forms of protectionist measures.

11. Building on our achievements to date, we have agreed to work further on macro-prudential policy frameworks; better reflect the perspective of emerging market economies in financial regulatory reforms; strengthen regulation and oversight of shadow banking; further work on regulation and supervision of commodity derivatives markets; improve market integrity and efficiency; enhance consumer protection; pursue all outstanding governance reform issues at the IMF and World Bank; and build a more stable and resilient international monetary system, including by further strengthening global financial safety nets. We will also expand our MAP based on the indicative guidelines to be agreed.

12. To promote resilience, job creation and mitigate risks for development, we will prioritize action under the Seoul Consensus on addressing critical bottlenecks, including infrastructure deficits, food market volatility, and exclusion from financial services.

15. We welcome the Fourth UN LDC Summit in Turkey and the Fourth High-Level Forum on Aid Effectiveness in Korea, both to be held in 2011.

17. The actions agreed today will help to further strengthen the global economy, accelerate job creation, ensure more stable financial markets, narrow the development gap and promote broadly shared growth beyond crisis.

The Seoul Summit Document

The Seoul Action Plan

2. Since then, we have made important progress through our country-led, consultative Mutual Assessment Process (MAP) of the Framework:

• Significant steps have been taken to strengthen the capacity of international financial institutions (IFIs) in support of development.

6. Monetary and Exchange Rate Policies: We reaffirm the importance of central banks' commitment to price stability, thereby contributing to the recovery and sustainable growth. We will move toward more market-determined exchange rate systems and enhance exchange rate flexibility to reflect underlying economic fundamentals and refrain from competitive devaluation of currencies. Advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates. Together these actions will help mitigate the risk of excessive volatility in capital flows facing some emerging market economies. Nonetheless, in circumstances where countries are facing undue burden of adjustment, policy responses in emerging market economies with adequate reserves and increasingly overvalued flexible exchange rates may also include carefully designed macro-prudential measures. We will reinvigorate our efforts to promote a stable and well functioning international monetary system and call on the IMF to deepen its work in these areas.

7. Trade and Development Policies: We reaffirm our commitment to free trade and investment recognizing its central importance for the global recovery. We will refrain from introducing, and oppose protectionist trade actions in all forms and recognize the importance of a prompt conclusion of the Doha negotiations. We reaffirm our commitment to avoid financial protectionism and are mindful of the risks of proliferation of measures that would damage investment and harm prospects for the global recovery. With developing countries' rising share in world output and trade, the goals of global growth, rebalancing and development are increasingly interlinked. We will focus efforts to resolve the most significant bottlenecks to inclusive, sustainable and resilient growth in developing countries, low-income countries (LICs) in particular: infrastructure, human resources development, trade, private investment and job creation, food security, growth with resilience, financial inclusion, domestic resource mobilization and knowledge sharing. In addition, we will take concrete actions to increase our financial and technical support, including fulfilling the Official Development Assistance (ODA) commitments by advanced countries.

10. Structural Reforms: We will implement a range of structural reforms to boost and sustain global demand, foster job creation, contribute to global rebalancing, and increase our growth potential, and where needed undertake:

• Green growth and innovation oriented policy measures to find new sources of growth and promote sustainable development.

In pursuing these reforms, we will draw on the expertise of the OECD, IMF, World Bank, ILO and other international organizations.

11. … To support our efforts toward meeting these commitments, we call on our Framework Working Group, with technical support from the IMF and other international organizations, to develop these indicative guidelines, with progress to be discussed by our Finance Ministers and Central Bank Governors in the first half of 2011; and, in Gyeongju, our Finance Ministers and Central Bank Governors called on the IMF to provide an assessment as part of the MAP on the progress toward external sustainability and the consistency of fiscal, monetary, financial sector, structural, exchange rate and other policies. In light of this, the first such assessment, to be based on the above mentioned indicative guidelines, will be initiated and undertaken in due course under the French Presidency.

International Financial Institution Reforms

14. When the world was in the middle of the global financial crisis, we met and agreed to provide the IFIs with the resources they needed to support the global economy. With our agreements to increase their resources substantially and endorse new lending instruments, the IFIs mobilized critical financing, including more than $750 billion by the IMF and $235 billion by the Multilateral Development Banks (MDBs). Financial markets stabilized and the global economy started to recover. Even in the midst of the crisis, we knew that further reforms of the IFIs were required.

15. We committed to modernize the institutions fundamentally so that they better reflect changes in the world economy and can more effectively play their roles in promoting global financial stability, fostering development and improving the lives of the poorest. In June 2010, we welcomed the reforms to increase the voting power of developing and transition countries at the World Bank. We also remained committed to strengthening the legitimacy, credibility and effectiveness of the IMF through quota and governance reforms.

Modernizing IMF governance

16. Today, we welcomed the ambitious achievements by the Finance Ministers and Central Bank Governors at the Gyeongju meeting, and subsequent decision by the IMF, on a comprehensive package of IMF quota and governance reforms. The reforms are an important step toward a more legitimate, credible and effective IMF, by ensuring that quotas and Executive Board composition are more reflective of new global economic realities, and securing the IMF's status as a quota-based institution, with sufficient resources to support members' needs. Consistent with our commitments at the Pittsburgh and Toronto Summits, and going even further in a number of areas, the reforms include:

• Shifts in quota shares to dynamic emerging market and developing countries and to under-represented countries of over 6%, while protecting the voting share of the poorest, which we commit to work to complete by the Annual Meetings in 2012.

• Continuing the dynamic process aimed at enhancing the voice and representation of emerging market and developing countries, including the poorest, through a comprehensive review of the quota formula by January 2013 to better reflect the economic weights; and through completion of the next general review of quotas by January 2014.

• Greater representation for emerging market and developing countries at the Executive Board through two fewer advanced European chairs, and the possibility of a second alternate for all multi-country constituencies.

• Moving to an all-elected Board, along with a commitment by the IMF's membership to maintain the Board size at 24 chairs, and following the completion of the 14th General Review, a review of the Board's composition every eight years.

17. We reiterate the urgency of promptly concluding the 2008 IMF Quota and Voice Reforms. We urge all G20 members participating in the expanded NAB to accelerate their procedures in completing the acceptance process. We ask the IMF to report on the progress, in accordance with agreed timelines, toward effective implementation of the 2010 quota and governance reforms to our Finance Ministers and Central Bank Governors at their periodic G20 meetings.

18. When combined with the already agreed voice reform of the World Bank, these represent significant achievements in modernizing our key IFIs. They will be even stronger players in promoting global financial stability and growth. We asked our Finance Ministers and Central Bank Governors to continue to pursue all outstanding governance reform issues at the World Bank and the IMF.

Surveillance

19. We recognize the importance of continuing the work on reforming the IMF's mission and mandate, including strengthening surveillance.

20. IMF surveillance should be enhanced to focus on systemic risks and vulnerabilities wherever they may lie. To this extent, we welcome the decision made by the IMF to make financial stability assessments under the Financial Sector Assessment Program (FSAP) a regular and mandatory part of Article IV consultation for members with systemically important financial sectors. We call on the IMF to make further progress in modernizing the IMF's surveillance mandate and modalities. These should involve, in particular: strengthening bilateral and multilateral work on surveillance covering financial stability, macroeconomic, structural and exchange rate policies, with increased focus on systemic issues; enhancing synergies between surveillance tools; helping members to strengthen their surveillance capacity; and ensuring even-handedness, candor, and independence of surveillance. We welcome the IMF's work to conduct spillover assessments of the wider impact of systemic economies' policies.

Multilateral Development Banks

21. We reiterate our commitment to completing an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association, to help ensure that LICs have access to sufficient concessional resources.

Strengthening global financial safety nets

22. As the global economy became more interconnected and integrated, the size and volatility of capital flows increased significantly. The increased volatility was a source of instability during the financial crisis. It even adversely affected countries with solid fundamentals and the effects were greater on those with more open economies. These problems persist. Current volatility of capital flows is reflecting the differing speed of recovery between advanced and emerging market economies. National, regional and multilateral responses are required. Strengthened global financial safety nets can help countries to cope with financial volatility, reducing the economic disruption from sudden swings in capital flows and the perceived need for excessive reserve accumulation.

24. We welcome the following achievements from our mandate:

• The creation of the Precautionary Credit Line (PCL) as a new preventative tool. The PCL allows countries with sound fundamentals and policies, but moderate vulnerabilities, to benefit from the IMF's precautionary liquidity provision.

• The recent decision by the IMF to continue its work to further improve the global capacity to cope with shocks of a systemic nature, as well as the recent clarification of the procedures for synchronized approval of the FCLs for multiple countries, by which a number of countries affected by a common shock could concurrently seek access to FCL.

• The dialogue to enhance collaboration between Regional Financing Arrangements (RFAs) and the IMF, acknowledging the potential synergies from such collaboration.

25. Building on the achievements made to date on strengthening global financial safety nets, we need to do further work to improve our capacity to cope with future crises. Therefore, we asked our Finance Ministers and Central Bank Governors to explore, with input from the IMF:

B. Ways to improve collaboration between RFAs and the IMF across all possible areas and enhance the capability of RFAs for crisis prevention, while recognizing region-specific circumstances and characteristics of each RFA.

26. Our goal is to build a more stable and resilient international monetary system. While the international monetary system has proved resilient, tensions and vulnerabilities are clearly apparent. We agreed to explore ways to further improve the international monetary system to ensure systemic stability in the global economy. We asked the IMF to deepen its work on all aspects of the international monetary system, including capital flow volatility. We look forward to reviewing further analysis and proposals over the next year.

Transformed financial system to address the root causes of the crisis

33. Delivering on our commitment in Toronto, we endorsed the policy recommendations prepared by the FSB in consultation with the IMF, on increasing supervisory intensity and effectiveness. We reaffirmed that the new financial regulatory framework must be complemented with more effective oversight and supervision…

Implementation and international assessment, including peer review

36. …In this regard, we recognized the value of the FSAP jointly undertaken by the IMF and the World Bank, and the FSB's peer review as means of fostering consistent cross-country implementation of international standards.

38. We re-emphasized the importance we place on achieving a single set of improved high quality global accounting standards and called on the International Accounting Standards Board and the Financial Accounting Standards Board to complete their convergence project by the end of 2011. We also encouraged the International Accounting Standards Board to further improve the involvement of stakeholders, including outreach to, and membership of, emerging market economies, in the process of setting the global standards, within the framework of independent accounting standard setting process.

Future work: Issues that warrant more attention

41. While we have made significant progress in a number of areas, there still remain some issues that warrant more attention:

• Further work on macro-prudential policy frameworks: In order to deal with systemic risks in the financial sector in a comprehensive manner and on an ongoing basis, we called on the FSB, IMF and BIS to do further work on macro-prudential policy frameworks, including tools to mitigate the impact of excessive capital flows, and

• Addressing regulatory reform issues pertaining specifically to emerging market and developing economies: We agreed to work on financial stability issues that are of particular interest to emerging market and developing economies, and called on the FSB, IMF and World Bank to develop and report before the next Summit. These issues could include: the management of foreign exchange risks by financial institutions, corporations and households; emerging market and developing economies' regulatory and supervisory capacity where necessary, including with regard to local branches of foreign financial institutions which are systemic in their host country and development of deposit insurance schemes; financial inclusion; information sharing between home and host supervisory authorities on cross border financial institutions; and trade finance.

Fighting Protectionism and Promoting Trade and Investment

42. Recognizing the importance of free trade and investment for global recovery, we are committed to keeping markets open and liberalizing trade and investment as a means to promote economic progress for all and narrow the development gap. The importance of free trade and open markets is illustrated by the joint report of the OECD, ILO, World Bank and WTO on the benefits of trade liberalization for employment and growth. These trade and investment liberalization measures will help achieve the G20 Framework objectives for strong, sustainable and balanced growth, and must be complemented by our unwavering commitment to resist protectionism in all its forms. We therefore reaffirm the extension of our standstill commitments until the end of 2013 as agreed in Toronto, commit to rollback any new protectionist measures that may have risen, including export restrictions and WTO-inconsistent measures to stimulate exports, and ask the WTO, OECD, and UNCTAD to continue monitoring the situation and to report publicly on a semi-annual basis.

44. We strongly believe that trade can be an effective tool for reducing poverty and enhancing economic growth in developing countries, LICs in particular. To support LIC capacity to trade, we welcome the adoption of the Multi-Year Action Plan on Development. We note our commitment to at least maintain, beyond 2011, Aid for Trade levels that reflect the average of the last three years (2006 to 2008); to make progress toward duty-free quota-free market access for least developed country (LDC) products in line with our Hong Kong commitments, without prejudice to other negotiations, including as regards preferential rules of origin; to call on relevant international agencies to coordinate a collective multilateral response to support trade facilitation; and to support measures to increase the availability of trade finance in developing countries, particularly LICs. In this respect, we also agree to monitor and assess trade finance programs in support of developing countries, in particular their coverage and impact on LICs, and to evaluate the impact of regulatory regimes on trade finance.

Seoul Development Consensus for Shared Growth

46. The crisis disproportionately affected the most vulnerable in the poorest countries and slowed progress toward achievement of the Millennium Development Goals (MDGs). As the premier economic forum, we recognize the need to strengthen and leverage our development efforts to address such challenges.

47. At the same time, narrowing the development gap and reducing poverty are integral to achieving our broader Framework objectives of strong, sustainable and balanced growth by generating new poles of growth and contributing to global rebalancing. We are therefore using our best efforts for a rapid increase in the share of global growth and prosperity for developing countries, LICs in particular.

48. We commit to work in partnership with other developing countries, LICs in particular, to help them build the capacity to achieve and maintain their maximum economic growth potential. We have thus developed a consensus for the G20's contribution to global development efforts in line with our Toronto mandate.

49. We endorse today the Seoul Development Consensus for Shared Growth (Annex I) and its Multi-Year Action Plan on Development (Annex II).

50. The Seoul Consensus and the Multi-Year Action Plan are based on six core principles:

• First, an enduring and meaningful reduction in poverty cannot be achieved without inclusive, sustainable and resilient growth, while the provision of ODA, as well as the mobilization of all other sources of financing, remain essential to the development of most LICs.

• Second, we recognize that while there are common factors, there is no single formula for development success. We must therefore engage other developing countries as partners, respecting national ownership of a country's policies as the most important determinant of its successful development, thereby helping to ensure strong, responsible, accountable and transparent development partnerships between the G20 and LICs.

• And finally, we will focus on tangible outcomes of significant impact that remove blockages to improving growth prospects in developing countries, especially LICs.

51. The Seoul Consensus also identifies nine key pillars where we believe actions are necessary to resolve the most significant bottlenecks to inclusive, sustainable and resilient growth in developing countries, LICs in particular: infrastructure, human resource development, trade, private investment and job creation, food security, growth with resilience, financial inclusion, domestic resource mobilization and knowledge sharing. The Multi-Year Action Plan then outlines the specific, detailed actions to which we commit in order to address these bottlenecks, including to:

f) Improve income security and resilience to adverse shocks by assisting developing countries enhance social protection programs, including through further implementation of the UN Global Pulse Initiative, and by facilitating implementation of initiatives aimed at a quantified reduction of the average cost of transferring remittances;

h) Build sustainable revenue bases for inclusive growth and social equity by improving developing country tax administration systems and policies and highlighting the relationship between non-cooperative jurisdictions and development; and

i) Scale up and mainstream sharing of knowledge and experience, especially between developing countries, in order to improve their capacity and ensure that the broadest range of experiences are used to help tailor national policies.

53. We reaffirm our commitment to achievement of the MDGs and will align our work in accordance with globally agreed development principles for sustainable economic, social and environmental development, to complement the outcomes of the UN High-Level Plenary Meeting on the MDGs held in September 2010 in New York, as well as with processes such as the Fourth UN LDC Summit in Turkey and the Fourth High-Level Forum on Aid Effectiveness in Korea, both to be held in 2011. We also reaffirm our respective ODA pledges and commitments to assist the poorest countries and mobilize domestic resources made following on from the Monterrey Consensus and other fora.

Financial Inclusion

56. Working with the Alliance for Financial Inclusion, the Consultative Group to Assist the Poor and the International Finance Corporation, we commit to launch the Global Partnership for Financial Inclusion (GPFI) as an inclusive platform for all G20 countries, interested non-G20 countries and relevant stakeholders to carry forward our work on financial inclusion, including implementation of the Financial Inclusion Action Plan. The GPFI's efforts over the next year will include helping countries put into practice the Principles for Innovative Financial Inclusion, strengthening data for measuring financial inclusion, and developing methodologies for countries wishing to set targets. We agree that the GPFI should report to us on its progress at our 2011 Summit in France.

57. Recognizing the vital role of SMEs in employment and income generation, we welcome the strong response to the G20 SME Finance Challenge and the innovative models for scaling up private SME finance that have emerged from the competition and congratulate the winners…We welcome the commitment of Canada, Korea, the United States and the Inter-American Development Bank of $528 million to the Framework through grants and co-financing.

Energy

Fossil Fuel Subsidies

59. We note the preliminary report of the IEA, World Bank and OECD and ask these organizations, together with OPEC, to further assess and review the progress made in implementing the Pittsburgh and Toronto commitments and report back to the 2011 Summit in France.

Climate Change and Green Growth

68. We are committed to support country-led green growth policies that promote environmentally sustainable global growth along with employment creation while ensuring energy access for the poor. We recognize that sustainable green growth, as it is inherently a part of sustainable development, is a strategy of quality development, enabling countries to leapfrog old technologies in many sectors, including through the use of energy efficiency and clean technology…

Annex I: Seoul Development Consensus for Shared Growth

“Narrowing the development gap and reducing poverty are integral to our broader objective of achieving strong, sustainable and balanced growth and ensuring a more robust and resilient global economy for all.” —Toronto Declaration, June 26-27, 2010

In the wake of the most severe economic shock in recent history, the G20 has the opportunity to contribute to the reconstruction of the world economy in a form conducive to strong, sustainable, inclusive and resilient growth. Through the Seoul Development Consensus for Shared Growth, we seek to add value to and complement existing development commitments, particularly those made at the recent High-Level Plenary Meeting on the Millennium Development Goals, and in other fora.

Why Growth Must Be Shared

At Pittsburgh we agreed to work together in an unprecedented process of mutual assessment to ensure our individual economic policies collectively achieved an outcome of strong, sustainable and balanced growth. This Framework was borne of a recognition that for the world to enjoy continuing levels of prosperity it must find new drivers of aggregate demand and more enduring sources of global growth. We recognize as a crucial part of this exercise that we need to enhance the role of developing countries and low income countries (LICs) in particular, for the following reasons:

• First, because for prosperity to be sustained it must be shared.

• Second, because we acknowledge that the impact of the recent crisis demonstrated a global interconnectedness that is disproportionately affecting the most vulnerable in the poorest countries. It has been estimated that, as a result of the recent crisis, an additional 64 million people will be living in extreme poverty (i.e., living on less than USD 1.25 a day) by the end of 2010. We therefore have a responsibility to fulfill.

• Third, as the premier forum for our international economic cooperation, because the G20 has a role to play, complementing the efforts of aid donors, the UN system, multilateral development banks (MDBs) and other agencies, in assisting developing countries, particularly LICs, achieve the Millennium Development Goals (MDGs). Our role must relate to our mandate on global economic cooperation and recognize that consistently high levels of inclusive growth in developing countries, and LICs in particular, are critically necessary, if not sufficient, for the eradication of extreme poverty.

• Fourth, because the rest of the global economy, in its quest for diversifying the sources of global demand and destinations for investing surpluses, needs developing countries and LICs to become new poles of global growth – just as fast growing emerging markets have become in the recent past.

Our overarching objective of helping LICs improve and maintain the levels and quality of growth, thereby reducing poverty, improving human rights and creating decent jobs, requires strengthening the relationships among high, middle and low income countries. This entails promoting sustainable economic, social and environmental development; honoring equity in the partnerships that exist; building stronger and more effective partnerships among advanced countries, emerging countries and LICs; engaging the private sector and civil society; and refocusing our priorities and efforts to remove the bottlenecks for LIC growth. We further believe there is no “one-size-fits-all” formula for development success and that developing countries must take the lead in designing and implementing development strategies tailored to their individual needs and circumstances.

G20 Development Principles

We therefore commit ourselves to a Multi-Year Action Plan to achieve these objectives. This Plan will be based on the following principles, intended to capture the key characteristics of our actions and policies:

1. Focus on economic growth. Be economic-growth oriented and consistent with the G20 Framework for Strong, Sustainable and Balanced Growth, which requires narrowing of the development gap. More robust and sustainable economic growth in LICs will also go hand-in-hand with their capacity to achieve the MDGs. Actions and policies should have the capacity to significantly improve the prospects for inclusive, sustainable and resilient growth above business as usual.

2. Global development partnership. Engage developing countries, particularly LICs, as equal partners, respecting their national ownership and recognizing that the most important determinant of successful development is a country’s own development policy. Ensure that actions foster strong, responsible, accountable and transparent development partnerships between the G20 and LICs.

3. Global or regional systemic issues. Prioritize actions that tackle global or regional systemic issues such as regional integration where the G20 can help to catalyze action by drawing attention to key challenges and calling on international institutions, such as MDBs, to respond. Focus on systemic issues where there is a need for collective and coordinated action, including through South-South and triangular cooperation, to create synergies for maximum development impact.

4. Private sector participation. Promote private sector involvement and innovation, recognizing the unique role of the private sector as a rich source of development knowledge, technology and job creation. Encourage specific ways to stimulate and leverage the flows of private capital for development, including by reducing risks and improving the investment climate and market size.

5. Complementarity. Differentiate, yet complement existing development efforts, avoiding duplication, and strategically focus on areas where the G20 has a comparative advantage and can add value focusing on its core mandate as the premier forum for international economic cooperation.

6. Outcome orientation. Focus on feasible, practical and accountable measures to address clearly articulated problems that are serious blockages to significantly improving growth prospects for developing countries. Such measures should have the potential to provide tangible outcomes and be significant in impact. Implementation of G20 action on development should be monitored through an adequate accountability framework.

In close consultation with our developing country and LIC partners, as well as relevant international and regional organizations with development expertise, we have also identified nine areas, or “key pillars,” where we believe action and reform are most critical to ensure inclusive and sustainable economic growth and resilience in developing countries and LICs. These areas are: infrastructure, private investment and job creation, human resource development, trade, financial inclusion, growth with resilience, food security, domestic resource mobilization and knowledge sharing. Creating optimal conditions for strong, sustainable and resilient economic growth in developing countries will require reform and transformation across each of these interlinked and mutually reinforcing key pillars.

Guided by our development principles and oriented around the key pillars, we have developed the following Multi-Year Action Plan on Development. We believe these action plans address some of the most critical bottlenecks to strong and sustainable economic growth and resilience in developing countries, in particular LICs, and have high potential for transformative, game-changing impact on people’s lives, helping to narrow the development gap, improve human rights and promote gender equality. We commit to full, timely and effective implementation of these action plans and, to this end, will continue to closely monitor their progress, in synergy with other processes, including preparations for the Fourth High-Level Forum on Aid Effectiveness to be held in Korea in late 2011.

Annex II: Multi-Year Action Plan on Development

The following sets out our concrete actions and outcomes to be delivered and developed over the medium term. Dates in parentheses denote deadlines to be met. The Development Working Group will continue its work and will monitor progress on the Multi-Year Action Plan by reporting to the Sherpas.

Infrastructure

Gaps in infrastructure, including with respect to energy, transport, communications, water and regional infrastructure, are significant bottlenecks to increasing and maintaining growth in many developing countries. We are committed to overcoming obstacles to infrastructure investment, developing project pipelines, improving capacity and facilitating increased finance for infrastructure investment in developing countries, in particular low income countries (LICs).

Action 1: Develop Comprehensive Infrastructure Action Plans
We request the regional development banks (RDBs) and the World Bank Group (collectively, multilateral development banks, or MDBs) to work jointly to prepare action plans that increase public, semi-public and private finance and improve implementation of national and regional infrastructure projects, including in energy, transport, communications and water, in developing countries, LICs in particular. The MDBs will pursue actions in the following five areas:

Information and needs assessment

• Identify infrastructure gaps, needs and funding requirements, particularly with respect to regional and rural infrastructure, as well as opportunities to promote public-private and semi-public partnerships (June 2011); and

• Working with developing countries and regional agencies, deliver bankable growth-supporting regional connectivity projects, building on the momentum created by existing initiatives and facilities (e.g., Infrastructure Project Preparation Facility (IPPF), New Partnership for Africa’s Development (NEPAD), African Water Facility (AWF) and Asian Infrastructure Financing Initiative (AIFI)). (November 2011)

Internal practices

• Identify possible improvements in their lending guidelines, internal policies and practices with a view to overcoming bottlenecks that constrain infrastructure lending, disbursements and the speed of project implementation (June 2011); and

• Assess the sufficiency of internal resources for project preparation, institutional capacity development and risk mitigation. (June 2011)

Improving the domestic infrastructure investment climate

• Working with LICs on a demand driven basis, assess and diagnose institutional, regulatory, policy, and public sector capacity bottlenecks in LICs that hamper public, semi-public and private investment in infrastructure and assist LICs in developing action plans within the context of national development goals and strategies to: (i) remove the bottlenecks to development, whole life costing and planning for investments in new infrastructure, operations and maintenance of existing infrastructure and rehabilitation of aging infrastructure; (ii) improve internal resource mobilization and increase fiscal space; and (iii) increase energy access, including by supporting more sustainable paths that make maximum use of cost effective renewable energy and resources, support energy conservation, and increase efficiency. (November 2011)

Special measures for regional integration

• Identify and make recommendations with respect to specific institutional, regulatory and policy changes needed for national policies and regional architecture to respond to the physical and economic needs of regional projects (November 2011);

• Identify a limited number of regional initiatives with a plan for action to reduce bottlenecks and deliver concrete outcomes in these initiatives (November 2011); and

• Identify MDBs’ institutional bottlenecks that may impede investment in cross-border and regional infrastructure projects. (November 2011)

Transparency and sustainability

• Working with existing pilots, develop an initiative ready for implementation to significantly improve transparency in procurement, construction and infrastructure finance (November 2011); and

• Assess how best to integrate environmental safeguards into infrastructure development in an effective and cost efficient manner. (November 2011)

The final outcomes of these MDB action plans should be reported to the Summit in France and be accompanied by an endorsement and commentary by the HLP (see below). (June 2011 for preliminary report; November 2011 for final report)


Action 2: Establish a G20 High-Level Panel for Infrastructure Investment
We have created a High-Level Panel for Infrastructure Investment (HLP) to mobilize support for scaling up infrastructure financing. The HLP will last for one year, until the Summit in France.

Composition

• Approximately 12 members will be appointed in a non-executive capacity for their expertise and authority in developing country public infrastructure investment needs, public finance and economics, constraints in LICs, sovereign wealth fund investment criteria, public private partnerships, project finance, innovative finance, and risk management (February 2011; December 2010 for appointment of Chair); and

• Administrative and technical support and resources will be provided by a dedicated group of experts from the MDBs and the private sector.

Terms of Reference

The HLP will:

• Review MDB policy frameworks and identify and recommend concrete measures to scale up finance and diversify the sources of affordable financing for infrastructure needs, including from public, semi-public and private sector sources;

• Take into account the limitations of risk bearing capacity of private and semi-public finance, lessons of successes and failures from the past and ongoing programs, best practice, the importance of durability and whole life costing, and innovative ways to mitigate and intermediate risks to attract finance; and

• Review the MDB Action Plan and provide independent comment in an iterative process to ensure workability, the maximization of the outcomes and a focus on environmental sustainability and transparency.

• The final outcomes of the HLP should be reported to the Finance Ministers meeting and to the Leaders at the Summit in France. (June 2011 for preliminary report; November 2011 for final report)

Human Resource Development

Developing human capital is a critical component of any country’s growth and poverty reduction strategy. Adding to education initiatives related to the Millennium Development Goals (MDGs), it is important for developing countries, in particular LICs, to continue to develop employment-related skills that are better matched to employer and market needs in order to attract investment and decent jobs.

Action 1: Create Internationally Comparable Skill Indicators
We call upon the World Bank, ILO, OECD, and UNESCO to work together to develop internationally comparable and practical indicators of skills for employment and productivity in developing countries, particularly LICs, to assist them to:

• Better match training to employers’ needs and future labor market opportunities in developing countries;

• Identify gaps in the education system for basic level employable skills;

• Identify the links between education, health problems, gender gaps and life-long skills development; and

• Produce a comparable database across countries to serve as a monitoring tool for assessing employable skills development in LICs. The relevant institutions will submit an interim report at the Summit in France, a final report on the skills indicators by 2012, and a final report on the comparable database by late 2014. (2012; late 2014)

Action 2: Enhance National Employable Skills Strategies
The MDBs, ILO, OECD and UNESCO have agreed today to form a unified and coordinated team with the aim of supporting a pilot group of self-selected LICs to enhance their national strategies to develop skills, improve productivity in existing jobs, and promote investment in new jobs. This action should:

• Focus on strengthening national and regional vocational education and training institutions and programs;

• Build on the G20 Training Strategy submitted at the Toronto Summit and begin by identifying existing gaps that act as barriers to increasing investment in skills development and productivity, including through considering the impact of gender gaps and health problems such as non-communicable diseases; and

• Review the work done and, based on the results achieved, consider a wider roll-out of the program to LICs and middle income countries.

(2012)

Trade

No country has grown and reduced poverty without access to and the ability to trade. Recognizing both the capacity and access to trade as key elements in economic growth and poverty reduction, we are committed to facilitating trade with and between developing countries, in particular LICs.

Action: Enhance Trade Capacity and Access to Markets
• We agree to make progress towards duty-free and quota-free (DFQF) market access for the least developed country (LDC) products in line with Hong Kong commitments without prejudice to other negotiations, including as regards preferential rules of origin. We will explore, in collaboration with the relevant international organizations, the scope for further improvement and cooperation among G20 members leading to the implementation of this commitment.

• We are committed to at least maintaining, beyond 2011, Aid for Trade levels that reflect the average of the last three years (2006 to 2008). We are also resolved to strengthen the role of South-South trade cooperation and to reinforce the involvement of the private sector in these measures. In parallel with the implementation of these commitments, we will ensure that aid flows to other sectors are sustained. (2011 and beyond)

• We will engage fully in the ongoing processes of relevant institutions, in particular the WTO, OECD, World Bank and other multilateral and regional development bodies, to monitor these commitments and evaluate their impact on LICs' capacity to trade. We will consider the outcome of the Global Aid for Trade Review of July 2011 and adjust our Multi-Year Action Plan on Development accordingly. (2011)

• To follow up on the Toronto Declaration, which asks international agencies, including the World Bank and other MDBs, to step up their capacity and support trade facilitation, we call on such institutions to coordinate a collective multilateral agency response by the time of the Global Aid for Trade Review in 2011. (July 2011)

• We ask the G20 Trade Finance Expert Group, together with the WTO Experts Group on Trade Finance and OECD Export Credit Group to further assess the current need for trade finance in LICs and, if a gap is identified, will develop and support measures to increase the availability of trade finance in LICs. We call on the WTO to review the effectiveness of existing trade finance programs for LICs and to report on actions and recommendations for consideration by the Sherpas through the G20 Development Working Group in February 2011. (February 2011)

• In order to develop practical measures that can be pursued nationally and regionally to support successful regional trade integration, in particular between African countries, we ask the African Development Bank, in collaboration with the WTO and MDBs, to identify before the Summit in France the existing obstacles and barriers to regional trade integration in Africa. (June 2011)

Private Investment and Job Creation

Domestic and foreign private investment are key sources of employment, wealth creation and innovation, which in turn contribute to sustainable development and poverty reduction in developing countries. The decisions and actions in this area are primarily those of investors themselves and those of developing countries in improving the policy environment for investment. Recognizing the centrality of private investment to development and job creation, we will support and assist investors, developing countries and key development partners, such as the International Finance Corporation and International Development Association, in their work to better leverage and maximize the economic value-added of private investment and to create globally competitive industries. We will work with successful existing initiatives such as the UN Global Compact, the Investment Climate Facility for Africa, the World Bank’s Annual Doing Business Report and indicators, and the MDG Call to Action.

Action: Support Responsible Value-Adding Private Investment and Job Creation
• We will identify, enhance as needed, and promote the best existing standards (developmental, social and environmental) for responsible investment in value chains and voluntary investor compliance with these standards. (June 2011)

• We request UNCTAD, UNDP, ILO, OECD and the World Bank to review and, consistent with best practice of responsible investment, develop key quantifiable economic and financial indicators for measuring and maximizing economic value-added and job creation arising from private sector investment in value chains. Based on these indicators, these international organizations should make recommendations to assist developing countries to attract and negotiate the most value-adding investment to their economies. (June 2011; Summer 2012)

• We request the World Bank and relevant agencies, in association with the G20, to establish a G20 Challenge on Innovation to provide a platform for innovative solutions to be brought to scale and to showcase entrepreneurship aimed at solving social challenges (e.g. innovative services on business strategies focusing on youth unemployment). (November 2011) Based on the outcome, we will recommend how to engage the private sector to find innovative business solutions that meet the needs of the poor in a sustainable way. (Summer 2012)

• The G20, MDBs, UNCTAD, UNDP, ILP and OECD will, based on the outcomes of this and other work, assist developing countries, in particular LICs, to develop action plans with the view to strengthen financial markets to boost small and medium enterprises (SMEs), improve the business investment climate, maximize the value-added of private investment and support the regulatory framework for foreign and domestic investment. Existing international investment arrangements between G20 countries and LICs will be strengthened to promote investment in LICs. (June 2012)

Food Security

We emphasize the need for increased investment and financial support for agricultural development and welcome commitments made through the Global Agriculture and Food Security Program (GAFSP) and other bilateral and multilateral channels. We encourage additional contributions by the private sector, the G20 and non-G20 actors to support country-led plans and ensure predictable financing. We endorse the Rome Principles for enhancing global policy coherence and mitigating risks to sustainable agricultural productivity, access to food, nutrition and crisis prevention.

Action 1: Enhance Policy Coherence and Coordination
• In order to strengthen existing agriculture research systems we request the FAO and the World Bank to examine and recommend potential innovative results-based mechanisms, such as those examined by the Consultative Group on International Agricultural Research (CGIAR) and advanced market commitments for enhanced agricultural productivity. (March 2011)

• We underline the need to fulfill our existing commitments on food security and sustainable agricultural development. We will review and monitor progress on G20 commitments and request the FAO, World Bank and OECD, in cooperation with the L’Aquila Food Security Initiative (AFSI), to monitor progress and report back at the Summit in France. (March 2011 for preliminary report; June 2011 for final report)

• We call for support to build capacity in tropical agriculture technologies and productive systems. (Medium-term)

• We request key international organizations, including the UN Committee on World Food Security (CFS), to identify bottlenecks and opportunities to increase policy coherence for food security consistent with the Rome Principles. The work should focus on harnessing the potential of the agriculture sector to advance sustainable economic growth and poverty reduction, enhance engagement with the private sector and strengthen North-South, South-South and triangular cooperation. (March 2011 for preliminary report; June 2011 for final report )

Action 2: Mitigate Risk in Price Volatility and Enhance Protection for the Most Vulnerable
• We request that FAO, IFAD, IMF, OECD, UNCTAD, WFP, the World Bank and WTO work with key stakeholders to develop options for G20 consideration on how to better mitigate and manage the risks associated with the price volatility of food and other agriculture commodities without distorting market behavior, ultimately to protect the most vulnerable. We ask the World Bank to work with other relevant international agencies to develop measures to improve information on national and regional food stocks and food production projections, provide nutrition intervention for the most vulnerable, and ensure access to humanitarian supplies. (March 2011 for preliminary report; June 2011 for final report)

• We are committed to promoting increased procurement from smallholder producers and to strengthen their access to markets, in line with domestic and regional strategies. (Medium term)

• We encourage all countries and companies to uphold the principles of Responsible Agricultural Investment. We request UNCTAD, the World Bank, IFAD, FAO and other appropriate international organizations to develop options for promoting responsible investment in agriculture. (March 2011 for preliminary report; June 2011 for final report)

Growth with Resilience

Social protection systems and international remittances, together with improved access to financial services, play an important role in providing income security for poor communities in developing countries, and in particular LICs, providing buffers to those communities from the impact of external shocks and contributing to the maintenance and enhancement of aggregate demand. Lessons can be learned from the performance of specific social protection mechanisms in developing countries during the recent crisis, and applied for the benefit of LICs, including through South-South cooperation. Measures can also be taken to facilitate and increase the efficiency of international remittances, building on existing work in this area.

Action 1: Support Developing Countries to Strengthen and Enhance Social Protection Programs
Recognizing the vulnerabilities exposed by the global financial crisis, we call upon the UNDP, in consultation with the ILO, MDBs and other relevant international organizations, to:

• Identify lessons learned from the implementation of social protection mechanisms in developing countries, in particular LICs, during and after the crisis;

• Prepare best practice guidelines based on this experience; and

• Make recommendations on how to surmount barriers inhibiting cross-country knowledge sharing and program replication or expansion. The primary focus of this work will be on social protection mechanisms that support resilient and inclusive growth by helping vulnerable communities to deal with external shocks. It should consider options for improving the timeliness and accuracy of poverty data, including through further implementation of the UN Global Pulse Initiative. The outcomes of this work, and of any relevant programs being taken forward by G20 members under North-South, South-South or triangular cooperation arrangements, will be reported to the Summit in France. (March 2011 for preliminary report; June 2011 for final report)

Action 2: Facilitate the Flow of International Remittances
We recognize the importance of facilitating international remittance flows and enhancing their efficiency to increase their contribution to growth with resilience and poverty reduction. We ask the World Bank, RDBs and other relevant organizations, including the Global Remittances Working Group, to work with individual G20 members and non-G20 members in order to progress further the implementation of the General Principles for International Remittance Services and related international initiatives aimed at a quantified reduction of the global average cost of transferring remittances. The outcomes of this work will be reported to the Summit in France. (November 2011)

Financial Inclusion

Given that more than two billion adults are excluded from financial services and millions of micro-, small-and medium-sized enterprises (MSMEs) face serious constraints in accessing finance, financial inclusion is fundamental for improving the livelihoods of the poor and in supporting MSMEs, and work as the engines of economic growth and job creation.

Action 1: Establish the Global Partnership for Financial Inclusion
We will launch the Global Partnership for Financial Inclusion (GPFI) to provide a systematic structure for implementing the G20 Financial Inclusion Action Plan in close collaboration with the Alliance for Financial Inclusion (AFI), the Consultative Group to Assist the Poor (CGAP), and the International Finance Corporation (IFC). (November 2010) The GPFI will (i) facilitate an efficient and effective information sharing mechanism; (ii) coordinate the various financial inclusion efforts (iii) provide systematic monitoring of progress over time (iv) mobilize financial support for activities as needed, and (v) launch and coordinate taskforces to address specific financial inclusion issues (e.g. financial inclusion data). The GPFI will coordinate its work with the APEC initiative and other financial inclusion initiatives. The progress and annual report of the GPFI will be submitted to the Summit in France.
Action 2: SME Finance Challenge and Finance Framework for Financial Inclusion
SME Finance Challenge We will announce the 14 winning proposals of the SME Finance Challenge that offer innovative models for catalyzing private capital for SME finance. (November 2010) Finance Framework for Financial Inclusion We commit to establishing a finance framework that mobilizes grant and risk capital for winning proposals from the SME Finance Challenge and for scaling up successful SME financing models. The framework will use existing funding mechanisms and the SME Finance Innovation Fund, a newly created multilateral trust fund.
Action 3: Implement the Action Plan for Financial Inclusion
We will adopt the G20 Financial Inclusion Action Plan to promote the application of the Principles for Innovative Financial Inclusion (the Principles) and the lessons learned from the SME stocktaking exercise. (November 2010) The actions to be implemented include (i) advancing the implementation of the Principles through a commitment by each G20 member to implement at least one of the Principles; (ii) encourage the Standard Setting Bodies to further incorporate financial inclusion objectives into their work; (iii) encouraging further private sector activities to increase access to financial services; (iv) strengthening and expanding data availability for measuring financial inclusion and methodologies for countries that wish to set financial inclusion targets; (v) supporting peer-learning capacity building and training; (vi) improving coordination at the national and international levels; and (vii) integrating financial inclusion into financial assessment programs. The GPFI will submit a progress report on implementation at the next Summit in France (November 2011).

Domestic Resource Mobilization

It is essential to continue to strengthen tax regimes and fiscal policies in developing countries to provide a sustainable revenue base for inclusive growth and social equity, as well as to enhance the transparency and accountability of public finances.

Action 1: Support the Development of More Effective Tax Systems
We ask the expanded OECD Task Force on Tax and Development, UN, IMF, World Bank and regional organizations such as the Inter-American Center for Tax Administration and African Tax Administration Forum and other relevant organizations to:

• Identify key capacity constraints faced by developing countries in their tax systems and make recommendations on capacity building to (i) improve efficiency and transparency of tax administrations and (ii) strengthen tax policies to broaden the tax base and combat tax avoidance and evasion (June 2011);

• Develop a knowledge management platform and promote South-South cooperation to support the capacity of developing countries in tax policy and administration systems (Medium-term);

• Survey and disseminate all G20 and international organizations’ actions on supporting tax systems in developing countries (June 2011);

• Set up objective measures to track progress in the capacity improvement of LIC’s tax administration systems (June 2011); and

• Identify ways to help developing countries’ tax multinational enterprises (MNEs) through effective transfer pricing. (June 2011) The results will be reported at the Summit in France. (November 2011)

Action 2: Support Work to Prevent Erosion of Domestic Tax Revenues
We ask the Global Forum to enhance its work to counter the erosion of developing countries’ tax bases and, in particular, to highlight in its report the relationship between the work on noncooperative jurisdiction and development. (Medium term)

The results will be reported at the Summit in France. (November 2011)

Knowledge Sharing

Sharing development experiences, including through North-South, South-South and triangular cooperation, contributes to the adoption and adaptation of the most relevant and effective development solutions. We encourage international organizations such as the UN, World Bank, OECD and RDBs that operate knowledge sharing platforms to strengthen and broaden sources of knowledge on growth and development. We agree that knowledge sharing initiatives should be mainstreamed in each pillar in this Multi-Year Action Plan.

Action: Enhance the Effectiveness and Reach of Knowledge Sharing
We request the Task Team on South-South Cooperation (TT-SSC) and UNDP to recommend how knowledge sharing activity, including North-South, South-South, and triangular cooperation, can be scaled up. These recommendations should include measures to broaden knowledge sources, improve brokering functions, strengthen the dissemination of best practices and expand funding options. (June 2011)

Annex III: G20 Anti-Corruption Action Plan

Corruption threatens the integrity of markets, undermines fair competition, distorts resource allocation, destroys public trust, and undermines the rule of law. Corruption is a severe impediment to economic growth, and a significant challenge for developed, emerging and developing countries

In this regard, we recognize the importance of building upon and complementing existing global mechanism, i.e., the UNCAC, including other international instruments such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and regional instruments.

2. To adopt and enforce laws and other measures against international bribery, such as the criminalization of bribery of foreign public officials, and begin by 2012 the necessary discussions to lead to, on a voluntary basis, more active engagement within the OECD Working Group on Bribery with regards to the standards of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or to the ratification of the Convention…

7. … To that end, building upon the existing work of organizations such as the OECD and the World Bank, G20 experts will study and summarize existing whistleblower protection legislation and enforcement mechanisms, and propose best practices on whistleblower protection legislation.

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2011 Cannes Summit (November 3-4)

Cannes Summit Final Declaration: Building Our Common Future: Renewed Collective Action for the Benefit of All

Development: Investing for Global Growth

69. As part of our overall objective for growth and jobs, we commit to maximise growth potential and economic resilience in developing countries, in particular in Low-Income Countries (LICs). Development is a key element of our agenda for global recovery and investment for future growth. It is also critical to creating the jobs needed to improve people's living standards worldwide. Recognizing that development is a concern and duty to all G20 countries, our Ministers met for the first time on Development in Washington on September 23, 2011.

70. We support the report of the Development Working Group, annexed to this Declaration, implementing the G20's Seoul Development Consensus for Shared Growth, and call for prompt implementation of our Multi-Year Action Plan.

71. We take actions to overcome the most critical bottlenecks and constraints hampering growth in developing countries. In this regard, we decided to focus on two priorities, food security and infrastructure, and to address the issue of financing for development.

72. The humanitarian crisis in the Horn of Africa underscores the urgent need to strengthen emergency and long-term responses to food insecurity. In accordance with our Multi-Year "Action Plan on Food Price Volatility and Agriculture", we:

73. Investing in infrastructure in developing countries, especially in LICs and, whilst not exclusively, with a special emphasis on sub-Saharan Africa, will unlock new sources of growth, contribute to the achievement of the Millennium Development Goals and sustainable development. We support efforts to improve capacities and facilitate the mobilization of resources for infrastructure projects initiated by public and private sectors.

74. We commissioned a High Level Panel (HLP), chaired by Mr Tidjane Thiam, to identify measures to scale-up and diversify sources of financing for infrastructure and we requested the MDBs to develop a joint action plan to address bottlenecks. We welcome both the HLP's report and the MDB Action Plan. In this regard, we support the following recommendations to :

75. We commissioned the HLP to establish criteria to identify exemplary investment projects in cooperation with multilateral development banks. We highlight the 11 projects mentioned in the HLP report annexed to this Declaration, which have the potential to have a transformational regional impact by leading to increased integration and access to global markets, with due consideration to environmental sustainability. We call on the MDBs, working with countries involved and in accordance with regional priorities (in particular the Program for Infrastructure Development in Africa), to pursue the implementation of such projects that meet the HLP criteria and to prioritize project preparation financing, notably the NEPAD Infrastructure Projects Preparation Facility.

76. We stress the importance of following-up on these concrete actions and invite MDBs to provide regular updates on the progress achieved.

77. Recognizing that economic shocks affect disproportionately the most vulnerable, we commit to ensure a more inclusive and resilient growth. We therefore decide to support the implementation and expansion of nationally-designed social protection floors in developing countries, especially low income countries. We will work to reduce the average cost of transferring remittances from 10% to 5% by 2014, contributing to release an additional 15 billion USD per year for recipient families.

78. Recognizing that 2.5 billion people and millions of Small and Medium Enterprises (SMEs) throughout the world lack access to formal financial services, and the crucial importance for developing countries to overcome this challenge, we launched in Seoul an ambitious Global Partnership for Financial Inclusion (GPFI). We commend the ongoing work by the GPFI to foster the development of SME finance and to include financial inclusion principles in international financial standards. We endorse the five recommendations put forward in its report, annexed to this Declaration, and commit to pursue our efforts under the Mexican Presidency.

79. We welcome the presentation of the report by Mr Bill Gates on financing for development. We recognize the importance of the involvement of all actors, both public and private, and the mobilisation of domestic, external and innovative sources of finance.

80. Consistent with the Multi-Year Action Plan agreed in Seoul, we strongly support developing countries' mobilization of domestic resources and their effective management as the main driver for development. This includes technical assistance and capacity building for designing and efficient managing of tax administrations and revenue systems and greater transparency, particularly in mineral and natural resource investment. We urge multinational enterprises to improve transparency and full compliance with applicable tax laws. We welcome initiatives to assist developing countries, on a demand-led basis, in the drafting and implementation of their transfer pricing legislation. We encourage all countries to join the Global Forum on Transparency and exchange of information in tax purposes.

81. We stress the pivotal role of ODA. Aid commitments made by developed countries should be met. Emerging G20 countries will engage or continue to extend their level of support to other developing countries. We welcome the emphasis on ensuring that poor countries benefit rapidly from innovation and technological advances, and agree to encourage triangular partnerships to drive priority innovations forward. We commit to raise the quality and efficiency of aid by concentrating on the highest impact interventions and increase the focus on concrete results and overall impact on development.

82. We agree that, over time, new sources of funding need to be found to address development needs. We discussed a set of options for innovative financing highlighted by Mr Bill Gates, such as Advance Market Commitments, Diaspora Bonds, taxation regime for bunker fuels, tobacco taxes, and a range of different financial taxes. Some of us have implemented or are prepared to explore some of these options. We acknowledge the initiatives in some of our countries to tax the financial sector for various purposes, including a financial transaction tax, inter alia to support development.

83. We welcome the upcoming 4th High-Level Forum on aid effectiveness to be held in Busan, Korea (29 November-1st December 2011). The Forum will be an opportunity to establish a more inclusive partnership to address development effectiveness.

84. We look forward to a successful replenishment of the Asian Development Fund and of the International Fund for Agriculture Development.

Communique: G20 Leaders Summit

Addressing the challenges of development

25. Recognizing that economic shocks affect disproportionately the most vulnerable, we commit to ensure a more inclusive and resilient growth.

26. The humanitarian crisis in the Horn of Africa underscores the urgent need to strengthen emergency and long-term responses to food insecurity. We support the concrete initiatives mentioned in the Cannes final Declaration, with a view to foster investments in agriculture and mitigate the impact of price volatility, in particular in low income countries and to the benefit of smallholders. We welcome the initiative of the Economic Community of Western African States (ECOWAS) to set up a targeted regional emergency humanitarian food reserve system, as a pilot project, and the "ASEAN+3" emergency rice reserve initiative.

27. Recognizing that the lack of Infrastructure dramatically hampers the growth potential in many developing countries, particularly in Africa, we support recommendations of the High Level Panel and the MDBs and highlight eleven exemplary infrastructure projects and call on the MDBs, working with countries involved, to pursue the implementation of such projects that meet the HLP criteria.

28. In order to meet the Millennium Development Goals, we stress the pivotal role of ODA. Aid commitments made by developed countries should be met. Emerging countries will engage or continue to extend their level of support to other developing countries. We also agree that, over time, new sources of funding need to be found to address development needs and climate change. We discussed a set of options for innovative financing highlighted by Mr Bill Gates. Some of us have implemented or are prepared to explore some of these options. We acknowledge the initiatives in some of our countries to tax the financial sector for various purposes, including a financial transaction tax, inter alia to support development.

Cannes Action Plan for Growth and Jobs

…We are firmly committed to support the recovery, ensure financial stability and restore confidence. Only through collective actions on all of these fronts will we move closer to stronger, more sustainable and balanced growth. Our ultimate objective is to provide more and better jobs for our citizens, to promote social inclusion in all countries, and to foster development and poverty reduction particularly in less developed countries around the globe.

Strengthening the Medium-term Foundations for Growth

We have agreed that the actions to address immediate risks to recovery must be complemented by sustained, broad-based reforms to boost confidence, raise global output and create jobs.

We have agreed to a six-point plan to strengthen the medium-term foundations for growth: (1) commitments to fiscal consolidation; (2) commitments to boost private demand in countries with current account surpluses, and, where appropriate, to rotate demand from the public to the private sector in countries with current account deficits; (3) structural reforms to raise growth and enhance job creation across G-20 members; (4) reforms to strengthen national/global financial systems; (5) measures to promote open trade and investment, rejecting protectionism in all its forms; and (6) actions to promote development. Annex provides detailed policy commitments by all members, with the key actions summarised below:

1. Specific and concrete fiscal consolidation plans are essential to put public finances on a credible and sustainable track, and are key to reducing current account deficits (raising national savings), which will further promote global rebalancing in a number of large countries….

c) India commits to strengthening revenue mobilization through tax reforms, including a unified goods and services tax, and overhauling the personal and corporate tax code.

c) China will rebalance demand towards domestic consumption by implementing measures to strengthen social safety nets, increase household income and transform the economic growth pattern. These actions will be reinforced by ongoing measures to promote greater exchange rate flexibility to better reflect underlying economic fundamentals, and gradually reduce the pace of accumulation of foreign reserves..

d) Other surplus economies recognise that they too have a significant role to play in promoting global rebalancing and commit to encourage private spending (Indonesia, Korea). Indonesia has announced a national plan for infrastructure that will significantly increase private investment.

3. Further progress on structural reforms is critical to raising output in all G-20 countries.

a) Structural reforms will be combined with active, flexible labour market policies and effective labour institutions that provide incentives for increasing formal and quality jobs. Members commit to promote mobility and encourage participation, including tax and benefit reforms to reduce long-term unemployment and encourage the participation of older workers and women where appropriate.

b) Members will enhance competition and reduce distortions. Actions include: infrastructure investment (Brazil, India, Indonesia, Mexico, Saudi Arabia, South Africa); supporting research, education and skills development and eliminating tariffs on machinery and manufacturing inputs (Canada); reform of pricing for factors of production, promote market-based interest rate reform in an orderly manner and gradually achieve RMB capital account convertibility as stated in its current 5-year plan (China); structural reforms in the services sector to boost productivity (France, Germany, Italy, Korea); tax reform aimed at a more employment-friendly taxation (Germany, Italy); raising standards of disclosure of information by financial institutions (Russia); phasing out wasteful and distortive subsidies in the medium term, while providing targeted support for the poor (India, Indonesia); reforms to energy efficiency and greater use of renewable and domestic energy resources (Turkey), agriculture (Argentina); ; enhanced regional integration to promote trade and investment (South Africa); improved practices and enhanced oversight of the short-term financing markets and reforms to help promote a rise in household savings as a share of GDP (US); transitioning to a clean energy economy through effective carbon price mechanism (Australia) and, efforts to promote green growth (Korea).

6. While reducing barriers to trade and investment will help reduce the development gap and support progress towards the Millennium Development Goals, further efforts to support capacity building and channelling of surplus savings for growth-enhancing investments in developing countries, including infrastructure development, would also have positive spillovers for global growth, rebalancing and development.

a) Improved market access for least developed countries should be complemented with a strengthening of trade facilitation, trade finance and aid-for-trade programs to enhance their trade capacity.

b) Developing countries have the potential to contribute to stronger and more balanced global growth and should be viewed as markets for investment, especially in infrastructure. We welcome the MDBs Infrastructure Action Plan and the HLP recommendations. It is important to ensure adequate flows of official financing for development as well as to promote innovative approaches that leverage private capital.

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