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G20 Toronto Summit: Austerity vs. Consumerism

G20 Toronto Summit: Austerity vs. Consumerism

Monday, 16 November, 2020 - 05:45
Heads of state participating at the G20 2010 Toronto summit.

At Group of Twenty (G20) summits in 2009 and 2010, heads of state directed serious focus at challenges facing global trade, alarmed by statistics showing signs of contraction for the first time in 25 years.

Leaders extended pledges related to flow of investment and trade until the end of 2010, stressing that no new obstacles were to be placed in front of goods and services.

G20 countries, at the time, stressed consensus on sparing trade and investment any negative impact of national political measures, including measures designed to support the financial sector.

“We will not retreat into financial protectionism, particularly measures that constrain worldwide capital flows, especially to developing countries,” the leaders said in their final communique in 2009.

The G20 leaders approved a support package of $1.1 trillion to shore up a wavering financial situation.

They pledged $250 billion to support trade finance during years 2009 and 2010 and agreed to make available an additional $850 billion of resources through the global financial institutions to support growth in emerging markets and developing countries by helping to finance counter-cyclical spending, bank recapitalization, infrastructure, trade finance, balance of payments support, debt rollover and social support.

The G20 2010 Toronto summit represented a vital turning point for the global economy as it was the group’s fourth meeting. It was held after the financial collapses in Asia and the United States, troubles rocking the Eurozone and massive debt saddling Greece.

Both in 2009 and 2010, Saudi Arabia’s participation reflected the importance of the effective role the Kingdom plays in world economies.

Saudi Arabia -- the only Arab country in the G20 -- offered its programs to increase government spending on local projects and shared the financial stability it had achieved. Late King Abdullah bin Abdulaziz led the Kingdom’s delegation at the summit.

In 2010, G20 leaders differed over two main economic approaches that affect global trade. The first approach, promoted by Germany, sees to rationalized and controlled spending. The second approach, backed by the US Barack Obama administration, supported increased spending to promote economic growth.

European austerity recommendations clashed with the Obama administration’s vision for supporting consumerism as a way to revitalize economies.

In their final declaration in 2010, G20 leaders underlined the need for combating tax evasion, money laundering, corruption and terror funding and confronting non-compliance with internationally agreed precautionary standards.

They also agreed to work with international institutions and regional development banks to review investment policies.

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