Expected Output of G20 Washington Meeting for World

The Minister of Finance Samir Sharifov is attending the meeting of finance ministers and central bank governors of G20 (16-19 April) in Washington.

According to the Ministry of Finance of Azerbaijan, the important event discusses the preparation for the summit of G20, which will be held in the Turkish resort of Antalya in November. Also on the agenda there are issues of reforming the International Monetary Fund (IMF). This part of the discussion will be also attended by members of the International Monetary and Financial Committee of the Board of Governors of the IMF not included in the "twenty".

Azerbaijan takes part in these meetings at the invitation of Turkey - the mistress of the upcoming summit G20.

Transformation Inevitable

The Fund needs to be reformed, as it is unable to solve the dilemma - it has to either increase quotas and redistribute them in favor of developing countries, or increase the resource base of the Fund at once with a slight redistribution of shares among the shareholders. The innovation has been discussed for the fifth year, but it always stumbles on the need for ratification by a majority of IMF member countries (plus the US factor having a quota of SDR 17.69% and 16.75% of the votes, which gives it a veto over key decisions of the Fund, requiring a majority of 85% of the vote).

To overcome the inhibition of reforms by the Americans in April 2014, it was proposed to divide the decisions of 2010 on the overall increase in the size of quotas from 238.4 billion SDR (Special Drawing Rights) to 476.8 billion SDR and the redistribution of more than 6% of quota from developed to developing countries. Moreover, the decisions should be separate and not in the package. The decision to increase the quota requires ratification by a majority of 70% of the votes, that is, it can be done without taking into account the views of the United States, but the redistribution of quotas requires ratification by a majority of 85% of the votes, that is, without the ratification by the United States it is not feasible. So the dialogue should be continued, and if necessary, more acceptable solutions to the problem should be sought.

Global Trends

In the discussion of the "twenty" the main issue of the global economy is fluctuations in the national currencies, including the euro weakening. The prices for oil (the main theme of the discussion of the global economy at the Istanbul meeting of the financial "twenty" in February) will not be a priority, as more important is the problem of devaluation and general fluctuations in national currencies in light of the steady trend of weakening the euro against the major currencies. The weakening of the euro is beneficial to the European Union, but the competitiveness of goods from other regions of Europe is undermined. In addition, they will consider the slowdown of the economies of emerging markets, so the finance ministers will certainly discuss how long-term the recently observed trend is.

In addition, the financial "twenty" will focus on the problems of development promotion and their participation in it.

Since this year on the international scene is marked by the development dimension, summarizing the results of the Millennium Development Goals endorsed by the United Nations 15 years ago is expected. In the summer, the Global Conference on Financing for Development is to take place. Respectively, the Turkish government as the current chairman of the G20 has proposed an additional subject of the possible role of the "twenty" in promoting the development of the poorest countries.