G-20 leaders take 'bold' action to strengthen economy, Obama says

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After a day of talks with 18 nations and the European Union, President Barack Obama said the joint statement from the G-20 leaders constitutes "bold and concerted action."

"We've brought the global economy back from brink," Mr. Obama said in a late afternoon news conference at the David L. Lawrence Convention Center. "We laid the groundwork today for long-term prosperity as well."

Mr. Obama was scheduled to depart Pittsburgh International Airport this evening, and said his day-and-a-half visit was productive for the consensus achieved on the economic front. The most important features of the joint communique issued by the G-20, Mr. Obama said, were the agreements to continue stimulus spending until employment figures return to normal, rein in executive pay -- though no specific caps were imposed -- and to facilitate a more cooperative global economic environment.

But questions from reporters focused on Iran's nuclear ambitions, after Mr. Obama's headline-grabbing morning announcement -- along with French President Nicolas Sarkozy and United Kingdom Prime Minister Gordon Brown -- of a second covert uranium enrichment site outside the city of Qom.

Mr. Obama reiterated his hard line against the previously undisclosed facility -- which the leaders claim is in violation of International Atomic Energy Association regulations. He said if Iran does not comply with international demands to abandon the program at an Oct. 1 meeting in Geneva, he will seek sanctions -- and Mr. Obama did not rule out military intervention.

"But I will also reemphasize that my preferred course of action is to resolve this in a diplomatic fashion," Mr. Obama said. "It's up to Iran to respond."

In response to a question about the protests -- which were large but peaceful today -- Mr. Obama said that this was mild compared to past summits.

"The mayor and the county executive deserve credit for having managed what has been a very tranquil G-20 summit," Mr. Obama said.

He added that some of the protesters might actually appreciate the work that was done inside the convention center.

"What they would have heard was a strong recognition from what is the most diverse collection of leaders in history that it is important to make sure the market is working for ordinary people, that government has a role in regulating the market in ways that don't cause the kinds of crises that we have been living through," Mr. Obama said.

The president also thanked Mayor Luke Ravenstahl and County Executive Dan Onorato by name for hosting and lamented that he couldn't get to Pamela's diner for pancakes. But Japanese Prime Minister Yukio Hatoyama did manage to score some of the crepe-style delicacies.

"I don't know how he worked that but he was raving about them," Mr. Obama said.

As the president spoke, both of them broke out into smiles.

"We've been thanking the president for some time for the honor to host the event," Mr. Ravenstahl said "We still have our folks out there keeping everyone safe."

Mr. Onorato credited the police officials who planned the response to the event and the counter demonstrations. "The mayor and I have got to give credit to the professionals. We gave them the tools they needed."

He said it showed the world that "We can pull off an event like this."

Mr. Ravenstahl said the police who handled the crowds "showed a tremendous amount of restraint in many cases. I give them credit. . . We're pleased we delivered a peaceful event."

As for shutting down the city he said "the short term inconvenience is worth the long term benefits to the City of Pittsburgh."

Mr. Obama said several world leaders commented on the city's revival during dinner last night and said Pittsburgh's rebirth after the decline of the steel industry could provide them instructive lessons to bring home as the international delegations depart this evening.

Other highlights of the day included an announcement of future summits, Canada agreeing to a significant loan to the Bank of Africa and Michelle Obama attending a performance at the city's high school for the performing arts.

Canadian Prime Minister Stephen Harper said the G-20 communique issued today provides a framework for sustainable and balanced economic growth, and includes still fragile agreements aimed at strengthening regulatory systems for banks and other financial firms.

Much work is left to be done, but G-20 leaders made great progress toward coordinating action plans.

The agreements are in broad terms, and much work remains to put them into action, he told reporters during a press briefing.

"This is a framework for global governance, not a world government, but sensible governance ... to ensure stability and transparency of markets," he said.

Much progress has been made since the London G-20 Summit in April, Mr. Harper said.

"The world was facing a catastrophe in a situation where financial markets were falling at a precipitous rate, something we had not seen since 1929 ... and leaders got together and agreed to coordinate action plans to deal with that. As a consequence, we stabalized the financial sector," he said.

"We're not out of the woods on the recession and neither are we to the place where we've got a genuine system of governance in place where the major economies will think globally now instead of just nationally."

The state of global economies affects all countries, "so if we think only about our own national interests we're not actually going to fix our problems. Countries like China, the United States and others are thinking more systemically, and that's what we need."

Dominique Strauss-Kahn, managing director of the International Monetary Fund, welcomed the actions of the group of 20 nations to sustain global recovery.

He called their commitments to act together to generate strong, sustainable and balanced growth and to modernize global economic governance "historic decisions to adapt global economic cooperation to the needs to the 21st century. The commitment by the leaders of the G-20 to a shift in representation is a ground-breaking step to improve the IMF's legitimacy and effectiveness."

He said he was very encouraged by the outcome of the summit, including the new role assigned to the IMF.

"International cooperation has been key to the response in this crisis. The active engagement of leaders is needed to sustain the global economic recovery and is reflected in their discussions of the 'Framework for Strong, Sustainable and Balanced Growth.' "

He said the IMF will take up these issues when its 186 member countries gather next week in Istanbul. Those countries include G-20 nations.

But Mr. Strauss-Kahn cautioned that supportive policies must be sustained until the world's economic recovery is completed. He said the recovery is "fragile" and added that he remains concerned about high unemployment and other financial problems that could persist, particularly if steps to restore banks to health are not completed.

Mr. Strauss-Kahn said, however, that policies intended to support the economy should be maintained until the recovery is complete, calling it "fragile." He said he remains concerned about unemployment, and other financial problems that could linger, particularly if action to bolster the health of banks is not completed in a timely fashion.

He also said that a return to steady, balanced world growth will require additional increases in savings by some countries and policies, including reforms that support increased domestic growth elsewhere.

"Global rebalancing of demand could have important implications for investment and innovation. With consumers in emerging markets playing a bigger role, the composition of global production is likely to change," he said. "This makes it all the more important for policy makers to accelerate reforms that reduce barriers to competition and thus support innovation."

He said he also welcomes the G-20's continued support of the IMF, including delivering on a pledge made at the last summit in London to raise $500 billion to prevent the economic crisis from worsening. He also noted the leaders' reaffirmation of an initiative from London to reach agreement on IMF quotas -- which would shift power to developing and emerging nations -- by January 2011.

"Today's G-20 commitment to a shift in quota share to dynamic emerging market and developing countries of at least 5 percent from over-represented to under-represented countries, and to protect the voting share of the poorest in the IMF, is a decisive move," he said. "This historic decision, and the emergence of the G-20 as a key forum for international economic cooperation, will lay the foundation for a deeper partnership in global economic policy between emerging and developing countries and the advanced economies."

In briefings throughout the day, China said it will do its part to ensure global economic revival, stability and growth.

President Hu Jintao called upon his fellow G-20 country leaders to step up macroeconomic policy coordination and maintain the intensity of their economic stimulus plans to ensure that recovery does not falter.

"We should resolutely oppose and reject protectionism in all forms, uphold a fair, free and open global trading and investment system, and impose no new restrictions on goods, investment and services," Mr. Hu said in a statement to the other world leaders.

The communique released echoed Mr. Hu's earlier statement, declaring, "Continuing the revival in world trade and investment is essential to restoring global growth. It is imperative we stand together to fight against protectionism."

Vice Minister of Foreign Affairs He Yafei expressed his worries about fluctuations in major reserve currencies, whose ramifications can be felt globally, and said the G-20 will produce an international "mutual assessment" system of macroeconomic policies.

His trepidations were very real for China, which has vast U.S. treasury holdings whose value is at risk given the fluctuations of the weak dollar.

Mr. He said it is the responsibility of the major reserve currency countries to carefully consider their policies, since they "have an impact on asset value and economies of other countries."

The topic of giving developing countries more clout in international financial institutions is one that China has been pushing for years due to the disparity between its limited representation in the IMF and the actual size of its economy, which is the third largest in the world.

"Global governance structure and policymaking strategies should reflect the realities of world economy today," Mr. He said. "Developing and developed countries should have equal voting power."

Australian Prime Minister Kevin Rudd, a former diplomat who has pushed for a greater role for China and other developing nations in the International Monetary Fund, said today was a "historic day for Australia" after today's announcement of quota reforms that would shift quota share of "at least 5 percent" from over-represented countries to under-represented countries with emerging economies.

"It is important for Australia that our voice be heard at councils of the world," Mr. Rudd said. "Australia has made the point . . . that our financial institutions should reflect [the makeup of their participants.] We have secured for the first time a place at the table."

Mr. Rudd also praised the G-20 leaders for past and ongoing efforts to stimulate economies and end the recession -- including the "framework" issued at the conclusion of the summit today -- saying "Decisions made by these leaders affect the working people of Australia."

"The G-20 stepped up to the plate as the global economic crisis morphed into the global recession, arresting the fall and collapse of the economy," he said. "Millions of ordinary people have suffered. Australia's institutions remain strong, but it is truly a global problem. Today's summit represents another important chapter in responding to the worst recession in 75 years.

"It would be a mistake to conclude our work is done," he said. "[Recovery] will be tough, it will be bumpy, it will be long. But this is an unprecedented voyage of discovery, and we cannot afford to return to the global imbalances we had before."

Sweden's Prime Minister Fredrik Reinfeldt and Finance Minister Anders Borg praised the outcome of the G-20 conference.

Both men said that the convening countries had good discussions regarding exit strategies for withdrawing stimulus measures after the economic crisis has subsided, as well as regulations of bankers' bonuses.

"Greed can't be regulated away, but after the strong statements that have been made, it should be clear that we cannot go back to the old practices," said Mr. Borg.

The two men also addressed the outcome of dialogue on climate change, which left "a good feeling" regarding where discussions were heading.

"We'll come back in couple of weeks to see where we stand, maybe to have some kind of new meeting, a new conference," Mr. Reinfeldt said, calling the climate issue "a huge global problem."

The agreement released at the end of the conference included the phasing out fossil fuel subsidies, which "encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change."

Brazil's ambassador to the United States, Antonio de Aquiar Patriota, speaking first in Portugese and then English, told reporters the next G-20 Summit is planned for 2010 in Canada, followed by another in Korea. He also spoke of the G-20's emergence as the world's primary economic forum during the summit here.

"Another important accomplishment for this meeting, for the Pittsburgh summit, will be towards a higher degree of institutionalization of the G-20," he said, "So next year, two summits and a yearly summit thereafter.

"What does this represent? This means that the G-20 is not only an ad hoc group that will continue to meet as long as countries are concerned with the current economic and financial crisis, but it is a forum for deliberation even once the economy gets back on its own or improves and the situation economically worldwide improves."

Also, he spoke of the prospects of reaching a deal today on efforts by emerging economies to broker a greater voice at the International Monetary Fund. The so-called BRIC nations -- Brazil, Russa, India and China -- have proposed a 7 percent shift in IMF quotas. Other nations have balked at relinquishing some of their power, however, and favor a 5 percent transfer instead.

"Well, this is the expectation, I think, of the 20 leaders, so yes, the answer is yes, in the affirmative," he said. "I haven't been participating in the last-minute discussions, so we will just have to wait and see. The language that I am aware of says 'at least 5 percent' so indeed the BRIC countries that have been coordinating have been defending the notion that it should be closer to 7 percent. But 'at least closer to 5 percent' allows you that kind of flexibility."

Italian Prime Minister Silvio Berlusconi said in a press briefing this afternoon that the Group of Eight still has a place in the international stage, a statement that comes amidst widespread doubts regarding the organization's staying power.

"The G-8 has a place for nuclear nonproliferation and political issues," Mr. Berlusconi said during the untranslated briefing, which began fifteen minutes later than its scheduled time of 4:15 p.m. "The G-20 has a different context and deals with a different reality, so to speak."

The G-8 has faced criticism for not being representative of the world's most powerful economies. For instance, China, which is not a G-8 member country, has a larger economy than both Canada and Russia.

Mr. Berlusconi, who hosted the G-8 summit in Italy two months ago, has urged that the two forums be kept separate and for the maintenance of the dominance of the smaller group.

Regarding the results of the two-day G-20 conference, Mr. Berlusconi said he was "very pleased" with the plans to tackle the deregulated financial system and the approach taken toward reconfiguring the International Monetary Fund.

On Tuesday, Mr. Berlusconi and Australian Prime Minister Kevin Rudd issued a joint statement urging major world economies to adopt transparent rules to fight financial speculation and market manipulation, which threaten global economic growth.

"A more transparent and efficient regulatory system must be part of our joint efforts to confront the fundamental questions of energy and food security," they wrote in the letter, which was released by Mr. Berlusconi's office.

Meanwhile Spain President Jose Luis Rodrigues Zapatero said his country is ready to be a global player in efforts to combat global warming.

To Spain, global warming is not a problem but an opportunity to lay the groundwork for a new green economy, he said.

His nation will put up no obstacles in the worldwide effort to reduce carbon emissions, he said.

Mr. Zapatero said he is pushing to ensure that Spain, as well Italy, can play significant roles in the upcoming Copenhagen Climate Change Summit. He also is pressing for the two nations to become members of the G-20.

Neither nation is a member, but both were represented at the international conference wrapping up today at the Lawrence L. Davidson Convention Center.

Spain has the world's ninth largest economy

On the African front, the Canadian government has made a commitment to provide the African Development Bank with $2.6 billion in capital.

Prime Minister Stephen Harper this morning announced that Canada will provide the ADB more lending room to respond to the pressures of the global economic crisis.

"Our support recognizes efforts by the African Development Bank to ensure it has sufficient resources to respond quickly to the demands of its borrowing members while it continues its poverty reduction efforts," said Mr. Harper.

Canadian officials said that Canada's increase in callable capital, which serves as a guarantee from shareholders, will see Canada triple the level of its shares in the bank.

That will allow the bank, which supplements development projects through direct loans to African countries, to increase its lending by 75 percent, officials said.

Speaking at a University of Pittsburgh panel on Wednesday, Donald Kaberuka, president of the African Development Bank, said he came to Pittsburgh with a goal of seeking more funding for the bank, which was almost at its capacity lending level.

At the high school, the wives of the world leaders and spouses from various international organizations including the United Nations attended a special performance.

After being greeted by First Lady Michelle Obama, they were broken up into five groups, visiting two different classes that represent the school's program, which offers six different majors: visual arts, literary arts, theater, instrumental music, vocal music and dance. Each group was accompanied by a teacher and a student from the school who was on hand to explain what they were seeing.

Pittsburgh Public Schools Superintendent Mark Roosevelt said he was honored to have the First Lady visit, noting that the students "have big dreams and they are displaying for you their commitment to doing all the hard work to reach those dreams."

He also announced that the school was one of two high schools in Pennsylvania to be named a national blue ribbon school, which honors schools that are either academically superior or have made dramatic gains in student achievement and helped close the gaps in achievement among minority and disadvantaged students.

About 11:30, school principal Melissa Pearlman took the stage to introduce each summit spouse, who stood up in the balcony as their names were announced, to cheers from about 250 students seated in the auditorium.

Ms. Pearlman then introduced Mrs. Obama, who was greeted with wild shrieks from the audience. She was wearing a boldly patterned purple and white silk dress from one of her favorite Chicago designers, Maria Cornejo of Zero, and a wide studded leather belt.

She greeted the students with a "How are you all doin' today?" More screams and shrieks. Mrs. Obama went on to deliver a 12-minute speech about the importance of arts education, telling the students "you can literally say the whole world is watching you today," and telling the spouses that they were about to see "some of the hottest up-and-coming young talents in the nation -- that would be you."

While the program focused on the performing arts, 9th grader Miller Schulman of Squirrel Hill -- a student in the school's visual arts department --presented his artwork on the theme of "Pittsburgh Transforming," as a gift to the First Lady.

Musical highlights? Impossible to pick. The school's choral ensemble sang a song written expressly for the occasion, accompanied by Mr. Ma: "Welcome, welcome G20 Summit/We're glad you came and hope things will change."

The program ended at 12:15. All the participants came out on stage for their bows, earning a standing ovation. The guest artists agreed to stay for a discussion about the performance.

The dignitaries then went to the Warhol Museum across the Allegheny River for lunch.



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