A “white paper” of sorts from 3 top analysts at Goldman
Comments »A close look at Chinese poverty
Comments »Teng, who didn’t complete primary school, earns 70 renminbi (about $12 per day) working at a brick factory in Luan, a nearby city. His marriage prospects are poor, because he doesn’t earn much money. And he can’t leave for a higher-paying job on the coast because he must take care of his parents.
To reach this village in the Qinling Mountains, you drive 90 minutes outside bustling Xi’an on a deserted toll road. In China, the infrastructure frequently precedes the traffic. Turning off the highway, you climb into the mountains on a well-paved road that climbs around gorges, past a shallow, rushing river where water spills rapidly over large boulders, past a temple complex nestled in a small valley. The small bus beeped loudly every time it rounded a switchback. After 45 minutes, we pulled off the main road into the village — about 40 yards of paved road flanked by a couple dozen buildings with terra cotta roof tiles, and braids of drying corn nailed to the wall.
Here, 28 families scratch out a meager existence. The children have left for schools in larger towns, and the able-bodied who can seek work in the cities. The rest go into the mountains to gather herbs, grow some soybeans and corn, or subsist on extremely meager pensions of about80 renminbi ($15) per month.
Here’s some breaking news for the China bulls: Despite the gleaming towers of Shanghai, the monumental glass-and-steel sprawl of Beijing, the massive airports and high-speed rail networks, this is a very poor country. The urban China of bourgeois living, brand names and chic restaurants is real and growing. But the denizens of modern China are only 20 years removed from the poverty of Ta Ping. And a huge chunk of the country remains trapped in it.
“China is in the process of developing from a poor country to a rich country,” says Wen Hai, a senior professor of economics at Beijing University. “On the one hand you have the people on the coasts, and then you see the backwater.”
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Iran Ready to Have a Nuke Party
Intelligence provided to U.N. nuclear officials shows that Iran’s government has mastered the critical steps needed to build a nuclear weapon, receiving assistance from foreign scientists to overcome key technical hurdles, according to Western diplomats and nuclear experts briefed on the findings.
Documents and other records provide new details on the role played by a former Soviet weapons scientist who allegedly tutored Iranians over several years on building high-precision detonators of the kind used to trigger a nuclear chain reaction, the officials and experts said. Crucial technology linked to experts in Pakistan and North Korea also helped propel Iran to the threshold of nuclear capability, they added.
The officials, citing secret intelligence provided over several years to the International Atomic Energy Agency, said the records reinforce concerns that Iran continued to conduct weapons-related research after 2003 — when, U.S. intelligence agencies believe, Iranian leaders halted such experiments in response to international and domestic pressures.
The U.N. nuclear watchdog is due to release a report this week laying out its findings on Iran’s efforts to obtain sensitive nuclear technology. Fears that Iran could quickly build an atomic bomb if it chooses to has fueled anti-Iran rhetoric and new threats of military strikes. Some U.S. arms-control groups have cautioned against what they fear could be an overreaction to the report, saying there is still time to persuade Iran to change its behavior.
Iranian officials expressed indifference about the report.
“Let them publish and see what happens,” said Iran’s foreign minister and former nuclear top official, Ali Akbar Salehi, the semiofficial Mehr News Agency reported Saturday.
Salehi said that the controversy over Iran’s nuclear program is “100 percent political” and that the IAEA is “under pressure from foreign powers.”
‘Never really stopped’
Although the IAEA has chided Iran for years to come clean about a number of apparently weapons-related scientific projects, the new disclosures fill out the contours of an apparent secret research program that was more ambitious, more organized and more successful than commonly suspected. Beginning early in the last decade and apparently resuming — though at a more measured pace — after a pause in 2003, Iranian scientists worked concurrently across multiple disciplines to obtain key skills needed to make and test a nuclear weapon that could fit inside the country’s long-range missiles, said David Albright, a former IAEA official who has reviewed the intelligence files.
“The program never really stopped,” said Albright, president of the Washington-based Institute for Science and International Security. The institute performs widely respected independent analyses of nuclear programs in countries around the world, often drawing from IAEA data.
“After 2003, money was made available for research in areas that sure look like nuclear weapons work but were hidden within civilian institutions,” Albright said.
U.S. intelligence officials maintain that Iran’s leaders have not decided whether to build nuclear weapons but are intent on gathering all the components and skills so they can quickly assemble a bomb if they choose to. Iran has consistently maintained that its nuclear activities are peaceful and intended only to generate electricity.
The IAEA has declined to comment on the intelligence it has received from member states, including the United States, pending the release of its report.
But some of the highlights were described in a presentation by Albright at a private conference of intelligence professionals last week. PowerPoint slides from the presentation were obtained by The Washington Post, and details of Albright’s summary were confirmed by two European diplomats privy to the IAEA’s internal reports. The two officials spoke on the condition of anonymity, in keeping with diplomatic protocol.
Albright said IAEA officials, based on the totality of the evidence given to them, have concluded that Iran “has sufficient information to design and produce a workable implosion nuclear device” using highly enriched uranium as its fissile core. In the presentation, he described intelligence that points to a formalized and rigorous process for gaining all the necessary skills for weapons-building, using native talent as well as a generous helping of foreign expertise.
“The [intelligence] points to a comprehensive project structure and hierarchy with clear responsibilities, timelines and deliverables,” Albright said, according to the notes from the presentation.
Key outside assistance
According to Albright, one key breakthrough that has not been publicly described was Iran’s success in obtaining design information for a device known as an R265 generator. The device is a hemispherical aluminum shell with an intricate array of high explosives that detonate with split-second precision. These charges compress a small sphere of enriched uranium or plutonium to trigger a nuclear chain reaction.
Creating such a device is a formidable technical challenge, and Iran needed outside assistance in designing the generator and testing its performance, Albright said.
According to the intelligence provided to the IAEA, key assistance in both areas was provided by Vyacheslav Danilenko, a former Soviet nuclear scientist who was contracted in the mid-1990s by Iran’s Physics Research Center, a facility linked to the country’s nuclear program. Documents provided to the U.N. officials showed that Danilenko offered assistance to the Iranians over at least five years, giving lectures and sharing research papers on developing and testing an explosives package that the Iranians apparently incorporated into their warhead design, according to two officials with access to the IAEA’s confidential files.
Danilenko’s role was judged to be so critical that IAEA investigators devoted considerable effort to obtaining his cooperation, the two officials said. The scientist acknowledged his role but said he thought his work was limited to assisting civilian engineering projects, the sources said.
There is no evidence that Russian government officials knew of Danilenko’s activities in Iran. E-mails requesting comment from Russian officials in Washington and Moscow were not returned. Efforts to reach Danilenko through his former company were not successful.
Iran relied on foreign experts to supply mathematical formulas and codes for theoretical design work — some of which appear to have originated in North Korea, diplomats and weapons experts say. Additional help appears to have come from the father of Pakistan’s nuclear program, Abdul Qadeer Khan, whose design for a device known as a neutron initiator was found in Iran, the sources said. Khan is known to have provided nuclear blueprints to Libya that included a neutron initiator, a device that shoots a stream of atomic particles into a nuclear weapon’s fissile core at the start of the nuclear chain reaction.
One Iranian document provided to the IAEA portrayed Iranian scientists as discussing plans to conduct a four-year study of neutron initiators beginning in 2007, four years after Iran was said to have halted such research.
“It is unknown if it commenced or progressed as planned,” Albright said.
The disclosures come against a backdrop of new threats of military strikes on Iran. Israeli newspapers reported last week that there is high-level government support in Israel for a military attack on Iran’s nuclear installations.
“One of the problems with such open threats of military action is that it furthers the drift towards a military conflict and makes it more difficult to dial down tensions,” said Peter Crail, a nonproliferation analyst with the Arms Control Association, a Washington advocacy group. “It also risks creating an assumption that we can always end Iran’s nuclear program with a few airstrikes if nothing else works. That’s simply not the case.”
Special correspondent Thomas Erdbrink in Tehran contributed to this report.
The Vanishing Little Star of Bethlehem
News coming out of the Middle-East in the last few months has focused on two principal areas: the Israeli-Palestinian conflict, and the so-called “Arab Spring”. The headlines have been restricted to these two topics. Buried deep within the bodies of such prestigious papers as the New YorkTimes, the Washington Post, and the Los Angeles Times, if covered at all, are stories of the on-going destruction and persecution of millennia-old Christian communities within the cradle of Christianity: the Middle-East. The phenomenon is not exactly new; it’s been going on for decades if not centuries, but the growth and spread of Islamic fundamentalism within the last decade and the overthrow of Western-oriented Arab dictatorships has set in motion a rising tide of anti-Christian behavior that threatens to wipe out Christianity in the Middle-East in what amounts to a repetition of what has occurred to Jewish communities throughout Islamic nations within the past six decades since the creation of the Jewish State of Israel.
Five nations that demonstrate the ongoing obliteration of Christianity in the region will serve to illustrate the point: Egypt, Iraq, Afghanistan, Palestine, and Iran.
We start with Egypt, a nation of eighty million with a 10 % minority population of eight million Coptic Christians. The Coptic Church is one of the world’s oldest, and its appearance in Egypt precedes Islam by at least half a millennium. Earlier this past month, Copts throughout Egypt organized demonstrations to protest the fire-bombing of a church in upper Egypt the prior week, as well as one back in mid-March, and the on-going campaign of harassment by Islamists in the region. At the October 9, 2011 demonstration in front of the Maspero district headquarters of the national television network, attended by a reported figure of 10,000 Copts, the Egyptian army opened fire with live ammunition, killing Copts indiscriminately. Then armored military vehicles appeared driving into the crowds randomly, causing widespread mayhem. Final tally: 24 dead and over 300 wounded. The on-going Islamist attacks against the Copts are causing many to consider seeking refuge in the West.
Let’s move on to Iraq. Twenty years ago, Iraq’s Christian community numbered over a million members. A decade ago, out of a total population of almost 24 million, 850,000 identified as Christians. Today, with a population of 30.7 million, the Christian population appears to be less than 335,000. What has happened? Although the new Iraqi constitution guarantees freedom of religion, there is no provision in the Iraqi system for those that wish to convert, especially if it is from Islam to Christianity. And radical Islam has been launching attacks on Christian Iraqis ever since Saddam Hussein’s ouster. This past year has seen the level of violence increase, starting with last year’s al-Qaeda attack on Our Lady of Deliverance Syrian Catholic Church in Baghdad which left 52 dead. Anti-Christian persecution continues, unabated.
In Afghanistan, along with the country being virtually “Judenfrei” or “Judenrein”, it is now free of any overt symbol of Christianity with the destruction of the last remaining church in March 2010. The U.S. State Department’s recently released report on religious freedom indicates that the small native Christian population feels tremendous pressure to remain out of sight, and the case of the Moslem who converted to Christianity and was nearly executed under Afghanistan’s Sharia law for Islamic apostasy demonstrates that freedom of conscience does not exist in present day Afghanistan despite the presence of American and NATO forces in that country for a decade.
When we turn to the Palestinian Territories, we are looking at the birthplace of Christianity. To see this two millennia community threatened with disappearance must be gut-wrenching for devout Christians. But like it or not, the Christian Arab population of the Holy Land faces the threat of extinction. The causes are many, but explosive Muslim birth rates compared with bare replacement rates among Arab Christians have caused the Christian percentage of the Palestinian Territories to diminish sharply. In actuality, the Palestinian Christian population has increased in the past forty-four years from 42,494 in 1967 to slightly more than 50,000 today. However, because of the changing percentage ratios of Christians to Muslims in the greater Bethlehem area—a region traditionally associated with very high percentages of Christian populations (70-95%)—the decreases to 28-60% appear as precipitous declines.
Along with the huge Muslim population explosion in the West Bank and Gaza there is now a phenomenon that does not bode well for the Christian Arab populations of these two areas. The radicalization of Islam, especially in Gaza where HAMAS controls the government, has resulted in pressure on the Christian community. But even in areas controlled by the Palestinian Authority, such as Bethlehem, Christian Arabs feel persecuted by the Moslem majority. Whether or not the persecution is officially sanctioned by the PA and/or HAMAS in their respective regions of control, it is clear that neither is doing enough to root out anti-Christian vigilantism.
The final country that we examine in this brief survey is Iran. Although the Islamic Republic of Iran enshrines freedom of religion in its constitution and has seats each for a Jewish and Armenian Christian representative in the national legislature (Majlis), because of Islamic (Sharia) law, conversion from Islam to Christianity is considered apostasy and as such is a capital crime. The result is that both converts to Christianity, and those Christians that aid them, find themselves under severe persecution, imprisonment, and occasionally, threat of execution. The current case of Pastor Yusef Nadarkhani is a perfect example. Nadarkhani is currently scheduled for execution for apostasy from Islam. Over 250 Christians were arrested in the last year for their religious beliefs and more than one has been release from prison only to disappear until his or her body parts show up in different locations.
In conclusion, it was revealed recently that some 105,000 Christians are killed annually because of their religious convictions, the vast majority at the hands of radical Muslims. At the end of his article, Elwood McQuaid makes a poignant statement, raising several pertinent questions that deserve repetition here: “In America, Muslims are protected, much more so than evangelical Christians. Protecting Muslim citizens is an honorable pursuit that raises America’s standards far above those in so many other parts of the world. Yet why are the same leaders who so passionately protect Muslim rights in America doing nothing for Christians who are dying in record numbers? Why do so many of our leaders hold their tongues as the world turns a blind eye? And there is another question—one we must all ask ourselves: Why has the church been virtually silent about the suffering of our brethren?” Why, indeed?
Comments »Papa Greek and Opposition Reach Deal
Greek Prime Minister George Papandreou and opposition leader Antonis Samaras have agreed on a new coalition government to approve a euro zone bailout deal before elections, the office of the country’s president said on Sunday.
The agreement came after the two leaders held talks with the president in an effort to break a political deadlock and thrash out a deal for a national unity government demanded by the country’s European partners.
A presidency statement said they will meet again on Monday to discuss who would head the coalition government, but that Papandreou would not lead the new administration.
“Tomorrow there will be new communication between the prime minister and the opposition leader on who will be the leader of the new government,” the statement said.
The statement made no mention of how long the interim government would last.
The European Union gave Greece 24 hours on Sunday to explain how it will form a unity government to enact a bailout agreement.
Papandreou and his opponents have been scrambling to hammer out a deal ahead of a meeting by finance ministers of euro countries on Monday, to show that Greece is serious about taking steps needed to stave off bankruptcy.
Comments »ECB May End Italy Bond Buys if No Reforms Come
The European Central Bank often discusses the possibility ending the purchase of Italian government bonds if it concludes Italy is not adopting promised reforms, ECB Governing Council Member Yves Mersch said.
“If we observe that our interventions are undermined by a lack of efforts by national governments then we have to pose ourselves the problem of the incentive effect,” Mersch said according to extracts of an interview with Italian daily La Stampa to be published on Sunday.
Asked if this meant the ECB would stop buying Italy’s bonds if it did not adopt reforms it has promised to the European Union, Mersch, who heads Luxembourg’s central bank, replied:
“If the ECB board reaches the conclusion that the conditions that led it to take a decision no longer exist, it is free to change that decision at any moment. We discuss this all the time.”
Since the ECB resumed its bond buying programme (SMP) around three months ago it has purchased some 100 billion euros of government bonds, a majority of which are thought to be Italian BTPs.
Mersch said the ECB did not want to become a lender of last resort to help the euro zone solve its debt crisis and said it was concerned that its job could be made more difficult by governments that “don’t meet their responsibilities.”
“Our job is not to remedy the errors of politicians,” he said.
Mersch also defended the right of Italian Lorenzo Bini Smaghi to remain on the ECB board even though this means Italy now has two members and France has none, much to the annoyance of French President Nicolas Sarkozy.
“He (Bini Smaghi) has an eight year mandate, the treaties do not say that if someone comes from a specific Treasury ministry he has a right to a place on the ECB board,” he said.
“The spirit of the treaties is that everyone leaves his passport in the wardrobe when he participates in ECB meetings.”
Comments »Greek Political Parties Continue to Bicker and Posture
Prime Minister George Papandreou launched his campaign on Saturday for a coalition to save Greece from bankruptcy, but rival parties showed little willingness to cooperate in tackling the nation’s economic, political and social crisis.
Papandreou said negotiations would start soon to form a broad-based government, tasked with ensuring parliament backs a euro zone bailout vital to keeping Greece afloat and preventing its crisis from bringing down much bigger economies.
But a government source said Papandreou’s deputy, Finance Minister Evangelos Venizelos, was already negotiating behind the scenes to win support from smaller parties for a government that Venizelos himself wants to lead.
“Venizelos is having contacts with party leaders to secure their agreement,” said a government official who requested anonymity.
Greece’s two top political forces — the ruling socialist PASOK party and conservative opposition New Democracy — displayed little appetite for working together to tackle a crisis that has driven Greece deep into recession, sent unemployment soaring and living standards tumbling.
REJECTION
New Democracy chief Antonis Samaras flatly rejected Papandreou’s proposal of a coalition which would rule for several months and shepherd the 130 billion euro bailout, Greece’s last financial lifeline, through parliament.
But in snubbing Papandreou, who survived a parliamentary confidence vote in the early hours of Saturday, the conservative opposition acknowledged the leading role being played by his financeminister in the maneuvering for power.
“Whenever we try to find a way out, the Papandreou-Venizelos government invents new obstacles to block it,” New Democracy chief Antonis Samaras said. “We made our offer and he (Papandreou) shut the door. The offer is still on the table. I hope he realizes his mistake.”
Samaras repeated his demand for Papandreou to make way for a short-lived national unity government before snap elections. “We did not seek a role in this government, only that Mr Papandreou, who has become dangerous for the country, resigns.”
Two opinion polls showed Greeks appeared to favor Papandreou’s option. One commissioned by Proto Thema newspaper showed 52 percent of respondents supported the coalition idea while 36 percent wanted snap elections as proposed by Samaras.
Another poll commissioned by Ethnos newspaper put support for the rival proposals at 45 and 41.7 percent respectively.
Papandreou, whose father and grandfather were famous Greek prime ministers, defeated Venizelos for the PASOK leadership in 2004. But as Greece’s economic crisis created political turmoil, he turned for support to Venizelos, a burly former law professor with a reputation as a political bruiser.
Sources close to negotiations insist that Papandreou — by contrast an athletic, U.S.-educated member of an elite family — is going through the motions of trying to form a coalition, and will eventually make way for Venizelos.
Far from being competing political forces, the sources say, the two are aware of what each other is doing under a deal allowing Papandreou to depart with honor after two years in which the government has imposed pay and pension cuts plus tax rises at the behest of Greece’s international lenders.
The cabinet is due to meet informally on Sunday afternoon.
UNLIKELY BEDFELLOWS
Venizelos appeared to be reaching out to some unlikely bedfellows in his hunt for support. George Karatzaferis, who heads the far right LAOS party, said he had spoken to Venizelos in parliament during the confidence debate.
However, he played down the significance of their encounter, saying he would not join any coalition without New Democracy being there too and urged Samaras to change his mind.
“We need to realize that we haven’t got a prime minister. It’s all a formality. Papandreou resigned yesterday in parliament and the applause in the room was divided equally, for his speech and for his departure,” Karatzaferis said.
Papandreou officially opened his search for a coalition after meeting President Karolos Papoulias, saying Greece had to establish a political consensus to prove it wanted to keep the euro, while European leaders try to persuade the outside world that the currency bloc can overcome its huge problems.
“In order to create this wider cooperation, we will start the necessary procedures and contacts soon,” he told reporters. “A lack of consensus would worry our European partners over our country’s will to stay in the euro zone.”
Without saying when he might quit, Papandreou said during the confidence debate he was ready to discuss who should lead the new government. “The last thing I care about is my post. I don’t care even if I am not re-elected,” he said.
Under heavy domestic and international pressure, the prime minister retreated from a proposal for a referendum on the euro zone rescue. Greek voters could well have rejected the deal, potentially torpedoing euro zone leaders’ attempts to stop the debt crisis devastating economies such as Italy and Spain.
THINGS MAY TURN UGLY
Weary Greeks expressed disgust at the political wrangling.
“I’m sick of politicians in Greece, and feel that things will now turn ugly. If only they could cooperate, everything would be much better,” said Tassos Pagonis, a 48-year-old Athens taxi driver. “But will Greece be saved? I’m afraid not. Europeans don’t trust us anymore, they will throw us out.”
Pensioner Yiannis Vlahos, 83, compared the fates of Greece and Germany, which occupied the country in World War Two.
“When the Germans left we had some hope. They were ruined by World War Two but they worked hard and became the strongest economy. We Greeks haven’t learned our lesson, we only steal,” he said. “We ourselves hate our beautiful country.”
The leaders of France and Germany told Papandreou this week that Greece would not get a cent more of aid if it failed to approve the bailout, meaning that the state would run out of money in December.
Comments »FLASH: Papandreou Wins His Confidence Vote
G20 Releases List of Banks Required to Hold More Capital
El-Erian Regarding Europe: ‘Unfortunately It’s A Mess’, And Now Things Are Worse Than Before The Last Bailout
[youtube://http://www.youtube.com/watch?v=VOo2hgxLO7I&feature=related 450 300]
Comments »
BOB JANJUAH: The Euro Bailout Is Fiction, And The S&P Is Going To Plunge
Not sure if i picked this up a few days ago; but i thought it was worth a read.
Comments »Summary of the G20 Discussion
The following is the full text of the communique from the summit of the Group of 20 industrialized and developing nations, held in Cannes on Nov. 3-4.
1. We, the Leaders of the G20, met in Cannes on 3-4 November 2011.
2. Since our last meeting, global recovery has weakened, particularly in advanced countries, leaving unemployment at unacceptable levels. In this context, tensions in the financial markets have increased due mostly to sovereign risks in Europe; there are also clear signs of a slowing in growth in the emerging markets. Commodity price swings have put growth at risk. Global imbalances persist.
3. Today, we reaffirm our commitment to work together and we have taken decisions to reinvigorate economic growth, create jobs, ensure financial stability, promote social inclusion and make globalization serve the needs of the people.
A global strategy for growth and jobs
4. To address the immediate challenges faced by the global economy, we commit to coordinate our actions and policies. Each of us will play their part.
5. We have agreed on an Action plan for Growth and Jobs to address short term vulnerabilities and strengthen medium-term foundations for growth.
Advanced economies commit to adopt policies to build confidence and support growth and implement clear, credible and specific measures to achieve fiscal consolidation. We welcome the decisions by European Leaders on October 26th, 2011 to restore debt sustainability in Greece, strengthen European banks, build firewalls to avoid contagion, and lay the foundations for robust economic governance reform in the Euro area and call for their swift implementation. We support the measures presented by Italy in the Euro Summit and the agreed detailed assessment and monitoring by the European Commission. In this context, we welcome Italy’s decision to invite the IMF to carry out a public verification of its policy implementation on a quarterly basis.
Taking into account national circumstances, countries where public finances remain strong commit to let automatic stabilizers work and take discretionary measures to support domestic demand should economic conditions materially worsen. Countries with large current account surpluses commit to reforms to increase domestic demand, coupled with greater exchange rate flexibility.
We all commit to further structural reforms to raise output in our countries.
Monetary policies will maintain price stability over the medium term and continue to support economic recovery.
6. We are determined to strengthen the social dimension of globalization. We firmly believe that employment and social inclusion must be at the heart of our actions and policies to restore growth and confidence. We therefore decide to set up a G20 task force which will work as a priority on youth employment. We recognize the importance of social protection floors in each of our countries, adapted to national situations. We encourage the ILO to continue promoting ratification and implementation of the eight core Conventions ensuring fundamental principles and rights at work.
7. Convinced of the essential role of social dialogue, we welcome the outcomes of the B20 and L20 and their joint statement.
Towards a more stable and resilient International Monetary System
8. We have made progress in reforming the international monetary system to make it more representative, stable and resilient. We have agreed on actions and principles that will help reap the benefits from financial integration and increase the resilience against volatile capital flows. This includes coherent conclusions to guide us in the management of capital flows, common principles for cooperation between the IMF and Regional Financial Arrangements, and an action plan for local currency bond markets. We agree that the SDR basket composition should continue to reflect the role of currencies in the global trading and financial system. The SDR composition assessment should be based on existing criteria, and we ask the IMF to further clarify them. To adjust to currencies’ changing role and characteristics over time, the composition of the SDR basket will be reviewed in 2015, or earlier, as currencies meet the existing criteria to enter the basket. We are also committed to further progress towards a more integrated, even-handed and effective IMF surveillance and to better identify and address spill-over effects. While continuing with our efforts to strengthen surveillance, we recognize the need for better integration of bilateral and multilateral surveillance, and we look forward to IMF proposals for a new integrated decision on surveillance early next year, and for increased ownership and traction.
9. We affirm our commitment to move more rapidly toward more market-determined exchange rate systems and enhance exchange rate flexibility to reflect underlying economic fundamentals, avoid persistent exchange rate misalignments and refrain from competitive devaluation of currencies. We are determined to act on our commitments to exchange rate reform articulated in our Action plan for Growth and Jobs to address short term vulnerabilities and restoring financial stability and strengthen the medium-term foundations for growth. Our actions will help address the challenges created by developments in global liquidity and capital flows volatility, thus facilitating further progress on exchange rate reforms and reducing excessive accumulation of reserves.
10. We agreed to continue our efforts to further strengthen global financial safety nets and we support the IMF in putting forward the new Precautionary and Liquidity Line (PLL) to provide on a case by case basis increased and more flexible short-term liquidity to countries with strong policies and fundamentals facing exogenous shocks. We also support the IMF in putting forward a single facility to fulfil the emergency assistance needs of its members. We call on the IMF to expeditiously discuss and finalize both proposals.
11. We welcome the euro area’s comprehensive plan and urge rapid elaboration and implementation, including of country reforms. We welcome the euro area’s determination to bring its full resources and entire institutional capacity to bear in restoring confidence and financial stability, and in ensuring the proper functioning of money and financial markets.
We will ensure the IMF continues to have resources to play its systemic role to the benefit of its whole membership, building on the substantial resources we have already mobilized since London in 2009. We stand ready to ensure additional resources could be mobilised in a timely manner and ask our finance ministers by their next meeting to work on deploying a range of various options including bilateral contributions to the IMF, SDRs, and voluntary contributions to an IMF special structure such as an administered account. We will expeditiously implement in full the 2010 quota and governance reform of the IMF.
Reforming the financial sector and enhancing market integrity
12. In Washington in 2008, we committed to ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate. We will implement our commitments and pursue the reform of the financial system.
13. We have agreed on comprehensive measures so that no financial firm can be deemed “too big to fail” and to protect taxpayers from bearing the costs of resolution. The FSB publishes today an initial list of Global systemically important financial institutions (G-SIFIs). G-SIFIs will be submitted to strengthened supervision, a new international standard for resolution regimes as well as, from 2016, additional capital requirements. We are prepared to identify systemically important non-bank financial entities.
14. We have decided to develop the regulation and oversight of shadow banking. We will develop further our regulation on market integrity and efficiency, including addressing the risks posed by high frequency trading and dark liquidity. We have tasked IOSCO to assess the functioning of Credit Default Swaps markets. We have agreed on principles to protect financial services consumers.
15. We will not allow a return to pre-crisis behaviours in the financial sector and we will strictly monitor the implementation of our commitments regarding banks, OTC markets and compensation practices.
16. Building on its achievements, we have agreed to reform the FSB to improve its capacity to coordinate and monitor our financial regulation agenda. This reform includes giving it legal personality and greater financial autonomy. We thank Mr Mario Draghi for the work done and we welcome the appointment of Mr Mark Carney, Governor of the Central Bank of Canada as Chairman of the FSB, and of Mr. Philipp Hildebrand, Chairman of the Swiss National Bank as Vice-Chairman.
17. We urge all jurisdictions to adhere to the international standards in the tax, prudential and AML/CFT areas. We stand ready to use our existing countermeasures if needed. In the tax area, we welcome the progress made and we urge all the jurisdictions to take the necessary actions to tackle the deficiencies identified in the course of the reviews by the Global Forum, in particular the 11 jurisdictions identified by the Global Forum whose framework has failed to qualify. We underline the importance of comprehensive tax information exchange and encourage work in the Global Forum to define the means to improve it. We welcome the commitment made by all of us to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and strongly encourage other jurisdictions to join this Convention.
Addressing commodity price volatility and promoting agriculture
18. As part of our financial regulation agenda, we endorse the IOSCO recommendations to improve regulation and supervision of commodity derivatives markets. We agree that market regulators should be granted effective intervention powers to prevent market abuses. In particular, market regulators should have and use formal position management powers, among other powers of intervention, including the power to set ex-ante position limits, as appropriate.
19. Promoting agricultural production is key to feed the world population. To that end, we decide to act in the framework of the Action Plan on Food Price Volatility and Agriculture agreed by our Ministers of Agriculture in June 2011. In particular, we decide to invest in and support research and development of agriculture productivity. We have launched the “Agricultural Market Information System” (AMIS) to reinforce transparency on agricultural products’ markets. To improve food security, we commit to develop appropriate risk-management instruments and humanitarian emergency tools. We decide that food purchased for non-commercial humanitarian purposes by the World Food Program will not be subject to export restrictions or extraordinary taxes. We welcome the creation of a “Rapid Response Forum”, to improve the international community’s capacity to coordinate policies and develop common responses in time of market crises.
Improving energy markets and pursuing the Fight against Climate Change
20. We are determined to enhance the functioning and transparency of energy markets. We commit to improve the timeliness, completeness and reliability of the JODI-oil database and to work on the JODI-gas database along the same principles. We call for continued dialogue annually between producers and consumers on short medium and long-term outlook and forecasts for oil, gas and coal. We ask relevant organizations to make recommendations on the functioning and oversight of price reporting agencies. We reaffirm our commitment to rationalise and phase-out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption, while providing targeted support for the poorest.
21. We are committed to the success of the upcoming Durban Conference on Climate Change and support South Africa as the incoming President of the Conference. We call for the implementation of the Cancun agreements and further progress in all areas of negotiation, including the operationalization of the Green Climate Fund, as part of a balanced outcome in Durban. We discussed the IFIs report on climate finance and asked our Finance Ministers to continue work in this field, taking into account the objectives, provisions and principles of the UNFCCC.
Avoiding protectionism and strengthening the multilateral trading system
22. At this critical time for the global economy, it is important to underscore the merits of the multilateral trading system as a way to avoid protectionism and not turn inward. We reaffirm our standstill commitments until the end of 2013, as agreed in Toronto, commit to roll back any new protectionist measure that may have risen, including new 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.
23. We stand by the Doha Development Agenda (DDA) mandate. However, it is clear that we will not complete the DDA if we continue to conduct negotiations as we have in the past. We recognize the progress achieved so far. To contribute to confidence, we need to pursue in 2012 fresh, credible approaches to furthering negotiations, including the issues of concern for Least Developed Countries and, where they can bear fruit, the remaining elements of the DDA mandate. We direct our Ministers to work on such approaches at the upcoming Ministerial meeting in Geneva and also to engage into discussions on challenges and opportunities to the multilateral trading system in a globalised economy and to report back by the Mexico Summit.
24. Furthermore, as a contribution to a more effective, rules-based trading system, we support a strengthening of the WTO, which should play a more active role in improving transparency on trade relations and policies and enhancing the functioning of the dispute settlement mechanism.
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.
Intensifying our Fight against Corruption
29. We have made significant progress in implementing the Action Plan on combating corruption, promoting market integrity and supporting a clean business environment. We underline the need for swift implementation of a strong international legislative framework, the adoption of national measures to prevent and combat corruption and foreign bribery, the strengthening of international cooperation in fighting corruption and the development of joint initiatives between the public and the private sector.
Reforming global governance for the 21st century
30. We welcome the report of UK Prime Minister David Cameron on global governance. We agree that the G20 should remain an informal group. We decide to formalise the Troika. We will pursue consistent and effective engagement with non-members, including the UN and we welcome their contributions to our work.
31. We reaffirm that the G20’s founding spirit of bringing together the major economies on an equal footing to catalyze action is fundamental and therefore agree to put our collective political will behind our economic and financial agenda, and the reform and more effective working of relevant international institutions. We support reforms to be implemented within the FAO and the FSB We have committed to strengthen our multilateral trade framework. We call on international organisations, especially the UN, WTO, the ILO, the WB, the IMF and the OECD, to enhance their dialogue and cooperation, including on the social impact of economic policies, and to intensify their coordination.
On December 1st. 2011, Mexico will start chairing the G20. We will convene in Los Cabos, Baja California, in June 2012, under the Chairmanship of Mexico. Russia will chair the G20 in 2013, Australia in 2014 and Turkey in 2015. We have also agreed, as part of our reforms to the G20, that after 2015, annual presidencies of the G20 will be chosen from rotating regional groups, starting with the Asian grouping comprising of China, Indonesia, Japan and Korea.
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