23 October 2010

Real Progress Made at G20 Finance Ministers' Meeting in Korea

I welcome the real progress made by the G20 in Korea this weekend toward delivering on its objective of strong, sustainable and balanced global growth.

Once again, the G20 has shown it can operate with unity of purpose and achieve results.

I am proud of the role Australia has played in the work of the G20 through the global financial crisis and as we move through the recovery phase.

It is clear from discussions with my G20 colleagues that the global recovery, while continuing, is both fragile and patchy.

Australia is, of course, not immune from developments across the globe, which is why it is so important that we play a constructive role in the G20 to work towards a stronger global economy.

The G20 continues to drive the global economic reform agenda in the recovery, just as it did during the depths of the economic crisis.

IMF reform has been an area where Australia has been a key player and a strong advocate over the last 18 months, co-chairing the G20's IMF governance working group with South Africa.

I am pleased that this weekend we achieved an agreement to fundamentally reform the IMF governance structures, giving more weight to emerging, developing and underrepresented economies.

These represent some of the most significant reforms to the governance of the IMF since its inception following the Second World War.

This will increase the effectiveness of the IMF and ensure it is better placed to contribute to a stronger world economy, particularly to support countries when they are most at risk.

The meeting also agreed upon a range of measures that will reduce excessive imbalances in the global economy.

The G20 acknowledges that there are a range underlying structural imbalances that are apparent in the global economy which need to be curtailed, including in trade and investment between economies.

It was recognized that country positions need to be taken into account, including Australia's position, as a commodity exporting country, with a strong investment pipeline, and strong economic and fiscal position.

Ministers also struck an agreement that will see a move over time to more market determined exchange rates and a commitment to refrain from competitive devaluation of currencies.

This is an important step toward addressing global imbalances and supporting strong and sustainable global economic growth.

We know in Australia the benefits that can come from a market based currency based on our own experience for nearly three decades, operating as a shock absorber against risks in the global economy.

We welcome this commitment from G20 Finance Ministers, with a broad acknowledgement that market based currencies are not only good for individual member states, but for the G20 as a whole.

We also endorsed significant progress on reforms to the global financial regulation, which recognises individual country circumstances.

GYEONJU, KOREA