G-20 says government spending can help ease crisis

SAO PAULO: Economic officials from 20 leading nations called for increased government spending to boost the troubled global economy and said developing countries deserve a prominent role in talks to overhaul the world financial system.

Finance ministers and central bank presidents from the Group of 20, which includes wealthy and developing nations, agreed the world must work together to address the current crisis. But they approved no specific plans ahead of a meeting of G-20 heads of state set for Washington next week.

Ministers urged governments to increase spending or cut taxes as they can to help reverse an economic downturn that is expected reduce global trade next year for the first time since 1982.

Each country will have to design its own stimulus package to meet its specific needs, said David McCormick, the US Treasury's undersecretary for international affairs.

The G-20 also backed a call to bolster developing nations' voting power in key groups including the International Monetary Fund and the World Bank, following decades of complaints that their voices have been stifled.

"Institutions must be comprehensively reformed so that they can more adequately reflect changing economic weights in the world economy and be more responsive to future challenges," the ministers' declaration said.

Yet the statement failed to address a French proposal that large emerging economies including Brazil, Russia, China and
India be added to the powerful Group of Eight industrial nations, which has huge influence over global economic policy.