MOSCOW, February 15 (RIA Novosti) – The G20 Group of developed and leading emerging market economies should focus its efforts on working out effective measures to overcome stagnation in the world economy, Russian President Vladimir Putin said on Friday.
“The main challenge today is whether the G20 Group can be also effective in solving long-term development tasks and offering policies that would pull the global economy out of stagnation and uncertainty, and into a steady growth trajectory,” Putin said at a meeting of G20 finance ministers and central bank chiefs.
Russia, which holds the G20 rotating presidency this year, has formulated the G20’s agenda based on this challenge, Putin said.
“Russia proposes that the G20 agenda be focused on the main tasks of ensuring balanced growth and creating jobs, stimulating investment, increasing transparency and developing effective regulation,” Putin said.
The G20 countries should pursue transparent state debt management policies to promote a return of investor confidence, Putin said, adding the average debt burden in developed economies already exceeded their GDPs.
“There is no clarity how countries will service their debt,” which causes investors’ cautious behavior and drives countries into “an endless circle of debt and economic crises,” Putin said.
“We are convinced that an understandable and transparent policy by governments to manage their budget deficit and state debt can ensure a necessary level of investors’ confidence,” the Russian president said.
This is the reason why the issues of investment, transparency and effective regulations are at the focus of the G20 agenda during Russia’s presidency, he said.
Russia will maintain a conservative strategy regarding state debt levels, Putin said.
“Russia has one of the world’s lowest state debt levels … and the country’s lowest inflation rate for the past 15-20 years. We hope we’ll continue this strategy this year and in the medium term. We’ll abide by a very weighted and responsible conservative approach to state finances,” Putin said.
This year Russia has introduced new fiscal rules reducing the dependence of the country’s budget on oil prices and making budget processes predictable, Putin said.
The new fiscal rules link Russia’s spending to average oil prices for the past five years rather than projected oil prices, with a year added to this calculation each year until the basic price is calculated for the past ten years.
Russia also plans to merge the Russian Central Bank and the Federal Financial Markets Service to create a financial market mega-regulator, Putin said.
“Its task will be to introduce higher financial regulation standards and strengthen market confidence,” Putin said.
The Group of Twenty (G20) is a forum of the world’s largest economies consisting of 19 countries and the European Union. It was established as an instrument of global crisis management following the 2008 economic crisis.
G20 members account for 90 percent of global GDP and 80 percent of world trade.