Finance ministers and central bank governor of G20 nations met for a two-day meeting at Ankara. They pledged take appropriate action to maintain and strengthen the economic recovery.
The communique said that G20 finance ministers and central bank governors will try to avoid persistent exchange rate misalignments and continue to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability, Xinhua reported.
“Monetary policies will continue to support economic activity consistent with central banks’ mandates,” the communique said, adding “monetary policy tightening is more likely in some advanced economies”.
On the issue of currency wars, they said: “We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluations, and resist all forms of protectionism.”
Facing the worldwide challenges, finance ministers and central bank governors said that they will carefully calibrate and clearly communicate their actions, especially against the backdrop of major monetary and other policy decisions, to minimize negative spillovers, mitigate uncertainty and promote transparency.
The communique said: “We remain committed to timely and effective implementation of our growth strategies that include measures to support demand and lift potential growth.”
International Monetary Fund (IMF) managing director Christine Lagarde said: “Downside risks to the outlook have increased, particularly for emerging market economies. Against this backdrop, policy priorities have taken on even more urgency since we last met in April.”
The major challenge facing the global economy is that growth remains moderate and uneven, she said. For the advanced economies, activity is projected to pick up only modestly this year and next.
For the emerging market economies, prospects have weakened in 2015 relative to last year, though some rebound is projected next year. For both the advanced and emerging economies, productivity growth continues to be low,” she said.
The IMF chief called for a concerted policy effort from the members states to address these challenges, including continued accommodative monetary policy in advanced economies; growth-friendly fiscal policies; and structural reforms to boost potential output and productivity.
Two men each claim to be the prime minister. Lawmakers are exchanging blows in Parliament. A former finance minister says Sri Lanka is on the brink of an “economic anarchy.”
Welcome to Sri Lanka, where the political crisis is getting worse by the week.
The trouble started when President Maithripala Sirisena, fed up with disagreements with his prime minister over money, an alleged conspiracy plot and unresolved issues of wartime crimes against civilians, fired Ranil Wickremesinghe and his Cabinet and replaced them with a government headed by a popular former strongman, Mahinda Rajapaksa.
But lawmakers balked and twice passed a no-confidence motion. Sirisena, however, refuses to accept that his choice of prime minister has been defeated.
Sirisena government can’t be legal
Jehan Perera, head of the local analyst group National Peace Council, said that the government appointed by the president can’t be called legal because Sirisena had not sought a parliamentary vote when he dismissed Wickremesinghe.
“It can be called illegitimate because provisions for a confidence vote in Parliament are being blocked by the president’s own party through their riotous behavior,” Perera said, referring to a brawl last week that was followed by another pandemonium in the chamber when Rajapaksa loyalists refused to let the speaker conduct proceedings.
Wickremesinghe says his dismissal is invalid because he still holds a majority in the 225-member Parliament. The dismissal is also disputed because of the latest constitutional change, which lawyers say has taken away presidential powers to dismiss the prime minister.
Life goes on
Despite all the drama and two rival prime ministers, life hasn’t collapsed, thanks to the efficient bureaucracy that keeps the wheels of administration turning.
Even though there is no Cabinet recognized by Parliament, and despite warnings by Wickremesinghe supporters that state officials should not take orders from an “illegal government” of Rajapaksa, bureaucrats continue to work with the president who is the chief executive and the ministers appointed by him, officials said on condition of anonymity because they are not authorized to speak to the media.
Budget dilemma looms
However, decisions regarding new projects or purchases involving large sums of money are on hold.
The absence of a recognized government has delayed the budget for 2019. Mangala Samaraweera, who was finance minister in Wickremesinghe’s Cabinet, said that there will be no legal way of spending money in the coming year without a parliament-approved budget.
Sri Lanka’s Constitution says that control over public finances lies with Parliament and no funds can be released without a warrant signed by the finance minister and approved by the legislature. That means all government payments starting from January can be deemed illegal, Samaraweera says.
Sri Lanka is on the brink of an “economic anarchy and chaos as never experienced before.”
“The cavalier and irresponsible actions of the president … based on personal animosities and precipitating a series of illegal acts, places at risk Sri Lanka’s ability to meet its immediate debt obligations,” he said.
Sri Lanka has to repay $1 billion of its foreign loans in early January, which is also in the prerogative of Parliament to approve.
Wickremesinghe’s lawmakers have presented a motion to the speaker seeking to block funding to the prime minister’s office, which if passed, would curtail Rajapaksa’s functions.
“As far as the people are concerned, they are witnessing the normal functioning of the country,” insisted government spokesman Keheliya Rambukwella.
However, he conceded that Sri Lanka will have issues on accessing government money if the stalemate is not resolved by the end of the year. Sirisena called snap elections for Jan. 5, but the opposition challenged the decision, and the dispute is in court. (VOA)