The world’s rich nations pushed back on Friday against emerging market complaints about the spillover effects of their monetary policies, saying they had to get their own houses in order and get with the agenda of boosting global growth.
As finance ministers and central bank chiefs from the Group of 20 developed and emerging countries gather ahead of a weekend meeting in Sydney, many are already talking at cross purposes.
Emerging nations want the U.S. Federal Reserve to calibrate its winding down of stimulus so as to mitigate the impact on their economies and financial markets. Developed members reply that the troubles in the emerging world are mostly homegrown and domestic interest rates have to be set with domestic recoveries in mind.
A draft of the communique, reported by Bloomberg News, highlighted how the push for growth had trumped concerns about volatility in emerging markets that had threatened to overshadow the meeting.
“We commit to developing new measures to significantly raise global growth, while maintaining fiscal sustainability,” Bloomberg quoted the draft as saying.
“We recognize accommodative monetary policy settings in advanced economies will need to normalize in due course, in line with stronger growth.”
Developed market policymakers see little risk of the recent market turmoil spiraling into the kind of contagion which prompted concerted and coordinated action from the G20 following the global financial crisis.
“Emerging markets need to take steps of their own to get their fiscal house in order and put structural reforms in place,” U.S. Treasury Secretary Jack Lew said at a financial conference in Sydney ahead of the ministerial meetings.
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