 Okay, well welcome back Thank you again for participating this morning on a wet Friday morning. It's it's great to see a Good group here still and again. I know there are a lot of people watching online and welcome to you as well I'm delighted to have on either side of me two people who individually would be a headline maker here Talking about a lot of issues, but but certainly about the G20 Delighted to have both of them at the same time for a conversation about The G20 and what to look forward to in the next couple of months up to the summit in St. Petersburg On my left is the second of the two former bosses that I alluded to earlier when I introduced Caroline David Lipton is deputy first deputy managing director of the IMF He has been in that role for almost two years I think David and I worked together at the White House and at Treasury. He has a long distinguished career in international finance in the private sector in in the at the IMF in US Treasury and in academia and I think he's actually pretty well-known figure here in Washington and so Welcome to him. Oh, I should have said he got his PhD from an obscure Institution in Cambridge, Massachusetts because that's a lead into our other speaker Ksenia Yudaeva is the Russian Sherpa the G20 Sherpa and that's a big responsibility this year as Russia hosts She's also chief of the president's experts directorate in the executive office of the Russian president Ksenia has been in that office for over a year now, I think And has taken on recently the role of organizing the st. Petersburg summit and all the many related Aspects of of a hosting year in the G20 She was prior to her government service again has a long distinguished career in international economics Including his chief accountant economists at Sphere Bank and she also worked in the Moscow office of the Carnegie Endowment and in addition to Degrees from Moscow State University and the new economics school. She also again has a PhD from another obscure Institution in Cambridge, Mass, which you can read about in the biography here. So delighted to have them both here We're gonna go through the G20 agenda starting with the kind of core three pillars that were just talked about in the last panel And let's do them one by one So we'll start with a sort of macro growth global growth story and I wanted to ask David You just the IMF just issued an update of its Regular annual world economic outlook just this week and you downgraded Slightly the outlook for the global economy when I looked back at the April Release I noticed one thing that really struck stood out as a difference back in April. You were You were pretty positive about conditions and emerging markets You even had a headline in the in the summary of the of the we owe that said, you know Re-accelerating activity in emerging markets and developing economies. What happened? Let me start by saying just a couple words about the G20. I think the G20 as a group has been a very important one and it started with the Washington meeting in 2008 and then through the London summit and the Pittsburgh summit in 2009 it really addressed the Question, how do we stop this crisis? In the midst of financial crisis and how do we make sure it never happens again? And I think through in the work that the G20 has done over the years we've seen very good cooperation among the G20 to Deal with the most acute phases of crisis But we're now faced with the fact that Recovery is disappointing and it's never really taken hold as strongly as we would like Yes, we have in our most recent outlook downgraded growth a little bit We've been saying for some time that we see three speed growth with the most rapid growth in emerging markets With some recovery, but not strong enough recovery in the US and a few other countries And still quite disappointing situation in Europe where the eurozone remains in recession I think Matt you're absolutely right that one of the more substantial revisions this time has been that The emerging market world has slowed someone Now to keep it in perspective. It's still the fastest-growing part of the world and It's always hard to gauge exactly How high growth can be for how long in the emerging market world, but I think we are seeing some slowdown and We're looking at the reasons for that but we also downgraded growth in Other parts of the world in essence everywhere except Japan. We've downgraded growth at least a little bit But again keeping this all in perspective. I think the the main point that I want you to take away is that growth has slowed somewhat in the Ladder part of last year and in the first part of this year. We see it accelerating a bit some recovery this year and into next year, but we see growth as remaining Insufficiently strong to deal with the challenge of creating jobs at a pace that will allow Countries to reduce unemployment rate satisfactorily and Coming back to our subject of the day. I think what that means is that there is an important role for the G20 Which has of course countries from each of the Country categories advanced emerging Different regional distributions Each of the countries in in the G20 to play a part to work together in the G20 to try to find ways to through collective action to contribute to a stronger recovery and we have Been speaking about that for some time and we'll continue to take it up in this I do want to come back to the sort of policy response, but just on the outlook itself. You mentioned Europe I mean I sort of again see a sort of schizophrenia in a way about Europe because on the one hand in the April release you seem sort of palpably relieved that the euro area is not about to break up and And this time you know you expressed and you just did again a concern that Europe is not performing well enough But then you show it accelerating returning from Recession to positive growth, you know fairly substantially over the next 18 months. How should we think about Europe? Well, you're a major subject of course of the G20's focus in the last 18 months two years I mean Europe has been afflicted by crisis. I think it's taken a number of important decisions Europe wide decisions individual country decisions that have greatly reduced the risk the tail risks of quite acute crisis, but we still see recession and we still see Very significant problems in peripheral countries and not and a weakening of growth in the core countries So when we go through this, we don't see any Unfortunately, you don't see a single silver bullet. It's not as though there's one policy pedal that you push and growth is restored rather our recipe includes Seeking action policy action on every margin where there is some room to provide Help and that is that we believe that stronger monetary policy accommodation is Necessary that we've seen a kind of banking fragmentation across Europe and the failure of Banks to Provide credit that's supportive of recovery and so we think there's work for the ECB the European Central Bank And others in Europe to try to work on improving the channels of transmission So that monetary policy is provides an impulse and that that is felt more broadly We see a job for continued fiscal adjustment, but adjustment at a pace that's Determined country by country Where countries that really need to adjust quickly do so but countries that have some elbow room to provide support for their economies do that and a range of structural reforms that can be supportive of growth and raising potential growth over time and Lastly, we see an important role for improving some of the architecture of Europe itself. It's been in a sense an imperfect Currency zone and Economic Union. It's a it's a single market for goods But it's been in the European Union 27 markets for banks with individual supervisors We've been pushing among other things banking Union With a whole set of steps that we think will Help improve the functioning of the banks and capital markets in Europe and provide some impetus for growth and that I think that agenda now is Had it's certainly been taken up. I think that agenda is progressing and You know on the presumption that monetary policy will provide some more accommodation and that the plans for Banking Union and some of the fixes to the architecture go forward on that basis. We see some recovery in Europe in the coming year Okay, let me bring Cassania into the conversation before we talk about your role in the G20. Let me just ask you as a Russian economist Russia is actually doing reasonably well and as the ambassador earlier indicated you're debt-free you have you know Not many of the problems that many of the other countries that we're talking about here today have so first of all Sort of what's the outlook for Russia, but then more broadly when you look out on the world What do you see and what do you worry about in terms of the macroeconomic picture? Let's say well rush is doing Reasonably well I agree with this assessment But Russia is very much concerned with the trends in the global economy and in the Russian economy we hear Because Russia's growth has slowed down both Generally after 208 but this year in particularly And we believe that this is largely a result of several global tendencies including recession in Europe And slow down in some major European countries and including slow down in Russia So the the global growth slowdown, which we observed this year in which the MF predict is a challenge for Russia as well as for other G20 economy and this is why it's important for Our economies to discuss this issue and maybe come up with some ideas how we're gonna address this issue how we How we are going to move forward Let me say a couple words personally as an economist rather than government official. I think that The world are went through several Stages after the crisis there was a huge decline in 208. We was the result of the financial meltdown then there was some recovery which was also In some countries fueled by extensive Monetary and fiscal policies, but now it looks like the world is Going through those structural Injustments, which we all knew We're supposed to happen before we move to the balance growth stage, right? And I'm speaking mainly about China for Only that both China and the US for example need to Go through some structural adjustment in order to get out of this big deficit between the two countries, right? And I think that are some adjustments happened in the United States and China is starting to go through these adjustments Right now they are not using any more the same tools which they used to use back into 09 and to support growth they are going through every thinking station But these structural adjustments in China will have significant impact on structural adjustment and probably it requires some structural adjustments in other countries This is a stage where the world is getting into one more issue which Was Quite surprisingly on the agenda for the last month. This is exit strategies and effect of this Exit policy and monitor exit for monetary policies on other countries Russia as well as most of 220 countries Experienced a significant financial market volatility After some rumors that the United States is And our federal reserve is going to scale down in purchases of government bonds Right. So I think that the impression words that are as soon as a Crisis will be over a growth will stabilize central banks will be able to scale down their non-traditional policy Financial sector will be less volatile, right the last month proved to all of us that Volatility is probably For a number of years to come Even after growth will stabilize But because central banks will have to get out of The non-traditional policies, right? So it's also something which needs needs to be Refined by Many financial ministers and central banks of 120 countries whether they would like to Approach this volatility how or it's a right that it's a big new issue which is back on Which is on the agenda right now Well, I want to ask David about exit strategy if I don't I'm sure somebody in the audience is going to but but but let me take this Back up to the G20 level again and say I mean it's interesting you talk about rebalancing but It sort of feels as though the the Pittsburgh framework which you know had those three big adjectives strong sustained and balanced growth That the the talk about the framework itself and about the the mutual assessment process under the framework You don't hear sort of as much discussion of that does that mean because you know we sort of solve the problem We don't need the map Or am I mischaracterizing where we are in that? I mean what what role does the G20 and those? The framework and the map play in addressing these I think you ask a very important question and as I said before I think our premise is that There's a need for more growth virtually everywhere and there is no single silver bullet So you have to look at every margin Global rebalancing is one of those margins and there's been I think some Complacency that's set in because global imbalances have gone down somewhat if you look at the Chinese surplus It was eight nine ten percent and now it's two and a half three percent You can look at other imbalances around the world. They've gone down somewhat but The question is whether those imbalances have gone down because of rebalancing or because the economy slowed and Exporters aren't exporting importers aren't importing. I think we're going to find that imbalances are Diminished but not in a permanent way and that there really is still work to be done to promote rebalancing and that that can be a significant contributor to strengthening global growth Now what I think we need is a G20 process of peer review something that the G20s talked about Really from its inception, but hasn't made enough of and I hope that as this Russian presidency goes on and This one is virtually finished with the leaders summit coming up in September But as we move then into the Australian Presidency that follows that we can have a process where the G20 sit down together and have a more serious Peer review and not a general one, but one that's more specific where countries can talk quite earnestly about What they feel others could do to contribute to make a contribution and Perhaps in that way through that dialogue reach some Agreements on collective action that would be useful for everybody that that sounds like a good idea I mean this is a group of the the main economies in the world and they are peers and they have an opportunity To review what Cassini is this going to be part of the Russian agenda in St. Petersburg? How are you framing the macro discussion and I want to specifically as a follow-up ask you about You're financing for investment Category which is under under your theme of growth and jobs Actually right now we started to discuss Carolyn. I think In the morning already told you that we had a meeting today in the morning We started to discuss how we're going to start to the discussion of macro issues of this summit itself right, but Are clearly leaders to all the cuts? Many of the topics which we are discussing now But I think that the process which David is speaking about is the process within the so-called group or which Not sure that everybody here in the audience are familiar with how to 20s that would be helpful actually Let me tell you there was actually revealing for me. I was a newcomer for the 20s. They are real life. How big The 20 and how many different processes and walls and how it works The 20 of course has everybody knows about leader summit right leader summit happens once a year and there is also sharper process preparation for the summit and ministers of finance process the prepare meanings of the ministers of finance and central bankers themselves and also Prepare their financial part for the leaders apart from that There are on many issues which are on the agenda. There are special working group or task forces with experts From different countries which discuss the specific issues in more detail. So there is this expert level discussion Which reports either to shepherds or financial ministers and then from financial ministers and shepherds We report to the president right so it's a multi-layer process and The recent group within the financial track, which is actually called the framework for Sustainable and balance probe and I think that when David says that country Country's needs to sit with each other and as peers discuss what's going on. It's largely supposed to have an inside This group. I don't think that leaders have Enough time for such a such a discussion. I think the idea was also to do this on on the working level and it actually Happens to to to some extent you during those framework Meetings maybe not as deep as we it was perceived from from the beginning But actually happy that David is rising this issue because from the very beginning the group was a controversy about the role of the IMF and the role of the framework itself because it was the IMF who did this review on for the 20 from and still doing this is still doing it and Framework is doing it itself. So this separation of obligation between the IMF and the framework purpose is interesting to discuss as well But anyway, there is this group working group discussion level shepherds and financial ministers And are like for me like one of the things which I Learned and you in this process about what the 20 is doing Did 20 is a plural where you have all those different countries sitting around the table discussing issues on different level and still While we are in the so-called multipolar world, so we have a lot of distrust misunderstanding different views on different countries and different levels and I think that Did when he provides the form for the dialogue and for bringing together the views and for building trust In one countries and I think that this is one of the issues which we need to understand I I'm in my role as a sheriff. I'm permanently asked the question Is the 20 efficient or not efficient whether it was efficient Right now or et cetera. I think that this is really the issue about Trust between countries with each other because are there are Well, we are probably not living in the zero some word But some countries still may believe that the benefit or others benefit more from some policies than them and Building trust through the discussion is an important task for going to as well and rebalancing is one of the issues Where this is needed? I personally agree very much that the habits of cooperation that are being built in the G20 is one of its Real assets and something that people underestimate the importance of but it's actually quite important to get this group of countries that Haven't had these conversations before and maybe don't have the full amount of trust I do want to come back to the institutional questions, but we have a lot to cover and let me just move on But one more question about the macro sort of side of things David There's been a lot of angst in the world about recently about competitive exchange rate depreciations and yet the IMF seems to take a relatively benign view of this and You've been criticized for being not vigilant enough and not outspoken enough about about these issues I'm the whole raison d'etre for the establishment of the IMF was to address this set of issues How do you respond to that criticism if it's fair if it exists? We've been asked by the G20 by our whole membership to look at how policies in any one country spill over and affect other countries and we're doing that and I Think when we look at that in the recent period we've identified those spillovers And we're on the we're in a sense on the lookout for Policies that are misguided and causing Problems or potential problems most of the focus in Early part of this year was on the unconventional monetary policies that a number of central banks in Different ways at different times US UK European central bank and Bank of Japan have been carrying out when we look at those policies we see that We see the clear rationale that central banks have for these policies in a setting where economies are sluggish Inflation is falling and is below targeted levels Interest rates have already been reduced to zero so the central banks haven't any very much conventional monetary policy instrumentation left and at a time when fiscal policy room for maneuver is limited by high deficits and high debts unconventional monetary policies have actually made at various points important contributions either in Stabilizing markets that had become illiquid and non-functional or in supporting a Modicum of economic recovery. So, you know, we start by recognizing that when countries are pursuing important domestic objectives with Important benefits and we see benefits coming from unconventional monetary policy that has to be Their core consideration now, of course, there can be negative spillovers from Policies pursued for good reasons and with good results and we've looked around at that But we've not seen On in general, we've not seen that the two things you would look for Would be whether currencies were getting out of alignment whether they were getting away from what could be justified by fundamentals and And in a sense creating imbalances that were undesirable or spillovers where the liquidity creation and the asset purchases of being undertaken under this rubric of unconventional monetary policy were raising asset prices in a way that either Caused asset bubbles or threatened to cause asset bubbles and when we look around we don't see that we haven't seen that so I you know the The concern over currency wars. I think was overblown early in the year. There were currency worries We were asked to follow up on those worries Our results are pretty much as I just said But interestingly if anything the situation has flipped Rather the other way around where what countries were concerned about early in the year Was that this liquidity was leading to capital flows into emerging market countries? That was causing their exchange rates to strengthen Causing them to lose competitiveness and threatening their growth but of course with the discussion and attention now around Whether or not the feds going to start to taper In essence diminish the amount of unconventional monetary policy. What we've seen is quite the opposite. We've seen Capital flowing out of emerging market countries their currencies weakening and The concern has really changed around now in this episode we too again. We are being asked to look at this process to assess the ways in which Markets are reacting to what the Fed is doing and saying and You know, that's something we we take into account as we give our advice to emerging market countries about How to respond and we'll so we'll be involved in in that process as well I don't know if you want to comment on that. I wanted to move on the agenda and talk about financial regulation just briefly, okay, so Mark so was up here earlier and and gave a good overview of the the extensive array of work through the financial stability board on Basel three capital requirements on Systemically important financial institutions of TC derivatives shadow banking whole range of issues What what do you see as the main sort of gaps in this area and what what is Russia concerned about? What does it want to do this year to advance the the the international financial regulatory agenda? Well From from what I know I'm gonna say from the very beginning that surface do not control financial Yes That There are lots of discussions On the extra territorial nature of American regulation and there are lots of concern with that in in G20 It includes OTC derivatives and some some other areas and has been concerned for Many countries to some extent in for Russia, but Maybe not not that much but that's a concern. So this is the issue which everybody discussing I think that We still need to come with a solution what to do with the rating agencies and price reporting Agency on the On the Commodities market but but the agenda is So I think that Most of us supposed to be achieved this year who has been achieved this one world on Basel three right there is a lot of discussions about whether Basel tree should be introduced now or Its introduction should be delayed are because of the considerations of the fact which it May have in growth and we have the same discussion in Russia for example Russian central bank was supposed to introduce Basel three in October But right now what we hear from from from the central bank is that it may after conversations with the banking Community it may Extended the plans I was somewhat and to introduce it in January as well as America has decided, right? But I think that it will introduce it Maybe not At the dates where it was supposed to do it at the very beginning, but sometimes later I'm conscious of time and I want to give the audience enough time and I have at least two other topic areas I want to talk to you so unless you're burning to say something about Finrag I'm going to ask a question about the third big area, which is Reform of the international financial architecture, which again Mark Sobel talked about in the last round Which you know initially was focused on Kind of reallocating shares and shares and the in the international financial institutions like the World Bank and IMF to Reflect the shift of the center of gravity in the world economy, especially towards large emerging countries and and Cassania I noticed that you've Characterized this whole area as trust and transparency Why and what does that mean and what do you again hope? Transparency is one of the priority of Russian presidency we actually Our approach this year was not to introduce any new topic or try not to introduce any new topic to the discussion because there are already Very many issues on the table and 20 is becoming non-manageable because of that But we introduced several principles through which we look on all the existing areas already and trust in transparency is One of them And as an example, I can mention what we do in the energy area For example, I did 20 Is to support the so-called Judy oil and Judy gas initiative already for a number of years and This two initiatives is collection on data on the physical wellings of production and sales of oil and gas And rush to organize the seminar with market participants And discussed with them how they use the data whether they use them at all What do they think are is? How how this data set can be improved in order to be more useful for market participants? And actually we learned quite a lot after the seminar are because we were told that information about financial transactions right now is as important as information on final kind of users and producers Because on the commodity markets all those intermediary players traders financial players They became so big that they can dramatically change the situation on on on the market and The existence needs to be taken into account in all models all should be rethought in order to Understand how markets are going to move and I think that this is one of the areas where we are now looking for practical solutions one of the solutions which was Offered to our said that the seminars is to improve the regulation of transparency of trades in order to change the situation This is just one of the example how we are used this principle of transparency In order to or improve and to come up with some practical solutions and David on the on the sort of the original sort of Purpose of this topic which was to again shift sort of the balance of power in a way I mean have the United States and other advanced economies hurt themselves and hurt the effectiveness of the IMF by Frankly dragging their feet on on some of these shifts and particularly the quota reform I think it's important if the world is going to call upon the IMF to go in and fight crisis and deal with the new problems that the world faces the IMF has to have legitimacy and It can't be viewed as the pawn of any one country or a group of countries The world is changing with the rapid growth of emerging market countries and those the changes in economic importance have to be reflected In our governance structure across the whole spectrum of dimensions in which you you might want to deal with that and so You know there have been changes in our governance structure and changes in our quota system and in our The way our executive board governance works, but there have not yet been enough we have reforms that have been decided in 2010 and Approved by many countries, but not yet approved by the United States of America. I think that it is quite clear that the IMF serves an important role in In Promoting global Financial stability and global growth. That's something that's good for all our members and in particular Good for the United States so it makes sense for the United States to stand behind the IMF as an institution and I know that there is legislation being considered right now to put forward the Quota increase and governance reforms that have been Proposed and and adopted by many countries, and I hope that will go through. I think it's very hard to see how our Role can continue as it needs to unless our governance is as modern as The model the global economy Excellent, Xenia I wanted to give you an opportunity before we go to the audience to just talk about the rest of the agenda You talk a little bit energy, but there's trade. There's Anti-corruption there's development. Do you want to quickly summarize sort of what Russia wants to get done in some of those areas? Okay, so on on trade. We are visible with We are trying to build consensus around extending the non-protectionist stance also We are a came up with the proposal of Establishing some principles of transparency of the RTAs which will clearly in line with the WTO Process, but still we think that it's important in this work which needs trust and transparency To have these principles of transparency of the original trade agreements then in development area this is An important here are because development was put on the agenda at the CEO the CEO summit and Most of the plan Nine pillar plan was supposed to be completed by the end of this year So in the development area, we are going through two exercises One of them is accountability exercise and We are Analyzing all what was done and we develop an area to fulfill this CEO plan and another one is preparation of The roll and he called it some kind of building blocks or ideas for for the new plan The group now has come up with some specific language Frankly for good, but the exact word they use right now. It's no plan. No framework. It's something else But anyway, so we are developing these new ideas, which will be fitted and the the new Plan on on development and let me say one one one last thing 20 will be five years this year so This means that this accountability exercise or Is becoming more and more important for the 20 and we are doing this here accountability in development and in in the framework and Some other groups are doing similar exercise. For example labor group is doing what we call Monitoring exercise collection of some best practices on the labor markets in different countries And this is your accountability will probably come one more important for the 20 or four years to come Okay, one final question to you. I can't resist you I'm guessing based on having had a little bit of experience in this myself that you've had a tough year And I wondered whether your view on whether the G20 should have a secretariat To help with this Has changed at all or evolved during that year and and and sort of part B What advice would you give the Australians going forward? Oh Wow Actually, my view has I have such a good team. I'm very proud of my team. So my My view I made it for yaks early. Yeah, don't get enough respect. So good. Good job. Yes Yes, they have a pretty good yaks. It's a lot of Lucas and she's very Experienced and she organized it work very well. So I think that there is a positive side and not having a continue a constant bureaucracy but having some domestic people to to work on that and my advice to the Australians is also Try to get some good people on the team and to prepare to 20. They actually Preparing very well, I think Australian we're studying everything what we are doing Almost from the very beginning and we have a very good contact with Australia and both on Political and practical issues. Good. We heard a little from Amanda earlier about the planning and I'm sure Australia will do a great job I destroy the process by the way of working with the next toast and the last toast I think is very important and and a useful part of the Management of this important institution, okay, I'm gonna open it up to questions I think we have maybe 15 or 20 minutes If you do have a question raise your hand with someone's already done wait for the microphone Identify yourself and please ask a question Gennio is Dinova from Eurasia group. My question is from Miss Udiva Can you talk a little bit more about whether you view? monetary easing is an effective solution for Specifically for Russia and also for other countries in the G20. Oh Well, you know as a member in Russia if you follow Russia's domestic Discussion, you know as a member of President administration, I'm trying to minimize my comments on the policy of the central bank We think that there are too many rumors about its Dependence on the Government and only president administration and it's actually way more independent when people perceive And this is why I would not comment on this question Okay, you're you're following a good tradition because Caroline Atkinson Mark Sobel and you have all declined to comment very smart David, do you want to say anything about that subject? Well, I do want to say a general point first To say that you can't answer your question as a general matter monetary policy and macro policy as a whole has to be Tailage of the circumstances of individual countries and there are some that have economic slack if you look at the periphery of Europe You have countries with 25 27 percent unemployment That's a very different situation than say in Russia unemployment is at an all-time low in Russia Russia faces the question Is growth low because demand is low demand from the rest of the world? Or is growth low because? It's really not profitable enough to invest and I think that we've just had our annual policy dialogue with Russia and not speaking about monetary policy per se, but about the posture of demand management, I think Russia's essentially At full employment meaning it's got the low unemployment rate. It has low slack in industry and It's going to be hard for Russia to boost growth very much by stimulating demand It might get a little for a while but it would be at the cost of pushing up inflation probably pushing down the currency and That would actually go in the wrong direction from the standpoint of creating an environment in which there could be more investment and more growth and Russia has Investment that's between 20 and 22 percent of GDP It aspires. It's been growing it in the neighborhood of 3 percent It aspires to grow in the neighborhood of 5 percent to do that it needs to have investment to GDP more in the neighborhood of 25 percent and Investment 25 percent of GDP to do that It really needs to put its focus principally on creating an environment in which there can be more business More investment and in time a more rapid growth rate I should have said David speaks with great authority on this part of the world He cut his policy teeth and the transitions of the former Soviet Union and Eastern Europe And so you should listen carefully to what he says about that subject. Okay next Center for study of the presidency. I'm a trade lawyer, so I asked this question with great humility But the idea peer review that David Lipton mentioned is very attractive I know if I understood her correctly miss you they ever said Well, this sort of happens at the expert level Even if that's true Perhaps we all agree instinctively That behind David's suggestion is the idea that if these 20 are to move the world economy Direction their needs at least some I Components of this kind of discipline that a peer review Might produce you've seen a lot of peer review with the IMF, so I just wonder what you would add To your suggestion that is both politically realistic and the elements of the review that you think might most Move in a common direction Let me note first that there was in some sense peer review and collective action in Washington at the first G20 and Then in 2009 both at the London summit and the Pittsburgh summit the leaders had good discussions They took in they made important commitments Those commitments were strong enough that they influenced market thinking about the trajectory of the global economy I think peer review has to start at the expert level, but it can't finish at the expert level there are certain obviously I mean I think Xenia is absolutely right that the leaders aren't going to sit around and talk about The details of this, but it needs to start at the expert's level be refined to Be discussed by finance ministers, and then when it when there's really a plan the leaders in part Political impetus by reviewing what their finance ministers have suggested and making the commitments So I see it as a three-tiered Process, I think it as you said we have peer review at the IMF. That's what we're all about So it's it's in a way natural that we would propose that this take place in other fora It's what we do with our members at our executive board I Think that the G20 is special because it's the only forum It's really the only forum where leaders From this wider group of countries countries representing about 85% of the GDP of the globe sit together and so if this could operate in the way I've described you and people Leaders that take commitments. I think those could be meaningful commitments and vis-a-vis the markets quite convincing Okay somebody over there Did you have a question? Gary climbing climbing international. I want to ask a general question not Russia specific but more generally about the emerging markets slow down and the bricks generally suffering GDP Downward revisions financial market corrections. How does that affect? some of the plans for let's say a bricks development bank or cross investment through The respective sovereign wealth funds are those ambitions still Priorities on the agenda and how do you reconcile that with the G20 process in this upcoming summit in in the future? Well, I guess that's for me. Well, this plan is still on the agenda. There is A lot of negotiations going on about specifics of these two instrument Because there are two ideas on the table one of them is bricks development banks And in another one is reserve pool So this is I think an equivalent to the bricks World Bank and bricks I'm right That's the share of responsibilities And now there is a discussion. I think all countries generally support this idea, but now they discuss How to how to structure these two? institutions and in more details Okay, I thought I saw it's hard with the lights to see but I thought I saw somebody in the back quadrant there Maybe not other questions. Okay, sir. Second. Yep Hi, I'm Don Lee with the LA Times This question from a suit I've I know there's a lot on the agenda for the G20, but could you just say what? Top two or three outcomes or agreements that the Russian presidency would like to see Wow I think that What we would like to see first of all isn't good discussion on the global economy for some practical things which we discussed about some some commitments by by by countries on different areas commitments on the future financial Strategies, but also given that we are going to have ministers of labor and ministers of finance meeting next week We also hope that they can they will be able to come up with some joint statement Which would reconcile the idea of supporting economic growth and employment on the one hand and budget stability on on the other then our On on trade I already said this is extension of the non-protectionist and support for Bali Transparency of RTAs etc. and the energy we are launching the Map website the global marine protection Website this is the site where exchange on information on regulation of our Energy exploration and transportation and the marine environment and coastal areas Will will take place And there are some other small initiatives in this area then In the our development. I already said we are coming up with a new plan There is one one idea which I would like to offer to this audience This is the idea which was suggested to us by C20 and we're still discussing it C20. This is civil 20 Yes, they suggested to rename the framework on blends and sustainable growth Into the framework for balance sustainable and inclusive growth And we're still discussing whether we should do this or not and that's a question for the audience actually The audience supports this idea or not and they mean to take on issues of inequality. It is of inequality. Yes Okay, interesting David There's something I meant to ask you before you were president the creation of the G20s work on fossil fuel subsidies And now the IMF has sort of taken a stand on that as well You want to sort of talk about your thinking about that and how the G20 has moved that forward and what more could be done Yeah at the IMF we did a paper in March of this year that quantified the impact of fossil fuel subsidies showing that they were very large large enough to be debilitating the budget balance and fiscal sustainability of a number of countries especially countries in the Middle East countries in Africa and that the lack of Taking action on externalities meaning energy pricing that doesn't take into account pollution congestion effects on climate change that these were very substantial in Advanced economies in the United States and other advanced economies our view is that that addressing energy subsidies would bring very substantial benefits across the globe and We would like we're working with our member countries to take action on energy subsidies It it is often a politically very sensitive subject whether you're talking about Subsidies in developing countries or the lack of treating the externalities in advanced economies and we understand that But we think it's important enough that this ought to move from discussion To action now the G20 took a commitment in Pittsburgh in 2009 to eliminate fossil fuel subsidies over the medium term I think the medium term has arrived and it's time to get on with it I predict that they won't and That will see more action in eliminating fossil fuel subsidies in developing countries where they really need to do it in order to Have enough resources To take care of their people to provide health education spending infrastructure spending I think we'll see more action there, but we certainly as an institution are Encouraging all countries to take action to plan and take action on reducing energy subsidies I mean just to link the last two responses It's important in talking about these issues and if we talk about inclusive growth and inequality To note that in the fossil fuels case David mentioned the political sensitivity But the reality is that a lot of these subsidies are going to middle-income people not to the poorest in Societies and so, you know, they're there. I think there's some some real issues there And one needs to look at this in a sort of fact-based way, but okay any other questions from the audience Welcome one or two final ones if they're burning questions again, I can't see everybody but No, all right. Well, we we ended up right on time. I think so that's perfect. Listen Let me thank both panelists for for joining us up here Go ahead And any particularly let me say on behalf of CSIS and our audience that it's really helpful to have people like you join us because I work on international economic issues, but most of my colleagues work on you know sort of traditional Foreign policy issues and it's hard sometimes to make the connection I think people see the global governance story as sort of relevant to foreign policy But I think even the sort of the hard economic issues that we've been talking about here are also so Intertwined and so importantly with with foreign policy questions that I think it's very important for for us to have this conversation So I really appreciate you're both taking time and coming all the way from Moscow to join us. So good luck Thank you for having us. Thank you