Asian stock markets rose again on Friday after the world leaders pledged more than $1 trillion to combat the global economic crisis. At the G20 meeting in London, the world powers also vowed new efforts to tighten financial regulations. The move has generated mixed opinions across Asia.
Leaders of five Asian countries attended the London G20 summit
Japan’s Prime Minister Taro Aso has welcomed it, saying it had sent a ‘robust’ message that the world's major economies want to stimulate growth.
Though there was no official reaction from China, the state media hailed it as a watershed event in securing the developing world a greater say in the global economic issues.
Greater role of developing countries
China and India and other developing countries were calling for reforms of the International Monetary Fund or IMF and other institutions. They insisted that the global institutions should match changing global economic and political realities.
Speaking at a discussion round by the popular 163.com website Xiang Songzha, a currency expert from Beijing was upbeat about the success of the G20 summit:
"We have now a plan for the reform of the International Monetary Fund or IMF. This is a big breakthrough," says Xiang.
"Premier Wen Jiabao had also said that we needed a plan, a road map. I think that China's voice has been heard. I think this is a huge success for China."
In India, the reaction to the G20 plan has been rather critical. Mohan Guruswamy, an economist from New Delhi explains:
"We don’t know who is going to get how much. If three quarters of this amount goes to address the toxic debt problems in the western countries then it will be of little use for countries like India."
Guruswamy says that the summit failed to address certain important issues such as the problems of the American economy.
"For us what is important is to know how the US is going to manage itself. These issues are important for other countries too. They were not discussed at the G20."
Boosting demand in the US
The financial crisis has badly affected the exports across the continent. With Japan's exports dropping to almost 50 percent in February compared to the same period last year, its economy is among the worst hit.
"These measures might help Japan most directly if they stimulate demand in the US and Europe, which are the main markets for Japanese goods," says Andrew Wood from the Financial Times in Hong Kong.
Experts also insist that the world should look for a long term solution to avert the crisis in future.
"A good part of the money should be given to the developing world as grants to rebuild them," says Guruswamy.
"The countries in Asia have huge problems of poverty, lack of infrastructure, physical, urban infrastructure. When you invest here, it will create jobs and it will create wealth and that wealth can then transform the world."
The Asian think tanks have however welcomed the consensus of the world leaders to avoid protectionism.They say restricting free trade under the present circumstances would further deepen the global crisis.