Prime Minister Julia Gillard has urged world leaders to look beyond the G20 meeting to improve their economies, amid rising unrest in countries struggling to come out of recession.
The prime minister told G20 leaders that unrest such as riots and rallies in England, France and Greece over government belt-tightening and the success of America’s Tea Party movement should not pressure governments into insular thinking such as trade protectionism.
In the Thursday night discussions on the challenges of the future, she said the pressure to wind back economic reform had only just begun and more difficult days lay ahead.
Many G20 members have begun major cutbacks in government spending as they experience low growth rates and high unemployment during the fallout from the global financial crisis.
Ms Gillard said moves to bring in blinkered economic policies were best resisted by nations working together and anyone breaking ranks would make it harder for everyone.
As the battle between the US and China continued over exchange rates, the prime minister said it was important the G20 did not fudge the issue and committed to clear timelines for countries to move towards more market-based exchange rates.
China has been accused of flooding markets such as the US with cheap goods, by manipulating the yuan.
But China argues cutting back on exports would risk pushing millions of people into poverty and creating instability.
However Australia doesn’t expect China to move quickly on this.
It is understood a form of words for the final G20 communique to be released on Friday afternoon is close to agreement.
It is expected the finance ministers meeting in France in February will discuss indicative guidelines to assess what each country needs to do to rebalance their trading performance.
After the International Monetary Fund runs its eye over each country’s books, it will report to a meeting of finance ministers in April.
Many G20 leaders believe that 2011 offers an excellent opportunity for action, given it is largely free of the pressures of national elections.
Ms Gillard briefly met with US President Barack Obama on Thursday night, but will hold her first formal talks with him in Yokohama on Saturday.