Toronto:
World leaders on Monday endorsed a bold pledge by rich nations to slash budget deficits to half in three years despite concerns by some that cutting stimulus spending too quickly could stall the global recovery.
The deficit-cutting goal was outlined in a final statement from the top 20 industrial and developing nations at their weekend summit, as per its official release.
Canadian Prime Minister Stephen Harper, host of the G-20 summit, said it was critical that the countries "send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order." The deficit pledge would mean cutting the red ink in half within three years and getting total debt stabilized by 2016.
"Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016," according to the statement. The gross domestic product measures the value of all goods and services and is the broadest gauge of economic health.
The G-20 includes the world's major industrial countries, the United States, Japan, Germany, France, Britain, Canada, Italy and Russia plus major developing nations such as China, India, Brazil, and South Korea. (
Read: Consolidate global recovery: PM tells G-20)
Harper told the leaders that they needed to walk a "tightrope" between deficit spending this year, ensuring the fragile recovery continues, and then switching to deficit
reduction programmes.
The G-20 conference, which followed two days of discussions among the older G-8 members, attracted protesters unhappy with economic globalisation. The demonstrations turned violent on Saturday as protesters torched police cruisers, hurled bottles at police and smashed windows with baseball bats and hammers. Arrests topped 500 by Sunday.
The deficit targets that the G-20 countries adopted had been outlined by Harper in a letter he sent to fellow earlier leaders this month.
Harper's proposal stood in contrast to the priorities US President Barack Obama laid out in a competing letter.
Obama urged the G-20 countries to avoid the costly mistake made during the 1930s, when countries reduced government support too quickly and ended up prolonging the Great Depression. But in the discussions in Canada, it was clear that Obama's view was in the minority as country after country stressed the need to reduce deficits.