World Bank offers trade boost as OECD casts G20 shadow

The scale of the problem was underlined by the Organization for Economic Co-operation and Development (OECD),which said the economies of its 30 members would shrink by 4.3 per cent in 2009,shedding 25 million jobs this year and next.

Japan,the world’s second largest economy,announced plans for its third stimulus package and Japanese media predicted it would aim to create 60 trillion yen ($612 billion) worth of demand and 2 million jobs.

The OECD’s chief economist Klaus Schmidt-Hebbel said international stimulus measures taken so far should restore growth in 2010 — a forecast that echoed a line in a draft G20 communique obtained by Reuters on Monday.

The draft shows leaders want to agree to avoid currency moves and protectionist measures that would damage other economies. It also repeats existing promises to get economies back on track,but does not contain any specific details.

A report released by a G20 working group on restructuring the financial services industry said hedge funds should be more closely regulated and credit ratings agencies subject to tighter supervision.

British Prime Minister Gordon Brown,the summit host,said G20 leaders should aim to save or create 20 million jobs and must act together to increase the potential impact of their actions.

“Leaders meeting in London must supply the oxygen of confidence to today’s global economy and give people in all of our countries renewed hope for the future,” he said. Speaking to Reuters ahead of the summit,World Bank President Robert Zoellick played down the chances of a dethroning of the dollar as the world’s leading currency.

“I think the dollar will remain the principal reserve currency. The question will be whether you have complementary measures,” Zoellick said.

Zoellick also said the Bank expects world trade volumes to fall by 6 per cent this year,the largest decline in 80 years. While he offered few details about the program to boost trade,which is being considered by the World Bank board later on Tuesday,Zoellick said the drop in commerce was exacerbated by a shortfall in trade credit,which allows exporters and importers to settle accounts.