George W. Bush welcomes Manmohan Singh to the White House. (PTI)

Washington, Nov. 15: Even as world leaders neared agreement here on a broad framework to prevent the global economy from going over an abyss, US President-elect Barack Obama, who is not attending the summit, has set the “real” agenda for the weekend gathering of heads of state and government.

Before some of the world leaders at the summit will have returned home from the two-day deliberations here, Obama and his victorious Democratic Party will begin altering the agenda that the lame-duck Bush administration has presented before the American people and later at the meeting of world leaders as a solution to the financial crisis in the US.

While Bush was addressing leaders from the Group of 20 (G-20) rich and emerging economies this morning, Obama warned in a radio address to his nation that “if (the US) Congress does not pass an immediate plan that gives the economy the boost it needs, I will make it my first order of business as President” on January 20, 2009.

On Monday, when the senate reconvenes for a lame-duck session, Democrats will craft legislation for a $25-billion assistance for the US automobile industry which provides livelihood for five million Americans.

For Obama and the Democrats, the most important element in any economic stimulus to counter the current crisis is guarantee of employment, while Bush is looking at a stimulus that will stabilise financial institutions, interest rates and credit.

Bush and the Republican Party, defeated in the November 4 elections, are opposed to any aid at this stage for the auto industry and want to restrict the bailout to financial institutions.

In his speech to the summit, Prime Minister Manmohan Singh appeared to endorse the Obama line rather than a stimulus package of the Bush kind for the global economy.

“Depressed conditions in the global economy are likely to produce a downturn in private investment in developing countries which will worsen recessionary trends. It is necessary to take steps to counter this development,” Singh told the summit today.

“Expanding investment in infrastructure by the public sector and also the private sector where possible is an ideal counter-cyclical device. It has the immediate effect of stimulating demand counter-cyclically and the longer-term effect of laying the conditions for an early return to faster growth. Investment in infrastructure is today perhaps the best signal for reviving private investment, including FDI, tomorrow,” the Prime Minister proposed to world leaders.

His close aide, the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, last night stressed the importance of employment generation in any economic stimulus even as he maintained that it was the sovereign decision of each country what kind of stimulus should be given to its economy.

Obama also made it clear that the two-day summit here was only a beginning and that much more is to be done after he takes office. “I am glad President Bush has initiated this process because our global economic crisis requires a co-ordinated global response.”

The leaders of G-20 have responded to the reality that long-term measures to deal with the global economy can only be initiated after a new US President takes office. They are expected to meet again in spring next year, possibly in London.

German Chancellor Angela Merkel told reporters here that the leaders would today agree on a plan “that includes almost 50 actions that have to be implemented by the end of March” before they gather for the next summit.

Among those “actions” is a new “college of supervisors” for financial regulation drawn from many nations.

Singh called for “a comprehensive review of the procedures of the International Monetary Fund (IMF), leading to recommendations on governance reform that would enable the Fund to perform the role of macro-economic policy co-ordination”.

He said the IMF “is the logical body to perform the task of multilateral surveillance of macro-economic imbalances and their relationship to financial stability.”

But he expressed doubts if it was now equal to that task. “Over the years, the Fund has become marginal to the task of policy analysis and consultations on macro-economic imbalances and related policies in the major countries. That task is now performed in other forums, though it is questionable whether it is being performed well.”