Rudd heads for G20 in positive mode

Kevin Rudd is keeping a wary eye on the global economy. Photo / Greg Bowker

CANBERRA: Australian Prime Minister Kevin Rudd will meet world leaders in the United States next week as the only head of government with an economy not in recession.

World leaders from the Americas, Africa, Asia and Europe will gather in the industrial city of Pittsburgh to take stock a year after the global financial crisis erupted, triggered by the collapse of Lehman Brothers bank.

The leaders will also use the G20 and the United Nations General Assembly session in New York to work on stumbling blocks to global agreement at the UN climate change summit in Copenhagen in December.

Rudd will fly in to New York today for a seven-day visit where he will attend the United Nations before heading to Pittsburgh, Pennsylvania, on Thursday for the Group of 20 meeting of developed and developing nations.

Climate change groups are looking for progress on agreement on financing arrangements to assist developing nations to make the changes necessary to reduce greenhouse gas emissions.

Described as "a deal breaker", it will require nations to come up with funds to ensure the global effort to fight climate change works.

They are also hoping any G20 agreement on measures to aid economic recovery will include "green recovery" initiatives aimed at locking in commitments on renewable energy use and reduced deforestation.

US President Barack Obama will host the G20, the third since the global financial crisis tipped much of the world a year ago into the worst economic collapse in 75 years.

Leaders will consider the impact of the emergency measures introduced at the London G20 in April which included trillions of dollars of co-ordinated economic stimulus packages.

While the chairman of the US Federal Reserve, Ben Bernanke, said during the week he believed economic recovery was in sight, G20 leaders have voiced concerns about winding down stimulus spending too early.

Rudd and Treasurer Wayne Swan will take heart from an OECD report this week that said Australia's more than A$50 billion ($62 billion) in stimulus spending had prevented the loss of 200,000 jobs.

While the opposition is calling on Labor to reduce its stimulus spending, questioning its effect, Swan says without it Australia's economy would have contracted by 1.3 per cent.

Rudd told Parliament this week that the world "stood at the abyss" a year ago as credit flows froze and financial markets and banks around the world collapsed.

"But we cannot rest on our laurels because the Australian financial sector is in fact deeply integrated with global markets and therefore must be part of the global reform effort," Rudd said.

Next week's G20 is likely to take further decisions to reregulate financial and credit markets, reform the International Monetary Fund and the World Bank, and efforts to curtail excessive executive pay.

Leaders are also expected to discuss exit strategies from emergency stimulus policies.

Rudd is scheduled to address the UN general assembly and will also take part in the Clinton Global Initiative in New York.

Swan, Climate Change Minister Penny Wong and Foreign Minister Stephen Smith will also be in the US next week.

- AAP