The upcoming G20 meeting where 85% of the World’s GDP will be present will take place in
In 1933 the meeting was organized by the League of Nations . The objectives of many Nations were to re-instate the currency link to the Gold Standard, which would secure that prices and wages would fall in parallel with a downturn, and the idea was that this would still enable foreign trade. The objective of some of the leaders – Mussolini, Hitler – was to demonstrate that nationalism and increased spending of re-armament would prove to be a way out of the crisis, while the country that was accused to put a torpedo to the
"I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment,"
This time around the agenda is almost the same - http://www.londonsummit.gov.uk/en/summit-aims/ - but with the added objective to re-start the World on a path towards sustainable growth.
The official UK website for the G20 meeting expresses the hope that the meeting will restore financial stability and avoid further recession. Not all the key players share the optimism –
At the same time tens of thousands protest against the G20 meeting . As people are being fired, the ‘end of capitalism’ is often heard in the crowds. What may be an even worse sign is some experts view that we may have seen the ‘end of globalisation’. See the views expressed by Harold James in this version of ‘What matetrs’. :
"The breakdown has created a political impasse. State rescues of entire banking systems are a necessary and inevitable response to the financial meltdown, but the consequence will be to try to limit banking to national units. Italian taxpayers will not want to see their money used to bail out remote eastern European debtors. The same political logic applies for fiscal stimulus packages, where voters will not want to see foreign producers in effect subsidized."
We may once more witness a situation where US will take the lead in what would this time become a new era of nationalism, disguised as regionalism. Already the rescue packages accepted by the
Others remain optimistic. See Recommendations – From Brookings - http://www.brookings.edu/reports/2009/0326_g20_summit.aspx or to quote from their list of recommendations also pointing to IMF as a potential key player: (See the full report from
“At least a tripling of resources for the IMF from currently $250 billion to $750 billion through a combination of a generalized quota increase, a sizeable SDR ($250 billion) allocation, a further authorization to borrow under the so-called “New Arrangements to Borrow” (NAB) or ad hoc borrowings from selected surplus countries— following the commitment already by
The fears in US and
Or, as it was put in this article: Public Debts at Armageddon height: http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5811186.ece
“With the debts of the nationalised and part-nationalised banks now on the public sector balance sheet, the ratio of public sector debt to GDP in the UK exceeds that of Italy and Japan. And it is set to grow much higher. On the basis of the planned levels of borrowing, it could exceed 65 per cent of GDP in 2010-11. And at that scale of indebtedness, the Armageddon scenario most feared by the Treasury - that there will be insufficient lenders to match the planned level of borrowing - begins to look a distinct possibility.”
The UK recession clearly deepens as UK Public deficit hits all time record – but this time around so does the recession in almost all other countries. This is what gives us the hope that the G20 meeting – even if it may not solve all problems – at least will prove to be the first step on a long journey towards more global commitment and cooperation – including a greater role for the 3rd World countries. The Financial Ministers met 2 weeks ago and this statement was part of their end comminqué for the preparatory G20 meeting:
"Emerging and developing economies, including the poorest, should have greater voice and representation, and the next review of IMF quotas should be concluded by January 2011,”