Was G20 summit a huge success?

09.APR.09

The G20 Summit of the world’s most economically powerful nations ended in London (actually, in Horsham, Sussex) last week, with much of the international media and the chief protagonists themselves hailing it as an unqualified success. The Summit was arranged in the light of the grave world economic crisis, which was on the brink of bringing even the hitherto strongest economies to their knees.{{more}} In times past, such crises would be fixed by the leaders of the leading capitalist nations, the so-called G7, later extending to Russia and dubbed the G8, simply meeting and agreeing on measures to be taken. But times are changing, and such is the shift in the balance of power and wealth in the world that they were forced to go beyond the “rich man’s club” and include powerful countries from the developing world. The claims of China, India, Saudi Arabia, Brazil, Mexico and South Africa could no longer be ignored.

At the end of the Summit, a Communique was issued which represented the broad areas of agreement reached and the measures to be taken. These include trebling the resources made available to the International Monetary Fund (IMF) and allowing it to sell off some of its gold, thereby making a total of US$1,100 billion ($1.1 trillion) to restore credit, growth and jobs in the world economy. They have also agreed on fiscal expansion to save and create millions of jobs, to raise world output by 4 per cent by the end of 2010 and accelerate transition to the green economy. These measures have apparently helped to boost confidence as evidenced by the positive reaction of the international markets afterwards.

It is interesting to note the language of the Communique itself. In its eight paragraphs, it speaks not only of “decisive, coordinated and comprehensive action” to boost demand and save jobs, but in language which reflects a whiff of desperation, the world’s leaders say that they are prepared to take “whatever action is necessary” until growth is restored. This hint of desperation is echoed later in the Communique when they “recognize the urgent need to pursue all options…to finance countercyclical spending…and social support.” Imagine the bosses of the international financial institutions calling for “countercyclical measures”? How PM Gonsalves and other leaders of developing countries, chided for precisely such measures, must feel themselves vindicated!

While there is no doubt that the fact that the G20 could come up with common actions to tackle the economic crisis must be welcomed, it would be a mistake to think that is the be-all and end-all of the matter. Questions arise as to whether they waited until the problems reached crisis proportions before acting and whether the emphasis on “restoring growth” is sufficient. What about addressing chronic underdevelopment, poverty and hunger in the world, the fate of the majority of humankind? Similarly the Communique only pays lip-service to a fundamental problem facing the world-the environment. Saving the planet from man-made destruction is as urgent an undertaking, more so in fact than saving banks or restoring credit. However, whilst, as one commentator notes, “the G20’s strategy for solving the financial and economic crisis…is detailed, innovative, fully costed and of vast scale and ambition, its plans for solving the environmental crisis are brief, vague and uncosted.” (Geoege Monibot, GUARDIAN, Uk). Monibot goes on to say: “No expense is spared in saving the banks. Every expense is spared in saving the biosphere”.

Finally, Caribbean nations, already cornered by unfavourable international trade rules and agreements, will be very worried by the Declaration of the G20 “To take actions against non-cooperative financial jurisdictions including tax-havens….The era of banking secrecy is over.”This is a battle which countries such like ours have been fighting in a bid to diversify our economies. Are we to pay for the sins of the profligate? This cannot be good news for the Caribbean.

In spite of this, the good news is that our risen Lord is still on His Throne. A blessed Easter to everyone.