The recent G-20 meeting in London turned out better than expected. PM Gordon Brown did a great job reconciling the different national positions. President Obama's debut at an international meeting was well-received. But perhaps the most important development is the growing role China is playing in the global system.
This is a major step forward for the reform of global governance. However the road ahead is still long. Although the combined stimulus packages appear huge, we can't really get out of the recession by spending money. We must not forget that it was the profligacy of the past that created the bubble in the first place. Increasing global demand can ameliorate the pain only to an extent. There is also in this crisis a process of Schumpeterian creative destruction purging the world of excesses.
The reform of the IMF and the World Bank cannot be avoided. For the heads of these two organisations to be reserved for Europeans and Americans respectively is out of sync with the times. China's proposal for a global reserve currency was not directly addressed; instead the IMF's Special Drawing Rights was increased. This is a delicate subject for the future.
One helpful outcome of the Summit is the establishment of a monitoring mechanism against trade protectionism. Pressures to protect domestic producers and markets are hard to fend off particularly when elections are around the corner. If any country is offside, it is the duty of the WTO to blow the whistle.
It is good that ASEAN was represented at the London Summit by the ASEAN Chair presently held by Thailand.
George Yeo
35,000 disgruntled people turned up all over London to make their voices heard at Summit. Protestors emerged from four London Underground stations and converged at the Bank of England. Clashes between the police and the protesters intensified in the afternoon.
Posted by: TOC: To G20 - Put people first, not corporations | April 14, 2009 at 04:09 PM