Friday, April 3, 2009

G20 Lays the Foundation for a Better World

At the G20's London Summit, the governments of the world's wealthiest nations showed their support for free markets and global trade as well as a willingness to assist those in the emerging world who have been hardest hit by this recession.

The CBC reports that G20 nations will inject $1 trillion into the world economy in an effort to curb the global financial crisis. Hedge funds will be made to submit to regulation, banks will be more transparent and trade financing will be made available over the next two year through several institutions, including the World Bank and the International Monetary Fund.

The package even has some teeth, it includes tough standards and sanctions for those who do not come into line. US President Barack Obama said, "we will identify jurisdictions that refuse to co-operate, including tax havens, and we will take action against them."

International financial reform includes regulating credit agencies to end conflicts of interest. Tax havens will have to disclose their banking details. An early warning mechanism will also be put in place to avert similar global calamities in the future. And an oversight group will monitor pay and bonuses to ensure they reflect actual performance.

Germany's Merkel, the leader of the largest European economy, praised the outcome of the G20 meeting, saying it was a "very, very good, almost historic compromise." Despite Canadian Prime Minister Stephen Harper's absence from the group photo, Canada played a prominent role. Harper told reporters in London the actions that world leaders have taken "really is unprecedented, co-ordinated, and fast action by the international community to an economic crisis, and frankly a speed and level of engagement that we've never seen in the past."

Canada is in good shape, "because of a regulatory system that enabled domestic banks to stave off many of the ills afflicting other institutions overseas," Harper said. Appropriately Canada was an integral part of a financial regulation report that was used as the model for the G20s regulatory efforts announced on Thursday.

Obama praised the communiqué agreed upon at the London G20 summit for tackling the economic crisis head-on. "This document will help put an end to the bubble and bust economy that prohibits sustained growth," he said. He painted the expenditure as an investment, rather than charitable aid. "These are all future markets for all economies," he said.

Harper said the agreement reached at the conclusion of the G20 summit in London was a "remarkable statement" that should give financial markets "an awful lot of confidence." Indeed international stock markets reacted well as summit leaders revealed the largest economic stimulus package the world as ever seen.

Rather than exacerbate the problem, as some had feared, world leaders managed to resist protectionism, fix the financial system and stimulate the global economy thereby contributing to a global recovery.

As Harper said, we have shared economic values regarding "the importance of globalized markets, free trade, … [and] also the importance of governments' responsibilities to act economically and socially when catastrophe hits."

Contrary to the tired polemics of protestors, this summit shows that governments can intercede and manage free markets to serve humanity. Brown said, "We want to encourage corporate responsibility in every part of the world." "Today the largest countries in the world have agreed to a global plan for recovery and reform," Brown said. "I think the new world order is emerging and with it the foundations of a new and progressive era of international co-operation."

As predicted by The Green Market last November, this crisis could auger the dawn of a new international system that balances free markets and government oversight. This crisis affords a great opportunity, not only to better manage our economies but to invest in a global Green New Deal and eventually create a Sustainable World Order.

Green is a powerful catalyst for consensus building. However even Obama's pledge to lead the New Energy Economy cannot arrest the threat to our environment without the participation of the rest of the world. That participation may be forthcoming as we may be on the cusp of a new era of international economic and environmental cooperation. With its extraordinary industrial growth, China's participation is key. We are seeing evidence of greater cooperation and as we know, China-US cooperation is vital to recovery and the environment.

The Chinese character for difficulty also means opportunity, appropriately China is planning to work closely with the US as it assumes its responsibilities alongside other nations in the global community. I am amongst those who dare to hope that the agreement achieved at the G20 in London, constitutes the beginning of a global commitment to greater economic, social and environmental responsibility.

G20 London Summit Leaders Statement
Declaration on Strengthening the Financial System
Declaration on Delivering Resources Through the International Financial Institutions


Mike Rulle said...

The G20 can indeed help the global economy. They can best do this through open trade borders; limiting internal subsidies for stagnant inefficient industries; encouraging growth policies through lower taxation; admit that evidence for global warming/climate change theories are weak to non existent at best and thus we should eliminate costly programs to reduce carbon emissions; to insist that any major spending initiatives undergo a public and published "cost-benefit" analysis and/return on investment analysis; to stop using terms like "regulation" in general terms and describe specifically what is meant; to distinguish between legal tax avoidance and illegal tax cheating; to recognize that the perfect is the enemy of the good and that Capitalism is not the enemy; to admit that future social promises in social security pensions and medical care are undeliverable.

I could continue, but unfortunately it is probably pointless. How much of this was covered by the G20 summit? Not much I am afraid.

Unknown said...

Consider the Connection to:
The Economic Pyramid
There are 2 sides to the Economic Pyramid. NEGATIVE(-) & POSITIVE (+)
(-)___or___(+) The choice is ours.
The earth is in the balance.
Where is the Economic Pyramid?
Search 4 me: