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G20: Next Time, Perhaps…

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by Sanjay Suri

31 Mar 09 | IPS

If the draft declaration of the G20 meeting in London is anything to go by, the most specific outcome of this summit is that there will be another one later in the year.

Several governments have begun to lobby already to host the next G20, in apparent confidence that this one is not going to take care of the problems that the leaders are gathering to address, if not resolve.

As governments take their time, real dangers look so large that the problem may rapidly outpace any solution.

A 24-point draft declaration published by the Financial Times reveals little sign of any agreement with teeth. The Consensus declared by G20 leaders in Washington last November became notable for a breach of what was agreed – the G20 declared itself against protectionism, only for the World Bank to count 73 instances of protectionism by G20 members since then. And that is not the final tally.

This time the G20 is seeking to bring institutional surveillance to that resolve. The draft declaration notes that world trade is falling for the first time in 25 years. And in order to sustain the benefits of globalisation and open markets, “we reaffirm the commitment made in Washington not to raise new barriers to investment or to trade in goods and services, including within existing WTO limits, not to impose new trade restrictions, and not to create new subsidies to exports.”

The draft declaration says governments will “notify promptly governments and other relevant institutions of any measures which have the potential to cause direct or indirect trade distortions,” and that governments “will not retreat into financial protectionism.”

The leaders “call on the WTO, together with the IMF and other international bodies as appropriate, to report on our adherence to these undertakings on a quarterly basis.” In effect the WTO and the IMF are appointed policemen on duty to report aberrations from these ideas, if not to act against them.

Certainly, the draft declaration is subject to change; a tougher agreement may well emerge when heads of government meet. But the indications are, through weeks of high-level official meetings capped by a G20 finance ministers’ meeting in London last month, that the leaders will not agree very much that is more binding than this.

There is nothing here to say what the IMF might actually do once it identifies instances of protectionism. The World Bank’s 73 have made little difference to the countries that produced them. For just about every country, the choice is clear between conference room embarrassment over protectionist measures and an answerability to people and enterprises in severe need of some form of protection.

The language again is sufficiently vague on the matter of regulation to mean almost nothing at all. The draft speaks of “effective regulation” and “a stronger supervisory and regulatory framework for the future”, but what that really means is open to intense negotiations when the leaders meet Thursday. French President Nicholas Sarkozy has called for a global regulatory system, a proposal rejected outright by the U.S. and by Britain. And these two countries have not quite worked out just who will regulate banks and financial houses like the hedge funds, and with what powers of intervention.

Here again, as with protection, the draft speaks of “regulation or oversight”. Critical to such a body will be at least powers of access; and there is no agreement in sight of any decision by banks to open their books to such inspection. And the record so far is not promising; in the face of the biggest banking crisis ever, and with trillions of dollars of taxpayer money paid into keeping banks going, there is no public disclosure just how bankrupt the banks may be, of how deep the pit is.

One provision in the draft agreement provides that “each of us commits to candid, even-handed and independent IMF surveillance of our economies and financial sectors, of the impact of our policies on others, and of risks facing the global economy.” This provision seems certainly up for debate; for a start it will have to be a new look International Monetary Fund, with greater clout for developing countries, and perhaps more money from them as well.

The arrangement by which the IMF is run by a European and the World Bank by a U.S. citizen is certain to be dropped. But then too, there is little promise in sight that any IMF observations – and they could be little more than that as provisions now stand – could do anything to change policies that leaders may determine to be in national interest.

Heads of government can of course initiate and agree changes to the draft that may give it more punch. But the draft as it stands leaves leaders plenty of room for taking national decisions independent of international commitments. And few seem in a hurry to abandon that kind of right to choose. So, to the next G20, then.

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Written by Editors

31 March 2009 at 11:57 pm

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  1. G20 Summit in London;Prayers & Good Wishes, 2 April 2009; God Bless

    Prayers are amazing. This precious gift is always with us

    Let us all pray for the G20 Summit in London where the Leaders of the World accompanied along with Strategic Decision Makers meet

    That they form a coalition; a mutual understanding based upon a Vision for the Global Economy

    A Vision that is based upon Values Based Principles and grows from strength to strength to overcome the challenges being faced globally with Wisdom

    Seek the grace of God to fill the Universe with a Vision of Happiness & Wisdom always
    When the World prays together; the wishes seek to manifest

    When the World is Happy, we are all Happy. In one another’s Happiness is our true Happiness; Development; Prosperity & Progress

    Let us gratefully acknowledge; appreciate and express our sincere thanks to God for everything always;

    Protocol; Etiquette, Be Appreciative; Be Grateful; Be Meaningful; Be Purposeful; Be Respectful and Be Responsible always Please

    Express thanks to God time and again always, For the Health and Wellness,
    For the Wonderful Families; Friends, For the Inspiration & Wisdom, For Fulfilling our Needs, For Showing us the way, For the Courage, For the Natural Resources,
    For always being near us, For the lamp of peace; love; faith and hope that glows in all our hearts, For God’s graceful and loving presence, For God’s Blessings,
    For Guidance through the challenges, For the Trust in us, For knowing what is best for us always, For permitting the Love and Light of God to shine through our lives

    Prayer; May One and All be Appreciative; Grateful and Thankful

    Happiness

    May Happiness be showered on One and All; May One and All be Healthy;

    May One and All be Loved & Respected; May One and All have Well-being

    May One and All realize that their Happiness is linked to others Happiness;

    May One and All recognize that when the World is Happy, they are Happier;

    May One and All discover the true meaning of Life is that Life is Precious
    May One and All be Resourceful & Talented; May One and All Achieve and Excel;
    May One and All be Considerate; Creative; Meaningful; Purposeful and Responsible;
    May One and All Love Nature; The Environment & Humanity;

    May One and All Respect One Another; May One and All Inspire One Another;

    May One and All realize that they each have a very meaningful and special purpose in Life;

    May One and All believe that they are the precious Gems of this Universe;

    May One and All realize that Life is Beautiful; Precious, Meaningful and Purposeful;

    May One and All be a Symbol of God’s Loving Love and Light; Radiating Joy for others;

    May One and All be Blessed with Happiness, Prosperity; Progress& Wisdom always

    Thank you for your prayers for the World; they are immensely appreciated and reciprocated with utmost appreciation and gratitude

    Trust in God and Faith in Ourselves, May God Bless You and Your Families with a Vision of Happiness and Wisdom always

    When the World is Happy, We are all Happy; In one another’s Happiness is our true Prosperity, Development and Greatest Happiness

    May Universal Appreciation; Happiness; Consideration; Compassion; Respect; Peace; Love; Cooperation; Inspiration; Gratitude; Economic Development, Stability; Prosperity, Progress & Wisdom prevail always

    Love & Light;

    God Bless,

    Vashi

    ©2009 Vashi Ram Chandi

    Vashi Ram Chandi

    1 April 2009 at 4:56 am


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