A downpour in Washington has a new meaning at the G20. On a gloomy, rainy afternoon, 20 heads of state including India, the UK, the US, France and all other G20 members, will meet to decide the future of the global economy. George Bush set the agenda in a speech to Wall Street saying free market capitalism will be the key message at the G20 over the weekend.
George Bush said the “aim should not be more government. It should be smarter government.” Bush believes the current crisis is "a decisive moment for the global economy" and that like any other system, capitalism is not perfect. Members of the G20 have varied expectations from this meet.
The optimists are looking for stronger regulation for the excesses in the system. The realists are certain a weekend meeting will not end the woes of the economy or even Wall Street for lack of an agreed-upon cause of this crisis. The pessimists are sure that with a lame duck President, though can still call the shots, any package will not be convincing or confident.
G20: Who's Saying What?
Germany: Chancellor Angela Merkel has called for far-reaching regulation.
USA: President Bush says G20 is the key to the global crisis.
UK: Prime Minister Gordon Brown has called for “urgent” international action to prevent the world economy.
India: Manmohan Singh says interests of developing nations and their development should be protected.
France: President Nicolas Sarkozy is keen to propose a 100-day deadline for crisis resolution.
From a financial standpoint, G20 is hoping that over-arching changes to the US Treasury’s bailout package will need much more money than just $750 billion and that now the core economy recession will assume centre stage for America, the world’s largest consuming economy.
India on its part is keen to ensure that America does not become in any way protectionist during a slowdown, especially so after the export numbers in India slumped by 15 per cent for the first time in several months. India’s Prime Minsiter Manmohan Singh is also carrying the message here on behalf of a large number of developing nations, to ensure that the various stages of growth and development are not hampered.
G20 countries are keen on actively pursuing solutions from the International Monetary Fund and the World Bank or any other bailout body, as the case may be. In that one respect, many call this G20 meet a historic one with the potential of becoming Bretton Woods II. However, there’s plenty of work to be done to bring the right kind of consensus on board. Bretton Woods I led to the culmination of the International Monetary Fund and this G20 certainly hopes that the new financial order will lead to a new institution that will extend the work of IMF and the World Bank in saving economies in a slump.
What makes this one meet a shade less exciting is the absence of President-elect Obama, who though invited by Bush, has chosen to stay away from any economic measure the current government wants to put its name to. Several G20 heads of state, sources say, were hoping to use this G20 meet to interact with Obama for a first time but are now disappointed.
There are, indeed, signs that the global economic system needs an overhaul, but will the G20 summit in Washington agree to anything that might to lead to a radical transformation? No one can yet say with certainty.