G-20 fritters as crisis deepens – Financial crisis

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By Hossein Askari and Noureddine Krichene

Finance ministers and central bank governors from the Group of 20 (G-20) countries who met in London at the weekend to draft an agenda for the eagerly awaited April 2 group summit in the United Kingdom capital failed to address the nuts and bolts issues and misdiagnosed the reasons underlying the global economic and financial meltdown.

There is still time to improve and strengthen the agenda before April 2. If they fail, the April meeting will be piled on the trash heap of history, another meeting with no substantive results.

The leaders must address a number of pressing issues and set up an effective structure for addressing them. They cannot resolve the world's economic and financial woes in one day, but they can set up a sound foundation for addressing them and avoiding similar problems in the future.

Such an achievement, much more than soaring rhetoric, would give financial institutions, investors and consumers around the world badly needed confidence. The world needs assurance that there is light at the end of the tunnel. There are today a number of committees for addressing global economic and financial issues, most prominently: at the level of heads of state, the Group of Seven (and the Group of Eight to include Russia), and more recently the G-20; at the ministerial level, the G-20, The International Monetary and Financial Committee of the IMF (IMFC), The Development Committee (World Bank and IMF), the Organization for Economic Cooperation and Development (OECD); and at the level of international institutions, the annual meetings of the IMF and the World Bank.

Yet, with all of these forums and more, little economic coordination and cooperation of significance seems to ever emerge. The most important reason for failure is nationalism and the absence of commitment to international solutions for what "appear" to politicians as largely national problems requiring national solutions. Today, however, for the first time in recent memory, leaders admit the world faces a truly global crisis, one that may be trumped only by the Great Depression. To address these issues, world leaders must address a number of overriding issues and set up the infrastructure to follow up on what will, in all likelihood, be eloquent and potentially empty words.

First, the G-20 leaders should commit to the G-20 as the forum, possibly modified or expanded, to address global economic issues. The G-7 or G-8 forums are no longer realistic avenues as they exclude China, India, Brazil and a number of other growing economic powerhouses. If they make such a commitment to the G-20, then they should set up a practical mechanism to address its membership.

Asia Times Online :: Asian news and current affairs

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