G20 Crisis Summit

News Reviews (November 16)

World Leaders and Global Financial Crisis
WASHINGTON: World leaders at a 2-day financial crisis summit in Washington have agreed on an action plan to restore global growth and prevent future financial upheaval. They have designed many action plans to deal with the credit crunch worldwide and to reverse the global economic downturn.

"There is no logic to making any political and economic decisions without the G20 members, developing countries must be part of the solution to the global financial crisis," Lula, a participant of G20 summit said. Ones can conclude that, right now the emerging economies are playing an important role to go on a journey to achieve an even better place for all mankind.

The G20 (85% of global economy) issued a final statement after one of the biggest international economic gatherings in years. The statement pledged responses on a number of fronts, with another meeting scheduled for April, 2009 to flesh out policy.

"We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world`s financial systems," the G20 said Saturday (Nov. 15), after the crisis summit in Washington.

One of those plans is government spending, which is to be used to reverse immediate economic downturn. Meanwhile, a global trade deal is to be promoted to guard against protectionism, simply mean the world is right now a flat one and there is no border in trade worldwide. The third one is to achieve a better environment for financial economics. Financial regulation and world financial institutions are to be reformed.

"We should reform the international financial institutions. Again, these institution have been very important -- the World Bank, IMF -- but they were based on an economic order of 1944," Bush told a press conference. Meantime, Gordon Brown said "it is absolutely clear that we are trying to build new institutions for the future." Moreover, Taro Aso of Japan voiced support for a dollar-centered currency system, despite growing concern about the troubled global financial mechanism.

Further, the G20 called for fiscal stimulus measures, by the tax cuts or government spending, to take "rapid effect," and urged more interest rate cuts. The G20 though could bolster efforts in the U.S. Congress to push through a second economic stimulus plan (the first one is $700 billion bail-out plan), which is opposed by Bush and backed by his successor, Obama. Britain, right now is heading fast into recession, may unveil tax cuts this month.

However, there are some points that could not be achieved. World`s press was less than impressed with those outcome of the summit, expressing cynicism about what could come-by in the face of the global financial meltdown.

The final communique was also significant in what it did not included. There was no mention of the creation of a global financial market enforcer as demanded by some European and emerging economies that was opposed by the United States. Either, there was no reference to coordinated stimulus packages from government, an idea promoted by Britain.

Meanwhile, Obama instead sent former secretary of state Madeleine Albright and ex-Republican lawmaker Jim Leach to meet with members of visiting delegations on his behalf. He was criticized by public of being not so active, even though he is just a president-elect of the United States but his voice or suggestion will be listened, some analysts commented.

President Gorge W. Bush, who bid an emphatic "goodbye" at the end of his press conference, said he had told fellow leaders that America would enjoy a "seamless" transition to Obama`s new team.

(Sources: World leaders urge fast action on financial crisis, by David Lawder and Emmanuel Jarry 'Reuters', and World leaders agree action plan at crisis summit by Adam Plowright 'AFP', November 16, 2008)