G-20 summit: How can the outcome effect the world

There was a lot of hue and cry about G-20 summit in Washington on 15^th November, 2008. But it has proven to be a dud according to many experts. The meeting has lasted only for six hours. The experts have reportedly said that the outcome has nothing new. Wall street journal has also responded to the meeting as failure.

It has come out with a formal statement like, “We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems”

US President George W. Bush convened the G-20 meeting to tackle the financial crisis that is seen as the worst since the 1930s. It is to be noted that G20 countries, represent 85 percent of the world economy. India has been continually advocating expansively of redrawing the international financial system but the final communiqué amounted to a commitment to keep working on reforms.

Indian Premier Man Mohan Singh has told “Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims.”

The developed Nations clearly hijacked the agenda of the meeting. President Bush has managed his agenda to be endorsed.

The summit is ended up with pursuing G-7 agenda. Voice of G-11 and Russia seems to be ignored.

Even the European Union countries could not get anything out of it. They have been supporting some kind of protectionism but President Bush has announced that the world leaders are agreed to continue with the process of liberalization. No EU leaders could counter that. George Bush has also told that the World Bank and IMF will be modernized. He ignored the demand of G-11 countries of democratizing the institutions.The meeting was highly dominated by America.

President elect Obama has abstained from the meeting. Two of his advisors, of course, have been meeting with the world leaders privately.

It was expected that the emerging countries and the European Union would come out with a voice against increasing rate of dollar. But Japanese Prime Minister Taro Aso has endorsed his support to a dollar-centered currency system. He has, of course offered a $ 100 B loan to IMF. Dollar enjoys the status of Reserve Currency of the world and it help Dollar to keep its rate high. That will help dollar remain in its dominating position.

The Australian Prime Minister Kevin Rudd has admitted that the involvement of emerging economies like China and India in the G20 summit is an important step in solving the present economic crisis.

Angela Merkel, Chancellor, Germany expressed her satisfaction with the outcome of the summit. She is happy with the fact that emerging economies and the developed countries have promised to act together. According to her it is a new beginning in an extremely difficult situation.

Beijing welcomed the step to expand access for developing countries to financing through the IMF. China has not given any indication of extending its co-operation. It is worth mention that it has a reserve of US$2 trillion. A final statement from the leaders pledged responses on a number of fronts, with another meeting scheduled for April to flesh out policies.

G-20 members in Washington have agreed to work on an action plan. They are willing to restore global growth and prevent future financial upheaval. They have also been agreed to continually promote global trade deal that can be used as a safeguard against protectionism. The action plan will include tighter financial regulation and more transparency for markets. Fiscal support is to be increased to reverse immediate economic decline by boosting local demand.

The next meeting is likely to be scheduled for London, the place proposed by the French President.