The last time the G-20 meet happened in Washington during Nov-2008, lot was expected but finally all we heard from the leaders were resolve to work together and commitment for a better monetary policy. Protectionism that could stifle trade was to be avoided but per the World Bank 17 of them have not followed the proposal and have tried to protect the economies.
So will the all talks and no decision funda be carried forward to one more round at London in April 2009? Or are we in for a different expectation around this time where economic crisis has increased to unimaginable proportions than what it was during the last meet that the monetary policies of most of the economies has been to sustain not growth but bare existence! So what are we in for this time?
While the US has been keen for the other economies to follow its pattern of pumping money to provide the economy stimulus program the EU is wary of the same while France and Germany have clearly stated that only a stringent financial regulatory regime will bring out the much needed stability. With so much of a disagreement between the world leaders at the outset the expectation meter straightaway is set very low with the French President even going to the extent of walking out if his demands for the strict regulatory norms of the rating agencies and hedge funds are not answered.
India and China too have an important role to play in this. When other economies are facing a slump these two economies have showed reselience marking the initial jitters as an impact of the global downturn. With the US which was more of a consumer market for a long time changing its shades to become a saving economy to reduce its debts, these economies have to change their trend to take a seizable position that the US economy occupied.
The main key areas that are to be discussed should be
- An economic stimulus that is uniform accross all the member nations.
- Stricter regulatory norms for the tax havens and the rating agencies.
- Make the funding bodies - World Bank and IMF more meaningful. What we have to remember is that though we are facing a crisis we sholudn't forget that many underdeveloped countries look upon us to provide them help. With the situation at hand worse even in the G-20 countries which account for 90% of world GDP, 80% of world trade and 2/3rd of population one need not be a genius to imagine how it will be in the underprevilaged ones.
- Finally atleast this time around protectionism needs to be avoided. With the liberalization of the markets and free-trade, the economies of many countries especially in the poverty stricken regions of Asia showing a remarkable development, much can be done to better their conditions if the bigger economies do not protect their trade. But these are easoer said than done, especially with the current economic situation.
With so many agendas to be met and a very small time span will the summit achieve anything at all? Though it surely will not be pandemonium it may not achieve anything notable in the end! The World is watching the leaders to see how they drive the economies at the time they are most needed to put up their best fight.
But one question still lingers me! With all the countries in debt who has lent these money and where has it gone???