G20
There is so much action planned around G20, it makes
me wonder if there is way too much hope pinned on the
summit to fix the financial crisis, or even prevent a
deeper global recession. There is also that
expectation that our world leaders will find ways to
avoid future global economic breakdowns of this
magnitude.
I am curious to see how each country maneuvers around these expansive, but fiendishly complicated agendas. What is intriguing is this unrelenting faith in multi-lateral solutions, when in fact each country is stuck between the rock and a hard place and is struggling to get itself out of this mess, let alone teaming up and seeking consensus.
In theory, there isn’t a lot one can disagree with the agenda. There is talk about comprehensive reforms of multilateral institutions (IMF and World Bank) to enhance their legitimacy and reflect the changing economic weights in the world economy; about giving developing nations a greater voice in these institutions and improving information sharing; enhancing accountability in financial markets, resolving deficiencies in financial regulation, improving risk management practices… and so on. The question of “how” this is done, will be interesting to see.
It is all great to talk about cleansing banks of toxic assets, clamping down tax havens and regulating hedge funds, but the larger and more important questions seem to be conflict-ridden. On the one hand, there is the US pushing for bigger global fiscal stimulus, and then there are the European countries in favor of more regulations to the financial system, both sitting on the opposite ends of the spectrum. It makes me wonder what a financial stimulus “with” appropriate reform might look like and what kind of common agenda might be developed as a result of this summit.
Can some countries really afford to spend more or tax less? What kind of role does the IMF see for itself in the future? How is any international supervision possible over the power of major banks? How do governments avoid protectionism? Who will get out of the summit feeling "like a trillion bucks"? ;) Will this years agenda be less of a global solution for a global problem and more one focused on Europe alone, and saving it from itself?
I have a feeling the summit will turn into a fun discussion with lots of ideas and false promises, but there's little hope that real solutions will emerge from it.
I am curious to see how each country maneuvers around these expansive, but fiendishly complicated agendas. What is intriguing is this unrelenting faith in multi-lateral solutions, when in fact each country is stuck between the rock and a hard place and is struggling to get itself out of this mess, let alone teaming up and seeking consensus.
In theory, there isn’t a lot one can disagree with the agenda. There is talk about comprehensive reforms of multilateral institutions (IMF and World Bank) to enhance their legitimacy and reflect the changing economic weights in the world economy; about giving developing nations a greater voice in these institutions and improving information sharing; enhancing accountability in financial markets, resolving deficiencies in financial regulation, improving risk management practices… and so on. The question of “how” this is done, will be interesting to see.
It is all great to talk about cleansing banks of toxic assets, clamping down tax havens and regulating hedge funds, but the larger and more important questions seem to be conflict-ridden. On the one hand, there is the US pushing for bigger global fiscal stimulus, and then there are the European countries in favor of more regulations to the financial system, both sitting on the opposite ends of the spectrum. It makes me wonder what a financial stimulus “with” appropriate reform might look like and what kind of common agenda might be developed as a result of this summit.
Can some countries really afford to spend more or tax less? What kind of role does the IMF see for itself in the future? How is any international supervision possible over the power of major banks? How do governments avoid protectionism? Who will get out of the summit feeling "like a trillion bucks"? ;) Will this years agenda be less of a global solution for a global problem and more one focused on Europe alone, and saving it from itself?
I have a feeling the summit will turn into a fun discussion with lots of ideas and false promises, but there's little hope that real solutions will emerge from it.
