March 27, 2009. Copyright 2009, Graphic News. All rights reserved

G20 summit seeks to put financial world to rights
By Joanna Griffin

LONDON, March 27, Graphic News:  For world leaders at the G20 summit in London on April 2, the stakes have never been higher: if they cannot unite on a common plan to counter the current crisis, the global economy risks an inevitable slide into a deeper, more devastating recession.

But their task goes beyond tackling the downturn. The world is looking to the G20 leaders to draft a new blueprint for its entire financial system to prevent a future crisis, including tighter regulation of banks and financial institutions. Many are calling for an overhaul of international organisations such the IMF to be part of the solution.    

Established in 1999, the G20 is a group of the world's most powerful countries that represent 85 percent of the world economy and 80 percent of world trade. As well as leading industrial powers such as the United States, Britain, France and Germany, the grouping includes emerging economic powers such as China, Brazil and India. Britain, which holds its rotating presidency, called the summit to discuss the crisis.

While clearly a country's wealth shapes its approach to the global slump -- it's easier for richer nations to spend their way out of a recession -- the key divisions clouding the summit are ideological. While Britain and the U.S. favour further fiscal stimulus, for example, Germany and France want global regulation. It was French President Nicolas Sarkozy who first called for a high-level meeting to "moralise capitalism".

Of course, any remedy needs the commitment of the U.S., the world's largest economy, but it is not clear how far new president Barack Obama backs international cooperation. Reports say Gordon Brown, Obama's G20 ally, is disappointed by suggestions that the U.S. leader is not seeking a "specific commitment" at the summit.

Obama's presence, like much else at this meeting, is unprecedented. Members are calling for changes to the IMF to give poorer countries a greater say, as well as to increase funding for the international body. The poorest of all do not have a place at the G20 table but their leaders and advocates will be assessing how any recovery plan will impact on them: the financial crisis has already led to a drastic reduction in aid.

Summit organisers and the police also face protests on an unprecedented scale as anarchists and other direct action groups plan to bring the City to a halt. Such is the hostility towards bankers that workers have been advised not to wear a suit and tie if they are travelling into the Square Mile. Meanwhile, environmentalists will aim to ensure that G20 leaders do not overlook the issue of climate change.   

The expectations, as well as the hurdles, are huge: the G20 leaders know that only a coordinated approach will prevent a retreat into self-interested protectionism that will have an impact well beyond their country's borders and the lifespan of their government. The rest of the world is watching.
/ENDS