THE G20 SUMMIT: OUR WORLD IN METAMORPHOSIS
ARTICLE BY ROSALIENE BACCHUS
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The aftershocks shaking nations across the globe, following the collapse of the US financial system, have
undermined our interdependent world economy. The magnitude of our present deteriorating world economy
demands unified global solutions and reforms, and urgent concerted action. For the first time, outgoing US
President George W. Bush convened the leaders of the Group of Twenty
(see Footnote 1),  representing 80
percent of world trade, for a global economic summit in Washington DC on November 15, 2008.

In their
Declaration of the Summit on Financial Markets and the World Economy (see Footnote 2),  G20 leaders
agreed “to work together to restore global growth and achieve needed reforms in the world’s financial
systems.”  Defining the root causes of the current crisis, the Group noted actions already taken by individual
governments and identified additional actions to be taken.

The need for financial markets reform was high on the Group’s agenda. While determining that regulation is
“first and foremost the responsibility of national regulators…,” they called for greater cooperation among
financial market regulators worldwide. They committed to implementing five agreed principles for reform:
strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial
markets, reinforcing international cooperation, and reforming international financial institutions. Finance
Ministers assumed responsibility for executing the Action Plan, with a timeline for initiating the reform process
and formulating additional expert recommendations. By April 30, 2009 the Group will gather again to review
the action taken.

The proposed inclusion of the emerging economies – such as Brazil, China, India, and Russia – within the
Financial Stability Forum
(see Footnote 3) is noteworthy. Finance Ministers also have the task of reviewing and
adapting the International Monetary Fund (IMF), the World Bank Group and other multilateral development
banks to meet today’s needs. Brazil’s President Luiz Inacio Lula da Silva has called for “bigger participation of
developing economies” in these institutions.

During these times of financial uncertainty, Group leaders recognized the need to avoid over-regulation and
protectionism. As a consequence, they agreed not to impose new barriers or restrictions to investment or
trade in goods and services over the next 12 months. There was also a renewed commitment to conclude
negotiations of the stalled WTO Doha Development Agenda.

Not all demands were met at the G20 Summit. There was no redrawing of the global financial system, no
creation of a global financial market enforcer or reference to coordinated government stimulus packages.
Nevertheless, as World Bank Group President Robert B. Zoellick said in his statement on the Summit: “It is a
positive step forward that leaders of developed economies are now meeting together with leaders from the
rising economic powers. But the poorest developing countries must not be left out in the cold. We will not
solve this crisis, or put in place sustainable long-term solutions by accepting a two-tier world.” The next four
months will demonstrate the capacity of our world leaders to work together to achieve real change for the
betterment of all the world’s peoples.


Footnotes
  1. Known as the G20: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico,
    Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the USA, and the European Union. Learn more
    at www.g20.org/G20/.
  2. Copy of the Declaration can be viewed on The White House website at www.whitehouse.gov/news/releases/2008/11/
    20081115-1.html.
  3. For more information about the FSF and its members, go to www.fsforum.org/index.htm.


Article published in the Guyana Journal, Guyana Journal Publication, Inc., New York, USA, December 2008, p.10.
Reprinted with permission.
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