The G-20 Response To The Global Economic Crisis-Part I

This article is the first in a series of articles on the outcome of the Summit Meet of the G-20 Heads of States, held in London, on the 2nd of April, 2009.

Introduction:  The G-20, or the Group of Twenty, is a forum of Finance Ministers and Central Bank Governors of member countries, established in the year 1999, to bring together “systemically important industrialized and developing economies” to discuss key issues in the golbal economy.   It seeks to promote a frank and constructive discussion between the industrialized and emerging economies, on key issues related to the global economic stability.   The member countries of this group are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, the United Kingdom, and the United States of America.

Outcome of the 2nd April Meet:  In the wake of the economic downturn that has engulfed a good part of the world, especially the western part, the G-20 Heads of State met on the 2nd of April this year, to take stock of the situation, and to come up with a response to the debilitating effects of the recession underway.

The G-20 Heads of States put their heads together to come up with a joint action plan, that they believe, is the right answer to the problem of the present global economic crisis.   Though, at this point of time, it is not clear as to who would play what role in the action plan, and who would contribute how much to the global economic revival kitty. 

One of the most striking results to emerge from the meeting, was the recognition of  the need for joint and concerted efforts, on part of the entire global community, to fight the contagion of the economic crisis.   It reflects, in a way, the helplessness of the Western Governments, especially the United States, in fighting the global crisis on their own.

While the G-20 leaders have spoken of the need for inclusive growth, encompassing the poorest countries of the world, they have stuck to their pet theme of “open world economy based on market principles”, albeit, with effective regulation and strong global institutions. 

The G-20 leaders have emphasized on the point of shared growth and prosperity.   The need for spreading the goodies around!   The need for the developed world, the developing world, and the undeveloped world to grow and prosper together, which means removing the disparities in growth and development between different geographical areas of the world.   Also the prospects and problems of the future generations are sought to be addressed, to ensure fair and equitable growth and development.

In order to address the problems of the current global economic crisis, the G-20 pledged to take several steps to overcome the problems.   Among them are:

1)  To restore confidence in the world economy, as also in the individual national economies.   To ensure growth and to save and create jobs and to protect the livelihood of the people.

2)  To repair the financial system, including Banking, that has been knocked out of shape, and unable to effectively engage in the basic banking activity of lending.

3)  To strengthen the financial regulatory systems that have been largely discredited, for not performing their jobs well, and to restore public confidence in them.

4)  To fund and reform international financial institutions like the International Monetary Fund and the World Bank, such that they develop the capacity to perform their jobs more competently, and play a more effective role in preventing recurrence of the economic crisis, now being witnessed.

5)  To promote global trade and investment for a more equitable regime of growth and development, and to reject protectionism that can act as a barrier to trade and investment.

6)  To build a inclusive, green, and sustainable recovery.   This alludes to  a plan of recovery that encompasses all parts of the world, leaving no part neglected, and to promote technologies and systems that are non-abrasive to the environment.

By adhering to the above agenda for sustainable development,( which will be discussed in more detail future articles), the G-20 countries hope to come out of the current crisis in one piece, and to ensure that no such economic scares occur in future.

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