The International Institute of Monetary Transformation   [ click to return to main site ]   subscribe
Apr
04

The G20 London Summit: Evaluation and Way Forward

Post By gaia1 in IMF/WorldBank

 

There is a great variety of opinions about the effectiveness of the Summit to “recover and reform” the international economic system. The linguistic use of these two terms and the frequency of the term restore in the official communiqué  indicate the prevailing view of restoring the earlier system with some built-in reform proposals to prevent the present economic meltdown. Given the imploding global economy with ever larger numbers of people being unemployed and underemployed, time for new thinking and action could have been expected. The NY Times editorial April 3 stated that “they fell short.” The question is to what extent did these leaders of twenty nations and assorted financial institutions fell short. The importance of answering that question determines what has to happen next.

 

The April 2 Summit has been portrayed as a second Bretton Woods. It is far from a BW Summit. For one, the first BW engaged for some 21 days in tough negotiations. Including the days for its preparation  this Summit cannot be called a second BW. Secondly, the basic BW1 institutions are still intact, though voice and representation issues are being discussed. The March 9 half day ECOSOC briefing of the IMF and IBRD show how little progress has been made. Perhaps, the next full day briefing on April 27 which would include the World Trade Organization as the third member of this “Unholy Trinity”, may put greater demands on the three institutions, but it will not be sufficient for the global imploding economy.

 

Rather than having a follow-up meeting of the G20 in the fall, it would be more productive, capitalizing on the Summit’s collaborative spirit, to call for a week-long period of working sessions as proposed by Walden Bello, using as the basic discussion document the March 19 report of the UN GA President's Commission on Monetary and Financial Crises, also called the Stiglitz commission after its chairman. At such sessions serious attention could also be devoted to Tierra International Monetary Union (TIMU) architecture, which presents a transformational challenge in the global monetary, financial, economic systems by instituting a carton based international reserve currency that could take care for the funding for development and mitigation and adjustment measures in dealing with the climate crisis. More information in the forthcoming third version of the Tierra Manifesto of 2009.