George Soros, the wizard speculator, has described the London G20 as “a make or break” moment for the world. And George Soros is not a man whose advice/prediction can be taken lightly. Not long after his advice/prediction, several hundred thousands of demonstrators started to demonstrate along the streets of London ahead of the G20 summit that begins on Thursday, 2nd April, 2009. The demonstrators who represent various interest groups are demanding, principally, that the leaders of the world should take action to: save or create jobs, alleviate poverty in all parts of the world and take steps to halt climate change. Before these two developments, trumpets had also sounded in America where the President of the world’s largest economy had called on his fellow leaders of the world to take decisive and comprehensive actions to tackle the global economic crisis. This call had received a robust and contradictory response from the Czechoslovakian President who happens to be the current rotating head of the European Union. Elsewhere, the British Prime Minister who hosts the G20 summit had been touring parts of the world canvassing for support for the world to act together at the coming London summit to tackle collectively what he called the “global problems” facing the entire world brought about by human failure that has manifested itself through failed banking and financial systems, failed financial regulations, failed macro and micro economic tools, failed businesses, rising joblessness and unemployment, collapsed public confidence, increasing public frustration and anger and the related, or unrelated, alarming climate change that is taking place all over the world.
When the leaders of the G20 meet on Thursday, the tasks before them shall be to reach a consensus on a broad framework for repairing the above problems collectively, using individual national tools that are appropriate to each country based on individual national circumstances and constraints. The biggest and most difficult problem that will face the leaders on Thursday, though, will not be any one of the actual problem-issues above that the group will be meeting to resolve, but how they will reach the consensus on how to resolve the problems. Reaching consensus, therefore, will be their biggest problem. The group is meeting as representatives of twenty governments that are accountable to twenty different countries, each of which has its own constitutional checks and balances that control governmental powers. Apart from the problem that will be dictated by the individual circumstances of twenty leaders, there also appears to have emerged four interest groupings within the larger group. There is the Europe minus Britain group that is led by Germany and France; there is America’s group that is co-championed by America and Britain; there is the Russian group that comprises the two non-capitalist members, Russia and China; and there is the fourth group that comprises of India, Brazil, Mexico, Indonesia and South Africa. While America and Britain will be trying to press for a decisive action including the injection of heavy physical stimulus, Germany and France will be pressing for a more restrained approach involving a step-by-step application of physical stimulus and more stringent financial and business regulations put in place. Russia and China, on the other hand, will be pressing for the control of the capitalist factors that led to the crisis and a creation of a new safer global foreign reserves currency, other than the American dollar; while the emerging economies of the third world, India, Brazil, Mexico, Indonesia and South Africa, will be more interested in getting increased financial support from the IMF to stimulate their own national economies. Despite all these, there will be one thing that all the twenty countries will agree on, and this one thing is the need for change, as stressed recently by the South Korean Finance Minister.
And truly change must come from the summit, if the world has to solve these global problems. Capitalism must change, to reflect the changing circumstances of modern societies that require the application of humanistic considerations to influence the way things are done. The banks and the banking system must change, to reflect the global nature of banking and financing. Multinational businesses and their modi operandi must change, to reflect the global nature of modern businesses. Financial regulations and regulators must change to reflect the fact that modern banking and financing, as well as modern production, consumption and distribution, have all become global in nature and, therefore, need to be regulated globally rather than nationally. Big and powerful business groupings and cartels such as OPEC must be controlled, to lessen the effect of their monopolistic tendencies on global economies. The way the stock markets work and speculations on stocks and major currencies must change, to prevent the harmful effects of the volatilities associated with them, usually engineered by inside dealers and opportunistic and selfish speculators. All cracks that create rooms for the ‘Madoffs’ and the ‘Stanfords’ to operate their crooked businesses must be filled-in and offshore islands must cease to be tax heavens, so as to prevent the creation and accumulation of wealth by foul means. The increasing numbers of failing businesses and unemployment must be halted and reversed to help put smiles on the faces of millions of people. On top of all these, there must be a change in the way we do things, so as to lessen the damage human activities are inflicting on the environment and thereby stop the on-going global climate change.
The tasks that face the leaders of the G20 summit on Thursday are colossal and efforts needed to effect the changes are huge and will require real commitment and statesmanship before success can be achieved. What has made the work more difficult than they should is the fact that some twenty statesmen and their teams of accompanying ministers and experts have national pressures on them, as politicians answerable to their electorates. They also represent twenty economies of varying levels and complexities. But the leaders also know that the world expects them to deliver, their individual circumstances notwithstanding. They must, therefore, put their differences aside and get on board together and find solutions for the problems that are tipping the world over. This is no time for pointing fingers at “those who created the problems”. This is time for finding solutions, not pointing blame fingers at others.
After that, the world must then find ways to prevent the recurrence of the current global mess. That is when the need to reform the United Nations must be considered seriously to enable the reformed world body to have a ’standing organ’ within it that will supervise the entire global economy over and above national governments and economic institutions, with the IMF and the World Bank working under that organ. Such an organ could be called ‘THE ECONOMIC COUNCIL’ and would directly report to the General Secretary of the world body. The Economic Council, staffed with the best economic brains in the world, would handle permanently and consistently the economic roles that the G20 has allocated unto itself; and would be performing these roles with no national pressures on its head. The world cannot continue to dwell in an illusion. The G20 is not effective for preventing future recurrence of the current mess, when it cannot speak and act with one voice. A herd without a shepherd is doomed to go astray. AFTER THE LONDON G20 SUMMIT, LET THE WORLD ACT AND REFORM THE UNO; AND LET THEM DO THAT SOONER THAN LATER!
Well, as for me and as usual, I talk my mind and invite you too to talk your mind. When things go wrong, as it has happened now, you and I bear the brunt. This means that we have to speak out and offer ideas that will help to mould policies where we are and globally. Why don’t you use this platform to speak your mind by commenting on the London G20 Summit? The use of libellous and directly offensive language is, however, not allowed at this website.
