So where do we stand, now that the momentous G20 event has concluded?
Well, one thing is for sure. Some pundits will be “up in arms” over the lack of tangible progress resulting from the summit.
However, this pundit is particularly impressed with the visible contours of the new global financial system.
In this author’s opinion, the most important takeaway from the G20 summit is that we, as citizens of the world, now have evolving multi-lateral coordination occurring on a global level.
See here: http://www.number10.gov.uk/Page18914
“We face the greatest challenge to the world economy in modern times; a crisis which has deepened since we last met, which affects the lives of women, men, and children in every country, and which all countries must join together to resolve. A global crisis requires a global solution.”
On a practical level, the implicit consensus understated here, is not to be overlooked. We now officially live in an age where a global consensus has developed in the sphere of the global political economy.
On a practical level, to get 20 human beings to agree on any one-thing is, in my view, a major accomplishment. As an experiment in analogy, take your 20 best friends and try to get them all to agree on a restaurant, and a time to meet…
After you’ve completed this simple experiment, then take 46 sovereign nations (the G19 + EU), and get them all to agree on immediate coordinated financial and regulatory action.
“We start from the belief that prosperity is indivisible; that growth, to be sustained, has to be shared; and that our global plan for recovery must have at its heart the needs and jobs of hard-working families, not just in developed countries but in emerging markets and the poorest countries of the world too; and must reflect the interests, not just of today’s population, but of future generations too.”
“We believe that the only sure foundation for sustainable globalisation and rising prosperity for all is an open world economy based on market principles, effective regulation, and strong global institutions.”
Clearly, the march toward an increasingly integrated world lurches onward.
“In order for our financial institutions to help manage the crisis and prevent future crises we must strengthen their longer term relevance, effectiveness and legitimacy.”
“So alongside the significant increase in resources agreed today we are determined to reform and modernise the international financial institutions to ensure they can assist members and shareholders effectively in the new challenges they face.”
“We will reform their mandates, scope and governance to reflect changes in the world economy and the new challenges of globalisation, and that emerging and developing economies, including the poorest, must have greater voice and representation.”
And now the real take home:
“we commit to implementing the World Bank reforms agreed in October 2008. We look forward to further recommendations, at the next meetings, on voice and representation reforms on an accelerated timescale, to be agreed by the 2010 Spring Meetings;”
“we agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process; and”
“building on the current reviews of the IMF and World Bank we asked the Chairman, working with the G20 Finance Ministers, to consult widely in an inclusive process and report back to the next meeting with proposals for further reforms to improve the responsiveness and adaptability of the IFIs (International Financial Institutions).”
When we take into consideration that the G20 represents approximately 85% of global GDP, and provided that these reforms do not get bogged-down in partisan complexities, then we can look forward to a financial future that is, for better or worse, on the vanguard of a new era of co-operation and integration, the likes of which the world has never experienced before.