The New Nation - Internet Edition

Md. Masum Billah

G-20 nations comprising of United States, Germany, Japan, France, Italy, Britain, Canada, European Union, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Korea, South Africa and Turkey sat in an emergency summit like meeting in Washington National Building Museum when the world economy has been gripped by ' economic tsunami'. Spain and the Netherlands were also invited. This G-20 group was established in 1999 with the wealthy and emerging economic countries. Several important proposal were made and some decisions are underway. This 20- nation group represents eighty-five percent world economies. It issued a five page communiqué that pledged to take whatever further actions necessary to stabilize the financial system. The members vowed saying "We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world's financial system." The leaders tasked their finance ministers with drawing up by March 31 a list of financial institutions whose collapse would imperil global capitalism.

Leaders considered creating a 'college of supervisors' to oversee the world's biggest financial institutions. They also proposed that they would add a level of security to monitor excessive risk-taking by banks and other financial firms. College of supervisors would bring together international regulators to coordinate oversight of the world's 30 largest financial institutions. US, EU, Japan and major developing countries are now close to a deal to create an early warning system to detect weakness in global financial system before they reach epic proportion. . International Monetary Fund and Financial Stability Forum also said they would cooperate to provide an 'early warning system' in an effort to prevent new financial crisis. This can be termed as a great success of this summit.

US Congress approved an aid package worth 25 billion dollars in September to help the auto industry invest in new generation technology but no timetable was fixed for payments to be made. Since then problems have mounted on the global financial crisis that has savaged the economy with all three US majors- General Motors, Ford and Chrysler- clamoring for help in the same way as Washington has bailed out the US banks.

The 15 nations in the eurozone are gripped by recession, two quarters of a economic contraction. EU data revealed that eruozone economy shrunk 0 .2 percent in the second and third quarters. 27 -nation European Union as a whole contracted in the third quarter but avoided recession only because its economy had zero growth in the second.France narrowly avoided joining Germany and Britain in recession with 0.1 percent growth in the third quarter. Finance minister Christine Lagarade acknowledged that it had been an 'astonishing escape'. But even Hong Kong, the trading tiger, falls into recession. Its direct effect has hit the whole world economy.

More in line with the thinking of European leaders such as French president Nicolas Sarkozy and German Chancellor Angela Merkel, the G-20 members gave the March 31 deadline for concrete proposals on global regulation oversight and market transparency.

While Bush wants a limited tinkering with global financial rules and no new trade barriers, Sarkozy has declared that ' Laissze-faire capitalism is over' as banks crippled by toxic mortgage assets are forced to turn to government aid

Though president-elect Barack Obama did not present himself directly in the summit, on his behalf former secretary of state Madeline Albright and ex-Republican lawmaker Jim Leach held a flurry of contacts with G-20 delegations including with Britain, China, France, Italy and Japan. In the Democratic Party's weekly radio address Obama said the US economy was already in 'recession' and welcomed Bush's convening the summit because present global economic crisis requires a coordinated global response. And yet as we act in concert with other nations we must also act immediately with other nations here at home to address America's own economic crisis. Through Obama's support and appreciation the summit has achieved political importance as well. He also felt its necessity.

German Finance Minister Peer Steinbruck commented the importance of the summit in this way"The window of opportunities for financial reform has never been as wide open as at present.". Canadian Prime Minister Stephen Harper said, "It was unlikely that the major economies of the world would consent to external control of their regulatory system." French president Nicholas Sarkozy said, "We want to change the rules of the game in the financial world. UK Prime Minister Gordon Brown has taken the lead in urging China and other big countries with big cOst stockpiles to finance the International Monetary Fund so that it can make more emerging loans. Japan announced it is prepared to lend up to $ 100 billion to the IMF to help emerging economies hit by the financial crisis. Deputy governor of China Central Bank Yi Gang said, "we will actively participate in rescue activities for the international financial crisis." Probably in exchange China is likely to want to hold more power at the IMF which is dominated by US and European Union. Again, the present milk scandal of China in the global business arena may cast a light through their participation.

Bush outlined to improve bank risk management practices, improve accounting rules for securities and harmonising accounting laws. Japan, US and other leading nations have agreed so that emerging economies such as China have a greater voice which China wants to volunteer.

The outgoing American president George W. Bush whose initiative actually convened the summit hoped "The world leaders have clear aim to lay the foundation for reform that will help prevent a similar crisis in future." But EU Commission president Jose Manuel Barroso commented on the success of the summit "We cannot expect a miracle from the summit but it's a beginning." Really it's a good beginning.