The group of 20's prescription to the world problems

The G-20 or the group of 20 is an association of 20 advanced and emerging countries who have agreed to come together to tackle the financial crisis. (Some trivia: the G20 only has 19 countries). The G20 was convened rather than the traditional G7 or the group of rich countries, both to give legitimacy to tackle the international problem at a broader level, given the increased importance of emerging countries. Besides, as the origin of the problem was in the first world, it might be a good idea to have a broader dialogue. Lastly, some of the emerging countries, particularly some with huge foreign reserves and surpluses and capacity for growth, could not possibly be ignored to tackle the ever deepening problem.

 At the end of the meeting of the heads of the government and finance ministers of the 19 countries plus EU, they came out with a statement based on common agreement towards solving the problems of the world economy. Here is a summary:

Page 1: Alan Greenspan made the mess

Page 2-end: Let's do the obvious in stimulating the economy and bring new regulations and promise to withhold erecting protectionist trade barriers - all without making any commitments on any of these.

 

Here is an even shorter summary:

Let's meet again.

India has of course within a few hours of the statement increased tariffs on steel and several other goods. So much for commitment. Of course almost every country will break all these nice promises, particularly the one promising to work towards implementing the Doha round successfully. All sound and fury signifying nothing.

 

Here is the text of the statement of G-20. 

See my main blog posting here.