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The ‘voracious’ US economy cannot do it alone any longer: Enter the G-20
By Kaufmann | April 2, 2009 No Comments »
An agreement of sorts is highly likely by the end of this G-20 Summit day here in London. Remember the law of large numbers: so many issues in the agenda makes it easy to find some areas of easier convergence. And commnuniques are not known to prioritize between what is centrally important and what is a sideshow. So don’t expect anything too brief.
But hopefully noteworthy and relevant will be some concrete progress in redressing increasing protectionist trends. And do expect concrete announcements on IMF resources and reforms. Yet, as per my entry of last night, far from sufficient progress (particularly given the dire global circumstances) will be made on macro-economic policies.
Consistent with the importance of redressing the major global macro-economic imbalances, last night President Obama delivered a blunt warning last night, saying that ’the “voracious” U.S. economy can no longer be the sole engine of global growth.’ Every European and G-20 leader want to have their photo op with Barack Obama, yet they (and particularly Germany, France and China) need to also deliver on their part…
The myriad of issues on the table is also an opportunity for scholars to comment and provide recommendation on many areas of expertise. The compendium just out from the Brookings Institution collects nine short articles (full disclosure, one is mine). Such recommendations may be relevant for the G-20 beyond today, since I expect that one of the good outcomes of this G-20 Summit will be the further institutionalization of this Group, and thus the important agenda becomes an ongoing process. Key pending policy issues then need to be further debated and acted upon.
The authors (all my colleagues) and areas of recommendations are:
Eswar Prasad proposes a set of policy responses, including macroeconomic stimulus, regulatory reform, global policy coordination and reform of the international financial architecture, that should receive immediate attention and action by G-20 leaders.
Paul Blustein discusses the threat of global economic protectionism and how leaders can realistically address the trend and tackle through next steps with the World Trade Organization.
Homi Kharas addresses the impact of the financial crisis on poor countries, and proposes that the focus of the G-20 should shift from calls for new money to speeding the flow of money already committed.
Colin Bradford and Johannes Linn discuss the nature of the G-20 summit and propose seven specific measures that the leaders should act on in order fight the current economic and financial crisis.
Mauricio Cárdenas makes the case for increasing funding to the regional development banks while mobilizing additional resources for the IMF in order to leverage immediate solutions.
Ernest Aryeetey and John Page address Africa’s economic landscape and how policymakers in Africa can respond to the crisis as well as how the international community can support Africa through aid and trade.
Lex Rieffel looks at Asia’s perspective on the summit meeting and the global financial crisis, noting the core issues surrounding agreement on increasing resources for the IMF.
Raj Desai examines the issue of political instability in the wake of the financial crisis and proposes a set of action items.
And I dicuss how governance failures contributed to the financial crisis, what can be learned from countries with good governance (many outside of the G-20), and how the G-20 can benefit from these lessons.
These articles can be found here.
Topics: Aid Effectiveness, Corruption, G-20, Public Financial Management, capture, financial crisis | | Read and Submit Comments