World Leaders to Tackle the Crisis

By Ioana Botea

Finance ministers from the G20 group of advanced and emerging economies will meet in London on April 2 to put the world economy on the path to recovery. The G20 has recognized that global challenges and the severity of the crisis call for urgent action, and the United Kingdom’s Chair has highlighted the need for a concentrated, coordinated international response. In order to restore confidence, participants to the summit will have to convene on a set of actions to stabilize the financial system and provide further macroeconomic support. A preliminary meeting is scheduled for March 14th to lay the groundwork for financial regulation, coordinated stimulus measures and bank rescues.

Successful dialogue between representatives of the 20 biggest economies will restate the importance of free trade, and dispel concerns about slipping into protectionism. Core issues such as climate change and international development are also on the agenda. British Prime Minister Gordon Brown summarized the goals of the summit, “Let us together renew our international economic cooperation. Help emerging markets rebuild the banks. Let us sign a world trade agreement to expand commerce. Let us work together, also, for low-carbon recovery.”

Chinese Foreign Minister Yang Jiechi has also expressed his hope for international cooperation. “The pressing task now is that all countries must work together to make the upcoming financial summit in London a success,” Mr. Jiechi declared last Saturday. He demanded more power for developing countries in the International Monetary Fund and World Bank. Members of the European Union support increased involvement of rising economic powers such as China, India and Brazil, in international organizations. Nevertheless, there is skepticism regarding their willingness to share power, since leaders of European states have been reluctant to renounce individual positions even to express a single European voice.

Created to tackle issues pertaining to the international financial system, the G20 has the responsibility to grapple the global crisis, and, now more than ever, to include the key emerging-market countries in the dialogue. The Chinese word for “crisis” is a combination of the characters “danger” and “opportunity”. The way in which political leaders respond to the current challenges is most probably going to determine the new hierarchy of power, and making allies in all corners of the world looks like the shrewdest strategy.