G-20 Meeting Marks a 'Turning Point'

By Ioana Botea


The G-20 meeting in London on April 2 represented Barack Obama's debut on the international arena. The fact that the American president was surrounded by 19 other leaders - and not just a few, suggests hid diminished importance and leadership on the global scene. Obama welcomed the change in America's power relationship, indicating the end of a world where Roosevelt and Churchill could rewrite the international financial system over a glass of brandy. In the new global context where the U.S. can no longer take decisions unilaterally, he assumed the responsability "to lead America into recognizing that its interests, its fate, is tied yp with the larger world." Gordon Brown concuured that the summit represents the end of the Washington Consensus, and that, "This is the day the world came together to fight against the global recession. Our message today is clear and certain: we believe that global problems require global solutions."

Obama insisted that the summit marks a "turning point in our global economic recovery." He also restated its historic relevance given not only by the magnitude and urgency of the task, but also by the unprecedented imperative to work together. After applauding his counterparts' efforts in the "very productive" meeting, the American president concluded that, "today the world's leaders have responded with an unprecedented set of comprehensive and coordinated actions." In order to revive the global economy and restore confidence, the leaders of the world's largest economies committed $1.1 trillion in suplementary loans and guarantees to facilitate trade, repair financial systems and bail out troubled countries. In addition, Obama emphasized the importance of bridging the divide between advanced and developing economies. He warned that by neglecting poor countries, "not only are we depriving ourselves of potential opportunities for markets and economic growth, but ultimately that despair may turn to violence that turns on us." The G-20 leaders also agreed to triple the resources of the International Monetary Fund to $750 billion.

It has been argued that some parts of the world are "decoupling", with China expected to register a growth rate of 6-7 percent, India of 5-6 percent, and Brazil of 1-2 percent in 2009. However, it is extremely difficult to gauge the power shift of emerging markets while the global crisis is still unfolding. At the same time, Obama's privileged position at the G-20 summit indicates the persistent superiority of the United States on the global arena. In an interview with Fareed Zakaria, Financial Times chief economic commentator Martin Wolf points out that, "the U.S. is central for good and ill. A big financial crisis in the U.S. has turned out to be a big world crisis. What better demonstration can there be of the centrality of the U.S.?"