Saturday, December 26, 2015

Global Cooperation: It's a Slow Process and Easier Talked About Than Done

We have noted here on the blog many times that while there are never ending global conferences, meetings, and summits, actual implementation of any kind of significant global coordination proves to be quite difficult. At best it's a very slow process as this article in the BRICSPOST points out. The article laments that now that the 2008 global financial crisis is past, actually getting anything done is hard to do at the global level. This is what we have pointed here. Absent a crisis, change takes place very slowly if at all in the global monetary system. Below are quotes from this BRICSPOST article.


G20 must act to prevent turning into a mere “talk shop” 

"President Xi Jinping announced in Turkey a few weeks ago that China, as the rotating chair, will host the G20 summit in Hangzhou in September 2016, with the theme of “promoting the innovative, dynamic, concerted and inclusive world economy”. It dovetails with G20’s lasting efforts in promoting global innovative economic growth, perfecting economic and financial governance, stimulating international trade and investment in order to have inclusive and concerted development.
As China assumes its chairmanship, the G20 arrives at a historic juncture of turning itself from a “fire brigade” into the global mechanism for addressing long-term and structural deficiencies in world economy. Greater expectations naturally have surfaced for China’s role in shepherding G20 and world economy in the right direction. What are the most important expectations and what should be done for China to meet them?
Why has China chosen that theme? Broadly speaking, there are three background reasons for the choice:
1. Though the world economy is more or less out of the financial crisis, the economic recovery is slow and unsatisfactory with no visible new driving forces.
2. Reforms in global governance lack progress and international rules-making on economy and trade is messy and confusing to say the least.
3. The G20 feels powerless or has its hands tied in coordinating global macro-economic policies."
. . . . . 
What are the expectations for China to have a successful summit and chairmanship for 2016?
"First, China is expected to lead G20 members in better and solid coordination of macro-economic and financial policies. The global community of economies with ever increasing interdependence has become a reality and no economy could even hope to go it alone. “We are in the same boat and need to row in the same direction”. This spirit was in full display in the first few years when all major economies were struggling to survive the financial crisis.
Unfortunately that spirit is no more these days now that the crisis is basically over. The G20 has to transform itself from a “fire brigade” for crisis management to a mechanism for policy coordination in finance, fiscal management and monetary measures. The regular consultations among G20 ministers of finance and governors of central banks should have “teeth” and be endowed with enforcement powers."
. . . . . 
"In a nutshell, China’s new developmental strategy of “innovative, coordinated, green, open and sharing” economic growth is similar to the theme for the G20 Hangzhou Summit, demonstrating that a new world economic growth strategy is gradually taking shape. Efforts will be focused on four elements: innovation, improvement upon global governance, promotion of international trade and investment as well as inclusive and concerted development.
Great expectations will produce great achievements if G20 members will continue to work hand in hand as they did at the very beginning of rolling back the financial crisis in 2008-2009."

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