G20 – Unlocking the benefits of the world economy?

Now the permanent stewards of the world economy, will G20 keep the momentum going by improving the global economic regime that has been crafted over the years?

Will G20 leaders from developing countries manage to make their colleagues from the West realize that in order for the world economy to work properly, there need to be advantages for the poor as well?
Will G20 leaders from developing countries manage to make their colleagues from the West realize that in order for the world economy to work properly, there need to be advantages for the poor as well?

G20 has come a long way – the new kid on the block in 2004 is now the leader of the pack. It started as an alliance to bring democracy to world trade at the WTO talks in Cancun and has become the main permanent body in the world responsible for economic co-operation, meeting annually at the leaders level

Hopefully G20 will not forget the importance of world trade. Will G20 again, manage to have an impact on world trade? The WTO trade talks in Cancun, as you may remember, collapsed as a result of G20 demanding fairer trade. If so, what strategies will be deployed to negotiate a trade deal that benefits not only multinationals in the North but also the poor in the South? How will G20 make the world focus on making international trade rules fairer? What steps will be taken to decrease rich countries protectionist policies?

G20 is now the key player on the global scene which, at least in theory, enables it to provide the conditions for developing countries to embark on peace, prosperity and pluralism. We have come a long way from G8 to G20 and it will go further. The developing world, representing four-fifth of humanity, is now much better represented on the global scene.

Poverty does not cause terrorism – but it causes frustration and resentment that help foster the kind of atmosphere in which extremist groups can thrive. A much better, and cheaper, way of defeating extremists than war on terrorism would be to give developing countries the possibility to trade out of poverty.

Trade has been shown to be the indispensable means for poverty reduction and growth. There also seems to be a close correlation between a country engaging in open trade and ultimately embracing democracy. With 40 percent of humanity living on less than $2 a day and approximately a billion living under military style dictatorships often engaged in civil war and genocide, we should care a lot. The most striking example of the benefits of a trade oriented economy versus a closed, self-sufficient one is the two Koreas. At the end of the Korean war in 1952 they were both extremely poor. And how North and South Korea have developed since then under their different systems is well known.

What will G20 do to craft a fairer world trade order? Most Westerners would like a fair global economic system. If, for instance, the issue of access to life-saving Aids drugs were put to a vote, the overwhelming majority would not support the position of Western pharmaceutical companies. The power of special interests is high – but will it still be if trade moves up the political agenda in G20? And once that has happened, will people in the West agree to anything that asks the poorest people in the world – the billions living on less than $2 a day – to pay the price? Will G20 leaders from developing countries manage to make their colleagues from the West realize that in order for the world economy to work properly, there need to be advantages for the poor as well? That’s the big question isn’t it ,and my hope is that they will succeed so that we can finally unlock the benefits of the world economy for all.

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16 thoughts on “G20 – Unlocking the benefits of the world economy?

  1. Yes! Much needed…
    Humans need to stop over- breeding and a balance of freedom & support for each other might be attainable someday. For all the good religions try to do; their negative aspects seem to out weigh it. The internet has given the world great access to each other & truth. Follow your heart & the bigger picture. Nations and religions will wither away as people begin to really love each other.

  2. Agree Eric. But the shift from US/EU to India, China & Saudi/the Gulf states will happen anyway, it’s just a question of how long it takes. What could speed it up is public opinion in the West, the second superpower. If it was up to the public, and not the politicians trade would be much fairer. So can G20 move fair trade up the public opinion ladder in the West? Vested interests in the US/EU will not yield power, if they can avoid it. But sooner or later reality will force them. So the question is can G20 make it sooner?

  3. It is the opinion of this responder that poverty in nations is one thing, and terrorism in nations is quite another. What may appear to resemble poverty is not in all cases. Just because there are peoples that wish to live in the dust does not make them poor. While it is the responsibility of the West to lend a hand up to those desiring it, others seek a hand out. A country and its government must help itself before seeking the help of others. Nations set on violence for violences sake should be left out of any sort of world organization for peace, regardless of the lip service they contribute to the discussion. Nations that foster terrorism do not want democracy, they do not seek fainess, they abhore intervention in their cultures and despise the G8, G20 and all other forms of "outside intervention." Factionalized groups of obsessive compulsive fanatics, hell bent on destruction of anything resembling the US policy, US lead involvement and US democratic ideals will always win out over fairness in trade.

    Continued….

  4. What I feel needs to be sought out is a serious investment in initiatives that will save our planet, deminish our global thirst for oil, recede from the mid-east all together, and live and let live. Wind technology, environmental impact from industry must be reversed, transportation systems improved to shrink the carbon footprint, investment in those countries that will benefit the world through advancement, and desalination of the ocean waters to fuel organic crop production in the dryest parts of the planet. Change the environment and we will change the world.

    Prosperity will win out where it is welcome, and the inhabitants of the dust, sand and stone huts will have their own paradise. This may sound isolationist, but the US was once so, and should return to it once again. We wanted nothing to do with the wars in Europe of the last century, despite the pleading of those affected by the Nazi regime. It was not until our own soil was violated that we interceded. Then we rebuilt the world, and are the bad guy today.

    Continued….

  5. We can't win regardless of action or inaction; let us get out of the fight, release our captives, close our borders, triple out import taxes and tarrifs, remove ourselves from the decision making bodies and live in the comfort and peace within our own borders, leaving the entire remainder of the world to fend for itself. Isolation and inaction will save the lives of our citizens; the deaf ear will not bleed.

  6. A good blog post, Catarina.

    The issue of rich nations v poor ones and democracy is a complex one – suffice it to say that simply making it easy for the poorer nations to trade and hoping that this will lead to Western-style democracy almost always leads to disappointment. The history of so many poor nations is that where trade barriers are eased or removed the only real change is that the few at the top get a lot richer and use this to cement their hold on power. Most people see little or no benefit (and, yes, there are nations that are the exception).

    …Continued

  7. continued…

    Conversely, the Western democratic government approach to ever-higher taxation and profligate spending, all the while claiming they are spending this money for the good of their people is also a nonsensical approach.

    We need to rethink the approach to government completely – simplifying it, reducing spending and taxation, and "teaching people to fish" rather than simply handing out the proverbial fish.

    As Abraham Lincoln so eloquently said,
    “You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people's initiative and independence. You cannot help people permanently by doing for them what they could, and should, do for themselves.”

  8. Catarina: Great post; and Guy, that YOU for your perspective and insight…with which I agree.

    Fortunately, we now live in a new Knowledge Economy in which land. labor and capital is not the asset to be managed. Instead the new currency is knowledge – how it is created, exchanges and applied (sometimes commercialized) to create value.

    Knowledge is a multiplier asset – grows when it is shared…and yes now among the new G20 leadership.

    Our ENTOVATION Network – now across 67 countries – has outlined this new vision:

    "A new economic world order based upon knowledge, not technology, innovation, not solutions, value-systems, not value chains, customer success, not satisfaction, and international collaboration, not competition."

    Finally, we can let go of our outdated, sub-optimal ‘redistribution of wealth strategies”!

    For more: http://www.entovation.com/momentum/globalmn.htm

  9. The problem with this sort of thing for me is that although the intended purposes are nobel and even admirable, they end up being little more than tools for applying leverage and forcing compromises. Even in the face of global impacts that affect everyone, nations will deliberately corrupt and try to manipulate every single agreement in their favor, even when the benefits are obviously short term and detrimental to the overall health of the economic system. In a nutshell, I rarely expect much, and am rarely disappointed.

  10. Great post Catarina. I like your noble ideas of those in need being assisted. That said, I'm not sure that I believe terrorism is birthed from poverty. Bin Ladin is a good example. So I have to ask, where do corrupt leaders like him, North Korea's Kim Jong il, and tyrannical African leaders fit in to the equation?

    1. Keyuri Bin Laden and co. are examples of leaders of terrorism. They do it for power. However, their followers ofthen do so out of desparation. A good example is suicide bombers. They are so deprived of everything, in every sense, they feel they have nothing left to live for.

  11. That's a fair argument but perhaps overgeneralized. Not all suicide bombers are motivated by wealth. It is fair to say that many are influenced by cultural ideology and tyrants that bully and threaten. I think we're on the same page that the G20 has infuence but the issues are far more complex than just throwing money at the problem. Remember the saying. "if you give a man a fish, he will eat for a day, if you teach him how to fish, he will eat for a lifetime." I believe the solutions lie with removing corrupt leaders and installing noble ones who have the will and power to build a great country!

    1. Sorry Keyuri, you completely misunderstood. Suicide bombers, such as Palestinians, have nobody left in their family, their house has been bulldozed, they starve and so forth. They are not doing it for wealth.

      Anyway, back to G20 and world trade. A huge problem when it comes to fair trade is the behavior of vested interests mainly Europe and the United States.

      As a result of EU and US farmsubsidies alone many developing countries cannot produce agricultural products as cheaply as EU/US products dumped on them. Many developing countries, above all in African, hence have difficulties treading themselves out of poverty.

      So let's hope that G20 can find a way of at least reducing EU/US protectionism.

  12. I think the G20 is important for the reasons you outlined Catarina. It seems that most of the meetings are still talk fests. Unless some countries take the lead and even start with something that may seem small but actually produces results I fear that progress will not occur.

  13. I agree that the G20 is a step in the right direction. It is definitely a noble effort as Paul said. I agree with Paul, I don’t have high expectations of any results coming from it but it does provide a little hope that some countries are trying to work together.

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