World Economy: G-20 Summit in London Key to Reviving Economy

By: CaraTan   Date: 17 March 2009

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London, 17 Mar. The upcoming G-20 summit in London will be key to getting the global economy back on track. All participating nations agree this has to happen, but whether or not this will be done smoothly and with unified agendas is another story.

When White House economic adviser Lawrence Summers requested the other nation’s leaders must do more to spark economic demand, the chairman and prime minister of Luxembourg,, Jean-Claude Juncker, expressed a dislike for such requests.

The Summers comment could be argued as being valid, considering the amount of GPD the US has pledged – a whopping 4.8% from 2008-2010. But on the other hand, nobody likes to be told what to do, especially from a government that has been seen as being imperialistic and all-knowing – that largely got the world into this financial and economic mess in the first place.

The April 2 summit is meant to set plans in place among the 20 nations to stabilize financial markets, enable families and businesses to pull through the hard economic times, bring back trust and confidence in the financial systems, and revive the economy back to sustainable growth.

This will be the first G-20-wide reform of international finance rules and institutions since Great Depression of the 1930s. The one thing everybody is hoping for, though, is that this summit is more fruitful that the one of 1933 that lasted more than a month and largely ended in failure.

Like the 1933 summit, the London summit will seek to avoid protectionist measures. Protectionism is any country’s first reaction to economic shocks in an effort to shield its own producers and prevent cheaper and more competitive products and services from entering the market from overseas.

Protectionism, however, kills healthy competition and means consumers often are forced to pay more for inferior products, ultimately hurting the protectionist nation.

Not everybody is so optimistic that the summit will result in meaningful, solid, actionable results. “Countries will use this as a platform to express items of national interest or their disdain for the unguided actions of others,” commented EconomyWatch contributor Hector Sim. “We can only hope these leaders can put their own agendas aside and work towards a cohesive policy towards recovery. A lot is riding on this one meeting.”

The G-20 nations represent about 90% of GNP, 80% of the world’s trade and of global gross national product, and approximately two-thirds of the planet's population.

Read more about the G-20 here: G-20, Group of Twenty


Vladimir Gonzales, EconomyWatch.com

 

 


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