G20 summit needs crisis-prevention mode
Updated: 2013-09-04 13:24
WASHINGTON - The Group of 20 summit, which has played a vital role in stabilizing the world economy since the onset of the global financial crisis, needs to transform from crisis-response mode to crisis-prevention mode, said a U.S. expert on Tuesday.
It's time to look back over the past five years of the G20 summit and ask what it has achieved and not achieved, said Fred Bergsten, senior fellow and director emeritus at the Washington-based Peterson Institute for International Economics.
Speaking at a press briefing, former U.S. Treasury official Bergsten said the summit has certainly played a "helpful role in the global recovery from the deep recession and threat of global depression that we faced back in 2008 and 2009" as world leaders from both advanced and emerging countries agreed to cooperate to stem the crisis and promote confidence.
"The question now is whether the G20 can transfer from being purely a crisis-response mechanism to a crisis-prevention mechanism," he said, explaining that countries have tried in the last year or two and made "marginal contributions," but have not yet really succeeded.
Bergsten also mentioned that this year's G20 summit came with the underlying changes in relative growth rate between developed countries and emerging economies, with developed countries gradually coming out of the woods, while pressures are mounting on developing countries.
Meanwhile, a lot of discussions will be focused on the proper conduct of economic policies in rich countries and emerging countries. It is not clear whether the incipient conflicts will become a blame game where one chastises the other's failure, or whether the countries will try to get together and strengthen cooperation.
The G20 leaders' summit is scheduled for September 5-6 in St. Petersburg, Russia. They will evaluate global economic growth and discuss ways to promote job creation and open trade.
"The economic context for this discussion is very different from last year," a senior White House official said in a recent background briefing. "It will be the first one since November 2010 that will not be dominated by urgent measures to resolve the financial crisis, initially in the United States and then in Europe."
G20 members represent about 80 percent of the global economy. It has been five years since the meeting of G20 leaders in Washington D.C. in November 2008, where they agreed to introduce coordinated action plans to stabilize the global economy. The G20 summit is still the premier forum for international economic issues.