There is arguably no immediate remedy for fixing the sagging world economy. Yet the forthcoming London G20 summit has drawn worldwide attention, as it aims to make a mark in putting the global economy on the road to recovery.
So will the London event live up to expectations?
Since late last year, the U.S. financial crisis has spilled over into all economic sectors, and is taking its toll on a global scale. The world economy has suffered an unprecedented setback, and is expected by the International Monetary Fund (IMF) to shrink for the first time in 60 years in 2009 by up to 2 percent.
The collapse of businesses, the loss of jobs and falling confidence all paint a bleak picture of what is believed to be the worst recession since the 1930s Great Depression.
Up to US$2 trillion involved in the global fiscal stimulus measures have yet to yield any encouraging results.
The consequent growing government deficits have become a topic of concern among the British and U.S. public. Many people are worried that their governments have created massive debts for future generations of taxpayers.
The G20 countries have been urged by the IMF to invest the equivalent of 2 percent of their GDP into stimulus efforts during 2009 and 2010. But the proposals have failed to draw unanimous support from many of the G20 members.
Why London Summit matters
The London summit is the second major gathering of G20 states, bringing together leaders of the countries for discussion on the economic crisis. Last November's Washington summit laid the groundwork for the London meeting.
The G20 countries, which represent 85 percent of the world's GDP, will make decisions, which will matter to each country as to how they will engage in a globally coordinated action to end the meltdown.
The knock-on effects of the economic crisis have highlighted the increased interconnectivity of countries in a globalized world. This also underlines the need to overhaul the international financial systems with the developing world having a bigger say in international financial institutions.
However, this would not be easily achieved, as developed countries, especially the U.S., are unwilling to give up their dominance of global financial institutions and markets.
China's recent proposal for creating a global currency to replace the dollar has been dismissed as "unnecessary," with many leaders, including Barack Obama, Gordon Brown and Kevin Rudd, arguing that the U.S. dollar remains strong. However, the IMF has forecast that the U.S. will see a 2.6 percent drop in GDP in 2009.
For the developed countries, the G20 offers an opportunity to show their courage, willingness and capacity to take on the challenge of fixing the world economy, with an emphasis on wider global issues and taking into account aspects affecting poorer countries.
The European Union (EU) nations have already agreed to develop principles for regulating the banking sector and to make US$100 billion in loans available to the IMF to support the developing world.
Cynicism toward G20
To rally support for his rescue initiatives, British Prime Minister Gordon Brown has been traveling throughout Europe and to the American continent, meeting with bankers and finance ministers, in efforts to make the April meeting a success.
His efforts have been greeted with little enthusiasm at home and many have expressed the view that the G20 is just a waste of time.
"I don't really care about the meeting because it is meaningless. There is more rhetoric than action," a driving instructor, Julia Freeman, told Xinhua.
"Unfortunately, we have a weak government, which is only interested in getting whatever they can from the country instead of serving the country," said a pensioner who identified herself only as Alice. "I do not believe the G20 will bring any change to this country," she added.
Recent disputes between Brown and Bank of England Governor Mervyn King over whether Britain should have a new fiscal stimulus plan have also worried the British public. Some people have even raised the question as to who is running Britain: the Prime Minister or the Governor?
In addition, Britain's involvement in Iraqi War has been highlighted as one of the reasons behind the country's increased financial burdens.
For environmentalists, the one-day summit, which will cost in excess of 19 million pounds (US$28 million), is a waste of resources. They also assert that the summit is environmentally unfriendly and will not achieve anything tangible.
"In this hi-tech world, they could talk by teleconference through the Internet, so do they really need to gather to fix a solution? They should consider their carbon footprints," says environmentalist Amy Scott.
Rising unemployment and mounting financial difficulties, along with unethical gains by bankers, have sparked a wave of public anger, some of which has turned into violence.
An unprecedented week of demonstrations began during the weekend before the G20. On Saturday, protesters marched through London demanding action to tackle unemployment. Many also called for efforts to curb climate change and fringe issues.
But the authorities are preparing for potentially violent protests when anti-capitalist demonstrators descend on London's financial center as the G20 begins.
The cost of policing for these protests is estimated to exceed 7.2 million pounds (around US$11 million).
"The success of the summit is whether we can make the recessions hallower and shorter than it would otherwise have been," Gordon Brown's G20 Special Envoy, Lord Malloch-Brown, said during a web chat with the public on Friday.
"The early test of the results will be whether we see a stop to the drift towards protectionism and whether we see banks lending again," he added.
Protectionism will end the benefits of the globalization, that is mutually reinforcing the cycle of job creation and falling product prices, he said.
However, the core achievement of this meeting must be the recovery of confidence, not just for investors but for all consumers and voters, said Lord Malloch-Brown, who is also British Minister for Africa, Asia and the UN.
"The G20 leaders have to convince a global constituency that they are in charge and that they know what they are doing. If they don't, they will obviously add to a sense of drift and crisis," he warned.
"There is no national recovery strategy, ultimately just a global one that our national actions need to support," he said, adding that "If we start to think and act nationally, and forget the global, we're not going to get out of this."
Sustainable consumption is the remedy
Though the G20 is not specifically intended to seek climate change solutions, it is expected to give a push to attendees toward making a commitment to a post-2012 global climate change framework, something that is to be agreed in Copenhagen at the end of this year.
Bringing about recovery of the global economy, whilst maintaining sustainability, remains high on the G20 agenda. The G20 countries, especially the richer ones, have been urged to take a lead in sustainable consumption, which is regarded as a key force for fighting climate change.
The real cause of climate change is not cities themselves but high-consumption lifestyles, says a study released recently by the International Institute for Environment and Development states.
Many cities have surprisingly low per capita emissions, but what is clear is that most emissions come from the world's wealthier nations, according to Dr David Dodman, the author of the study.
"High-income countries need to take the lead in showing how a high quality of life for all individuals can be achieved without placing an unsustainable load on environmental systems," Dodman said during an interview with Xinhua.
"Now we are fighting the fire, but as the crisis passes the debate will shift to environmental and social concerns and indeed a whole discussion of how we can live in better balance with our neighbors and the world, not only between borrowing and saving nations, but also in our consumption and how we live and use non-renewable resources," Lord Malloch-Brown said.
The EU has recently agreed a 5 billion euro (US$6.8 billion) package in funding for renewable energy and broadband projects to enable an economic recovery in Europe in both a green and hi-tech approach.
(Xinhua News Agency March 30, 2009)