OPINION> OP-ED CONTRIBUTORS
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OPINION> OP-ED CONTRIBUTORS
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G20 summit should keep global recovery continuing
By Jaspal Singh Bindra (chinadaily.com.cn)
Updated: 2009-09-21 09:04 Indeed, these emerging economies, increasingly aware of their responsibilities, have played their new roles with aplomb so far. China's unprecedented 4-trillion yuan fiscal stimulus was the cornerstone of the global economy's recovery this year. India's free-trade agreements with South Korea and ASEAN in recent months are laying the foundation for greater trade and investment flows within Asia. It is perhaps pertinent to remember that the leading emerging economies in Asia – G20 members China, India, South Korea and Indonesia – are largely driven by domestic demand. The comparatively low levels of consumer debt, high savings and large populations mean that these economies could surprise on the upside as they move to a consumption-led growth model. Asia's biggest economies have also pledged to further the Doha round to give a much needed fillip to world trade. This is a welcome development as protectionist sentiment, particularly in the West, risks stifling growth and perpetuating global poverty. Meanwhile, China and India have both pledged to play a constructive role in limiting the damage caused to the environment from their growing economies at the UN climate change talks in Copenhagen later this year. Developed economies among the G20 member nations have a particularly important role to play in Asia's efforts to curtail greenhouse gases while maintaining the region's growth trajectory. Japan and South Korea are already thinking of innovative ways to share their advanced technology and to finance their use in the rapidly developing countries of Asia. All these are signs that the emerging powers are keen to play a leadership role in reshaping the global economy. One of the biggest achievements of the April G20 meeting in London was the agreement by the developed nations to share major economic decision making powers concerning the global economy with the emerging economies such as China, India, South Korea and Indonesia. May the Pittsburgh meeting be remembered as a congregation that furthered this trend. The emerging powers deserve greater control over international financial institutions such as the IMF and the World Bank, reflecting their increased economic contribution and role in international trade since those institutions were formed in the aftermath of WWII. Only greater participation by the developing economies will ensure that these world bodies can effectively serve their developmental role. The crisis has set back the cause of ameliorating global hunger and lifting the most underdeveloped countries from the poverty trap. World leaders must not lose sight of this slow-burning fuse, even as the global economy returns to the growth path, As the world recovers back to health, policy makers should not succumb to the temptation to undo the gains achieved since London. Returning to the old world order is not an option – the old ways will perpetuate the imbalances and inevitably lead us to another, and possibly more severe, crisis. The need of the hour is to maintain the pro-growth fiscal and monetary stimuli, keep working at restoring confidence in the financial markets by reducing complexity and leverage, and fixing the imbalances that caused the biggest economic turmoil in our lifetime. Only a gathering as inclusive as the one assembling in Pittsburgh can take on such a demanding task. |
