G-20 Nations Seek Global Economic Fix
MELISSA BLOCK, host:
From NPR News, this is All Things Considered. I'm Melissa Block.
ROBERT SIEGEL, host:
And I'm Robert Siegel. They've come from South Africa and South Korea, the European Union and Brazil. The leaders of the Group of 20 nations are in Washington, and it's time for the long-discussed summit on the global financial crisis.
BLOCK: There's dinner tonight at the White House, and tomorrow five hours of meetings in the cavernous hall of the National Building Museum. As NPR's John Ydstie reports, the result is likely to be light on specifics, but there are hopes of a road map for a more stable financial system.
JOHN YDSTIE: President Bush is the host for this meeting, but it's not really a meeting he wanted. Leaders of France and Britain provided the impetus, says Sebastian Mallaby of the Council on Foreign Relations.
Mr. SEBASTIAN MALLABY (Senior Fellow, International Economics, Council on Foreign Relations): Gordon Brown and Nicolas Sarkozy both had domestic political motives for looking active on the crisis, and they persuaded the Bush administration, which had figured out by now that opposing multinational initiatives gets you into more trouble than it's worth to say yes to the idea.
YDSTIE: French President Sarkozy, who's also currently serving as president of the EU, is urging a new era of global regulation and sees this G-20 summit as a beginning of that effort. Yesterday in New York, President Bush tried to dampen some of that enthusiasm for tougher regulation.
(Soundbite of speech, November 13, 2008)
President GEORGE W. BUSH: History has shown that the greater threat to economic prosperity is not too little government involvement in the market; it is too much government involvement in the market.
(Soundbite of applause)
YDSTIE: Of course, given President Bush's lame-duck status, he's not in a position to drive the summit agenda. While Sarkozy's new era of global regulation may be too grandiose a description, there does appear to be support coalescing around a couple of initial steps on which the G-20 leaders could agree. One is described as a college of supervisors - essentially, regulators from the individual countries who would meet together periodically to coordinate the oversight of large, international, financial institutions. There's also support building for a better early-warning system to flag financial threats. The most likely area of agreement among the leaders, says Benn Steil of the Council on Foreign Relations, is for additional stimulus from individual nations aimed at heading off a severe global downturn.
Dr. BENN STEIL (Senior Fellow, Director of International Economics, Council on Foreign Relations): Very little can get done without explicit support from President-elect Obama, which is why I expect the idea of a global fiscal stimulus to be the only one that will get any real traction at the summit.
YDSTIE: President-elect Obama supports additional stimulus, but will not attend the summit because, he says, the United States only has one president at a time. He will have representatives in the wings, though; former Secretary of State Madeleine Albright and former Congressman Jim Leach will be available to meet with national delegations on his behalf. This summit marks the first time the heads of government from the G-20 have met together. That means the leaders of countries like China, India, Brazil and even Turkey have a seat at the table. They, too, are suffering from the fallout of the financial crisis, and Simon Johnson, a former chief economist at the International Monetary Fund, now a professor at MIT, says they have an agenda of their own.
Professor SIMON JOHNSON (Entrepreneurship, Sloan School of Management, Massachusetts Institute of Technology): The emerging markets would like bigger, better safety nets at the global level. That requires more cash. Some of that cash could come from emerging markets; some of it could come from the European Union and U.S. But there's a huge issue of governance around the global economy, and emerging markets have been asking for years for more representation, more voice.
YDSTIE: That voice for growing economic powers like China and India should probably come at the IMF, says Johnson. So far, that's been blocked largely by the Europeans. This G-20 summit, and another planned for March, may begin to chip away at that opposition. Indeed, the most significant achievement of this weekend's summit may be that it opens a new era of involvement for emerging-market nations in the international economic decision-making. John Ydstie, NPR News, Washington.