THE G-20 SUMMIT: GLOBAL PROBLEMS, GLOBAL FIXES

by J. Cate Pilgrim


After meeting with the Group of Twenty (G-20), where world leaders promised to crack down on hedge funds and tax havens, as well as pledging $1.1 trillion (get your mind around this number) to the International Monetary Fund and other global institutions, President Obama noted that American prestige had diminished under Bush. He said America’s participation in the summit would help the U.S. “forge partnerships as opposed to dictating solutions,” especially with the G-20’s Troika colleagues, Brazil and South Korea. He called the G-20 prescriptions the boldest international economic crisis response in history, saying proposed measures would have “a concrete effect” in each nation’s economy, but he could not point to any summit accomplishment that would help Americans beyond general points such as fighting protectionism and making the global economy work together. He did turn down French President Sarkozy’s proposal for a global regulator that would oversee every nation’s companies, as did the rest of G-20 representatives.

An examination of the G-20’s promised trillion dollar global bailout shows it to be much smaller than the U.S.’s $787 billion stimulus package. Although the summit trebled resources available to the International Monetary Fund, upping the amount to $750 billion, as well as creating a new Special Drawing Rights (SDR) allocation of $250 billion, Obama expressed dissatisfaction with the numbers. Multilateral development banks (MDBs) were ensured at least $100 billion of additional lending, and summit leaders promised $250 billion of support for trade finance. Additional resources from IMF gold sales were designated to help the poorest countries, and another $50 billion was offered to support social protection, boost trade and safeguard development in low income countries

Members of the twenty largest economies in the world said they were helping to save $5 trillion dollars worth of jobs which would otherwise have been destroyed. Obama promised America’s strategic and political support to the outcomes of the London summit, promising that America, “will not turn inward. We will not focus on ourselves.”