Friday evening, the heads of the world's 20 biggest economies encompassing 85% of global economic activity, will have dined, met, lunched, met again, and made their pronouncements. If history is any judge, this will end up being a 24-hour series of photo ops producing little if none at all immediate or lasting results.
Certainly, weighty issues are on the table: rebalancing world commerce, reforming the global financial system, reining in executive pay, fending off protectionism, and plotting out how to extricate national governments from deep involvement in the financial markets. However, the most successful events have been those bringing together technocrats and finance ministers over extended periods. Only during times of crisis, such as last fall’s financial crisis, having a forum like the G-20 will be invaluable as a speedy communication and cooperation forum.
It is hard to imagine that world leaders would reach consensus to coordinate stimulus spending, monetary policy, and other moves to stabilize the economy in normal times. Desperation eliminates many of the unnecessary options and leaves you with the bare necessities. No more redundant procedure or idealistic differences.
It is hard to imagine that world leaders would reach consensus to coordinate stimulus spending, monetary policy, and other moves to stabilize the economy in normal times. Desperation eliminates many of the unnecessary options and leaves you with the bare necessities. No more redundant procedure or idealistic differences.
Surely, pressing issues of the summit would be to ensure the US continues to save more and spend less while China steps up its nascent shift toward a more consumer-driven economy and away from exports. Such would counter the slowdown of worldwide growth as we strive for economic balance and stability.
On trade, the World Bank, the World Trade Organization reports more than 100 protectionist measures, which include a U.S. ban on certain Mexican trucks from operating in the U.S. and a "Buy American" provision in the Administration's $787 billion stimulus package.
Another issue that is likely to arise again is efforts by China, Russia, and other countries to create some other form of reserve global currency in addition to the dollar.
While the G20 is not structured to examine the scarcity of resources or the effects of global warming, I feel it is time for a cooperative effort to rectify the situation.
Since the Chinese, Indians and Russians have entered the market economy, the number of employed people worldwide has doubled, to about 3 billion. Vast new markets and low-wage production countries have developed, with serious consequences for the consumption of energy and water.
Oil consumption has increased by more than 25 percent since 1990, while the consumption of natural gas has grown by more than 50 percent. Fossil fuel production is becoming more and more difficult and costly.
The scarcity of water is even more serious. Global water use has doubled since 1950, and even as large segments of the world population lack adequate access to clean water, more and more water is being used in food production. For example, more than 1,000 liters of water are consumed to produce one kilogram (2.2 lbs.) of bread, while producing a kilo of beef uses up almost 16,000 liters of water.
We have reached the point at which the Earth's regeneration capacity is being stretched too thin. Theoretically, humanity today already needs 1.3 planets to maintain its lifestyle. If everyone were as wasteful as the Americans, five planets would not be enough. Not to mention that by 2050 the world's population will have increased by 2 billion needing food, clothing and shelter.
Given the Earth's limited system, the economy clearly cannot grow indefinitely. From an ecological perspective, this is the fundamental contradiction within the logic of growth. As economies mature, it automatically becomes more difficult for them to sustain their rates of growth. The principle is clear: Resource consumption must be decoupled from growth.
This is effectively what representatives of the world's governments will be discussing when they meet in Copenhagen for the United Nations Climate Change Conference in December. But, I remain reserved as to how effective the meeting will be. The UNO (A.K.A “Organization of the Useless Nations”) continues to be nothing more than a rubber stamp or a high-profile excuse for the America’s dominance.
We need change and perhaps, the world is changing, but we are far from our goal.
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