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Friday, 14 November 2008

14 November 2008

I’ll be honest with you: I’m going to try really hard to take this weekend’s global economic summit seriously. But it won’t be easy.

I’m not a great believer in summits: the truth is that the real work usually gets done in the weeks and months leading up to them, by hard-working civil servants whose names you’d never recognise. When the Presidents and Prime Ministers eventually turn up in their limousines, there’s rarely much left for them to do, other than hobnob around, do a bit of grandstanding, whisper to each other in corners and corridors, and hold not-very-informative press conferences.

Will this one be any different? Well, there hasn’t been much time for preparation, if only because the financial crisis erupted with such fury in September that there’s scarcely been time for anyone to do any preparing. My guess is that at the end of the weekend, they’ll announce with great pride that they’ve all done terribly well and agreed unanimously that lots more meetings need to be held.

Which, I admit, is probably a good thing. The last thing we need in our current predicament is each government and central bank going their own sweet way without any consultation with anyone else. But if you’re going to reinvent the wheel, an unwieldy committee made up of the world’s most powerful (and wannabe most powerful) nations is not the best way to go about it.

Do I have an alternative suggestion? Er, no. And my impression is that the events of the past couple of months have given these guys such an almighty fright that they may just be in a mood to do some serious thinking. Whether they’re also in a mood to do some serious compromising remains to be seen.

So here’s a little test for you. Can you name the members of the Group of 20 who are on the summit invitation list? They are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States.

You’re right, that’s only 19. The 20th is the European Union, which is the only way countries like Spain and Poland get a look in. According to the G20 website, the member countries represent around 90 per cent of global gross national product, 80 per cent of world trade, and two-thirds of the world's population. In other words, in strictly economic terms, just about everyone who matters.

In tonight’s (Friday’s) programme, we’re going to be discussing the prospects for this weekend’s summit with three supremely well-qualified economic thinkers: the US deputy trade representative John Veroneau, the French government economic adviser Laurent Cohen-Tanugi, and the Indian economist Jagdish Bhagwati of Columbia University, New York.

We recorded the discussion yesterday afternoon, as they all happened to be in London, and what struck me was how little they expect to emerge from the next couple of days. Yes, they agree that much needs to be done, especially in the field of tighter financial regulation – but they all say it’s going to take time.

Quite apart from anything else, there needs to be an agreement on what exactly has to be fixed before they start discussing how to fix it. And no one is unaware that their host this weekend, President Bush, will be off the world stage within a matter of weeks. His successor, Barack Obama, is making himself scarce this weekend, for all the usual protocol reasons – but no real work will get done till he’s got his feet under that desk in the Oval Office and has made his own thoughts known.

So, yes, let’s by all means pay attention to the summit this weekend. But let’s not pretend that all those presidential jets and motorcades will bring us renewed prosperity and stability by Monday morning. I still suspect that few, if any, of the summiteers know exactly how we got ourselves into this mess, so it’s asking quite a lot to expect them to get us out of it just yet.

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