The Group of Eight leaders in Toronto apparently haven’t found much to agree on in economics and have had to turn their attention to foreign policy. Rather than drawing a roadmap to deal with the critical issues of a crippling and growing global recession, nose-diving growth and budget deficits, the leaders of the rich and industrialised nations sought to play safe by castigating Pyongyang and Teheran, and nodding to a five-year exit timeframe from Afghanistan.
This is myopic, to say the least. They have abdicated their leadership role for the sake of collective political survival. More important, it doesn’t address the real and serious issues at hand. This Ostrich syndrome is suicidal, and the world cannot afford a repeat of the Wall ?Street adventures.
Though the leaders were unanimous in their concern over a double-dip recession, they have failed to come up with a plan to check it. Being at odds over how to strengthen the global recovery, each came up with their own country-specific remedy. Washington was overly cautious arguing European efforts to cut national deficits could make the current rocky economic situation worse. Europe for the first time in many decades sought to distance itself from the US. They argued that reducing government deficits is key to setting long-term growth on track. And then there was an altogether different approach from the emerging economies, such as India and Brazil, who warned against steep budget cuts, urging the developed world to encourage spending and growth. They believe that Europe and Japan should do more to stimulate growth and pave the way for other countries to export to them. The whole exercise, in other words, was academic in nature rather than result oriented.
What came as a real shock was the suggestion to withdraw the stimulus package that G20 leaders had previously agreed upon. If that happens, it would deny global financial markets liquidity and further push the ailing economies to the brink. The absence of a realistic approach to tackle the pestering crisis is thus alarming. Tricky issues such as soaring budget deficits and regulating banks cannot be avoided any longer. All this raises question about the credibility of the summit in Canada, and whether the G8 leadership is capable of thwarting a 1930 like scenario. The industrialised nations have to deliver. They must protect and ensure the confidence in the current global financial institutions. If the elite club cannot rescue the global economy, nothing can stop it from crashing. It’s never too late to stem the Wall Street rot. Courtesy:Khaleej Times
This is myopic, to say the least. They have abdicated their leadership role for the sake of collective political survival. More important, it doesn’t address the real and serious issues at hand. This Ostrich syndrome is suicidal, and the world cannot afford a repeat of the Wall ?Street adventures.
Though the leaders were unanimous in their concern over a double-dip recession, they have failed to come up with a plan to check it. Being at odds over how to strengthen the global recovery, each came up with their own country-specific remedy. Washington was overly cautious arguing European efforts to cut national deficits could make the current rocky economic situation worse. Europe for the first time in many decades sought to distance itself from the US. They argued that reducing government deficits is key to setting long-term growth on track. And then there was an altogether different approach from the emerging economies, such as India and Brazil, who warned against steep budget cuts, urging the developed world to encourage spending and growth. They believe that Europe and Japan should do more to stimulate growth and pave the way for other countries to export to them. The whole exercise, in other words, was academic in nature rather than result oriented.
What came as a real shock was the suggestion to withdraw the stimulus package that G20 leaders had previously agreed upon. If that happens, it would deny global financial markets liquidity and further push the ailing economies to the brink. The absence of a realistic approach to tackle the pestering crisis is thus alarming. Tricky issues such as soaring budget deficits and regulating banks cannot be avoided any longer. All this raises question about the credibility of the summit in Canada, and whether the G8 leadership is capable of thwarting a 1930 like scenario. The industrialised nations have to deliver. They must protect and ensure the confidence in the current global financial institutions. If the elite club cannot rescue the global economy, nothing can stop it from crashing. It’s never too late to stem the Wall Street rot. Courtesy:Khaleej Times
