More is being asked of the United Nations by more people in more places.
The United Nations today leads what seems at times like a double life. Pundits criticise it for not solving all the world's ills, yet people around the world are asking it to do more, in more places, than ever before - a trend that will continue in 2011.
It is not hard to see why. Newspapers, television and the internet make clear the sheer scale of the need. Conflicts rage in too many places. Natural disasters strike with greater fury and in greater numbers than ever.
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On top of all this, we face a new generation of threats, unlike any in history, which spill across borders and have global reach. No single country or group, however powerful, can deal with them alone. All must work together - in common cause for common solutions - to tackle challenges such as climate change, poverty and nuclear disarmament.
But there is profound scepticism that we can do so. The world looks to the UN as never before, yet the conventional wisdom is that we are not up to the job. The problems are too complicated. Resources are too few. The UN appears too divided to make the vital difference.
The conventional wisdom is, however, wrong; worse, it is dangerous, for we have all seen how quickly it can take hold, distort reality, and then harden like cement. For example, four years ago, when I came to office, only a handful of global leaders knew enough even to talk about climate change - the defining challenge of our times, whose effects we see every day, all around us. Today, we have moved climate change to the top of the global agenda.
But make no mistake: it has been a difficult road. In December 2009 in Copenhagen, world leaders talked far into the night and emerged, according to the conventional wisdom, with virtually nothing. In fact, though we did not get a comprehensive, legally binding treaty that would usher in an era of sustainable, low-carbon prosperity, as we had hoped, there were significant achievements in Copenhagen.
For the first time, developed and developing countries acknowledged their responsibility to curb emissions of greenhouse gasses and agreed on the goal of limiting global temperature rise to below 2 degrees. And, for the first time, countries made large pledges to finance mitigation and adaptation efforts: $30 billion over the next three years for fast-start financing, and $100 billion a year by 2020.
The lesson is that we should not dream of overnight breakthroughs, or allow ourselves to fall into despair in the absence of immediate progress. We must work to build on many smaller advances, wherever we can make them - by mobilising support, creating broad alliances, building coalitions, and taking into account a web of moving parts and complex issues - because that will set the stage for the eventual breakthroughs.
Collective action has never been easy, but it has never been more necessary than in achieving the UN's Millennium Development Goals - the world's blueprint for ending extreme poverty. The conventional wisdom will tell you that the MDG targets - reducing poverty and hunger, improving the health of mothers and children, combating HIV/AIDS, increasing access to education, protecting the environment, and forging a global partnership for development - are simply unattainable. In fact, we are controlling disease - polio, malaria and AIDS - better than ever, and making big, new investments in women's and children's health - the key to progress in many other areas.
Nevertheless, on climate change, poverty and other issues, the conventional wisdom is that the UN should cede responsibility to the G20. But the G20, by itself, is not the answer. Despite strenuous debate about currency issues and trade imbalances at its summit in Seoul in November, the sole area of agreement concerned an issue on the G20's agenda for the first time - economic development. Recognising that global recovery depends on the emerging economies (that is, the developing world), G20 leaders embraced investments aimed at lifting the world's most vulnerable people out of poverty.
That is why G20 leaders accept the need to work closely with the UN. After all, no organisation does development better. The G20 and the UN are finding new ways to work constructively together - not as rivals, but as increasingly close partners. And that is the way it should be.
Forty years ago, a great American statesman, Dean Acheson, looked back at the excitement he felt in helping to build the post-World War II order. Present at the Creation, he called his memoir.
Today, we find ourselves at an equally exciting moment, no less critical to the future of humankind. We, too, are present at a new creation. And the UN must constantly recreate itself as well. We must evolve and keep pace with a rapidly changing world. We must be faster and more flexible, efficient, transparent and accountable. In an age of austerity, resources are precious; we must make every dollar count.
People everywhere live in growing anxiety and fear. There is near-universal loss of trust in institutions and leaders. Amid such uncertainty, our future depends on a UN that brings together the countries of the world not only to talk and debate, but also to agree and to act; that mobilises civil society, business, philanthropists and ordinary citizens to help the world's governments solve current problems; and that delivers peace, development, human rights, and global public goods - in a word, hope - to people around the world every day.
Source: http://www.smh.com.au
12/30/2010
12/29/2010
G20 and EU 'posturing' could exacerbate future banking crises
The efforts of the G20 and European Union to overhaul financial regulations have been lambasted for being "disingenuous political posturing" that are "increasing the likelihood of future meltdowns", an influential think-tank has warned.
The TaxPayers' Alliance has published a paper accusing politicians and regulators of basing their response to the financial crisis on a "mistaken view of its causes" and "political considerations".
The paper, which was co-written with the Lagatum Institute, an academic group that focuses on wealth, attacks the key aim of politicians including Prime Minister David Cameron and Chancellor George Osborne for internationally co-ordinated regulation. It warns that "global regulation causes global crises".
The authors, Dalibor Rohac of the Legatum Institute and Matthew Sinclair of the Taxpayers' Alliance, said in the report: "Common capital adequacy rules, while increasing transparency, also encourage homogeneity in investment strategy and undertaking of risk, leading to a high concentration of risk. That means that global regulations can be dangerous because they increase the amplitude of global credit cycles."
The paper adds: "The Basel regulations may still be procyclical, imposing more onerous requirements on institutions at times when the system is in trouble."
The authors claim the new regulations, including the G20-sponsored Basel rules and the Capital Requirements Directive of the EU, have been based on too narrow a view that "greed and insufficient regulation" were the causes. They argue that "regulations and poor policy choices" were also to blame - and that the authorities are in danger of making similarly dangerous mistakes.
The paper claims that parts of the G20 agenda are "completely irrelevant" to reducing risk in the system. It argues: "The idea that "tax havens" and banking secrecy are among the issues that contributed to the financial crisis is completely unfounded. If anything, tax competition could curb some of the excesses of the big, fiscally irresponsible, welfare states by making it difficult for governments to impose too onerous fiscal burdens on mobile tax bases."
By Louise Armitstead
Source: Telegraph Media Group
http://www.telegraph.co.uk
The TaxPayers' Alliance has published a paper accusing politicians and regulators of basing their response to the financial crisis on a "mistaken view of its causes" and "political considerations".
The paper, which was co-written with the Lagatum Institute, an academic group that focuses on wealth, attacks the key aim of politicians including Prime Minister David Cameron and Chancellor George Osborne for internationally co-ordinated regulation. It warns that "global regulation causes global crises".
The authors, Dalibor Rohac of the Legatum Institute and Matthew Sinclair of the Taxpayers' Alliance, said in the report: "Common capital adequacy rules, while increasing transparency, also encourage homogeneity in investment strategy and undertaking of risk, leading to a high concentration of risk. That means that global regulations can be dangerous because they increase the amplitude of global credit cycles."
The paper adds: "The Basel regulations may still be procyclical, imposing more onerous requirements on institutions at times when the system is in trouble."
The authors claim the new regulations, including the G20-sponsored Basel rules and the Capital Requirements Directive of the EU, have been based on too narrow a view that "greed and insufficient regulation" were the causes. They argue that "regulations and poor policy choices" were also to blame - and that the authorities are in danger of making similarly dangerous mistakes.
The paper claims that parts of the G20 agenda are "completely irrelevant" to reducing risk in the system. It argues: "The idea that "tax havens" and banking secrecy are among the issues that contributed to the financial crisis is completely unfounded. If anything, tax competition could curb some of the excesses of the big, fiscally irresponsible, welfare states by making it difficult for governments to impose too onerous fiscal burdens on mobile tax bases."
By Louise Armitstead
Source: Telegraph Media Group
http://www.telegraph.co.uk
12/28/2010
MP backs G20 outlay
The Beacon Herald kicks off a series of year-end interviews with local political leaders with Perth- Wellington MP Gary Schellenberger. Wednesday, Perth-Wellington MPP and provincial Environment Minister John Wilkinson.
Perth-Wellington's MP is backing the government all the way on its controversial pension reform plan and on its stand that spending close to $1 billion on security for a weekend G20 summit in Toronto was justified.
Despite the arrests of about 1,000 demonstrators, many of whom were released without charge or who had charges withdrawn or dismissed, Gary Schellenberger said that in his view police did not exceed their authority.
"I'm strongly behind the government and I am strongly behind the police. I think they did a great job," said Schellenberger in a year-end interview.
Security costs could have been less, he suggested, "if we only had the protesters on the street and not the hooligans that were only there to cause trouble."
Schellenberger said he does not feel police overstepped their authority. Some of the incidents were orchestrated by demonstrators for the television cameras, he suggested.
"No one was killed," he pointed out, and the cost was about the same as for security at the Vancouver Olympics.
Challenged on the comparison of the two events, Schellenberger said the difference was the presence of 20 national leaders, including the U.S. president, at the Toronto event.
About 400 written complaints about police misconduct were made to the Office of the Independent Police Review Director following the June summit.
So far, one officer has been charged in connection with the melee that included damage to police cruisers and some smashed store fronts.
Federal Finance Minister Jim Flaherty was meeting with provincial government representatives in an attempt to achieve consensus on pension reform the day of the Schellenberger interview, but Flaherty had shifted considerably from an earlier position aimed at expanding the existing Canada Pension Plan to an optional private pool plan.
Critics doubted whether Canadians who already haven't been using available saving and investment opportunities would go for what appears to be a more complex, optional pension system.
Schellenberger, however, rejected that argument.
"This is what's the matter with the country. The government can't be everything to everybody and people have to take some responsibility," he said.
He mentioned that when he ran a home decorating business his company couldn't afford to contribute to the Canada Pension Plan.
He took care of his own personal savings and investments, he said.
"We're in an open society where people have the right to save money or to spend money."
The CPP amounts to a payroll tax for business, Schellenberger said, and if an employer can't afford to contribute but is forced to, the business will go broke and jobs will be lost.
Numerous reports on Canadians' retirement prospects have indicated most people don't put enough away for retirement and that even if they are entitled to a pension, it's not enough for a reasonably comfortable lifestyle.
VETERANS AFAIRS
As chair since September of the House of Commons' standing committee on veterans affairs, Schellenberger acknowledged past ombudsman Patrick Stogran brought forward some important issues about the treatment of veterans.
Veterans Affairs Minister Jean- Pierre Blackburn has acted to correct the situation, Schellenberger said.
"Minister Blackburn has really taken the bull by the horns to make sure our veterans are looked after properly."
One of Stogran's main criticisms was that bureaucrats in the ministry were more concerned about scrimping on health care funding for wounded soldiers than on making sure they were being amply compensated for the extended care they need.
"One thing I've realized out of this is that Veterans Affairs seemed to work well for our Second World War veterans and our Korean (War) veterans, but some of our modern veterans don't belong to any organizations -- they don't belong to the Legion or Army and Navy Vets."
Schellenberger cited changes made to the Veterans Charter, which was implemented in 2006, that are expected to assist those who may have fallen through the cracks.
"The minister has made some changes, some very important changes," he said, including a change that allows flexibility in how compensation for long-term health care is handed out for disabled veterans.
Schellenberger said the department was already working on some of the issues raised by Stogran -- since replaced by a new ombudsman.
"They were getting addressed one way or the other or they were working on getting them addressed. They just weren't quick enough for him," he said.
The standing committee will be reporting to the House in the new year on a study recently undertaken dealing with suicide and mental health among veterans and military personnel.
There was consensus around the table that such a study should be done, said the committee chair.
ELECTI ON?
Asked about the possibility of an election, Schellenberger said there's one chance for that happening around the budget but he had been told there will be "no poison pill in the budget."
"There's no appetite with the populace out there for an election. Our whole thing is to try to bring this economy back from the fragile state that it's been in."
That's where the finance minister's priorities are, said Schellenberger.
He defended the government's infrastructure stimulus program that has been extended to projects begun by March 2011 and pointed to local municipal projects that have benefited, including the new sanitary sewage system in Shakespeare and the industrial park expansion in Stratford.
The MP cited as an example of government money well spent the $3 million in stimulus funding granted to the Stratford Shakespeare Festival in 2009. Not only did it help turn around a projected multimillion-dollar deficit, but it generated some $34 million in economic activity in the Stratford area.
"That's money well spent," he said. "I think when government can give money to leverage money and create activity, that is good."
While local economic development strategies have been largely focused on job creation, Schellenberger said a recent pre-budget conference in Listowel raised the issue of a shortage of general labour.
"It's almost ironic," he said. "Our problem is we have a shortage of labour."
Erie Meats, which bought the former Campbell Soup plant in Listowel, is looking for employees. So is Spinrite Yarns, also in Listowel, as well as an auto parts manufacturer in the riding, he said.
Schellenberger said that in North Perth and in the area that includes Wellington-Palmerston, some 500 to 600 workers are needed for general labour.
In agriculture, he said, the pork and beef industry is "still in peril," although grain and oilseeds farmers have seen a turnaround with good yields and prices.
The value of the Canadian dollar vis-a-vis the U.S. dollar is still a big concern to area farmers and businesses in the riding, Schellenberger said.
Source: http://www.stratfordbeaconherald.com/
Perth-Wellington's MP is backing the government all the way on its controversial pension reform plan and on its stand that spending close to $1 billion on security for a weekend G20 summit in Toronto was justified.
Despite the arrests of about 1,000 demonstrators, many of whom were released without charge or who had charges withdrawn or dismissed, Gary Schellenberger said that in his view police did not exceed their authority.
"I'm strongly behind the government and I am strongly behind the police. I think they did a great job," said Schellenberger in a year-end interview.
Security costs could have been less, he suggested, "if we only had the protesters on the street and not the hooligans that were only there to cause trouble."
Schellenberger said he does not feel police overstepped their authority. Some of the incidents were orchestrated by demonstrators for the television cameras, he suggested.
"No one was killed," he pointed out, and the cost was about the same as for security at the Vancouver Olympics.
Challenged on the comparison of the two events, Schellenberger said the difference was the presence of 20 national leaders, including the U.S. president, at the Toronto event.
About 400 written complaints about police misconduct were made to the Office of the Independent Police Review Director following the June summit.
So far, one officer has been charged in connection with the melee that included damage to police cruisers and some smashed store fronts.
Federal Finance Minister Jim Flaherty was meeting with provincial government representatives in an attempt to achieve consensus on pension reform the day of the Schellenberger interview, but Flaherty had shifted considerably from an earlier position aimed at expanding the existing Canada Pension Plan to an optional private pool plan.
Critics doubted whether Canadians who already haven't been using available saving and investment opportunities would go for what appears to be a more complex, optional pension system.
Schellenberger, however, rejected that argument.
"This is what's the matter with the country. The government can't be everything to everybody and people have to take some responsibility," he said.
He mentioned that when he ran a home decorating business his company couldn't afford to contribute to the Canada Pension Plan.
He took care of his own personal savings and investments, he said.
"We're in an open society where people have the right to save money or to spend money."
The CPP amounts to a payroll tax for business, Schellenberger said, and if an employer can't afford to contribute but is forced to, the business will go broke and jobs will be lost.
Numerous reports on Canadians' retirement prospects have indicated most people don't put enough away for retirement and that even if they are entitled to a pension, it's not enough for a reasonably comfortable lifestyle.
VETERANS AFAIRS
As chair since September of the House of Commons' standing committee on veterans affairs, Schellenberger acknowledged past ombudsman Patrick Stogran brought forward some important issues about the treatment of veterans.
Veterans Affairs Minister Jean- Pierre Blackburn has acted to correct the situation, Schellenberger said.
"Minister Blackburn has really taken the bull by the horns to make sure our veterans are looked after properly."
One of Stogran's main criticisms was that bureaucrats in the ministry were more concerned about scrimping on health care funding for wounded soldiers than on making sure they were being amply compensated for the extended care they need.
"One thing I've realized out of this is that Veterans Affairs seemed to work well for our Second World War veterans and our Korean (War) veterans, but some of our modern veterans don't belong to any organizations -- they don't belong to the Legion or Army and Navy Vets."
Schellenberger cited changes made to the Veterans Charter, which was implemented in 2006, that are expected to assist those who may have fallen through the cracks.
"The minister has made some changes, some very important changes," he said, including a change that allows flexibility in how compensation for long-term health care is handed out for disabled veterans.
Schellenberger said the department was already working on some of the issues raised by Stogran -- since replaced by a new ombudsman.
"They were getting addressed one way or the other or they were working on getting them addressed. They just weren't quick enough for him," he said.
The standing committee will be reporting to the House in the new year on a study recently undertaken dealing with suicide and mental health among veterans and military personnel.
There was consensus around the table that such a study should be done, said the committee chair.
ELECTI ON?
Asked about the possibility of an election, Schellenberger said there's one chance for that happening around the budget but he had been told there will be "no poison pill in the budget."
"There's no appetite with the populace out there for an election. Our whole thing is to try to bring this economy back from the fragile state that it's been in."
That's where the finance minister's priorities are, said Schellenberger.
He defended the government's infrastructure stimulus program that has been extended to projects begun by March 2011 and pointed to local municipal projects that have benefited, including the new sanitary sewage system in Shakespeare and the industrial park expansion in Stratford.
The MP cited as an example of government money well spent the $3 million in stimulus funding granted to the Stratford Shakespeare Festival in 2009. Not only did it help turn around a projected multimillion-dollar deficit, but it generated some $34 million in economic activity in the Stratford area.
"That's money well spent," he said. "I think when government can give money to leverage money and create activity, that is good."
While local economic development strategies have been largely focused on job creation, Schellenberger said a recent pre-budget conference in Listowel raised the issue of a shortage of general labour.
"It's almost ironic," he said. "Our problem is we have a shortage of labour."
Erie Meats, which bought the former Campbell Soup plant in Listowel, is looking for employees. So is Spinrite Yarns, also in Listowel, as well as an auto parts manufacturer in the riding, he said.
Schellenberger said that in North Perth and in the area that includes Wellington-Palmerston, some 500 to 600 workers are needed for general labour.
In agriculture, he said, the pork and beef industry is "still in peril," although grain and oilseeds farmers have seen a turnaround with good yields and prices.
The value of the Canadian dollar vis-a-vis the U.S. dollar is still a big concern to area farmers and businesses in the riding, Schellenberger said.
Source: http://www.stratfordbeaconherald.com/
12/27/2010
Six months after G20 - was it worth it?
With graphic scenes of burning police cruisers and corralled protesters combating peace officers, June’s G20 summit caused a global commotion. Yet, with so many residual effects, was this meeting of government and financial leaders worth it?
No, said Kezio Mauronik, a downtown resident who calls himself a non-confrontational opponent to what many feel was a wasteful weekend.
“With the aftermath overshadowing the actual meetings, I don’t think many people who weren’t directly involved even know what the summit was about anymore,” he said. “Toronto citizens should not have been subjected to such a blatant disruption.”
Mauronik said he sees both sides of how the weekend erupted into disarray.
“Contrary to the popular line put forth by the police and the media, anarchy isn’t about breaking things,” he asserts. “What happened to police cars and shop windows was vandalism. To describe those acts as anarchism is pure ignorance.
“Still, it was disturbing to see the use of police force first-hand, something you’d expect in dictatorial countries, not Canada. As a normal citizen prompted to peacefully protest by our then-mayor, I shouldn’t have been subjected to that.”
Mauronik said he holds political leaders accountable for allowing Hogtown to be subjected to the debacle while “disowning the entire thing.”
A report by Ontario Ombudsman André Marin found that police were hastily granted greater powers by the Ministry of Community Safety and Correctional Services via an amendment to the Public Works Protection Act.
Marin said the revision created “martial law ... in the city of Toronto, leading to the most massive compromise of civil liberties in Canadian history.” His report calls for revision of the PWPA and a review of what powers police may receive under the act.
In response, Toronto police Chief Blair said, “I think it’s important that the public be assured that we’re all taking this very seriously” and noted five officers accused of using extreme force had been identified with more to come.
Premier Dalton McGuinty said the province acted with “good intention” yet was rash in allowing the law alteration. “The police were given additional authority. We moved too quickly to provide that authority,” he said.
Last Tuesday, Const. Babak Andalib-Goortani was charged with assault with a weapon in the takedown of a protester near the Ontario legislature during the summit.
Source: Metronews.ca
http://www.metronews.ca
No, said Kezio Mauronik, a downtown resident who calls himself a non-confrontational opponent to what many feel was a wasteful weekend.
“With the aftermath overshadowing the actual meetings, I don’t think many people who weren’t directly involved even know what the summit was about anymore,” he said. “Toronto citizens should not have been subjected to such a blatant disruption.”
Mauronik said he sees both sides of how the weekend erupted into disarray.
“Contrary to the popular line put forth by the police and the media, anarchy isn’t about breaking things,” he asserts. “What happened to police cars and shop windows was vandalism. To describe those acts as anarchism is pure ignorance.
“Still, it was disturbing to see the use of police force first-hand, something you’d expect in dictatorial countries, not Canada. As a normal citizen prompted to peacefully protest by our then-mayor, I shouldn’t have been subjected to that.”
Mauronik said he holds political leaders accountable for allowing Hogtown to be subjected to the debacle while “disowning the entire thing.”
A report by Ontario Ombudsman André Marin found that police were hastily granted greater powers by the Ministry of Community Safety and Correctional Services via an amendment to the Public Works Protection Act.
Marin said the revision created “martial law ... in the city of Toronto, leading to the most massive compromise of civil liberties in Canadian history.” His report calls for revision of the PWPA and a review of what powers police may receive under the act.
In response, Toronto police Chief Blair said, “I think it’s important that the public be assured that we’re all taking this very seriously” and noted five officers accused of using extreme force had been identified with more to come.
Premier Dalton McGuinty said the province acted with “good intention” yet was rash in allowing the law alteration. “The police were given additional authority. We moved too quickly to provide that authority,” he said.
Last Tuesday, Const. Babak Andalib-Goortani was charged with assault with a weapon in the takedown of a protester near the Ontario legislature during the summit.
Source: Metronews.ca
http://www.metronews.ca
12/24/2010
Central Bank appointed G20 financial partner
Central Bank of Kenya has been appointed a non-G20 member of the newly established Global Partnership for Financial Inclusion (GPFI).
12/23/2010
Hearing for G20-death officer may come after inquest
Misconduct proceedings for the police officer seen pushing Ian Tomlinson at a London protest could take place after the newspaper seller's inquest, a coroner's court has heard.
The 47 year old died after collapsing on the pavement on the fringes of G20 protesters on April 1 last year.
A pre-inquest review attended by members of his family today heard that the full inquest could take place as early as the end of March, although dates in April and May were also suggested. Judge Peter Thornton QC, sitting as assistant deputy coroner, said the inquest would last between five and six weeks, with the evidence being considered by a jury.
The Old Bailey judge discussed whether the inquest should take place before the misconduct hearing against Pc Simon Harwood, a member of the Metropolitan Police's territorial support group. He could be sacked under the fast-track misconduct proceedings.
Pathologist Dr Freddy Patel originally found that Mr Tomlinson died of natural causes but amateur video footage emerged showing him being pushed to the ground by the police officer.
Matthew Ryder QC, representing Mr Tomlinson's family, said the jury could be influenced by evidence that emerged from Pc Harwood's disciplinary hearing if it was held first. He told City of London Coroner's Court: "There is little advantage, and significant disadvantage, in having the inquest after the disciplinary process, and there is a risk of prejudice to the interests of justice in having the inquest afterwards."
Jeremy Johnson, for the Metropolitan Police, said the misconduct hearing should take place "promptly" and that there was a "delicate balance" in deciding the timings of the two cases. He said he was "narrowly in favour" of going ahead with Pc Harwood's misconduct hearing, and added: "Ideally the inquest would take place first but if there is to be a delay before the inquest happens, there is no barrier to the misconduct proceedings pressing ahead."
Mr Thornton will consider the timings of both hearings and said he would write to the force "hopefully this week" to give his opinion. He told the hearing: "There is no hard-and-fast rule about this; it's just a question of what is just and fair and, in the end, what makes sense."
A start date in May would prevent delays caused by Easter and the Royal wedding bank holiday in April, Mr Thornton said. But Mr Ryder argued for "as early a start as possible".
Mr Johnson agreed that the "considerable delay" that had already occurred was "regrettable". A date should be set within the next two weeks, with the venue also yet to be decided.
Source: Press Association Ltd.
http://www.midhurstandpetworth.co.uk
The 47 year old died after collapsing on the pavement on the fringes of G20 protesters on April 1 last year.
A pre-inquest review attended by members of his family today heard that the full inquest could take place as early as the end of March, although dates in April and May were also suggested. Judge Peter Thornton QC, sitting as assistant deputy coroner, said the inquest would last between five and six weeks, with the evidence being considered by a jury.
The Old Bailey judge discussed whether the inquest should take place before the misconduct hearing against Pc Simon Harwood, a member of the Metropolitan Police's territorial support group. He could be sacked under the fast-track misconduct proceedings.
Pathologist Dr Freddy Patel originally found that Mr Tomlinson died of natural causes but amateur video footage emerged showing him being pushed to the ground by the police officer.
Matthew Ryder QC, representing Mr Tomlinson's family, said the jury could be influenced by evidence that emerged from Pc Harwood's disciplinary hearing if it was held first. He told City of London Coroner's Court: "There is little advantage, and significant disadvantage, in having the inquest after the disciplinary process, and there is a risk of prejudice to the interests of justice in having the inquest afterwards."
Jeremy Johnson, for the Metropolitan Police, said the misconduct hearing should take place "promptly" and that there was a "delicate balance" in deciding the timings of the two cases. He said he was "narrowly in favour" of going ahead with Pc Harwood's misconduct hearing, and added: "Ideally the inquest would take place first but if there is to be a delay before the inquest happens, there is no barrier to the misconduct proceedings pressing ahead."
Mr Thornton will consider the timings of both hearings and said he would write to the force "hopefully this week" to give his opinion. He told the hearing: "There is no hard-and-fast rule about this; it's just a question of what is just and fair and, in the end, what makes sense."
A start date in May would prevent delays caused by Easter and the Royal wedding bank holiday in April, Mr Thornton said. But Mr Ryder argued for "as early a start as possible".
Mr Johnson agreed that the "considerable delay" that had already occurred was "regrettable". A date should be set within the next two weeks, with the venue also yet to be decided.
Source: Press Association Ltd.
http://www.midhurstandpetworth.co.uk
12/22/2010
Cop union blasts media over stakeout
Toronto Police's union boss is upset that media staked out the home of a cop charged with assaulting a G20 protester.
In a statement released Wednesday, association president Mike McCormack said media went to the home of Babak Andalib-Goortani on Tuesday after the Special Investigations Unit announced the constable was charged with assault with a weapon in connection with the beating initially suffered by Adam Nobody in June.
"These intrusions into the officer’s family life were inappropriate and inconsiderate," McCormack said.
Nobody also told the SIU he was beaten a second time by plainclothes officers after he was arrested at Queen's Park, the designated free speech zone for the G20 conference that was cleared by police in riot gear on June 26.
Media also tried to speak with Andalib-Goortani's spouse, McCormack said.
"The officer’s family has the right to go about their lives without being hounded by the media," he said. "His family are in no way related to the charge against the officer and have the right to be left alone."
He said "the media frenzy at the SIU building" when the officer was served with a summons and "the associated excessive publicity" can impact the officer’s right to a fair trial, and asked the media to stay away.
Andalib-Goortani is to appear in court next on Jan. 24.
By ROB LAMBERTI, Toronto Sun
Source: Toronto Sun
http://www.torontosun.com/
In a statement released Wednesday, association president Mike McCormack said media went to the home of Babak Andalib-Goortani on Tuesday after the Special Investigations Unit announced the constable was charged with assault with a weapon in connection with the beating initially suffered by Adam Nobody in June.
"These intrusions into the officer’s family life were inappropriate and inconsiderate," McCormack said.
Nobody also told the SIU he was beaten a second time by plainclothes officers after he was arrested at Queen's Park, the designated free speech zone for the G20 conference that was cleared by police in riot gear on June 26.
Media also tried to speak with Andalib-Goortani's spouse, McCormack said.
"The officer’s family has the right to go about their lives without being hounded by the media," he said. "His family are in no way related to the charge against the officer and have the right to be left alone."
He said "the media frenzy at the SIU building" when the officer was served with a summons and "the associated excessive publicity" can impact the officer’s right to a fair trial, and asked the media to stay away.
Andalib-Goortani is to appear in court next on Jan. 24.
By ROB LAMBERTI, Toronto Sun
Source: Toronto Sun
http://www.torontosun.com/
12/21/2010
McGuinty punishes those responsible for G20 secret law
Ontario Premier Dalton McGuinty has punished those under his command who were responsible for the secret law that was passed during the G20 summit.
The law was passed under the Ontario Public Works Protection Act on June 2 allowing police to search people trying to enter the G20 summit area.
Many people believed that Ontario had passed a rule allowing police to arrest those who came within five metres of the G20 security fence if they had no identification, or refused to show it to officers.
The Toronto Sun has reported that McGuinty said he dealt with the matter, "making changes, changing ministers," including former community safety minister Rick Bartolucci, who switched positions with Jim Bradley as minister of affairs and housing.
Source: Rogers
www.680news.com
The law was passed under the Ontario Public Works Protection Act on June 2 allowing police to search people trying to enter the G20 summit area.
Many people believed that Ontario had passed a rule allowing police to arrest those who came within five metres of the G20 security fence if they had no identification, or refused to show it to officers.
The Toronto Sun has reported that McGuinty said he dealt with the matter, "making changes, changing ministers," including former community safety minister Rick Bartolucci, who switched positions with Jim Bradley as minister of affairs and housing.
Source: Rogers
www.680news.com
12/20/2010
CEOs Choose 'Successful Hosting of G20' As Best News of 2010
CEOs of major Korean companies have chosen 'the successful hosting of the G20 Seoul Summit' as the most important economic news of 2010.
The Samsung Economic Research Institute revealed survey results Sunday showing that more than 22 percent of the respondents chose the Seoul Summit since they believe it helped boost the country's national brand power.
The survey compiled responses from over 300 opinion leaders of major Korean corporations.
The introduction of the smartphone and tablet PC came as the second major issue of the year, followed by the global currency imbalance and the free trade agreements with the EU and the United States.
Source: arirang
www.arirang.co.kr
The Samsung Economic Research Institute revealed survey results Sunday showing that more than 22 percent of the respondents chose the Seoul Summit since they believe it helped boost the country's national brand power.
The survey compiled responses from over 300 opinion leaders of major Korean corporations.
The introduction of the smartphone and tablet PC came as the second major issue of the year, followed by the global currency imbalance and the free trade agreements with the EU and the United States.
Source: arirang
www.arirang.co.kr
12/16/2010
G20 protest doctor Freddy Patel's charge legal 'abuse'
A pathologist who examined a man who died in the G20 protests should not face a separate charge as it would be an abuse of process, his lawyer said.
Dr Freddy Patel examined Ian Tomlinson, who was pushed over by a policeman. Dr Patel was suspended for three months after concerns over the autopsy.
The General Medical Council is now deciding if he made a separate autopsy ruling without "proper consideration".
Dr Patel also faces another allegation, that he falsified his CV.
The separate autopsy ruling relates to the 2002 death of a prostitute, known as Mrs E.
Police discovered her in a flat, naked apart from a towel, with blood on the wall.
In his autopsy, Dr Patel noted she had facial bruising around her nose and a bite mark on her leg.
She had a split to her liver and blood loss.
Dr Patel found she had died during consensual sex and attempts to resuscitate her had failed.
It is alleged Dr Patel did not consider appropriately whether she had been asphyxiated in a non-obvious way.
But the pathologist's counsel, Adrian Hopkins QC, argued the panel had already ruled on the case in July this year and the matter should therefore not be considered again.
He claimed the allegations were "almost identical" to charges earlier ruled upon by the panel.
Mr Hopkins said: "The substance of the case against Dr Patel is the same.
"It is no good simply to tweak the wording to make the same criticism.
"We say these changes are changes of style not of substance and we have to look at substance."
Mr Hopkins added the length of time that had passed since the death meant evidence had been lost, and Dr Patel had been unable to respond fully.
The panel has the authority to ban Dr Patel from practising.
The hearing continues.
An inquest into the death of Mr Tomlinson, a newspaper seller, will begin next year.
Dr Patel's examination concluded that he died of natural causes linked to coronary artery disease.
But two other pathologists later separately concluded that Mr Tomlinson died of internal bleeding as a result of blunt force trauma, in combination with cirrhosis of the liver, after the G20 protests on 1 April 2009.
No charges have been brought against Pc Simon Harwood, the officer who pushed Mr Tomlinson and appeared to strike him with a baton on mobile phone footage then posted on the internet.
Source: BBC
www.bbc.co.uk
Dr Freddy Patel examined Ian Tomlinson, who was pushed over by a policeman. Dr Patel was suspended for three months after concerns over the autopsy.
The General Medical Council is now deciding if he made a separate autopsy ruling without "proper consideration".
Dr Patel also faces another allegation, that he falsified his CV.
The separate autopsy ruling relates to the 2002 death of a prostitute, known as Mrs E.
Police discovered her in a flat, naked apart from a towel, with blood on the wall.
In his autopsy, Dr Patel noted she had facial bruising around her nose and a bite mark on her leg.
She had a split to her liver and blood loss.
Dr Patel found she had died during consensual sex and attempts to resuscitate her had failed.
It is alleged Dr Patel did not consider appropriately whether she had been asphyxiated in a non-obvious way.
But the pathologist's counsel, Adrian Hopkins QC, argued the panel had already ruled on the case in July this year and the matter should therefore not be considered again.
He claimed the allegations were "almost identical" to charges earlier ruled upon by the panel.
Mr Hopkins said: "The substance of the case against Dr Patel is the same.
"It is no good simply to tweak the wording to make the same criticism.
"We say these changes are changes of style not of substance and we have to look at substance."
Mr Hopkins added the length of time that had passed since the death meant evidence had been lost, and Dr Patel had been unable to respond fully.
The panel has the authority to ban Dr Patel from practising.
The hearing continues.
An inquest into the death of Mr Tomlinson, a newspaper seller, will begin next year.
Dr Patel's examination concluded that he died of natural causes linked to coronary artery disease.
But two other pathologists later separately concluded that Mr Tomlinson died of internal bleeding as a result of blunt force trauma, in combination with cirrhosis of the liver, after the G20 protests on 1 April 2009.
No charges have been brought against Pc Simon Harwood, the officer who pushed Mr Tomlinson and appeared to strike him with a baton on mobile phone footage then posted on the internet.
Source: BBC
www.bbc.co.uk
11/20/2010
Regulators part curtain on swaps and hedge funds
By Christopher Doering and Rachelle Younglai
WASHINGTON (Reuters) - Regulators moved on Friday to bring more transparency to the sprawling derivatives market, hedge funds and private equity, all dimly lit corners of the financial world getting more scrutiny.
Proposed rules issued by the Commodity Futures Trading Commission and the Securities and Exchange Commission showed regulators stepping cautiously as they implement hundreds of new regulations mandated in July by Congress.
Shining a brighter light on derivatives was one of the key goals of the landmark Dodd-Frank reforms, pushed through by Democrats and President Barack Obama over the resistance of most Republicans and a host of Wall Street lobbyists.
The CFTC's and SEC's proposed rules target a range of derivatives including credit default swaps, which were implicated in the downfall of troubled giants Lehman Brothers and AIG during the 2007-2009 credit crisis.
Swaps in interest rates, currencies, credit risk or other underlying values, are a big chunk of the $583-trillion global market for derivative contracts traded over-the-counter (OTC), or among private firms, rather than on exchanges.
Until now, the market has been virtually unregulated, despite its tremendous size. Its opacity has made it a lucrative business for the largest OTC derivatives dealers: Bank of America, Goldman Sachs, Citigroup, JPMorgan Chase and Morgan Stanley.
The CFTC and SEC, following through on Dodd-Frank, have proposed new standards for OTC swap reporting and record-keeping. The CFTC's proposal on the timing of swaps reporting met some skepticism.
"This proposal merely repeats the vague statutory direction provided in the Dodd-Frank Act," said Scott O'Malia, a Republican CFTC commissioner, in prepared remarks.
In its proposal on Friday, the CFTC did not set specific time limits for reporting most swap trades. It said only that they be submitted "as soon as technologically practicable." It proposed that data on standardized block trades and large notional swaps be held for 15 minutes before being released.
The legislation approved in July is known as the Dodd-Frank Act after its Democratic co-authors Senator Christopher Dodd and Representative Barney Frank.
'REAL-TIME' STANDARD MANDATED
Much of the world's derivatives trading is done in New York and London. The leaders of the Group of 20 (G20) leading economies agreed in 2009 that derivatives must become less risky and more transparent. A report on the issue is expected from G20 regulators in January.
Dodd-Frank called for requiring market participants to report swap trades in "real-time" and left it up to regulators to define what that means -- one of many Dodd-Frank details still to be fleshed out in the implementation phase.
"I am not convinced we are doing the best thing by mandating a 15-minute time limit to report block trades and large notional swap trades between dealers and end users, while providing little to no direction on the reporting of all remaining trades," O'Malia said.
The agencies will evaluate comments from the public on their proposals over the next two months, with changes possibly resulting. Under Dodd-Frank, the deadline for final implementation of most new derivatives rules is April 2011.
The CFTC's preliminary recommendation came on the same day the SEC proposed rules for security-based swaps. Taken together, the agencies' proposals gave an early outline of not only when, but where and how swap data will be disclosed.
Dodd-Frank opens a business opportunity to play a data handling and warehousing role for Depository Trade & Clearing Corp and major exchanges, such as CME Group Inc and IntercontinentalExchange. ICE this week applied to make its ICE Trust unit a registered clearer under the CFTC.
HEDGE FUNDS TARGETED
The SEC on Friday also proposed, under another Dodd-Frank mandate, requiring hedge funds and private equity firms with more than $150 million in assets under management to register with the investor protection agency.
This rule is designed to help the SEC root out fraud and abuse in the $1.65-trillion hedge fund business.
Recently, the hedge fund sector, which includes giants such as Bridgewater Associates and Paulson & Co, has not posted the immense profits that some years ago made it famous.
Many hedge funds are already registered with the SEC, taking some of the edge off the agency's proposals. "They are not going to be hard to comply with," said Ron Geffner, who works with hedge funds as a partner at Sadis & Goldberg LLP.
The European Parliament on November 11 approved new rules to regulate managers of hedge funds and private equity beginning in 2013. EU member-states had already approved the package.
The implementation deadline for the SEC rule on hedge fund and private equity firm registration is April 2011.
(Additional reporting by Ayesha Rascoe and Dave Clarke in Washington, Jonathan Spicer in New York; Writing by Kevin Drawbaugh; Editing by Jackie Frank and Tim Dobbyn)
Source: www.reuters.com
WASHINGTON (Reuters) - Regulators moved on Friday to bring more transparency to the sprawling derivatives market, hedge funds and private equity, all dimly lit corners of the financial world getting more scrutiny.
Proposed rules issued by the Commodity Futures Trading Commission and the Securities and Exchange Commission showed regulators stepping cautiously as they implement hundreds of new regulations mandated in July by Congress.
Shining a brighter light on derivatives was one of the key goals of the landmark Dodd-Frank reforms, pushed through by Democrats and President Barack Obama over the resistance of most Republicans and a host of Wall Street lobbyists.
The CFTC's and SEC's proposed rules target a range of derivatives including credit default swaps, which were implicated in the downfall of troubled giants Lehman Brothers and AIG during the 2007-2009 credit crisis.
Swaps in interest rates, currencies, credit risk or other underlying values, are a big chunk of the $583-trillion global market for derivative contracts traded over-the-counter (OTC), or among private firms, rather than on exchanges.
Until now, the market has been virtually unregulated, despite its tremendous size. Its opacity has made it a lucrative business for the largest OTC derivatives dealers: Bank of America, Goldman Sachs, Citigroup, JPMorgan Chase and Morgan Stanley.
The CFTC and SEC, following through on Dodd-Frank, have proposed new standards for OTC swap reporting and record-keeping. The CFTC's proposal on the timing of swaps reporting met some skepticism.
"This proposal merely repeats the vague statutory direction provided in the Dodd-Frank Act," said Scott O'Malia, a Republican CFTC commissioner, in prepared remarks.
In its proposal on Friday, the CFTC did not set specific time limits for reporting most swap trades. It said only that they be submitted "as soon as technologically practicable." It proposed that data on standardized block trades and large notional swaps be held for 15 minutes before being released.
The legislation approved in July is known as the Dodd-Frank Act after its Democratic co-authors Senator Christopher Dodd and Representative Barney Frank.
'REAL-TIME' STANDARD MANDATED
Much of the world's derivatives trading is done in New York and London. The leaders of the Group of 20 (G20) leading economies agreed in 2009 that derivatives must become less risky and more transparent. A report on the issue is expected from G20 regulators in January.
Dodd-Frank called for requiring market participants to report swap trades in "real-time" and left it up to regulators to define what that means -- one of many Dodd-Frank details still to be fleshed out in the implementation phase.
"I am not convinced we are doing the best thing by mandating a 15-minute time limit to report block trades and large notional swap trades between dealers and end users, while providing little to no direction on the reporting of all remaining trades," O'Malia said.
The agencies will evaluate comments from the public on their proposals over the next two months, with changes possibly resulting. Under Dodd-Frank, the deadline for final implementation of most new derivatives rules is April 2011.
The CFTC's preliminary recommendation came on the same day the SEC proposed rules for security-based swaps. Taken together, the agencies' proposals gave an early outline of not only when, but where and how swap data will be disclosed.
Dodd-Frank opens a business opportunity to play a data handling and warehousing role for Depository Trade & Clearing Corp and major exchanges, such as CME Group Inc and IntercontinentalExchange. ICE this week applied to make its ICE Trust unit a registered clearer under the CFTC.
HEDGE FUNDS TARGETED
The SEC on Friday also proposed, under another Dodd-Frank mandate, requiring hedge funds and private equity firms with more than $150 million in assets under management to register with the investor protection agency.
This rule is designed to help the SEC root out fraud and abuse in the $1.65-trillion hedge fund business.
Recently, the hedge fund sector, which includes giants such as Bridgewater Associates and Paulson & Co, has not posted the immense profits that some years ago made it famous.
Many hedge funds are already registered with the SEC, taking some of the edge off the agency's proposals. "They are not going to be hard to comply with," said Ron Geffner, who works with hedge funds as a partner at Sadis & Goldberg LLP.
The European Parliament on November 11 approved new rules to regulate managers of hedge funds and private equity beginning in 2013. EU member-states had already approved the package.
The implementation deadline for the SEC rule on hedge fund and private equity firm registration is April 2011.
(Additional reporting by Ayesha Rascoe and Dave Clarke in Washington, Jonathan Spicer in New York; Writing by Kevin Drawbaugh; Editing by Jackie Frank and Tim Dobbyn)
Source: www.reuters.com
11/14/2010
Opinion: If G-20 fails so be it but G-2 must succeed
The world’s biggest economies have begun the G20 meeting in Seoul and the intensifying ‘currency war’ between America and China must be addressed before all other issues, including G20 President Sarkozy’s ambitious world economy reform plans.
This summit was supposed to be Nicolas Sarkozy’s chance to try and persuade world leaders to accept changes in the way the world economy and markets work.
France would like to see the world’s richer economies introduce formal mechanisms to reduce the dramatic and volatile fluctuations in exchange rates and basic commodity prices, such as wheat, which he says are partially responsible for speculation and the economic imbalances we are seeing today. He would also like to see the introduction of a tax on market transactions.
Another project involves the widening of G20’s responsibilities to include issues such as the impact of climate change on economies and economic development.
Although Sarkozy’s efforts are laudable in principal they are also fatally flawed because of their ‘French approach’ to issues, which is based upon principles of state and G20 intervention, protectionism and legislation, excesses of which both China and America will not permit under any circumstances. Also, the sheer size of the task he has set himself may well be the reason he will fail. However it must also be said that his G20 agenda has found a lot of support in France and he knows that if he fails at least he will be credited for having tried, that which will not hurt his 2012 reelection chances, particularly if he accuses America and China of sabotaging his plans.
It could even be argued that it doesn’t really matter of G20 doesn’t work out for Sarkozy as long as progress is made on the biggest single issue, that of how to resolve the major differences over currencies which are poisoning the world economic atmosphere and will lead to turmoil if they are not reconciled.
The three main trading blocs are America, China and Europe. However, divisions within Europe have resulted in a lack of a coordinated effort to bring it the Euro down, with individual countries’ interests coming first. Germany has a surplus economy and is reluctant to accept a real stimulus package for the Euro as it fears inflation, France sees things in terms of protectionism, and the need to shore up deficit economies like those of Greece, Spain and Portugal are narrowing the options. Opinion is divided on whether the Euro should be artificially devalued and if so to what extent, but nobody doubts that Europe is falling behind.
Worse, Europe’s inefficiency is leaving the door wide open to what it fears most – a G2 duopoly consisting of America and China. European anger at this possibility is being expressed by many analysts and economists alike. That sentiment was aptly summed up in a recent article in Le Figaro which slams American “selfishness” and Chinese “duplicity.” That may or not be true but one thing is certain, and that is that Europe has found itself sidelined and the Chinese and Americans must find ways to absorb their trade imbalance if they want to be in a position to create a future world economy which would be primarily based on their economies. Failure to do so would not only be catastrophic for them, but for the rest of the world too.
The broad reasons for the ongoing “currency war” between the Yuan and the Dollar are well-known. American deficits are being financed by Chinese surpluses, and although this is keeping the weak American economy afloat it is not likely to move it forward unless China gives it some more rope in the form of a stronger Yuan, which would encourage American exports and jobs. America does not want to adopt an austerity economy because of fears of inflation which would be fueled by the Yuan.
But it is precisely because it is a surplus economy that China is unwilling to budge on the Yuan, fearing for its own exports even though it agrees in theory that the most effective single step forward would be an ‘arrangement’ which would suit both them and the Americans.
American complaints about huge Chinese surpluses at a time when the Chinese economy is booming compared to a weak American recovery did lead to China to de-peg the Yuan from the Dollar in June, but the extent to which it did so was deemed to be insufficient, not only by America but by the rest of the world as well.
China’s defense is that over-strengthening the Yuan could seriously affect its exports and its economy.
That situation led to the recent injection of a massive $600bn into the American economy as a “quantitative easing” (QE) measure designed to devaluate the dollar, help kick start jobs and promote growth. The move is also designed to force the Chinese to either devalue the Yuan or risk seeing the world flooded with excess liquidity which would then oblige a currency reevaluation.
In other words, America and China are fighting a currency war with each country using the weapons at its disposal, but if this situation is allowed to deteriorate much longer the result could well be a worldwide recession which would suit no-one at all.
America and the Dollar no longer dominate the world economy as they did before but they cannot be allowed to fail either. China too must be encouraged to continue its economic progress.
But that will only happen if there is a compromise. China must be persuaded to let the Yuan rise in order to give world exports a chance to breath and America would be very badly-advised to continue printing money to dope the world economy. Action to reduce the present tension on currency needs to be coordinated and simultaneous and both countries must be persuaded that 50% of some progress would be far better than 100% of none. This issue will not be fully resolved at the G20 summit, but the summit must concentrate all its efforts on laying the foundations of an agreement which is desperately needed. And that means that Nicolas Sarkozy will have to wait a while before trying to reform the broader system in one fell swoop.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
Michael Cosgrove
Digital Journalist
Source:www.digitaljournal.com
This summit was supposed to be Nicolas Sarkozy’s chance to try and persuade world leaders to accept changes in the way the world economy and markets work.
France would like to see the world’s richer economies introduce formal mechanisms to reduce the dramatic and volatile fluctuations in exchange rates and basic commodity prices, such as wheat, which he says are partially responsible for speculation and the economic imbalances we are seeing today. He would also like to see the introduction of a tax on market transactions.
Another project involves the widening of G20’s responsibilities to include issues such as the impact of climate change on economies and economic development.
Although Sarkozy’s efforts are laudable in principal they are also fatally flawed because of their ‘French approach’ to issues, which is based upon principles of state and G20 intervention, protectionism and legislation, excesses of which both China and America will not permit under any circumstances. Also, the sheer size of the task he has set himself may well be the reason he will fail. However it must also be said that his G20 agenda has found a lot of support in France and he knows that if he fails at least he will be credited for having tried, that which will not hurt his 2012 reelection chances, particularly if he accuses America and China of sabotaging his plans.
It could even be argued that it doesn’t really matter of G20 doesn’t work out for Sarkozy as long as progress is made on the biggest single issue, that of how to resolve the major differences over currencies which are poisoning the world economic atmosphere and will lead to turmoil if they are not reconciled.
The three main trading blocs are America, China and Europe. However, divisions within Europe have resulted in a lack of a coordinated effort to bring it the Euro down, with individual countries’ interests coming first. Germany has a surplus economy and is reluctant to accept a real stimulus package for the Euro as it fears inflation, France sees things in terms of protectionism, and the need to shore up deficit economies like those of Greece, Spain and Portugal are narrowing the options. Opinion is divided on whether the Euro should be artificially devalued and if so to what extent, but nobody doubts that Europe is falling behind.
Worse, Europe’s inefficiency is leaving the door wide open to what it fears most – a G2 duopoly consisting of America and China. European anger at this possibility is being expressed by many analysts and economists alike. That sentiment was aptly summed up in a recent article in Le Figaro which slams American “selfishness” and Chinese “duplicity.” That may or not be true but one thing is certain, and that is that Europe has found itself sidelined and the Chinese and Americans must find ways to absorb their trade imbalance if they want to be in a position to create a future world economy which would be primarily based on their economies. Failure to do so would not only be catastrophic for them, but for the rest of the world too.
The broad reasons for the ongoing “currency war” between the Yuan and the Dollar are well-known. American deficits are being financed by Chinese surpluses, and although this is keeping the weak American economy afloat it is not likely to move it forward unless China gives it some more rope in the form of a stronger Yuan, which would encourage American exports and jobs. America does not want to adopt an austerity economy because of fears of inflation which would be fueled by the Yuan.
But it is precisely because it is a surplus economy that China is unwilling to budge on the Yuan, fearing for its own exports even though it agrees in theory that the most effective single step forward would be an ‘arrangement’ which would suit both them and the Americans.
American complaints about huge Chinese surpluses at a time when the Chinese economy is booming compared to a weak American recovery did lead to China to de-peg the Yuan from the Dollar in June, but the extent to which it did so was deemed to be insufficient, not only by America but by the rest of the world as well.
China’s defense is that over-strengthening the Yuan could seriously affect its exports and its economy.
That situation led to the recent injection of a massive $600bn into the American economy as a “quantitative easing” (QE) measure designed to devaluate the dollar, help kick start jobs and promote growth. The move is also designed to force the Chinese to either devalue the Yuan or risk seeing the world flooded with excess liquidity which would then oblige a currency reevaluation.
In other words, America and China are fighting a currency war with each country using the weapons at its disposal, but if this situation is allowed to deteriorate much longer the result could well be a worldwide recession which would suit no-one at all.
America and the Dollar no longer dominate the world economy as they did before but they cannot be allowed to fail either. China too must be encouraged to continue its economic progress.
But that will only happen if there is a compromise. China must be persuaded to let the Yuan rise in order to give world exports a chance to breath and America would be very badly-advised to continue printing money to dope the world economy. Action to reduce the present tension on currency needs to be coordinated and simultaneous and both countries must be persuaded that 50% of some progress would be far better than 100% of none. This issue will not be fully resolved at the G20 summit, but the summit must concentrate all its efforts on laying the foundations of an agreement which is desperately needed. And that means that Nicolas Sarkozy will have to wait a while before trying to reform the broader system in one fell swoop.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
Michael Cosgrove
Digital Journalist
Source:www.digitaljournal.com
Difference of opinion at G-20 summit over what ails the global economy
Seoul: As a further indication of the fact that the pre-Summit negotiations of the G-20 are not going very smoothly, India has said that “there are no universally agreed upon diagnoses of what ails the global economy.”
Prime Minister Manmohan Singh conveyed this to British Prime Minister David Cameron, and President Philip Calderon of Mexico on Thursday during his bilateral meetings with them. This indicates that it disagrees with the United States' perception that only China's current account and capital account surpluses are to blame for the global economic predicament.
Dr. Singh also met the Prime Minister of Ethiopia in a bilateral meeting.
According to informed sources, the final G-20 communiqué could run to about 70 pages, reflecting the divergent views.
It has been evident that far too many differences of opinion on key issues of who has to do what have emerged and delegates have even been heard to “raise their voices,” according to an informed source.
The main issue is an old one, namely, that the U.S. and its allies do whatever they want to and then expect others to adjust their policies accordingly. The American decision to pump in $600 billion over the next few months has left everyone jumpy as to the consequences for their economies.
Brazil has already spoken out sharply against this. A Chinese official said on television that if America catches a cold it can't look for Chinese medicines.
China has already taken pre-emptive action against capital surges by asking Chinese banks to deposit more money with the Central bank. Many G-20 members have already put sand in the machine so that destabilising dollar inflows do not cause problems for them.
As a result of the U.S. decision, there are not many takers for the latest American proposal which seeks, as it were, to walk on four legs. In a letter to the G-20, U.S. Treasury Secretary Timothy Geithner, along with Tharman Shanmugaratnam, Singapore Finance Ministerand Wayne Swan, Finance Minister of Australia, have spelt out the four things that the world needs to do.
First, they say, global economic growth must be strengthened; second, in a manner of reminiscent of national policies, they say, global growth must also be balanced across countries so that some countries do not grow at a breakneck speed, while others languish; third, the first two objectives require the world to create “a new framework for cooperation to allow exchange rates to reflect economic fundamentals and support needed structural reforms;” and fourth, no protectionism, please.
The first and the last items are the only ones on which there is no disagreement. But the second and third suggestions are causing problems.
Informed sources told Business Line that India is sitting pretty during all these negotiations as it does what economic theory prescribes, namely, run a deficit on the current account which is financed by a surplus on the capital account. This is in contrast to “some countries” which run a surplus on both accounts.
India is, therefore, focusing on development by asking the developed world to invest in infrastructure in the developing countries. This is a relatively non-controversial issue.
However, India is being asked to endorse the currency adjustment suggestions and is looking for alternative and more ambiguous wording.
Source: www.indiaeveryday.com
Prime Minister Manmohan Singh conveyed this to British Prime Minister David Cameron, and President Philip Calderon of Mexico on Thursday during his bilateral meetings with them. This indicates that it disagrees with the United States' perception that only China's current account and capital account surpluses are to blame for the global economic predicament.
Dr. Singh also met the Prime Minister of Ethiopia in a bilateral meeting.
According to informed sources, the final G-20 communiqué could run to about 70 pages, reflecting the divergent views.
It has been evident that far too many differences of opinion on key issues of who has to do what have emerged and delegates have even been heard to “raise their voices,” according to an informed source.
The main issue is an old one, namely, that the U.S. and its allies do whatever they want to and then expect others to adjust their policies accordingly. The American decision to pump in $600 billion over the next few months has left everyone jumpy as to the consequences for their economies.
Brazil has already spoken out sharply against this. A Chinese official said on television that if America catches a cold it can't look for Chinese medicines.
China has already taken pre-emptive action against capital surges by asking Chinese banks to deposit more money with the Central bank. Many G-20 members have already put sand in the machine so that destabilising dollar inflows do not cause problems for them.
As a result of the U.S. decision, there are not many takers for the latest American proposal which seeks, as it were, to walk on four legs. In a letter to the G-20, U.S. Treasury Secretary Timothy Geithner, along with Tharman Shanmugaratnam, Singapore Finance Ministerand Wayne Swan, Finance Minister of Australia, have spelt out the four things that the world needs to do.
First, they say, global economic growth must be strengthened; second, in a manner of reminiscent of national policies, they say, global growth must also be balanced across countries so that some countries do not grow at a breakneck speed, while others languish; third, the first two objectives require the world to create “a new framework for cooperation to allow exchange rates to reflect economic fundamentals and support needed structural reforms;” and fourth, no protectionism, please.
The first and the last items are the only ones on which there is no disagreement. But the second and third suggestions are causing problems.
Informed sources told Business Line that India is sitting pretty during all these negotiations as it does what economic theory prescribes, namely, run a deficit on the current account which is financed by a surplus on the capital account. This is in contrast to “some countries” which run a surplus on both accounts.
India is, therefore, focusing on development by asking the developed world to invest in infrastructure in the developing countries. This is a relatively non-controversial issue.
However, India is being asked to endorse the currency adjustment suggestions and is looking for alternative and more ambiguous wording.
Source: www.indiaeveryday.com
11/13/2010
Japan: A cautionary tale
CNN) -- As the G-20 meeting wraps up, many leaders -- including U.S. President Barack Obama -- will take a short flight from Seoul, Korea, to Yokohama, Japan, for a summit of Asia-Pacific leaders.
They are taking a flight into the feared future of the developed world.
Japan's economy is beset by the three D's that other nations long to avoid: Deflation, staggering deficits and aging demographics.
"Japan is the one facing the worst problems," says Piero Ghezzi, managing director and head of emerging markets research at Barclay's Capital.
"After Japan are the fragile European countries that are in very dire straits: Greece, Ireland and Portugal ... Spain and Italy, too, but their problems are of a different order," Ghezzi said. "After that, the U.S."
Japan PM Kan speaks
The tale of twin sisters
Leaders from 21 Pacific Rim nations are gathering Saturday in Japan for the annual APEC (Asia-Pacific Economic Cooperation) summit.
It's the first summit since China became the world's second largest economy this year, taking a mantle Japan held since 1968 when its economy soared out of the ashes of World War II. The bubble burst in 1989, and the country has achieved only anemic growth.
Japan is saddled with the world's largest government debt baggage -- estimated to be 225 percent of GDP, and forecast to grow to 250 percent by 2015. By comparison, the U.S. debt is 93 percent of GDP, UK debt is 76 percent and for China it's 19 percent.
"Japan has additional problems like terrible demographics," Ghezzi said.
The aging population means fewer replacement workers who must shoulder the burden of public debt.
"The number of young people supporting our elderly is going to be 2-to-1 in the very near future," said Kathy Matsui, chief Japan strategist for Goldman Sachs Japan. Japanese governmental figures show 40 percent of the population will be over the age of 65 by 2050.
"Unless you allow immigration, it's very difficult to reverse," Ghezzi added. "It's structural, and almost irreversible."
To be sure, Japan remains a strong economy -- although it has slipped to the third largest this year -- there are no likely contenders to knock it further back in the global pecking order in the near future.
But prospects have been diminished by the steady corrosion of deflation, as Japanese consumers delay spending -- why buy today when it will be cheaper tomorrow? That has hurt the domestic job market. Once the land of lifetime employment, approximately one third of 20-to-30-year olds don't have full-time jobs, according to Japan's Ministry of Internal Affairs and Communications. The ministry's figures also show that the highest rate of unemployment is among people under age 25.
An aging population prefers deflation, which influences monetary policy, says Avinash Persaud, chairman of Intelligence Capital and an advisor to several G-20 government boards.
"Europeans and Japanese don't mind a deflationary environment," Persaud said. "Both are filled with older people, with fixed income bond investments. As a retired person on a fixed rate, then deflation is a good thing."
But it is bad for the Japanese economy as a whole and only made worse by Japan's rising yen. The credit crisis led currency speculators to dump the falling U.S. dollar for yen, causing the Japanese currency to hit 15-year highs against the dollar. That has hit export-dependent Japan hard, forcing companies like Toyota, Nissan and Sony to accelerate production outside of Japan.
In an interview with CNN's Kyung Lah earlier this week, Prime Minister Naoto Kan placed part of the blame on U.S. monetary policy. The U.S. Fed announced plans to pump $600 billion into the economy, driving the value of the U.S. dollar even lower.
"With regard to the strong yen, the basic cause is the U.S. economy was undergoing changes with everything being skewed to a weak dollar," said Kan. "Should there be excessive fluctuations in exchange markets, then we need to take resolute actions. In fact, we've already intervened in the market once. This remains an option we can take again."
But in the meantime, the younger generation has fewer expectations of a brighter future.
"Japan is a difficult place to live for young people," 30-year-old Toshiko Kubo told CNN in Tokyo. "Young people don't have goals. We can't have dreams. Even if we have a dream, there's no way to make it come true."
By Kevin Voigt, CNN
Source CNN
www.cnn.com
They are taking a flight into the feared future of the developed world.
Japan's economy is beset by the three D's that other nations long to avoid: Deflation, staggering deficits and aging demographics.
"Japan is the one facing the worst problems," says Piero Ghezzi, managing director and head of emerging markets research at Barclay's Capital.
"After Japan are the fragile European countries that are in very dire straits: Greece, Ireland and Portugal ... Spain and Italy, too, but their problems are of a different order," Ghezzi said. "After that, the U.S."
Japan PM Kan speaks
The tale of twin sisters
Leaders from 21 Pacific Rim nations are gathering Saturday in Japan for the annual APEC (Asia-Pacific Economic Cooperation) summit.
It's the first summit since China became the world's second largest economy this year, taking a mantle Japan held since 1968 when its economy soared out of the ashes of World War II. The bubble burst in 1989, and the country has achieved only anemic growth.
Japan is saddled with the world's largest government debt baggage -- estimated to be 225 percent of GDP, and forecast to grow to 250 percent by 2015. By comparison, the U.S. debt is 93 percent of GDP, UK debt is 76 percent and for China it's 19 percent.
"Japan has additional problems like terrible demographics," Ghezzi said.
The aging population means fewer replacement workers who must shoulder the burden of public debt.
"The number of young people supporting our elderly is going to be 2-to-1 in the very near future," said Kathy Matsui, chief Japan strategist for Goldman Sachs Japan. Japanese governmental figures show 40 percent of the population will be over the age of 65 by 2050.
"Unless you allow immigration, it's very difficult to reverse," Ghezzi added. "It's structural, and almost irreversible."
To be sure, Japan remains a strong economy -- although it has slipped to the third largest this year -- there are no likely contenders to knock it further back in the global pecking order in the near future.
But prospects have been diminished by the steady corrosion of deflation, as Japanese consumers delay spending -- why buy today when it will be cheaper tomorrow? That has hurt the domestic job market. Once the land of lifetime employment, approximately one third of 20-to-30-year olds don't have full-time jobs, according to Japan's Ministry of Internal Affairs and Communications. The ministry's figures also show that the highest rate of unemployment is among people under age 25.
An aging population prefers deflation, which influences monetary policy, says Avinash Persaud, chairman of Intelligence Capital and an advisor to several G-20 government boards.
"Europeans and Japanese don't mind a deflationary environment," Persaud said. "Both are filled with older people, with fixed income bond investments. As a retired person on a fixed rate, then deflation is a good thing."
But it is bad for the Japanese economy as a whole and only made worse by Japan's rising yen. The credit crisis led currency speculators to dump the falling U.S. dollar for yen, causing the Japanese currency to hit 15-year highs against the dollar. That has hit export-dependent Japan hard, forcing companies like Toyota, Nissan and Sony to accelerate production outside of Japan.
In an interview with CNN's Kyung Lah earlier this week, Prime Minister Naoto Kan placed part of the blame on U.S. monetary policy. The U.S. Fed announced plans to pump $600 billion into the economy, driving the value of the U.S. dollar even lower.
"With regard to the strong yen, the basic cause is the U.S. economy was undergoing changes with everything being skewed to a weak dollar," said Kan. "Should there be excessive fluctuations in exchange markets, then we need to take resolute actions. In fact, we've already intervened in the market once. This remains an option we can take again."
But in the meantime, the younger generation has fewer expectations of a brighter future.
"Japan is a difficult place to live for young people," 30-year-old Toshiko Kubo told CNN in Tokyo. "Young people don't have goals. We can't have dreams. Even if we have a dream, there's no way to make it come true."
By Kevin Voigt, CNN
Source CNN
www.cnn.com
11/12/2010
Obama: 'Hard-won consensus' at G-20
Seoul, South Korea (CNN) -- The G-20 summit wrapped up Friday in South Korea, with leaders of the world's top economies acknowledging that "risks remain," as some countries enjoy strong growth and others muddle along.
U.S. President Barack Obama touted a "hard-won consensus" on steps to monitor world trade and economic recovery, aimed at balancing growth globally.
"Uncoordinated policy actions will only lead to worse outcomes for all," the leaders said in a joint declaration.
At the summit, they agreed to steps that include moving toward more market-determined exchange rate systems and refraining from the competitive devaluation of currencies.
It remains to be seen how such steps play out, as countries struggle with their own political and economic priorities, however. They're aimed at limiting economic volatility around the world.
Obama highlighted summit priorities such as economic growth, deficit reduction and the need for economies to better balance imports and exports.
Obama's trip is part of a 10-day Asia tour that is aimed at strengthening the United States' trade and military ties with a region that has thrived economically.
During the summit, American and South Korean negotiators failed to reach an agreement on a new trade pact, creating new delays and obstacles for an accord that the White House has said could translate to an additional $10 billion in U.S. exports and 70,000 American jobs.
A long-running dispute over U.S. access to Korea's auto and beef markets was largely responsible for the failure, according to the White House.
South Korean President Lee Myung-bak has agreed to send a team to Washington to continue work on the trade pact.
Among the hurdles negotiators are trying to overcome: Korean conglomerates known as chaebols, which have kept a firm grasp on the union-strong country's marketplace, drawing complaints from foreign companies that have tried to do business there.
After the G-20, Obama was to head to Japan late Friday afternoon. He is to attend the APEC summit, which will be held in Yokohama on Saturday and Sunday.
Twenty-one countries form the Asia-Pacific Economic Cooperation, which focuses on economic coordination in the Asia Pacific region.
Grappling with a troubled U.S. economy, the Obama administration has highlighted the strengthening of economic and military ties during the president's Asia tour. Obama started his trip with a three-day stay in India, before heading to Indonesia and then to South Korea.
In India, Obama unveiled about $10 billion in contracts for U.S. exports to India. It is Asia's third-largest economy and one of the world's few growth markets.
In Indonesia, the president focused on the two countries' shared principles of unity and tolerance when he delivered a highly anticipated speech at the University of Indonesia. His visit was long-awaited Indonesia, where he spent four years as a child.
In South Korea, Obama met with a roster of world leaders such as Chinese President Hu Jintao and German Chancellor Angela Merkel. They represent economies that export much more than they consume.
Obama also paid tribute to American troops while he was in South Korea. He praised South Korean troops and Americans who fought during the 1950-53 Korean War.
In Japan, he'll attend the APEC summit, attend a leaders retreat and visit the Great Buddha of Kamakura.
The president will head back to the United States on Sunday.
By the CNN Wire Staff
Source: CNN
www.cnn.com
U.S. President Barack Obama touted a "hard-won consensus" on steps to monitor world trade and economic recovery, aimed at balancing growth globally.
"Uncoordinated policy actions will only lead to worse outcomes for all," the leaders said in a joint declaration.
At the summit, they agreed to steps that include moving toward more market-determined exchange rate systems and refraining from the competitive devaluation of currencies.
It remains to be seen how such steps play out, as countries struggle with their own political and economic priorities, however. They're aimed at limiting economic volatility around the world.
Obama highlighted summit priorities such as economic growth, deficit reduction and the need for economies to better balance imports and exports.
Obama's trip is part of a 10-day Asia tour that is aimed at strengthening the United States' trade and military ties with a region that has thrived economically.
During the summit, American and South Korean negotiators failed to reach an agreement on a new trade pact, creating new delays and obstacles for an accord that the White House has said could translate to an additional $10 billion in U.S. exports and 70,000 American jobs.
A long-running dispute over U.S. access to Korea's auto and beef markets was largely responsible for the failure, according to the White House.
South Korean President Lee Myung-bak has agreed to send a team to Washington to continue work on the trade pact.
Among the hurdles negotiators are trying to overcome: Korean conglomerates known as chaebols, which have kept a firm grasp on the union-strong country's marketplace, drawing complaints from foreign companies that have tried to do business there.
After the G-20, Obama was to head to Japan late Friday afternoon. He is to attend the APEC summit, which will be held in Yokohama on Saturday and Sunday.
Twenty-one countries form the Asia-Pacific Economic Cooperation, which focuses on economic coordination in the Asia Pacific region.
Grappling with a troubled U.S. economy, the Obama administration has highlighted the strengthening of economic and military ties during the president's Asia tour. Obama started his trip with a three-day stay in India, before heading to Indonesia and then to South Korea.
In India, Obama unveiled about $10 billion in contracts for U.S. exports to India. It is Asia's third-largest economy and one of the world's few growth markets.
In Indonesia, the president focused on the two countries' shared principles of unity and tolerance when he delivered a highly anticipated speech at the University of Indonesia. His visit was long-awaited Indonesia, where he spent four years as a child.
In South Korea, Obama met with a roster of world leaders such as Chinese President Hu Jintao and German Chancellor Angela Merkel. They represent economies that export much more than they consume.
Obama also paid tribute to American troops while he was in South Korea. He praised South Korean troops and Americans who fought during the 1950-53 Korean War.
In Japan, he'll attend the APEC summit, attend a leaders retreat and visit the Great Buddha of Kamakura.
The president will head back to the United States on Sunday.
By the CNN Wire Staff
Source: CNN
www.cnn.com
11/10/2010
Finally, a talking-shop worth having
The G20 has been a mild success. If it sticks to boring, pragmatic incrementalism, it might just remain one
ONE of the few winners from the global financial crisis was the G20, a group of the world’s biggest economies. These countries’ leaders have met four times in the past two years to chart a common response to the global recession and find ways to prevent a repeat. With big players from the emerging and rich worlds around the table, the G20 has a legitimacy that is lacking in other economic clubs, such as the rich-country-only G7. In the darkest moments of the crisis the G20 yielded impressive results, from a common commitment to fiscal stimulus to more resources for the IMF. Optimists hoped it could become something all too rare in international economic diplomacy: a talking-shop worth having.
Those hopes can be realised even though there are signs that the G20’s utility has faded as the world economy has recovered. The leaders’ last meeting, in Toronto in June, was a washout. It did nothing to reconcile widening divisions, particularly between Europeans and Americans, over the merits of short-term budget austerity. That feebleness has raised the stakes for the next gathering, in Seoul on November 11th-12th.
Global currency tensions are rising as America’s Federal Reserve embarks on a second round of “quantitative easing” (printing money to buy bonds, see article), as China resists allowing the yuan to strengthen much and as other emerging economies face a surge of capital inflows. If the G20’s leaders manage no more than another mealy-mouthed communiqué, many people will begin to suspect that it—like so many other of the Gs—is a waste of time.
That would be a pity. For behind the scenes, under the energetic chairmanship of South Korea, the G20 has notched up a few notable accomplishments in recent weeks. There has at last been some progress in overhauling the IMF. A reform of the “quotas” that determine countries’ heft will increase the clout of emerging economies. Over-represented European countries have been cajoled into giving up two seats on the board. The IMF has also revamped its lending schemes so that well-run countries have access to large amounts of cash if a crisis hits. South Korea argued, rightly, that such a safety net is essential if emerging economies are able to withstand financial crises without piling up ever-larger foreign-exchange reserves. These are small but important improvements. And, thanks to the G20, they were done quite quickly (at least by the glacial standards of international institutions).
If the Seoul summit is to be a success, the G20’s leaders must apply the same approach—call it urgent incrementalism—to today’s main challenge: rebalancing global demand so that it relies less on overindebted America and more on domestic spending in vibrant emerging economies, particularly China. The process will take several years, and is complicated by domestic politics. In America the Republican victory in the mid-term elections reduces the already slim chances of progress either on short-term fiscal stimulus or medium-term deficit reduction. Fiscal gridlock means extra reliance on quantitative easing to boost the economy. That, in turn, will provoke extra capital flows to emerging economies. And since the main emerging economy, China, keeps its capital account closed and its currency pegged, the pressure on others is all the greater.
A Korean lesson for France
The G20 meeting will not magically resolve these tensions. But it can help manage them. It can provide a common analysis of how far countries’ currencies are over- or undervalued and where current-account balances ought to head. America has proposed limiting these imbalances to 4% of GDP. That is too rigid, but there is plenty of scope for the G20 to agree on the ranges countries’ current-account balances should reach.
Incrementalism, however, even of the urgent sort, may not be grand enough for France, which takes over the leadership of the G20 on November 12th. Nicolas Sarkozy, France’s president, has made clear that he wants a debate “without taboos” on the future of the international monetary system. He wants to tackle big subjects, such as the dollar’s role as a reserve asset (see article). Unfortunately, history suggests that big-picture debates on the future of the international monetary system rarely yield results, while diverting attention from smaller, practical goals. France should take note. The G20 will remain worth having only if it sticks to the art of the possible.
Source: The Economist
www.economist.com
ONE of the few winners from the global financial crisis was the G20, a group of the world’s biggest economies. These countries’ leaders have met four times in the past two years to chart a common response to the global recession and find ways to prevent a repeat. With big players from the emerging and rich worlds around the table, the G20 has a legitimacy that is lacking in other economic clubs, such as the rich-country-only G7. In the darkest moments of the crisis the G20 yielded impressive results, from a common commitment to fiscal stimulus to more resources for the IMF. Optimists hoped it could become something all too rare in international economic diplomacy: a talking-shop worth having.
Those hopes can be realised even though there are signs that the G20’s utility has faded as the world economy has recovered. The leaders’ last meeting, in Toronto in June, was a washout. It did nothing to reconcile widening divisions, particularly between Europeans and Americans, over the merits of short-term budget austerity. That feebleness has raised the stakes for the next gathering, in Seoul on November 11th-12th.
Global currency tensions are rising as America’s Federal Reserve embarks on a second round of “quantitative easing” (printing money to buy bonds, see article), as China resists allowing the yuan to strengthen much and as other emerging economies face a surge of capital inflows. If the G20’s leaders manage no more than another mealy-mouthed communiqué, many people will begin to suspect that it—like so many other of the Gs—is a waste of time.
That would be a pity. For behind the scenes, under the energetic chairmanship of South Korea, the G20 has notched up a few notable accomplishments in recent weeks. There has at last been some progress in overhauling the IMF. A reform of the “quotas” that determine countries’ heft will increase the clout of emerging economies. Over-represented European countries have been cajoled into giving up two seats on the board. The IMF has also revamped its lending schemes so that well-run countries have access to large amounts of cash if a crisis hits. South Korea argued, rightly, that such a safety net is essential if emerging economies are able to withstand financial crises without piling up ever-larger foreign-exchange reserves. These are small but important improvements. And, thanks to the G20, they were done quite quickly (at least by the glacial standards of international institutions).
If the Seoul summit is to be a success, the G20’s leaders must apply the same approach—call it urgent incrementalism—to today’s main challenge: rebalancing global demand so that it relies less on overindebted America and more on domestic spending in vibrant emerging economies, particularly China. The process will take several years, and is complicated by domestic politics. In America the Republican victory in the mid-term elections reduces the already slim chances of progress either on short-term fiscal stimulus or medium-term deficit reduction. Fiscal gridlock means extra reliance on quantitative easing to boost the economy. That, in turn, will provoke extra capital flows to emerging economies. And since the main emerging economy, China, keeps its capital account closed and its currency pegged, the pressure on others is all the greater.
A Korean lesson for France
The G20 meeting will not magically resolve these tensions. But it can help manage them. It can provide a common analysis of how far countries’ currencies are over- or undervalued and where current-account balances ought to head. America has proposed limiting these imbalances to 4% of GDP. That is too rigid, but there is plenty of scope for the G20 to agree on the ranges countries’ current-account balances should reach.
Incrementalism, however, even of the urgent sort, may not be grand enough for France, which takes over the leadership of the G20 on November 12th. Nicolas Sarkozy, France’s president, has made clear that he wants a debate “without taboos” on the future of the international monetary system. He wants to tackle big subjects, such as the dollar’s role as a reserve asset (see article). Unfortunately, history suggests that big-picture debates on the future of the international monetary system rarely yield results, while diverting attention from smaller, practical goals. France should take note. The G20 will remain worth having only if it sticks to the art of the possible.
Source: The Economist
www.economist.com
11/09/2010
Finally, a talking-shop worth having
The G20 has been a mild success. If it sticks to boring, pragmatic incrementalism, it might just remain one
ONE of the few winners from the global financial crisis was the G20, a group of the world’s biggest economies. These countries’ leaders have met four times in the past two years to chart a common response to the global recession and find ways to prevent a repeat. With big players from the emerging and rich worlds around the table, the G20 has a legitimacy that is lacking in other economic clubs, such as the rich-country-only G7. In the darkest moments of the crisis the G20 yielded impressive results, from a common commitment to fiscal stimulus to more resources for the IMF. Optimists hoped it could become something all too rare in international economic diplomacy: a talking-shop worth having.
Those hopes can be realised even though there are signs that the G20’s utility has faded as the world economy has recovered. The leaders’ last meeting, in Toronto in June, was a washout. It did nothing to reconcile widening divisions, particularly between Europeans and Americans, over the merits of short-term budget austerity. That feebleness has raised the stakes for the next gathering, in Seoul on November 11th-12th.
Global currency tensions are rising as America’s Federal Reserve embarks on a second round of “quantitative easing” (printing money to buy bonds, see article), as China resists allowing the yuan to strengthen much and as other emerging economies face a surge of capital inflows. If the G20’s leaders manage no more than another mealy-mouthed communiqué, many people will begin to suspect that it—like so many other of the Gs—is a waste of time.
That would be a pity. For behind the scenes, under the energetic chairmanship of South Korea, the G20 has notched up a few notable accomplishments in recent weeks. There has at last been some progress in overhauling the IMF. A reform of the “quotas” that determine countries’ heft will increase the clout of emerging economies. Over-represented European countries have been cajoled into giving up two seats on the board. The IMF has also revamped its lending schemes so that well-run countries have access to large amounts of cash if a crisis hits. South Korea argued, rightly, that such a safety net is essential if emerging economies are able to withstand financial crises without piling up ever-larger foreign-exchange reserves. These are small but important improvements. And, thanks to the G20, they were done quite quickly (at least by the glacial standards of international institutions).
If the Seoul summit is to be a success, the G20’s leaders must apply the same approach—call it urgent incrementalism—to today’s main challenge: rebalancing global demand so that it relies less on overindebted America and more on domestic spending in vibrant emerging economies, particularly China. The process will take several years, and is complicated by domestic politics. In America the Republican victory in the mid-term elections reduces the already slim chances of progress either on short-term fiscal stimulus or medium-term deficit reduction. Fiscal gridlock means extra reliance on quantitative easing to boost the economy. That, in turn, will provoke extra capital flows to emerging economies. And since the main emerging economy, China, keeps its capital account closed and its currency pegged, the pressure on others is all the greater.
A Korean lesson for France
The G20 meeting will not magically resolve these tensions. But it can help manage them. It can provide a common analysis of how far countries’ currencies are over- or undervalued and where current-account balances ought to head. America has proposed limiting these imbalances to 4% of GDP. That is too rigid, but there is plenty of scope for the G20 to agree on the ranges countries’ current-account balances should reach.
Incrementalism, however, even of the urgent sort, may not be grand enough for France, which takes over the leadership of the G20 on November 12th. Nicolas Sarkozy, France’s president, has made clear that he wants a debate “without taboos” on the future of the international monetary system. He wants to tackle big subjects, such as the dollar’s role as a reserve asset (see article). Unfortunately, history suggests that big-picture debates on the future of the international monetary system rarely yield results, while diverting attention from smaller, practical goals. France should take note. The G20 will remain worth having only if it sticks to the art of the possible.
Source: The Ecoomist
www.economist.com
ONE of the few winners from the global financial crisis was the G20, a group of the world’s biggest economies. These countries’ leaders have met four times in the past two years to chart a common response to the global recession and find ways to prevent a repeat. With big players from the emerging and rich worlds around the table, the G20 has a legitimacy that is lacking in other economic clubs, such as the rich-country-only G7. In the darkest moments of the crisis the G20 yielded impressive results, from a common commitment to fiscal stimulus to more resources for the IMF. Optimists hoped it could become something all too rare in international economic diplomacy: a talking-shop worth having.
Those hopes can be realised even though there are signs that the G20’s utility has faded as the world economy has recovered. The leaders’ last meeting, in Toronto in June, was a washout. It did nothing to reconcile widening divisions, particularly between Europeans and Americans, over the merits of short-term budget austerity. That feebleness has raised the stakes for the next gathering, in Seoul on November 11th-12th.
Global currency tensions are rising as America’s Federal Reserve embarks on a second round of “quantitative easing” (printing money to buy bonds, see article), as China resists allowing the yuan to strengthen much and as other emerging economies face a surge of capital inflows. If the G20’s leaders manage no more than another mealy-mouthed communiqué, many people will begin to suspect that it—like so many other of the Gs—is a waste of time.
That would be a pity. For behind the scenes, under the energetic chairmanship of South Korea, the G20 has notched up a few notable accomplishments in recent weeks. There has at last been some progress in overhauling the IMF. A reform of the “quotas” that determine countries’ heft will increase the clout of emerging economies. Over-represented European countries have been cajoled into giving up two seats on the board. The IMF has also revamped its lending schemes so that well-run countries have access to large amounts of cash if a crisis hits. South Korea argued, rightly, that such a safety net is essential if emerging economies are able to withstand financial crises without piling up ever-larger foreign-exchange reserves. These are small but important improvements. And, thanks to the G20, they were done quite quickly (at least by the glacial standards of international institutions).
If the Seoul summit is to be a success, the G20’s leaders must apply the same approach—call it urgent incrementalism—to today’s main challenge: rebalancing global demand so that it relies less on overindebted America and more on domestic spending in vibrant emerging economies, particularly China. The process will take several years, and is complicated by domestic politics. In America the Republican victory in the mid-term elections reduces the already slim chances of progress either on short-term fiscal stimulus or medium-term deficit reduction. Fiscal gridlock means extra reliance on quantitative easing to boost the economy. That, in turn, will provoke extra capital flows to emerging economies. And since the main emerging economy, China, keeps its capital account closed and its currency pegged, the pressure on others is all the greater.
A Korean lesson for France
The G20 meeting will not magically resolve these tensions. But it can help manage them. It can provide a common analysis of how far countries’ currencies are over- or undervalued and where current-account balances ought to head. America has proposed limiting these imbalances to 4% of GDP. That is too rigid, but there is plenty of scope for the G20 to agree on the ranges countries’ current-account balances should reach.
Incrementalism, however, even of the urgent sort, may not be grand enough for France, which takes over the leadership of the G20 on November 12th. Nicolas Sarkozy, France’s president, has made clear that he wants a debate “without taboos” on the future of the international monetary system. He wants to tackle big subjects, such as the dollar’s role as a reserve asset (see article). Unfortunately, history suggests that big-picture debates on the future of the international monetary system rarely yield results, while diverting attention from smaller, practical goals. France should take note. The G20 will remain worth having only if it sticks to the art of the possible.
Source: The Ecoomist
www.economist.com
11/08/2010
Germany attacks US economic policy
By Ralph Atkins, FT.com
Germany has put itself on a collision course with the US over the global economy, after its finance minister launched an extraordinary attack on policies being pursued in Washington.
Wolfgang Schäuble accused the US of undermining its policymaking credibility, increasing global economic uncertainty and of hypocrisy over exchange rates. The US economic growth model was in a "deep crisis," he also warned over the weekend.
His comments set the stage for acrimonious talks at the G20 summit in Seoul starting on Thursday. Germany has been irritated at US proposals that it should make more effort to reduce its current account surplus. But Berlin policymakers were also alarmed by last week's US Federal Reserve decision to pump an extra $600bn into financial markets in an attempt to revive US economic prospects through "quantitative easing".
On Friday, Mr Schäuble described US policy as "clueless". In a Der Spiegel magazine interview, to be published on Monday, he expanded his criticism further, saying decisions taken by the Fed "increase the insecurity in the world economy".
" They make a reasonable balance between industrial and developing countries more difficult and they undermine the credibility of the US in finance policymaking."
Mr Schäuble added: "It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank's] printing press."
Germany's export success, he argued, was not based on "exchange rate tricks" but on increased competitiveness. "In contrast, the American growth model is in a deep crisis. The Americans have lived for too long on credit, overblown their financial sector and neglected their industrial base. There are lots of reasons for the US problems -- German export surpluses are not part of them."
There was also "considerable doubt" as to whether pumping endless money into markets made sense, Mr Schäuble argued. "The US economy is not lacking liquidity."
On the future of the eurozone, Mr Schäuble confirmed in the same interview that Berlin will push for a greater private investor involvement in future bail-outs. To ensure German taxpayers faced the smallest possible burden it was important to have the possibility of an orderly debt restructuring with the participation of private creditors, he said.
Germany's proposals for a planned new rescue mechanism have run into resistance from the European Central Bank, which fears they will add to investor uncertainty at a crucial time for Europe's 12-year old monetary union. Mr Schäuble said the new mechanism would apply only to new eurozone debt but argued the European Union "was not founded to enrich financial investors".
Mr Schäuble envisaged a two-stage process in a future crisis. The EU would put in place the same sort of saving and rescue programme as imposed this year on Greece. In a first stage, the term structure of government debt could be extended. If that did not work, then in a second stage, private creditors would have to take a discount on their holdings. In return, the value of the remainder would be guaranteed, Mr Schäuble said.
Source: CNN
www.cnn.com
Germany has put itself on a collision course with the US over the global economy, after its finance minister launched an extraordinary attack on policies being pursued in Washington.
Wolfgang Schäuble accused the US of undermining its policymaking credibility, increasing global economic uncertainty and of hypocrisy over exchange rates. The US economic growth model was in a "deep crisis," he also warned over the weekend.
His comments set the stage for acrimonious talks at the G20 summit in Seoul starting on Thursday. Germany has been irritated at US proposals that it should make more effort to reduce its current account surplus. But Berlin policymakers were also alarmed by last week's US Federal Reserve decision to pump an extra $600bn into financial markets in an attempt to revive US economic prospects through "quantitative easing".
On Friday, Mr Schäuble described US policy as "clueless". In a Der Spiegel magazine interview, to be published on Monday, he expanded his criticism further, saying decisions taken by the Fed "increase the insecurity in the world economy".
" They make a reasonable balance between industrial and developing countries more difficult and they undermine the credibility of the US in finance policymaking."
Mr Schäuble added: "It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank's] printing press."
Germany's export success, he argued, was not based on "exchange rate tricks" but on increased competitiveness. "In contrast, the American growth model is in a deep crisis. The Americans have lived for too long on credit, overblown their financial sector and neglected their industrial base. There are lots of reasons for the US problems -- German export surpluses are not part of them."
There was also "considerable doubt" as to whether pumping endless money into markets made sense, Mr Schäuble argued. "The US economy is not lacking liquidity."
On the future of the eurozone, Mr Schäuble confirmed in the same interview that Berlin will push for a greater private investor involvement in future bail-outs. To ensure German taxpayers faced the smallest possible burden it was important to have the possibility of an orderly debt restructuring with the participation of private creditors, he said.
Germany's proposals for a planned new rescue mechanism have run into resistance from the European Central Bank, which fears they will add to investor uncertainty at a crucial time for Europe's 12-year old monetary union. Mr Schäuble said the new mechanism would apply only to new eurozone debt but argued the European Union "was not founded to enrich financial investors".
Mr Schäuble envisaged a two-stage process in a future crisis. The EU would put in place the same sort of saving and rescue programme as imposed this year on Greece. In a first stage, the term structure of government debt could be extended. If that did not work, then in a second stage, private creditors would have to take a discount on their holdings. In return, the value of the remainder would be guaranteed, Mr Schäuble said.
Source: CNN
www.cnn.com
China tees up G20 showdown with U.S.
By Alan Beattie in Washington, Geoff Dyer in Beijing, Chris Giles in London
(FT) -- China has curtly dismissed a U.S. proposal to address global economic imbalances, setting the stage for a potential showdown at next week's G20 meeting in Seoul.
Cui Tiankai, a deputy foreign minister and one of China's lead negotiators at the G20, said on Friday that the U.S. plan for limiting current account surpluses and deficits to 4 per cent of gross domestic product harked back "to the days of planned economies".
"We believe a discussion about a current account target misses the whole point," he added, in the first official comment by a senior Chinese official on the subject. "If you look at the global economy, there are many issues that merit more attention -- for example, the question of quantitative easing."
China's opposition to the proposal, which had made some progress at a G20 finance ministers' meeting last month, came amid a continuing rumble of protest from around the world at the U.S. Federal Reserve's plan to pump an extra $600bn into financial markets.
Officials from China, Germany and South Africa on Friday added their voices to a chorus of complaint that the Fed's return to so-called quantitative easing would create instability and worsen imbalances by triggering surges of capital into other currencies.
Tim Geithner, the U.S. Treasury secretary, has proposed using what the U.S. refers to as current account "guidelines" to accelerate global rebalancing, partly as a way of changing the debate away from simply pressing China to allow faster appreciation in the renminbi.
But on Thursday and Friday, governments focused instead on the global impact of the Fed's action. "With all due respect, U.S. policy is clueless," Wolfgang Schäuble, German finance minister, told reporters. "It's not that the Americans haven't pumped enough liquidity into the market," he said. "Now to say let's pump more into the market is not going to solve their problems."
Pravin Gordhan, finance minister of South Africa, a key member of the emerging market bloc, said the decision "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis", and ran counter to the pledge made by G20 finance ministers to refrain from uncoordinated responses.
The U.S. Treasury declined to comment on Friday.
Experts say the mood has soured since the G20 Toronto summit in June and worry that unless the summit can patch up differences on trade imbalances and exchange rates, the outlook for international economic agreement is poor.
Ousmène Mandeng of Ashmore Investment Management and a former senior International Monetary Fund official, said: "The G20 will also have to show [in Seoul] it can work on the issue or its very existence will be in question."
In recent weeks, there had been some hints that China was favourable to the idea of current account targets. Yi Gang, a deputy central bank governor, said China aimed to reduce its surplus to 4 per cent of GDP in the medium-term
But Mr Cui's comments suggest that China's senior leaders have decided to reject Mr Geithner's proposal. "We believe it would not be a good approach to single out this issue and focus all attention on it," he said.
Separately, the deputy foreign minister also had a stern message for European leaders, warning them not to attend next month's Nobel Peace Prize ceremony for Liu Xiaobo, an imprisoned Chinese democracy activist.
Source:CNN
www.cnn.com
(FT) -- China has curtly dismissed a U.S. proposal to address global economic imbalances, setting the stage for a potential showdown at next week's G20 meeting in Seoul.
Cui Tiankai, a deputy foreign minister and one of China's lead negotiators at the G20, said on Friday that the U.S. plan for limiting current account surpluses and deficits to 4 per cent of gross domestic product harked back "to the days of planned economies".
"We believe a discussion about a current account target misses the whole point," he added, in the first official comment by a senior Chinese official on the subject. "If you look at the global economy, there are many issues that merit more attention -- for example, the question of quantitative easing."
China's opposition to the proposal, which had made some progress at a G20 finance ministers' meeting last month, came amid a continuing rumble of protest from around the world at the U.S. Federal Reserve's plan to pump an extra $600bn into financial markets.
Officials from China, Germany and South Africa on Friday added their voices to a chorus of complaint that the Fed's return to so-called quantitative easing would create instability and worsen imbalances by triggering surges of capital into other currencies.
Tim Geithner, the U.S. Treasury secretary, has proposed using what the U.S. refers to as current account "guidelines" to accelerate global rebalancing, partly as a way of changing the debate away from simply pressing China to allow faster appreciation in the renminbi.
But on Thursday and Friday, governments focused instead on the global impact of the Fed's action. "With all due respect, U.S. policy is clueless," Wolfgang Schäuble, German finance minister, told reporters. "It's not that the Americans haven't pumped enough liquidity into the market," he said. "Now to say let's pump more into the market is not going to solve their problems."
Pravin Gordhan, finance minister of South Africa, a key member of the emerging market bloc, said the decision "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis", and ran counter to the pledge made by G20 finance ministers to refrain from uncoordinated responses.
The U.S. Treasury declined to comment on Friday.
Experts say the mood has soured since the G20 Toronto summit in June and worry that unless the summit can patch up differences on trade imbalances and exchange rates, the outlook for international economic agreement is poor.
Ousmène Mandeng of Ashmore Investment Management and a former senior International Monetary Fund official, said: "The G20 will also have to show [in Seoul] it can work on the issue or its very existence will be in question."
In recent weeks, there had been some hints that China was favourable to the idea of current account targets. Yi Gang, a deputy central bank governor, said China aimed to reduce its surplus to 4 per cent of GDP in the medium-term
But Mr Cui's comments suggest that China's senior leaders have decided to reject Mr Geithner's proposal. "We believe it would not be a good approach to single out this issue and focus all attention on it," he said.
Separately, the deputy foreign minister also had a stern message for European leaders, warning them not to attend next month's Nobel Peace Prize ceremony for Liu Xiaobo, an imprisoned Chinese democracy activist.
Source:CNN
www.cnn.com
10/26/2010
Will the G20 deliver for the world's poor?
With over 8 million children dying each year from preventable causes, a global financial transaction tax could be the solution
To be in South Korea as part of its hosting of the G20 summit which will be held on 11 and 12 November is to witness a piece of history.
In the lifetime of South Korea's leaders, and in a triumph of development, the country has gone from having a GDP per capita lower than much of sub-Saharan Africa to being one of the world's largest economies, and is now a larger aid donor than some European countries. It didn't get here by following the "guidance" of the international financial institutions. Instead, South Korean growth came from redistributing wealth, managing market engagement and making massive public investment in human capital.
Indeed, the success of east Asia, and the failure of the Washington Consensus, prompted me to ask the G20 representatives attending the recent High-Level Development Conference in South Korea earlier this month whether we should swap the Washington consensus for a Seoul consensus. The eclipsing of the G7/G8 by the G20 marks a change in the global political economy. It changes the culture of global meetings too. I'm pretty sure, for example, that this is the first time a host government of such a meeting has had an official pop song.
But for those who had hoped that the expansion of the old colonial G8 into the more inclusive G20 would bring a greater focus on poverty, there will be some disappointment. The G20 do not want to discuss aid or debt for example, and it was a struggle to even get development on the agenda. Even with development now an official topic of discussion, I had one (western) government representative at the meetings confess: "I don't know much about development, I'm an economist." And though the chairman of the African Union is invited as an observer, the AU is still not a permanent, equal member of the forum. "There has to be a balance between efficiency and inclusiveness," goes the mantra. Those who complained about the old G8 but made it into the G20 go along with this. All reminiscent of the natural human tendency that when you're waiting for a bus in the rain, you shout at the buses that keep driving past; but when you get into the bus, you join in with the others shouting to the driver that the bus is too full to keep stopping at all the stops to let rain-drenched passengers in.
The civil society groups attending the meetings of Civil G20 have taken a different approach, with more than 100 participants from across the world. It is a wonderfully diverse group: in my first five minutes at a meeting I met an obstetrician, a teacher, a lawyer and a priest. But it is a hard group to organise. At times we got a little sidetracked. Discussing a civil society submission paper to the G20, someone asked another participant: "Are you upset because of the comma?"
For those focused on global poverty, the most important issue being discussed at the G20 is the idea of an FTT, a financial transaction tax to help raise the money needed to fight poverty. It sounds wonkish, but at a rate of just 0.05%, and applied globally, this could raise between £256bn and £446bn annually, roughly four to seven times the current level of overseas aid. Among the G20 representatives, opinion is divided. A senior official from a major economy told a group of community activists from Asia, Latin America and Africa that while the idea of taxing irresponsible traders may seem attractive, in the end the costs would fall upon "ordinary people like me and you". In the middle ground was the government representative who acknowledged that the FTT was a good idea but declared that it would be "hard to do". (Can the world's "premier economic forum" not do hard things?) But a representative from another G20 country urged me: "Please keep pushing on the financial transaction tax. We need you to do so. It's like with the landmines treaty. Governments said it couldn't be done. You in the NGOs kept pushing. And it happened. This can happen too. It will happen – if you keep pushing us."
Civil society advocacy stands little chance when all governments are opposed to us – but when an issue is in contention, like this one, we can be the force that makes the difference, that pushes an issue beyond the tipping point. The world is short of more than 3.5 million health workers, and an FTT could help pay for them. For some of the more than 8 million children who die every year from preventable causes, that could mean life instead of death. An FTT won't be agreed this month or next month, but if we can keep it on the agenda, as the French start to organise for their chairing of the G20 in 2011, we can help to ensure that it does happen, and that we make another piece of history.
• Ben Phillips is Save The Children's Asia strategy director. Currently based in Bangkok, he has previously lived in India, South Africa, Japan, the Netherlands and the US. He is the author of Learning to Survive: How Education for All could prevent millions of deaths from HIV/Aids, and Must Try Harder: a school report on donors' aid for education. He tweets at http://twitter.com/atbenphillips
Source: Guardian
www.guardian.co.uk
To be in South Korea as part of its hosting of the G20 summit which will be held on 11 and 12 November is to witness a piece of history.
In the lifetime of South Korea's leaders, and in a triumph of development, the country has gone from having a GDP per capita lower than much of sub-Saharan Africa to being one of the world's largest economies, and is now a larger aid donor than some European countries. It didn't get here by following the "guidance" of the international financial institutions. Instead, South Korean growth came from redistributing wealth, managing market engagement and making massive public investment in human capital.
Indeed, the success of east Asia, and the failure of the Washington Consensus, prompted me to ask the G20 representatives attending the recent High-Level Development Conference in South Korea earlier this month whether we should swap the Washington consensus for a Seoul consensus. The eclipsing of the G7/G8 by the G20 marks a change in the global political economy. It changes the culture of global meetings too. I'm pretty sure, for example, that this is the first time a host government of such a meeting has had an official pop song.
But for those who had hoped that the expansion of the old colonial G8 into the more inclusive G20 would bring a greater focus on poverty, there will be some disappointment. The G20 do not want to discuss aid or debt for example, and it was a struggle to even get development on the agenda. Even with development now an official topic of discussion, I had one (western) government representative at the meetings confess: "I don't know much about development, I'm an economist." And though the chairman of the African Union is invited as an observer, the AU is still not a permanent, equal member of the forum. "There has to be a balance between efficiency and inclusiveness," goes the mantra. Those who complained about the old G8 but made it into the G20 go along with this. All reminiscent of the natural human tendency that when you're waiting for a bus in the rain, you shout at the buses that keep driving past; but when you get into the bus, you join in with the others shouting to the driver that the bus is too full to keep stopping at all the stops to let rain-drenched passengers in.
The civil society groups attending the meetings of Civil G20 have taken a different approach, with more than 100 participants from across the world. It is a wonderfully diverse group: in my first five minutes at a meeting I met an obstetrician, a teacher, a lawyer and a priest. But it is a hard group to organise. At times we got a little sidetracked. Discussing a civil society submission paper to the G20, someone asked another participant: "Are you upset because of the comma?"
For those focused on global poverty, the most important issue being discussed at the G20 is the idea of an FTT, a financial transaction tax to help raise the money needed to fight poverty. It sounds wonkish, but at a rate of just 0.05%, and applied globally, this could raise between £256bn and £446bn annually, roughly four to seven times the current level of overseas aid. Among the G20 representatives, opinion is divided. A senior official from a major economy told a group of community activists from Asia, Latin America and Africa that while the idea of taxing irresponsible traders may seem attractive, in the end the costs would fall upon "ordinary people like me and you". In the middle ground was the government representative who acknowledged that the FTT was a good idea but declared that it would be "hard to do". (Can the world's "premier economic forum" not do hard things?) But a representative from another G20 country urged me: "Please keep pushing on the financial transaction tax. We need you to do so. It's like with the landmines treaty. Governments said it couldn't be done. You in the NGOs kept pushing. And it happened. This can happen too. It will happen – if you keep pushing us."
Civil society advocacy stands little chance when all governments are opposed to us – but when an issue is in contention, like this one, we can be the force that makes the difference, that pushes an issue beyond the tipping point. The world is short of more than 3.5 million health workers, and an FTT could help pay for them. For some of the more than 8 million children who die every year from preventable causes, that could mean life instead of death. An FTT won't be agreed this month or next month, but if we can keep it on the agenda, as the French start to organise for their chairing of the G20 in 2011, we can help to ensure that it does happen, and that we make another piece of history.
• Ben Phillips is Save The Children's Asia strategy director. Currently based in Bangkok, he has previously lived in India, South Africa, Japan, the Netherlands and the US. He is the author of Learning to Survive: How Education for All could prevent millions of deaths from HIV/Aids, and Must Try Harder: a school report on donors' aid for education. He tweets at http://twitter.com/atbenphillips
Source: Guardian
www.guardian.co.uk
10/25/2010
U.S., China discuss economic ties amid tension
Beijing, China (CNN) -- U.S. Treasury Secretary Timothy Geithner met China's Vice-Premier Wang Qishan on Sunday and "exchanged views" about economic relations between their countries, both sides said.
The meeting came shortly after Geithner publicly hammered China over its currency, which Washington says Beijing keeps at artificially low levels to boost exports.
Geithner had urged the world's leading finance ministers to take strong action to ensure emerging markets nations allow their currency to rise in value in line with the free market.
The worry is that if such currency manipulation continues, it could wreak havoc on international trade.
He insisted that "countries that have traditionally run large trade and current account surpluses" -- which China has done -- needed to move "away from export dependence and toward stronger domestic demand led growth."
He said rich countries like the United States needed to play their part too by saving, investing and exporting more.
He was speaking at a meeting of finance ministers of the G-20 group of nations. Their two-day meeting wrapped up Saturday in Gyeongju, South Korea, with the ministers pledging not to engage in currency wars.
Geithner then flew on to China, where he met Wang at the Qingdao Airport.
They also discussed plans for the G-20 leaders meeting in Seoul, South Korea, next month, the Americans said.
In the G-20 finance ministers' closing statement, they said they would "move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies."
The ministers added that the G-20 member nations would "continue to resist all forms of protectionist measures and seek to make significant progress to further reduce barriers to trade."
The G-20 stopped short of outright banning currency manipulation though.
The meeting was a precursor to the larger G-20 meeting taking place in Seoul on November 11 and 12. That summit will involve the heads of state from the G-20 nations. President Obama will attend.
Tensions about currency and trade are likely to be high at that meeting as well.
The G-20 acknowledged in Saturday's statement that the global economic recovery is currently advancing, but it was doing so in "a fragile and uneven way."
The ministers added that "growth has been strong in many emerging market economies, but the pace of activity remains modest in many advanced economies."
As further evidence of that, China announced earlier this week that its gross domestic product for the third-quarter rose at an annual rate of 9.6 percent.
While that's slower than in previous quarters, it is still far higher than the growth rates of the United States, Japan and nations in Europe.
China's central bank also announced earlier this week that it was raising a key interest rate for the first time in nearly three years.
That comes at a time when many expect the Federal Reserve to soon announce more details about how it intends to further ease its own monetary policies.
In a nod to the increased economic clout of China and other emerging markets, such as Brazil, India and Russia, the G-20 ministers also announced a deal Saturday that would give emerging markets countries more seats on the board of the International Monetary Fund.
By the CNN Wire Staff
Source: CNN
www.cnn.com
The meeting came shortly after Geithner publicly hammered China over its currency, which Washington says Beijing keeps at artificially low levels to boost exports.
Geithner had urged the world's leading finance ministers to take strong action to ensure emerging markets nations allow their currency to rise in value in line with the free market.
The worry is that if such currency manipulation continues, it could wreak havoc on international trade.
He insisted that "countries that have traditionally run large trade and current account surpluses" -- which China has done -- needed to move "away from export dependence and toward stronger domestic demand led growth."
He said rich countries like the United States needed to play their part too by saving, investing and exporting more.
He was speaking at a meeting of finance ministers of the G-20 group of nations. Their two-day meeting wrapped up Saturday in Gyeongju, South Korea, with the ministers pledging not to engage in currency wars.
Geithner then flew on to China, where he met Wang at the Qingdao Airport.
They also discussed plans for the G-20 leaders meeting in Seoul, South Korea, next month, the Americans said.
In the G-20 finance ministers' closing statement, they said they would "move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies."
The ministers added that the G-20 member nations would "continue to resist all forms of protectionist measures and seek to make significant progress to further reduce barriers to trade."
The G-20 stopped short of outright banning currency manipulation though.
The meeting was a precursor to the larger G-20 meeting taking place in Seoul on November 11 and 12. That summit will involve the heads of state from the G-20 nations. President Obama will attend.
Tensions about currency and trade are likely to be high at that meeting as well.
The G-20 acknowledged in Saturday's statement that the global economic recovery is currently advancing, but it was doing so in "a fragile and uneven way."
The ministers added that "growth has been strong in many emerging market economies, but the pace of activity remains modest in many advanced economies."
As further evidence of that, China announced earlier this week that its gross domestic product for the third-quarter rose at an annual rate of 9.6 percent.
While that's slower than in previous quarters, it is still far higher than the growth rates of the United States, Japan and nations in Europe.
China's central bank also announced earlier this week that it was raising a key interest rate for the first time in nearly three years.
That comes at a time when many expect the Federal Reserve to soon announce more details about how it intends to further ease its own monetary policies.
In a nod to the increased economic clout of China and other emerging markets, such as Brazil, India and Russia, the G-20 ministers also announced a deal Saturday that would give emerging markets countries more seats on the board of the International Monetary Fund.
By the CNN Wire Staff
Source: CNN
www.cnn.com
Trade imbalance targets elude G20
(FT) -- Leaders from the G20 group of leading economies will next month seek to agree specific guidelines on reducing global trade imbalances, in a fresh attempt to head off a potential "currency war".
Finance ministers and central bank governors, meeting this weekend in the South Korean city of Gyeongju, agreed on a policy framework to contain large current account surpluses and deficits, but a proposal to set specific targets ran into opposition.
The dollar traded near a one-week low against the euro or $1.3997 against the single currency in Asian time trading after the meeting, before coming back .
The meeting also announced significant progress in reforming the International Monetary Fund, shifting power away from Europe and towards emerging nations like China and Brazil.
Analyst reaction was muted. Eswar Prasad, a former IMF official now at Cornell University in the US, said a previous attempt to impose tougher IMF surveillance of current account imbalances had achieved little while the threat of such monitoring was unlikely to trigger policy changes in countries with large surpluses and deficits.
Todd Elmer, of Citigroup, said: "The meeting produced little pressure for the US to back away from its accommodative stance which has fuelled dollar depreciation, it does not call more strongly for increased flexibility in Asia and it appears to leave an out for some countries, like Japan, to pursue intervention or capital controls."
The US, which has been pushing China to allow its currency to rise and reduce its huge trade surplus, claimed victory. Tim Geithner, Treasury secretary, said after the meeting: "The most important thing we achieved is agreement on a framework for curbing excess trade imbalances in the future."
But the statement issued by the ministers left unclear how the imbalances would be reduced. The communiqué also issued a clear warning to the US that loose monetary policy could continue to push volatile capital flows into emerging economies.
European nations agreed to surrender two of their seats on the IMF's 24-member executive board to make way for emerging nations, who will also receive a greater share of "quotas", which determine voting power. But the exact decisions on reorganising quotas was deferred until 2012.
Christine Lagarde, France's finance minister, agreed the shift to combating imbalances would offer a sense of purpose to the French presidency of the G20 next year. The US and South Korea had also sought to forge consensus on a numerical target for surpluses and deficits at this weekend's meeting, suggesting a cap of 4 per cent of gross domestic product. But the idea of a specific target ran into stern opposition from Germany, Brazil and Japan.
By Christian Oliver, Alan Beattie and Peter Garnham, FT.com
Finance ministers and central bank governors, meeting this weekend in the South Korean city of Gyeongju, agreed on a policy framework to contain large current account surpluses and deficits, but a proposal to set specific targets ran into opposition.
The dollar traded near a one-week low against the euro or $1.3997 against the single currency in Asian time trading after the meeting, before coming back .
The meeting also announced significant progress in reforming the International Monetary Fund, shifting power away from Europe and towards emerging nations like China and Brazil.
Analyst reaction was muted. Eswar Prasad, a former IMF official now at Cornell University in the US, said a previous attempt to impose tougher IMF surveillance of current account imbalances had achieved little while the threat of such monitoring was unlikely to trigger policy changes in countries with large surpluses and deficits.
Todd Elmer, of Citigroup, said: "The meeting produced little pressure for the US to back away from its accommodative stance which has fuelled dollar depreciation, it does not call more strongly for increased flexibility in Asia and it appears to leave an out for some countries, like Japan, to pursue intervention or capital controls."
The US, which has been pushing China to allow its currency to rise and reduce its huge trade surplus, claimed victory. Tim Geithner, Treasury secretary, said after the meeting: "The most important thing we achieved is agreement on a framework for curbing excess trade imbalances in the future."
But the statement issued by the ministers left unclear how the imbalances would be reduced. The communiqué also issued a clear warning to the US that loose monetary policy could continue to push volatile capital flows into emerging economies.
European nations agreed to surrender two of their seats on the IMF's 24-member executive board to make way for emerging nations, who will also receive a greater share of "quotas", which determine voting power. But the exact decisions on reorganising quotas was deferred until 2012.
Christine Lagarde, France's finance minister, agreed the shift to combating imbalances would offer a sense of purpose to the French presidency of the G20 next year. The US and South Korea had also sought to forge consensus on a numerical target for surpluses and deficits at this weekend's meeting, suggesting a cap of 4 per cent of gross domestic product. But the idea of a specific target ran into stern opposition from Germany, Brazil and Japan.
By Christian Oliver, Alan Beattie and Peter Garnham, FT.com
10/23/2010
Geithner calls for cap on trade surpluses
Gyeongju, South Korea (FT) -- Washington has taken a fresh line of attack in attempts to get Beijing to allow its currency to appreciate, calling for the G20 group of leading economies to agree a cap on current account surpluses.
The U.S. has long sought faster and sustained appreciation of the renminbi but Beijing has consistently resisted specific targets.
In order to break this impasse, Timothy Geithner, U.S. Treasury secretary, said G20 finance ministers, meeting in the South Korean city of Gyeongju on Friday, should commit to limit trade deficits and surpluses that create imbalances in the global economy.
"G20 countries with persistent surpluses should undertake structural, fiscal and exchange rate policies to boost domestic sources of growth and support global demand," Mr Geithner wrote in a letter to G20 ministers that was circulated among reporters.
Still, much of Mr Geithner's language was tailored to the challenge posed by the renminbi. By building up domestic demand and increasing imports, China would be inclined to allow a faster strengthening of its currency.
"Emerging market countries with significantly undervalued currencies and adequate precautionary reserves need to allow their exchange rates to adjust fully over time to levels consistent with economic fundamentals," he added.
G20 officials on Friday said the U.S. initially proposed that trade surpluses should be capped at 4 per cent of gross domestic product.
One senior G20 official said the letter, drafted after a proposal from South Korea, would not come as a shock to the Chinese because financial officials had been sounding out Beijing in earlier meetings.
The G20 official said the Chinese had cautiously welcomed the suggestion of shifting the debate away from the narrow focus on currency and could even be open to the 4 per cent target because it chimed with their own forecasts.
"I do not know whether the Chinese fully agreed in advance or not, but if the Americans decided to circulate the letter, it should be a sign they have already agreed something. The bigger worry is opposition from Germany and Japan."
China gave no immediate reaction. Cui Tiankai, Beijing's representative to the G20, last week said any U.S.-led offensive on Chinese currency would be "wrong" but said he was "cautiously optimistic" a final deal could be done if it took broad macroeconomic factors into account.
He said asking China to set targets on currency was tantamount to asking it to manipulate the renminbi. He repeated Beijing's assertions that it was already doing enough to stimulate domestic demand and that it was unfair to expect a sudden change in consumers' habits.
Jim Flaherty, Canada's finance minister, said Mr Geithner's proposal was helpful and added that it could be regarded as part of an action plan to be agreed by a summit of G20 leaders in Seoul on November 11. A French official told reporters that Paris was also sympathetic to the suggestion, which echoed its complaints about Germany's surpluses.
However, Yoshihiko Noda, Japan's finance minister, told reporters that numerical targets would be difficult to implement. A senior German official also reacted negatively, telling Deutsche Presse-Agentur that Germany's surplus could not be likened to that of China. He argued that Berlin's surpluses were unrelated to the euro and were simply a sign of trading strength.
Mr Flaherty held out hopes that an initial compromise could be reached by the end of the Gyeongju meeting on Saturday.
"No one wants to walk out from here without an agreement on an action plan," he told reporters.
It was unclear whether a demand for action on current accounts would be any more acceptable to Beijing as it argues it is already taking sufficient steps to stimulate domestic demand. "We are not just an exporter," Mr Cui told a conference in Seoul. "We are making our best efforts to diversify our economy to base economic growth on domestic consumption and we are going to import more."
Despite the growing divisions, Lee Myung-bak, South Korea's president, joked he would not let any of the ministers leave until a deal was done.
"If you do not reach an agreement, when you come to leave, we may not operate buses, trains or planes," he said.
By Christian Oliver and Song Jung-a,
www.FT.com
The U.S. has long sought faster and sustained appreciation of the renminbi but Beijing has consistently resisted specific targets.
In order to break this impasse, Timothy Geithner, U.S. Treasury secretary, said G20 finance ministers, meeting in the South Korean city of Gyeongju on Friday, should commit to limit trade deficits and surpluses that create imbalances in the global economy.
"G20 countries with persistent surpluses should undertake structural, fiscal and exchange rate policies to boost domestic sources of growth and support global demand," Mr Geithner wrote in a letter to G20 ministers that was circulated among reporters.
Still, much of Mr Geithner's language was tailored to the challenge posed by the renminbi. By building up domestic demand and increasing imports, China would be inclined to allow a faster strengthening of its currency.
"Emerging market countries with significantly undervalued currencies and adequate precautionary reserves need to allow their exchange rates to adjust fully over time to levels consistent with economic fundamentals," he added.
G20 officials on Friday said the U.S. initially proposed that trade surpluses should be capped at 4 per cent of gross domestic product.
One senior G20 official said the letter, drafted after a proposal from South Korea, would not come as a shock to the Chinese because financial officials had been sounding out Beijing in earlier meetings.
The G20 official said the Chinese had cautiously welcomed the suggestion of shifting the debate away from the narrow focus on currency and could even be open to the 4 per cent target because it chimed with their own forecasts.
"I do not know whether the Chinese fully agreed in advance or not, but if the Americans decided to circulate the letter, it should be a sign they have already agreed something. The bigger worry is opposition from Germany and Japan."
China gave no immediate reaction. Cui Tiankai, Beijing's representative to the G20, last week said any U.S.-led offensive on Chinese currency would be "wrong" but said he was "cautiously optimistic" a final deal could be done if it took broad macroeconomic factors into account.
He said asking China to set targets on currency was tantamount to asking it to manipulate the renminbi. He repeated Beijing's assertions that it was already doing enough to stimulate domestic demand and that it was unfair to expect a sudden change in consumers' habits.
Jim Flaherty, Canada's finance minister, said Mr Geithner's proposal was helpful and added that it could be regarded as part of an action plan to be agreed by a summit of G20 leaders in Seoul on November 11. A French official told reporters that Paris was also sympathetic to the suggestion, which echoed its complaints about Germany's surpluses.
However, Yoshihiko Noda, Japan's finance minister, told reporters that numerical targets would be difficult to implement. A senior German official also reacted negatively, telling Deutsche Presse-Agentur that Germany's surplus could not be likened to that of China. He argued that Berlin's surpluses were unrelated to the euro and were simply a sign of trading strength.
Mr Flaherty held out hopes that an initial compromise could be reached by the end of the Gyeongju meeting on Saturday.
"No one wants to walk out from here without an agreement on an action plan," he told reporters.
It was unclear whether a demand for action on current accounts would be any more acceptable to Beijing as it argues it is already taking sufficient steps to stimulate domestic demand. "We are not just an exporter," Mr Cui told a conference in Seoul. "We are making our best efforts to diversify our economy to base economic growth on domestic consumption and we are going to import more."
Despite the growing divisions, Lee Myung-bak, South Korea's president, joked he would not let any of the ministers leave until a deal was done.
"If you do not reach an agreement, when you come to leave, we may not operate buses, trains or planes," he said.
By Christian Oliver and Song Jung-a,
www.FT.com
10/22/2010
G20 finance ministers resist US pressure over trade
US proposals that countries set targets to reduce trade imbalances appeared to be running into opposition at the G20 meeting of leading economies.
[justify]US Treasury Secretary [b]Timothy Geithner[/b] wrote to [b]G20[/b] members on Friday suggesting limiting surpluses and deficits to a percentage of output.
But Japan, Germany and Russia expressed opposition to what one delegate called "planned economy" thinking.
The proposal is seen as mainly directed at China, which had yet to comment.
Washington has for months been pressing China - without success - to let its currency appreciate.
Getting Beijing to tackle its large trade surplus would be an indirect way of forcing the yuan to rising in value.
In his letter to [b]G20[/b] colleagues on the opening day of a meeting of finance ministers in South Korea, Mr Geithner said countries should aim to reduce surpluses or deficits to a targeted share of gross domestic product.
US officials said the target would be 4% of GDP by 2015. China's current account surplus was 4.9% of GDP in the first half.
Japanese Finance Minister Yoshihiko Noda summed up the mood among other big exporters, including Germany, saying Mr Geithner's proposal was "not realistic".
Australian Treasury Secretary Wayne Swan said he was not sure a "one-size-fits-all" approach could work.
Tensions over exchange rates are like to dominate the meeting, being held ahead of a summit by heads of state next month.
Common approach
The [b]G20[/b] finance ministers are trying to find a co-ordinated path out of the financial crisis and avert what some leaders have called "currency wars".
Many countries have been happy to see the value of their currencies fall, as it boosts their export competitiveness.
The US has accused Beijing of resisting upward pressure on the yuan by buying dollars, thereby making America's exports to China more expensive.
However, China has expressed unhappiness at what it sees as foreign interference in what it believes is an internal matter.[/justify]
Source:BBC
www.bbc.co.uk
[justify]US Treasury Secretary [b]Timothy Geithner[/b] wrote to [b]G20[/b] members on Friday suggesting limiting surpluses and deficits to a percentage of output.
But Japan, Germany and Russia expressed opposition to what one delegate called "planned economy" thinking.
The proposal is seen as mainly directed at China, which had yet to comment.
Washington has for months been pressing China - without success - to let its currency appreciate.
Getting Beijing to tackle its large trade surplus would be an indirect way of forcing the yuan to rising in value.
In his letter to [b]G20[/b] colleagues on the opening day of a meeting of finance ministers in South Korea, Mr Geithner said countries should aim to reduce surpluses or deficits to a targeted share of gross domestic product.
US officials said the target would be 4% of GDP by 2015. China's current account surplus was 4.9% of GDP in the first half.
Japanese Finance Minister Yoshihiko Noda summed up the mood among other big exporters, including Germany, saying Mr Geithner's proposal was "not realistic".
Australian Treasury Secretary Wayne Swan said he was not sure a "one-size-fits-all" approach could work.
Tensions over exchange rates are like to dominate the meeting, being held ahead of a summit by heads of state next month.
Common approach
The [b]G20[/b] finance ministers are trying to find a co-ordinated path out of the financial crisis and avert what some leaders have called "currency wars".
Many countries have been happy to see the value of their currencies fall, as it boosts their export competitiveness.
The US has accused Beijing of resisting upward pressure on the yuan by buying dollars, thereby making America's exports to China more expensive.
However, China has expressed unhappiness at what it sees as foreign interference in what it believes is an internal matter.[/justify]
Source:BBC
www.bbc.co.uk
10/15/2010
Averting currency war tops G20 agenda
The pressure is on the world’s economic powers to negotiate a deal that will avert an all-out currency war amid wild fluctuations in global currency markets.
As the Canadian dollar hit parity with the U.S. greenback and the Japanese yen struck a 15-year high, a senior South Korean official said the currency upheaval – and the need to calm it down – has become the dominant issue for upcoming G20 meetings in his country.
n an interview with The Globe and Mail, South Korea’s ambassador to Canada warned that the credibility of the Group of 20 developed and emerging economies hangs on whether they can reach a new arrangement on exchange rates at fall meetings that begin next week.
Currency movements have become a pressing concern in recent months as the evidence mounts that economic growth is slowing in troubled developed economies. In the United States, growth is so slow that it has proven impossible to bring down the unemployment rate, which stood at 9.6 per cent in December. There are nearly 15 million unemployed people in the U.S., and more than 6 million of those have been out of work for at least six months.
A prolonged period of ultra-low interest rates, and massive deficit spending in most of the world’s biggest economies, has not been enough to stoke strong global growth. So some governments are now turning to one of the only tools they’ve got left – trying to devalue their currency, or at least keep it from going up, in order to make their exports more competitive.
That has caused some figures, most notably Brazilian Finance Minister Guido Mantega, to warn of the threat of an all-out currency war. Defusing such a battle wasn’t on the original G20 agenda as South Korea prepared to host, but it has shot to the top of the list since the organization last met formally in June in Toronto.
Finance ministers and central bankers of the G20 gather in Gyeonju late next week to take another crack at the currency dispute, after failing to resolve their differences last week in Washington at a meeting of the International Monetary Fund.
South Korea is well-placed to guide a debate that is largely focused on a disagreement between the world’s two superpowers: the United States and China. The U.S. insists China should allow the yuan to rise more quickly than it has, while China has warned that a major revaluation in currency would devastate its export-dependent economy, cause major unemployment and social upheaval.
Under pressure, China has recently allowed the yuan to rise a bit, and it hit a record high against the U.S. dollar on Thursday. But the pace is still much too slow for many in the U.S.
South Korea is a political ally of the West and hosts thousands of U.S. troops on its soil, yet it also has deep economic and social ties with China.
“We’re not sure whether we have that much power to bridge the gap between two major players, but as chair, as the host country, we’re just trying our best to encourage them to solve the problem,” said Chan-Ho Ha, South Korea’s ambassador to Canada, in an interview. “If we avoid this issue, then the legitimacy of G20 will be damaged because the whole world is watching very carefully.”
This week, Japan’s finance minister publicly questioned whether South Korea is able to guide talks on exchange rate policy, given its own recent actions to limit the rise of its currency.
“As the chair, South Korea and its role will be seriously questioned,” Yoshihiko Noda told Japan’s Parliament, a comment that drew objections from South Korea.
South Korea is among the countries – along with Brazil and China – that have limited the rise of their currencies in the past year, a general trend that has draw concern from the United States, the European Union and Canada.
On Thursday, the Bank of Korea left its borrowing rates unchanged in part because an appreciating won threatens export growth.
Bank Governor Kim Choong Soo said the issue of exchange rates “will and must be dealt with under the G-20 framework talks.”
Next Friday’s two-day gathering in Gyeonju is a precursor to the G20 leaders summit in Seoul in November. Meetings of the G20 were originally limited to finance ministers and central bankers, but grew to involve world leaders at the onset of the recession in 2008. The following year, the G20 declared itself to be the main platform for global decisions on economic policy, eclipsing the G7.
Combined, G20 nations account for 85 per cent of the world economy The fledgling forum is not without its critics, particularly from countries that did not make the cut. South Korea has heard many complaints from non-G20 nations who oppose the format, but Mr. Ha, the ambassador, says all the G20 can do is listen.
“If they open the door, lots of countries will just rush in,” he said. “So they cannot open the door now. So the solution is, we call it, outreach activities – trying to accommodate their views or their complaints.”
Mr. Ha said South Korea wants the G20 to focus on a new business-focused approach to developing emerging markets as a key part of the recovery.
“Some of the advanced economies have reached sort of a saturation point,” he said. “To expand further, demand should come from developing countries.”
Source: www.theglobeandmail.com
Lee warns against protectionism ahead of G20
By Lee Tae-hoon
President Lee Myung-bak expressed concern Friday that protectionism may rise and deal a blow to the Korean economy, as well as the global economy.
“I’m worried that a conflict of interests between countries may lead to protectionism,” President Lee said in a luncheon with managing editors of newspapers and broadcasters at Cheong Wa Dae.
“This is a problem that concerns us, as well as the world.”
However, he said Korea will likely be hit the hardest by an escalation of trade barriers as the fourth largest economy in Asia heavily depends on exports.
President Lee noted that Korea will host the G20 summit at a time when a growing number of countries are taking a different approach to finding solutions to their economic problems.
The G20 Seoul Summit is slated for Nov. 11 and 12.
“Korea will host the G20 at a difficult time,” he said. “It has become a much more important event than first thought as international cooperation has become of greater importance.”
The international tension on economic policies is expected to reach a climax at the summit as a general meeting of the International Monetary Fund (IMF) recently came to a close without any clear solutions to thorny issues, such as the reform of IMF governance and exchange rate rebalancing.
“To be honest, I’m very anxious,” President Lee said, noting that Korea will be judged based on the outcome of the summit. “Korea’s national prestige may soar or plummet.”
Lee said he wants the world to remember the G20 Seoul Summit for decades and praise Korea’s role in laying out the foundation for sustainable growth of the global economy.
President Lee Myung-bak expressed concern Friday that protectionism may rise and deal a blow to the Korean economy, as well as the global economy.
“I’m worried that a conflict of interests between countries may lead to protectionism,” President Lee said in a luncheon with managing editors of newspapers and broadcasters at Cheong Wa Dae.
“This is a problem that concerns us, as well as the world.”
However, he said Korea will likely be hit the hardest by an escalation of trade barriers as the fourth largest economy in Asia heavily depends on exports.
President Lee noted that Korea will host the G20 summit at a time when a growing number of countries are taking a different approach to finding solutions to their economic problems.
The G20 Seoul Summit is slated for Nov. 11 and 12.
“Korea will host the G20 at a difficult time,” he said. “It has become a much more important event than first thought as international cooperation has become of greater importance.”
The international tension on economic policies is expected to reach a climax at the summit as a general meeting of the International Monetary Fund (IMF) recently came to a close without any clear solutions to thorny issues, such as the reform of IMF governance and exchange rate rebalancing.
“To be honest, I’m very anxious,” President Lee said, noting that Korea will be judged based on the outcome of the summit. “Korea’s national prestige may soar or plummet.”
Lee said he wants the world to remember the G20 Seoul Summit for decades and praise Korea’s role in laying out the foundation for sustainable growth of the global economy.
Staggering' conditions on accused G20 ringleader
Alex Hundert’s words will not appear in this story.
Unlike other Canadians, he’s not allowed to speak to the press.
At least that’s how a court interpreted the new bail conditions placed on Hundert, an accused ringleader of violence during the G20 summit in June.
“It’s staggering in its breadth,” said John Norris, Hundert’s lawyer. “I’ve never heard of anything as broad as that.”
Hundert, 30, faces three counts of conspiracy pertaining to G20 activities, and was released in July on $100,000 bail with about 20 terms, including not participating in any public demonstration.
Shortly after his release, the Crown filed an appeal to revoke his bail. Superior Court Justice Todd Ducharme ruled against that appeal.
On Sept. 17, shortly after Ducharme’s decision, Hundert was arrested for participating in a panel discussion at Ryerson University — which police deemed to be a public demonstration.
On Wednesday Hundert agreed to the new, more stringent, bail conditions.
They include a clarification of the no-demonstration rule, to include a restriction on planning, participating in, or attending any public event that expresses views on a political issue.
Justice of the Peace Inderpaul Chandhoke told the court the new conditions also restrict Hundert from speaking to the media.
“I’ve never seen that before,” said Norris, who plans to appeal Hundert’s initial arrest for breach of bail conditions, as well as the newest rules put on his client.
Alan Young, a law professor at Osgoode Hall, says bail conditions are meant to prevent crimes from being committed — and a person’s rights can be infringed upon to a “reasonable” extent to ensure public safety.
But in this case, Young says, the court has gone too far.
“It’s basically putting a gag order on a citizen of Canada, when it’s not clear that the gag order is at all necessary to protect public order,” he said, of Hundert’s restriction from speaking to the media.
“People have to be able to air grievances, and the media is a primary tool in which people can air grievances effectively.”
Young called the strict bail conditions “astonishing” — something unheard of in modern-day Canada.
“It really seems to be a very severe deprivation of rights,” he said. “I’d be very curious to see how a higher court will respond.”
Nathalie Des Rosiers, of the Canadian Civil Liberties Association, says they plan to write the Attorney General in Hundert’s defence.
“Speaking to the media does not threaten public safety,” she said. “These bail conditions are only aimed at silencing speech.”
Unlike other Canadians, he’s not allowed to speak to the press.
At least that’s how a court interpreted the new bail conditions placed on Hundert, an accused ringleader of violence during the G20 summit in June.
“It’s staggering in its breadth,” said John Norris, Hundert’s lawyer. “I’ve never heard of anything as broad as that.”
Hundert, 30, faces three counts of conspiracy pertaining to G20 activities, and was released in July on $100,000 bail with about 20 terms, including not participating in any public demonstration.
Shortly after his release, the Crown filed an appeal to revoke his bail. Superior Court Justice Todd Ducharme ruled against that appeal.
On Sept. 17, shortly after Ducharme’s decision, Hundert was arrested for participating in a panel discussion at Ryerson University — which police deemed to be a public demonstration.
On Wednesday Hundert agreed to the new, more stringent, bail conditions.
They include a clarification of the no-demonstration rule, to include a restriction on planning, participating in, or attending any public event that expresses views on a political issue.
Justice of the Peace Inderpaul Chandhoke told the court the new conditions also restrict Hundert from speaking to the media.
“I’ve never seen that before,” said Norris, who plans to appeal Hundert’s initial arrest for breach of bail conditions, as well as the newest rules put on his client.
Alan Young, a law professor at Osgoode Hall, says bail conditions are meant to prevent crimes from being committed — and a person’s rights can be infringed upon to a “reasonable” extent to ensure public safety.
But in this case, Young says, the court has gone too far.
“It’s basically putting a gag order on a citizen of Canada, when it’s not clear that the gag order is at all necessary to protect public order,” he said, of Hundert’s restriction from speaking to the media.
“People have to be able to air grievances, and the media is a primary tool in which people can air grievances effectively.”
Young called the strict bail conditions “astonishing” — something unheard of in modern-day Canada.
“It really seems to be a very severe deprivation of rights,” he said. “I’d be very curious to see how a higher court will respond.”
Nathalie Des Rosiers, of the Canadian Civil Liberties Association, says they plan to write the Attorney General in Hundert’s defence.
“Speaking to the media does not threaten public safety,” she said. “These bail conditions are only aimed at silencing speech.”
G20 plans for 'too big to fail' banks
The Group of 20 leading economies (G20) meets in Seoul next month to agree a package of measures targeted at "too big to fail" banks.
The aim is to ensure that if any of the world's 30 or so "systemically important" lenders get into trouble, they can be dealt with quickly, at no cost to the taxpayer and without disrupting the broader financial system as well.
It is part of the G20's wider efforts to learn from the financial crisis that forced governments to stump up trillions of dollars to shore up banks.
Who is drafting these measure
The G20 has tasked the Financial Stability Board (FSB), made up of central bankers, regulators and treasury officials from its member countries, to draft the package.
The FSB meets in South Korea next week to finalise it.
Last year the FSB published an interim report on reducing the moral hazard posed by systemically important financial institutions or SIFIs in G20 jargon.
It outlines steps G20 countries could take within a "constrained discretion" framework, meaning a member country would have to show it was implementing enough measures listed to achieve the overall outcome for any SIFIs on its patch.
The Basel Committee of supervisors and central bankers from G20 countries agreed last month that SIFIs must hold additional "loss absorbing capacity" above new minimum global capital requirements known as Basel III being introduced from 2013.
What couild the package include
So far the FSB, regulators and policymakers have indicated several measures are likely:
capital surcharge: one idea is to force big banks to hold a capital buffer on top of Basel III.
contingent capital or CoCos, a bond that converts into equity when an agreed trigger point is hit as a bank gets into trouble.
creditor bail-ins: a bank's creditors agree in advance to have a restructuring imposed on them if the firm hits the skids so that the bonds they hold turn into equity.
more intensive supervision of bigger banks and more consistent supervision among different regulators.
resolution and "living wills": each country would be required to set up a mechanism for winding down collapsing banks efficiently to minimise disruption and uncertainty.
structural changes: if resolution mechanisms or living wills won't work because a bank is too complicated then structural changes should be considered.
Is a deal expected?
Yes and no.
G20 leaders will likely give general endorsement to the FSB package but say more work is needed to flesh them out -- a way of masking fundamental disagreements over some sections.
Countries are expected to select from the "menu" in the package but no item would be mandatory for everyone. This will be described as tailoring to an individual countries situation.
This is because some countries like Britain, the United States and Switzerland are sympathetic to a mandatory capital surcharge but Germany, France and Japan are against this.
A meeting of the Basel Committee, which would flesh out a surcharge to fit in with Basel III, failed to reach a consensus on this last month. Without everyone introducing a surcharge, some banks would end up disadvantaged.
Regarding CoCos, some countries like Switzerland and Britain are more sympathetic to their use but German and Spanish regulatory officials doubt how well they would work in a crisis.
There are also doubts if investors have an appetite for such hybrid debt and there is also debate over exactly when would the conversion to equity take place.
Structural remedies are also controversial. The United States has approved a Volcker Rule that requires some types of banks to spin off proprietary trading desks and hedge fund operations so that deposits are not at risk. European Union countries have opposed such a rule.
There is also disagreement over how banks should be wound up with US plans allowing parts of a failing bank to continue operating meeting with scepticism in Europe. Some regulators also say it may take many years to reach a foolproof way that can resolve cross-border banks, which are typically SIFIs.
The aim is to ensure that if any of the world's 30 or so "systemically important" lenders get into trouble, they can be dealt with quickly, at no cost to the taxpayer and without disrupting the broader financial system as well.
It is part of the G20's wider efforts to learn from the financial crisis that forced governments to stump up trillions of dollars to shore up banks.
Who is drafting these measure
The G20 has tasked the Financial Stability Board (FSB), made up of central bankers, regulators and treasury officials from its member countries, to draft the package.
The FSB meets in South Korea next week to finalise it.
Last year the FSB published an interim report on reducing the moral hazard posed by systemically important financial institutions or SIFIs in G20 jargon.
It outlines steps G20 countries could take within a "constrained discretion" framework, meaning a member country would have to show it was implementing enough measures listed to achieve the overall outcome for any SIFIs on its patch.
The Basel Committee of supervisors and central bankers from G20 countries agreed last month that SIFIs must hold additional "loss absorbing capacity" above new minimum global capital requirements known as Basel III being introduced from 2013.
What couild the package include
So far the FSB, regulators and policymakers have indicated several measures are likely:
capital surcharge: one idea is to force big banks to hold a capital buffer on top of Basel III.
contingent capital or CoCos, a bond that converts into equity when an agreed trigger point is hit as a bank gets into trouble.
creditor bail-ins: a bank's creditors agree in advance to have a restructuring imposed on them if the firm hits the skids so that the bonds they hold turn into equity.
more intensive supervision of bigger banks and more consistent supervision among different regulators.
resolution and "living wills": each country would be required to set up a mechanism for winding down collapsing banks efficiently to minimise disruption and uncertainty.
structural changes: if resolution mechanisms or living wills won't work because a bank is too complicated then structural changes should be considered.
Is a deal expected?
Yes and no.
G20 leaders will likely give general endorsement to the FSB package but say more work is needed to flesh them out -- a way of masking fundamental disagreements over some sections.
Countries are expected to select from the "menu" in the package but no item would be mandatory for everyone. This will be described as tailoring to an individual countries situation.
This is because some countries like Britain, the United States and Switzerland are sympathetic to a mandatory capital surcharge but Germany, France and Japan are against this.
A meeting of the Basel Committee, which would flesh out a surcharge to fit in with Basel III, failed to reach a consensus on this last month. Without everyone introducing a surcharge, some banks would end up disadvantaged.
Regarding CoCos, some countries like Switzerland and Britain are more sympathetic to their use but German and Spanish regulatory officials doubt how well they would work in a crisis.
There are also doubts if investors have an appetite for such hybrid debt and there is also debate over exactly when would the conversion to equity take place.
Structural remedies are also controversial. The United States has approved a Volcker Rule that requires some types of banks to spin off proprietary trading desks and hedge fund operations so that deposits are not at risk. European Union countries have opposed such a rule.
There is also disagreement over how banks should be wound up with US plans allowing parts of a failing bank to continue operating meeting with scepticism in Europe. Some regulators also say it may take many years to reach a foolproof way that can resolve cross-border banks, which are typically SIFIs.
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