The discussions were imperfect and the actions were inadequate, but it was better that they met than not. Last week, leaders representing nearly 90 percent of the global economy convened to solve the world’s economic ills. There were no absolute remedies offered, but did the Group of 20 summit address the hopes of rising powers?
Emerging powers benefited from changes in financial supervision and regulation and promises to reform financial institutions. As expected, the Financial Stability Forum was officially expanded and renamed. In the final communiqué, leaders committed to:
“Establish a new Financial Stability Board with a strengthened mandate, as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain and the European Commission.”
Leaders pledged to give a stronger voice in the world financial order to rising powers by changing members’ voting shares in the International Monetary Fund. But, arduous negotiations lie ahead if the quotas are going to accurately reflect the global balance of economic power.
“We will reform their mandates, scope and governance to reflect changes in the world economy and the new challenges of globalization, and that emerging and developing economies, including the poorest, must have greater voice and representation…
“To this end: we commit to implementing the package of IMF quota and voice reforms agreed in April 2008 and call on the IMF to complete the next review of quotas by January 2011.”
Before the London summit, financial ministers from Brazil, Russia, India and China called for the heads of the IMF and World Bank to be selected “irrespective of nationality.” Although not as strong, the final G20 statement was clearly a nod in this direction.
“We agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent and merit-based selection process.”
During the press conference after the summit, Indian Prime Minister Manmohan Singh spoke positively about the agreement and his personal meetings with other world leaders.
Clip from the London Summit.
