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Washington, Pittsburg G20 Summits and the Model of Economic Balance

Washington, Pittsburg G20 Summits and the Model of Economic Balance

Monday, 16 November, 2020 - 07:45
World leaders pose for a group photo at the opening of the G20 Summit hosted by US President George W. Bush (7th L) on November 15, 2008 in Washington, DC. (AFP)

“Just like yesterday.” The phrase has been uttered a lot these days when referring to past and the upcoming G20 summit. Even though the coronavirus pandemic has upended people’s lives and the global economy, it still appears as though history is repeating itself as it encounters crisis after crisis.

In 2008, the world witnessed another crisis – one less severe than the pandemic, but no less significant – with the global economic collapse. It took almost two years for the world to recover from it.

The crisis prompted world leaders at the time to form the Group of Twenty in order to address pressing international economic issues and problems. And so the first G20 summit was held in Washington on November 14–15, 2008. The third was held in Pittsburg in the United States.

Both summits were faced with similar daunting economic challenges, amid the global economic collapse, falling stock markets and real estate challenges. World leaders therefore called for setting up a new global economic framework and a council for global stability that would tackle the fallout from the crisis and avert its recurrence.

Extraordinary summit

World leaders gathered at the “extraordinary” inaugural G20 summit in the American capital. The summit on “Financial Markets and the World Economy” vowed to set up a model for more balanced global growth to avert another economic collapse. The leaders agreed to launch a series of policies and mechanisms that maintain this balance.

They reached a common understanding of the root causes of the global crisis, reviewed actions countries had taken and would take in the future to address the immediate crisis and strengthen growth, agreed on common principles for reforming their financial markets and reaffirmed their commitment to free market principles.

Observers believe that leaders at the upcoming G20 summit in Saudi Arabia will reiterate these commitments and boost cooperation to avert the impact of the pandemic. Riyadh will host the summit on November 21 and 22.

King Salman bin Abdulaziz had represented the Kingdom at the Washington meeting.

Collective work

A year later, world leaders met in Pittsburg for the third G20 summit. They discussed further actions to assure a sound and sustainable recovery from the global financial and economic crisis. They also designated the G20 to be the premier forum for international economic cooperation. They established the Financial Stability Board (FSB) to include major emerging economies and welcome its efforts to coordinate and monitor progress in strengthening financial regulation.

They agreed to work together to assess each others’ economic plans, reach consensus on best practices for needed reforms, and adopt policies to support the necessary rebalancing of global demand to ensure strong growth for all. The leaders committed to update the architecture for global economic cooperation. They reached a historic agreement to put the G20 at the center of their efforts to work together to build a durable recovery and reform the international financial system. They also made specific commitments to increase access to food, fuel and finance among the world’s poorest.

‘Corporate greed’

Outside the convention center, protests were staged against the G20 and “corporate greed”. Some 10,000 protesters staged a peaceful march. Protesters -- from environmentalists, socialists, Palestinians and Tibetans to union workers -- marched toward the convention center holding up signs such as “We Say No To Corporate Greed,” and “G20 = Death by Capitalism”. Protests -- usually against some aspect of capitalism -- have often marked summits since trade talks in Seattle in 1999.

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