planet earth looks blue

The G20 summit will convene in London in a month, but this weekend leaders are joining for a pre-meeting.  Why?  Because the entire world financial system is in need of a makeover.  The only way to accomplish such a behemoth task is if everyone can agree to work together, which would be a feat in itself.  On the table are tighter banking regulations, more funding, as well as reform for the IMF, and further interest rate cuts and government spending by all countries - a dinner party that John Maynard Keynes wouldn’t have missed for the world.

The meeting this weekend needs to show the global markets that the G20 leaders, who represent 85% of the world economy, are on the same page.  It is still unclear if the United States will go rogue, leaning towards a more protectionist economic policy, which would upset UK Chancellor Alistair Darling’s intentions for smooth talks.  Although protectionism would doom any country, and everyone from Gordon Brown to India’s External Affairs Minister Pranab Mukherjee have warned the US against it, there are many supporters within the country.  The ‘Buy American‘ provision in the stimulus package has left the international community ill at ease, and at least one Canadian company out of a job.  But with the American public favoring restrictions on hiring foreign workers and outsourcing business, and the media attacking the immigrant population, it will be difficult for the Obama administration to open its arms wide enough for a pro-trade policy.

Also Brazil, Russia, China, and India, are still waiting for an equal share of power in the IMF before they jump on the Western band wagon.  Hopefully some sort of consensus can be reached, but individual interests will have to somehow be balanced with international ones.  If they do succeed in Horsham this weekend, and London next month, one thing is certain, the world will be a stronger place for it.  

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