It’s been almost 40 years since Neil Armstrong took his historic steps as the first human on the moon (July 21, 1969). The words he spoke on that occasion are recorded in the psyches of those who heard his famous comments and will remain forever in our memories when we speak of giant steps for mankind.
Will the same be true for the steps taken during the recent G-20 meeting, commonly known as the London Summit? Will the actions approved by the heads of state of the world’s top 20 countries positively impact the global economies in the same fashion as Armstrong’s actions provided a boost to our fascination with science and technology? Only time will tell, but as a result of this historic gathering, at least a few more wheels have been put in motion to solve the greatest economic crisis the world has experienced in recent times.
The G-20, or the Group of Twenty Finance Ministers and Central Bank Governors, was formally established in September 1999, superseding several previous groups of this nature. The organization includes representatives from the major industrialized and emerging economies of the world. Twice over the past decade, the event has been attended by heads of government—in November 2008 and last week. That fact alone speaks to the magnitude of the current situation.
The nations involved account for about two-thirds of the world population as well as approximately 80% of world trade and 90% of global gross national product.
The purpose of the organization is to provide a forum for cooperation and consultation on financial matters affecting the various countries as well as the world in general. Broad areas of concern include ways and means for building and sustaining prosperity, global energy, reforms of financial systems, and coping with demographic changes being caused by an aging population.
Sometimes when events such as these were held by national leaders, the decisions reached were less than stellar and were often overshadowed by the pomp and circumstance associated with so many heads of state meeting. The final communiqués and agreements are often negotiated and drafted prior to the formal event, although the face-to-face conversations have produced the occasional (typically modest) surprise. Again, the stakes are a little higher this time around.
Since its creation, the G-20 has attempted to develop and strengthen international financial architecture. However, the circumstances that brought so many world leaders to conference tables last week were definitely different than at previous meetings due to the extent and depth of the financial crisis that is impacting the lives of individuals and institutional operations in every country in the world.
The G-20 leaders recognized early on that today’s extremely critical economic times were going to require historic and Herculean attempts toward resolution. They also realized that steps had to be taken together in order for the decisions to have any lasting effect toward curing the economic ills infecting the world economies.
Often in the past, European nations have been at the helm in proffering methods designed to stem global economic leakage. More recently, as the world has faced such severe financial crises, the US has taken the lead and has developed myriad stimulus action plans. At the same time, America has attempted to encourage the world to join in the pilgrimages designed to secure greater prosperity.
During the sessions of the London Summit, the question that seemed to be on the minds of many people was whether other leading nations would match US efforts—not in the amounts of money made available, but certainly in determination and willingness to take the steps required to move forward in solving the situation, particularly because of the magnitude of the problem.
That question was clearly and positively answered by the G-20’s unprecedented efforts to stem the decline and reverse the direction of global economic markets. Included among the many commitments made by these heads of government were reforms relating to international financial institutions, programs designed to promote world trade and engage emerging markets, plans to improve consistency and cooperation between countries, and the creation of new boards to oversee and reshape regulatory systems.
The overall objective of the summit was to restore confidence, fund and reform international financial institutions, create jobs, enhance lending programs, and underpin general prosperity around the world. The steps they took to do so were designed to ultimately reverse the global recession and prevent the reoccurrence of this kind of crisis in the future. There was far from unanimous consent of specific efforts, and we didn’t come away with our entire agenda being adopted (nor did we expect to), but the overall tenor was clearly positive.
Will the end result be the giant steps required to put us back on the path to future prosperity? Perhaps. At least they are substantive and significant steps on the journey toward securing the long-term economic future of our nation as well as countries around the world.