By Henry Gombay for The Black Star News
The G20 summit of leaders of industrialized and industrializing countries ended late Thursday evening here with a pledge of a $1 trillion dollars thrown in the financial markets to help ease the global economic crisis.
In a communiqué issued at the end of the summit, the leaders pledged to restore confidence and growth in global finances and also pledged to create more jobs.
In what was seen as an attempt to deal with the causes of the current global financial crisis, the G20 leaders agreed to expand the Financial Stability Forum and re-established it with a stronger institutional basis and enhanced capacity as the Financial Stability Board (FSB).
It will therefore assess the vulnerabilities affecting the financial system, identify and oversee action needed to address them. The FSB will from now on “promote co-ordination and information exchange among authorities responsible for financial stability.”
“The challenge is clear,” U.S. president Barack Obama, said. “The global economy is contracting. Trade is shrinking. Unemployment is rising. The international financial system is nearly frozen.”
Addressing the press at the end of the summit, British Prime Minister Gordon Brown said the G20 had also pledged to fund and reform international financial institutions, act decisively to kick-start international trade, and build an inclusive, green and sustainable recovery.
Brown said: “We will not hesitate as long as people are losing their jobs and their homes to make the difference that we can by improving their prosperity. Today’s actions of course will not immediately solve the crisis. But we have begun the process by which they will be solved.”
He added that this was not just a single collection of actions. “It is a collective action – people working together at their best,” Brown said.
World leaders who have abused their country’s financial systems by robbing their central banks and banking the proceeds in private numbered Swiss accounts are in for a shock. Germany’s powerful Chancellor, Angela Merkel told journalists, “The days of secret banking are now over.”
From now on, banks will be required to let the FSB look into questionable accounts held in a bank. Many dictators especially in developing countries have used the loophole of secret bank account to amass great wealth. Most of the money banked in such a way often end up being lost when those dictators are either killed or dies from natural causes without anyone knowing what they held in numbered Swiss accounts.
South African President Kgalema Motlanthe said he was happy with the outcome of the summit. He was also happy that for the first time, the G20 members invited the New Partnership for African Development (NEPAD) the summit, he said.
“South Africa was invited on its own merit of being an emerging economy,” he said, deflecting a question as to whether he represented the entire African continent. Answering a question put to him by The Black Star News as to whether the US$ 250 billion promised by the G20 to go towards helping Africa deal with the present global financial crisis would not end up buying private planes, palaces and limousines for some of Africa’s corrupt leaders, Motlanthe said this money would not go directly to African leaders but would be used by non-government bodies that would pay for services needed by the people of Africa.
Although Meles Zenawi the Ethiopian Prime Minister and also current NEPAD chair was here, he abruptly cancelled a press conference he was about to give. His people gave no reasons for this. But insiders in the press centre said Zenawi was worried about the kind of questions that were going to be put to him concerning human rights violations within Ethiopia and his dealing with his opponents and Ethiopia’s neighbours.
In terms of who benefitted and who lost through the outcome of this summit, it is clear that while the West was seen as trying its best to clean up its house after the global financial crisis that has claimed many jobs and foreclosures.
The $1 trillion poured into the Western world’s global finances is likely to go a long way in helping stem the crisis. The African continent really wasn’t heard; Motlanthe said he didn’t speak for the continent and Prime Minister Zenawi cowered in the shadows. On the other hand, Germany’s Merkel found time for journalists and spent a good hour explaining why she was here and what they had achieved.
Indeed, it was rather absurd that no representative of the African continent was at hand to put their case to the world media at such a major global setting.
At a press conference at the end of the summit, President Obama added that while the United States was his priority, every one of the world leaders ought to do what it takes to bring to an end the current global financial crisis.
For the British Prime Minister the summit could not have come at a better time. His ratings in polls have of late been falling badly due to accusations that as one who presided over Britain’s economy for a decade during Tony Blair’s premiership, he should have seen this meltdown coming.